[Senate Hearing 107-904]
[From the U.S. Government Publishing Office]
S. Hrg. 107-904
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
=======================================================================
HEARINGS
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
on
H.R. 5605/S. 2797
AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF VETERANS AFFAIRS
AND HOUSING AND URBAN DEVELOPMENT, AND FOR SUNDRY INDEPENDENT AGENCIES,
BOARDS, COMMISSIONS, CORPORATIONS, AND OFFICES FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 2003, AND FOR OTHER PURPOSES
__________
Corporation for National and Community Service
Department of Housing and Urban Development
Department of the Treasury
Department of Veterans Affairs
Environmental Protection Agency
Federal Emergency Management Agency
National Aeronautics and Space Administration
National Science Foundation
Neighborhood Reinvestment Corporation
Nondepartmental witnesses
__________
Printed for the use of the Committee on Appropriations
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
______
U. S. GOVERNMENT PRINTING OFFICE
78-495 WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON APPROPRIATIONS
ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin CONRAD BURNS, Montana
PATTY MURRAY, Washington RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois BEN NIGHTHORSE CAMPBELL, Colorado
TIM JOHNSON, South Dakota LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island MIKE DeWINE, Ohio
Terrence E. Sauvain, Staff Director
Charles Kieffer, Deputy Staff Director
Steven J. Cortese, Minority Staff Director
Lisa Sutherland, Minority Deputy Staff Director
------
Subcommittee on VA, HUD, and Independent Agencies
BARBARA A. MIKULSKI, Maryland, Chairman
PATRICK J. LEAHY, Vermont CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa CONRAD BURNS, Montana
ROBERT C. BYRD, West Virginia RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin LARRY CRAIG, Idaho
TIM JOHNSON, South Dakota PETE V. DOMENICI, New Mexico
ERNEST F. HOLLINGS, South Carolina MIKE DeWINE, Ohio
TED STEVENS, Alaska (ex officio)
Professional Staff
Paul Carliner
Gabriel A. Batkin
Alexa Sewell
Jon Kamarck (Minority)
Cheh Kim (Minority)
Administrative Support
Jennifer Storipan
C O N T E N T S
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Wednesday, March 25, 2002
Page
Department of Veterans Affairs................................... 1
Wednesday, March 13, 2002
Department of Housing and Urban Development...................... 109
Wednesday, March 20, 2002
Environmental Protection Agency.................................. 177
Wednesday, April 17, 2002
Corporation for National and Community Service................... 303
Wednesday, April 24, 2002
Neighborhood Reinvestment Corporation............................ 337
Department of the Treasury: Community Development Financial
Institutions Fund.............................................. 354
Wednesday, May 1, 2002
National Aeronautics and Space Administration.................... 409
Wednesday, May 8, 2002
Federal Emergency Management Agency.............................. 481
Wednesday, May 15, 2002
National Science Foundation...................................... 533
Nondepartment witnesses.......................................... 575
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MARCH 6, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:35 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski, (chairman)
presiding.
Present: Senators Mikulski, Kohl, Johnson, Bond, Shelby,
Craig, Domenici, and Stevens.
DEPARTMENT OF VETERANS AFFAIRS
STATEMENT OF HON. ANTHONY J. PRINCIPI, SECRETARY OF
VETERANS AFFAIRS
ACCOMPANIED BY:
FRANCES M. MURPHY, M.D., ACTING UNDER SECRETARY FOR HEALTH
ROBIN HIGGINS, UNDER SECRETARY FOR MEMORIAL AFFAIRS
GUY H. MCMICHAEL, III, ACTING UNDER SECRETARY FOR BENEFITS
D. MARK CATLETT, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR
MANAGEMENT
JAMES W. BOHMBACH, CHIEF FINANCIAL OFFICER, VETERANS BENEFITS
ADMINISTRATION
DANIEL TUCKER, DIRECTOR, BUDGET AND PLANNING SERVICE, NATIONAL
CEMETERY ADMINISTRATION
VINCENT BARILE, DEPUTY UNDER SECRETARY FOR MANAGEMENT, NCA
NORA E. EGAN, CHIEF OF STAFF
TIM S. McCLAIN, GENERAL COUNSEL
MAUREEN P. CRAGIN, ASSISTANT SECRETARY FOR PUBLIC AND
INTERGOVERNMENTAL AFFAIRS
JOHN A. GAUSS, ASSISTANT SECRETARY FOR INFORMATION AND
TECHNOLOGY
DENNIS DUFFY, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR POLICY
AND PLANNING
ELIGAH D. CLARK, CHAIRMAN, BOARD OF VETERANS' APPEALS
JOHN OGDEN, CHIEF CONSULTANT, PHARMACY BENEFITS MANAGEMENT
STRATEGIC HEALTH GROUP
ART KLEIN, DIRECTOR OF BUDGET OFFICE, VETERANS HEALTH
ADMINISTRATION
JIMMY NORRIS, CHIEF FINANCIAL OFFICER, VETERANS HEALTH
ADMINISTRATION
JOHN R. FEUSSNER, M.D., CHIEF RESEARCH AND DEVELOPMENT OFFICER,
VETERANS HEALTH ADMINISTRATION
LAURA MILLER, ASSOCIATE UNDER SECRETARY FOR HEALTH, VETERANS
HEALTH ADMINISTRATION
GORDON MANSFIELD, ASSISTANT SECRETARY FOR CONGRESSIONAL AND
LEGISLATIVE AFFAIRS
RITA A. REED, DEPUTY ASSISTANT SECRETARY FOR BUDGET
RICHARD J. GRIFFIN, INSPECTOR GENERAL
opening statement of senator barbara a. mikulski
Senator Mikulski. Good morning, everybody, to the
Subcommittee Veterans, Housing, and other Independent Agencies.
We will come to order.
Today we have the opportunity to listen to Mr. Secretary
Anthony Principi, to present to us the appropriations request
from the administration on behalf--on behalf of the
administration for the Department of Veterans Affairs.
This is a wonderful day in the sense that we welcome you,
Mr. Principi----
Mr. Principi. Thank you.
Senator Mikulski [continuing]. An old and dear friend. And
it is also Senator Bond's birthday.
And I am not going to tell any more. But, Senator Bond, you
know we, on the committee, love you. You know, we Democrats are
just crazy about you.
You are our little muffin here today.
Senator Bond. Thank you very much.
Senator Mikulski. That is just about the calorie count you
and I are supposed to have for all----
Senator Bond. I can only eat a quarter of it.
Senator Mikulski. I know you are--kind of a caffeine-kind
of guy.
Senator Bond. Yes, yes.
Senator Mikulski. No one ever thinks you are decaf; that is
for sure.
Senator Bond. No.
Senator Mikulski. But let me also present this to you this
morning and just say, Senator Bond, you are the cream in my
coffee.
Senator Bond. Thank you. I am deeply honored. Thank you.
Senator Mikulski. Now are you not glad we have gotten in a
good mood to talk to you?
prepared statement
Really, Senator Bond, you know that I think the world of
you. And I really enjoy so much our collegial relationship. And
I would like to take this time to wish you a happy birthday and
lots of good health and may you get all of your birthday
wishes, including the very, very best allocation for our
subcommittee.
[The statement follows:]
Prepared Statement of Senator Barbara A. Mikulski
I am very pleased to welcome VA Secretary Principi to the
Subcommittee. It is appropriate that we are beginning our 2003 process
with Secretary Principi, because keeping our promises to our nation's
veterans is this Subcommittee's highest priority. We look forward to
another productive year working with Secretary Principi and his team.
My goals for this hearing are two-fold. First, we must ensure that
the 2003 budget keeps the promises we made to our veterans. And second,
we must make sure the VA is a good steward of taxpayer dollars--so that
our veterans and the American people get the most for their hard earned
money.
The budget requests $57 billion for veterans' benefits and
services: $29 billion for entitlements, and $28 billion for
discretionary programs that are under this Subcommittee's jurisdiction.
This is a $3 billion increase in discretionary funding over 2002.
Promises made must be promises kept.
This year's request for medical care is $25.5 billion--a $2.6
billion increase over 2002. It includes $1.5 billion that the VA
expects to collect from third-party health insurance and co-payments
from veterans, as well as $800 million in retirement liability accruals
as proposed by the Administration.
So by our math, the real increase in VA medical care over 2002 is
$1.4 billion--excluding collections and accruals.
In the last three years, the Subcommittee has provided large
increases for medical care--$1.7 billion in 2000, $1.3 billion in 2001,
and $1 billion in 2002, to encourage more veterans to enroll in the VA
system, and to provide them with the medical care they deserve. At -a
time when high private health insurance and prescription drug costs are
really straining our elderly on fixed incomes, we can only expect that
the Subcommittee will be urged to continue these increases.
That is why I am very concerned about two major issues affecting
veterans' medical care.
First, I am perplexed and perturbed that the VA tells us it has a
$400 million shortfall in 2002. The VA-HUD Subcommittee provided $350
million above the President's request for VA medical care to ensure
that promises made to our--our nation's veterans can count on the
Subcommittee to keep promises. But the Subcommittee needs to be able to
count on the VA to provide accurate budget estimates, and I am now very
concerned about the VA's ability to count.
Second, I am very troubled about a proposal in this budget to
require certain veterans to pay a $1,500 deductible for medical care.
VA tells us that most of our ``Priority 7'' veterans--those who are not
disabled as a result of their service, and who make more than $24,000
per year--have private insurance that will pick up the tab. But that
doesn't mean much to the veteran who was lucky enough to avoid being
injured in battle, and who now makes a hard earned living in a small
business that doesn't provide him with health insurance.
I am very concerned that a $1,500 deductible will leave some
veterans without any health care at all. Especially in today's
climate--where the private sector is abdicating its responsibility so
frequently--we must protect those who use the VA system as a safety
net. There are many flaws in this deductible proposal, but the worst is
that VA can't tell us for certain how many veterans it will effect,
because it has a dismal performance of collecting insurance information
from our veterans. We have many concerns about the $1,500 deductible
proposal, and I hope Secretary Principi can answer our tough questions.
Instead of proposing deductibles to shift the healthcare burden
onto our veterans, the VA should be finding ways to improve what our
veterans and taxpayers are owed from private insurance companies. We
need to do more in this area, and I want to know what the VA is doing
to ensure that our veterans and taxpayers get what they are owed.
We understand that collections from veterans will also increase
because the prescription drug co-payment has been increased from $2 to
$7. Many of my veterans in Maryland have been surprised by this
increase, and I would like to know how the VA decided on $7, and if
there are plans to make further changes the copayment.
Also in the area of prescription drugs, I believe that the VA can
provide us with some very valuable lessons learned as we continue to
look for a Medicare prescription drug benefit. The VA spends almost $3
billion each year on drugs, and its benefit program could serve as a
model for the future. I'd like the Secretary to tell us about the
benefits that VA provides and how it develops its formularies so that
we can build upon this expertise.
On the other hand, unfortunately VA still has a way to go on
waiting times. Veterans still have to wait too long to see a doctor.
And on the benefits side, while the VA has made progress in
reducing its claims processing time, 165 days is still unacceptable. I
know Secretary Principi wants to reduce processing time to 100 days by
2003, and I am interested in learning how he plans to do this.
Finally, I also want to be sure that the VA is taking care of its
own caregivers. A recent Gallup poll found that nursing is the most
respected profession in the United States. Yet this country is facing a
nursing shortage that we're working hard to address. I'd like to know
what VA is doing to recruit, retain, and improve working conditions for
its nurses.
Again, I welcome Secretary Principi to his second appearance before
the Subcommittee and I look forward to hearing his testimony.
Senator Mikulski. With that, Mr. Principi, why do you not
go ahead and proceed with your testimony?
STATEMENT OF ANTHONY J. PRINCIPI
Secretary Principi. Thank you, Madam Chairwoman.
Senator Bond, Senator Johnson, it is a great pleasure to be
with you.
And I, too, wish you a very, very happy birthday, Senator
Bond. It is always good to come up here on birthdays.
I am very pleased to have this opportunity to present our
budget request to you and am grateful to the President for his
support. We are requesting $58 billion for veterans' benefits
and services, $30.1 billion for entitlement programs, and $27.9
billion for discretionary programs; an increase of $6.1 billion
over our 2002 enacted level.
Let's look specifically at our medical program. First, I
think it is important to back out accounting transfers, so that
the budget proposal does not appear to include any smoke and
mirrors or increases due to a proposed deductible. The real
apples-to-apples increase is 7 percent for medical care, a
$1,570,000,000 increase. I will talk a little bit more about
that increase and the challenges we face in health care.
Next, we are requesting an increase of $17 million for
burial services, a $94 million increase for our Veterans
Benefits Administration to continue the great work that our
people are doing in reducing the claims backlog, and a $64
million increase for capital programs. We have a robust medical
research program. We are requesting an increase that would
bring our appropriation to $409 million. Combining our $401
million subsidy from medical care funding with the funds we
receive through grants from universities and other Federal
agencies with our appropriation, we will have a $1.46 billion
program in medical research that we are very, very proud of.
VA'S MEDICAL CARE PROGRAM
With the funds allocated for medical programs, members of
the committee, we will be able to treat nearly 4.9 million
veterans in the coming fiscal year. That is a 3.3 percent
increase over fiscal year 2002. But it does not tell the whole
story. Clearly, we have seen such a phenomenal growth in
workload over the past several years. The growth has been
somewhat staggering since eligibility reform went into effect
in 1996 and we made the important transition to primary care
and community-based outpatient clinics. Our growth rate has
been 38 percent in priorities one through six. But the real
story is the growth in priority seven, which has grown 500
percent since 1996.
In 1996, priority 7s represented 3 percent of our workload.
Today they represent 33 percent of our workload. And that
number will grow to over 42 percent by the end of the decade.
The cumulative cost for priority 7s alone, just this one
category, is $20 billion between 2003 and 2007. In 2007 it will
consume over $5 billion a year of our budget.
So, we have grown in priority 7s from 200,000 veterans in
our system to over 1 million in 2002. And I believe patients
are coming to us for many, many reasons. I think there are some
national policy issues involved here. Veterans seek our care
because we have a very, very fine benefit package from primary
to nursing home care, including the very, very important
pharmacy benefit that we provide.
Of course, more outpatient clinics have been opened. We
have 622 now, across the country. Just as depicted in the
movie, ``If you build it, they will come,'' well, we have built
them, we have opened them, and they have certainly come. And I
think our quality is clearly so much better today. Our customer
satisfaction is good. We are not perfect, but we are doing good
work.
Those factors, coupled with HMO's, and Medicare HMO's
closing down, or no longer offering a pharmacy benefit, and the
fluctuating economy in some parts of the country, have resulted
in that increase in workload. That increase is something that
we need to deal with. I have been very, very honest in saying
that, notwithstanding this record requested increase in medical
care funding, without some actions by the Congress or by me as
Secretary, to either limit enrollment, or to require a greater
sharing in the cost of their care by priority 7s, or enactment
of Medicare subvention, or without increased collections for
medical care cost recovery, we will not have enough money to
treat all of the veterans who come to us in open enrollment. A
lot of the changes that took place in 1996 were premised on
Medicare subvention, which never happened.
I need to state for the record, because it is an important
policy issue that all of us have to grapple with to ensure that
the quality remains high, that the access times to get into
clinics are not reasonable. We see longer and longer wait times
in some parts of the country, which is unacceptable and not
good quality of care. We are not meeting the expectations
people have of us, and we need to grapple with that issue.
$1,500 DEDUCTIBLE PROPOSAL
The service-connected and some of the poor feel that they
are being squeezed out in some areas of the country, so there
are some warning signs on the horizon. After looking at all of
the options available to me, I opted for a deductible where
priority 7s would share in the cost of their care, rather than
closing off enrollment.
The deductible does not operate like a regular deductible.
No one is asked for money out-of-pocket at the beginning before
the care is provided. We will bill insurance companies for
every dollar of that deductible, and we will charge veterans
without insurance a percentage of reasonable charges.
The bottom line is we need to work with the members of this
committee and the House committee to devise a solution to this
problem, whether the deductible is modified or we look at other
steps that we can take to ensure that we manage our growth and
maintain high quality care.
GRANTS FOR VETERAN EMPLOYMENT
We are also requesting a transfer in funding of $197
million from the Department of Labor for the Veterans
Employment in Training Service Program. Though this program has
not worked as well as it should at the Department of Labor,
that is not an indictment of the people in the program. I think
it is more an indictment of the system.
Veterans in the age group of 20 to 24--those recently
discharged from the military having served their Nation
honorably, have a 9.6 unemployment rate compared to the general
population of 4.2 percent. In 20 States, fewer than 11 percent
of the veterans who go to the employment service for help were
place in suitable jobs. We have over 500,000 veterans who are
unemployed today, a third of whom have been unemployed for more
than 15 weeks.
I believe that VA, which has been entrusted with caring for
veterans as its sole mission, could manage this employment
program very well by making it outcome-based, performance-
based, and putting it into the continuum of programs we have
for veterans through vocational rehabilitation education, and
other programs. I support this transfer because I think it is
good for veterans. I would commission a task force, comprised
of the stakeholders, to help me identify how we can establish
this new program in VA and how it should work.
VETERANS BENEFITS ADMINISTRATION
On the benefits side of the house, I am pleased to report
to you that we are making progress on reducing the claims
backlog. In January of this year, we set a record in the number
of claims we decided: 62,536. That record was broken in
February; we decided 62,900 claims. That compares to 29,036 in
January of a year ago, and 28,900 in February a year ago. So,
we have doubled our productivity and our accuracy rate remains
at an all-time high.
PROCUREMENT REFORM TASK FORCE
We are looking at how we manage the VA. I have established
a procurement reform task force to provide me with
recommendations on how we can be better procurers of goods and
services. Outside of Defense, we are probably the largest
procurement department in government, with purchases of $5
billion annually in goods and services. I think there is an
awful lot of room for improvement. I now have the report on my
desk, and I intend to implement the recommendations to
standardize and use national contracting volume discounts to
improve the bottom line so that we have more money for
veterans.
ENTERPRISE ARCHITECTURE
We did the same with our Information Technology Program,
and established an enterprise architecture strategy
implementation and governance plan with an information
technology board to help us end stove-pipe design, development,
and procurement of IT. Under the leadership of Dr. John Gauss,
our new CIO, we will make some real progress in that area.
NATIONAL CEMETERY ADMINISTRATION
With regard to our national cemetery system, we are in the
process of opening 6 new national cemeteries across the
country. They are in different phases of development. Due to
the aging of the World War II population, interments are at an
all-time high in our national cemeteries. We have to ensure
that we have space to honor those who served their Nation in
uniform.
PREPARED STATEMENT
We have great challenges, Madam Chair, Senator Bond,
members of the committee. But I am convinced that we are on the
right road. And working together, I think we can overcome the
challenges that we face.
Thank you very much.
[The statement follows:
Prepared Statement of the Honorable Anthony J. Principi
Madam Chair, and members of the Committee, good morning. I am
pleased to be here today to discuss the President's 2003 budget
proposal for the Department of Veterans Affairs (VA) and tell you about
the significant progress we are making on behalf of the Nation's
veterans.
Our budget reflects the largest increase ever proposed for
veterans' discretionary programs. It ensures more veterans will receive
high-quality health care, that we will provide more timely and accurate
benefit claim determinations, and that we will maintain a dignified and
respectful setting for deceased veterans. Our proposal reflects the
debt of gratitude we owe to those who have served our country with
honor. It also signals our enduring commitment to the men and women in
uniform who today defend our freedom many miles away.
We are requesting $58 billion for veterans' benefits and services--
$30.1 billion for entitlement programs and $27.9 billion for
discretionary programs. This is an increase of $6.1 billion over the
2002 enacted level. Our budget increases VA's discretionary funding by
$3.1 billion over the 2002 level, including medical care collections.
Increases for specific programs are as follows: $2.7 billion for
medical programs; $17 million for burial services; $94 million for the
administration of veterans' benefits; and $64 million for capital
programs and other departmental administration.
Our budget request includes $197 million for a new grant activity
that replaces programs currently administered by the Department of
Labor and $892 million for certain Federal retiree and health benefits
as proposed by the Administration's Managerial Flexibility Act of 2001.
Excluding these new activities, our budget for discretionary programs
reflects an increase of $1.9 billion, or 7.8 percent over last year's
funding level.
medical care
For Medical Care, we are requesting budgetary resources of $25
billion, including $1.5 billion in collections. This amount includes
$793 million for accrual for certain Federal retiree and health
benefits and $260 million in increased collections related to the
proposed legislation deductible initiative. Under current law without
the impact of these two variables, the Medical Care increase is $1.5
billion--comprised of $1.4 billion in increased appropriations and $158
million in increased collections. This increase when combined with the
$1.1 billion impact of the deductible proposal, equals $2.7 billion,
the amount of the medical care increase that would be needed to support
the projected 6 percent increase in 2003, which is 290,000 more veteran
health care system users without the enactment of the deductible
proposal.
Madam Chair, we are focusing on improvements needed to our billing
and collection from third party insurers. While we have doubled our
collections in the past couple of years, we know we need to do more. In
a collaborative effort with an external contractor, we have identified
24 actions that will yield significant enhancements to our ability to
collect revenue. While many of these actions require time and
investment, we have already begun improvements to the revenue
collection process. I have directed that we begin the process of
consolidating billing and collection services, and that we explore the
cost and benefits of outsourcing these services. In addition, we are
aggressively pursuing insurance identification by obtaining new HIPAA
compliant software to facilitate exchange of medical information with
non-VA entities. We are also mounting increased veteran and employee
awareness and training campaigns. Further, we have developed a web-
based performance metrics program that is used by central office and
medical center staff to monitor and evaluate the critical steps in the
revenue cycle. Following the original implementation of reasonable
charges in September 1999, we have implemented two updates. Work is
nearly complete on the next reasonable charges update, which we expect
to publish in the Federal Register as an Interim Final Rule and
implement during Spring 2002. We expect to collect over $1 billion this
year with continuing increases in 2003 and beyond. We are committed to
maximizing our revenue opportunities from this source.
VA has experienced unprecedented growth in the medical system
workload over the past few years. The total number of patients treated
increased by over 11 percent from 2000 to 2001--more than twice the
prior year's rate of growth. For the first quarter of 2002, we
experienced a similar growth rate when compared to the same period last
year. The growth rate for Priority 7 medical care users has averaged
more than 30 percent annually for the last 6 years, and they now
comprise 33 percent of enrollees in the VA health care system. Based on
current law, this percentage is expected to increase to 42 percent by
2010.
I am proud that an increasing number of veterans are choosing to
receive their health care in the VA system. Despite this success, we
have much to accomplish. Patient access to our medical facilities must
be improved and this budget reaffirms our commitment to do so. Our goal
is for veterans to receive non-urgent appointments for primary and
specialty care in 30 days or less, while being seen within 20 minutes
of their scheduled appointment. We have included an additional $159
million in our request to work toward this goal.
Madam Chair, I know you agree that VA's health care system should
maintain timely, high quality care for service-connected and low income
veterans and remain open to all veterans. To effectively manage
participation in the system, we are proposing a $1,500 medical
deductible for Priority 7 veterans. With no change in policy, the cost
of care for Priority 7 veterans would grow from $1 billion in 2000 to
over $5 billion in 2007. To assure that rising workload does not dilute
the quality of care, Priority 7 veterans are being asked to pay for a
greater portion of their health care than in the past. We are
recommending that these veterans be assessed a deductible for their
health care at a percentage of the reasonable charges up to a $1,500
annual ceiling. This is not a standard deductible that must be paid
upfront and veterans' insurance may cover all charges. If all
projections, funding levels, and the new deductible are realized, VA
anticipates continued open enrollment to all veterans in 2003 without
detriment to our traditional core patients--those with service-
connected disabilities and lower incomes.
VA is working to meet the challenges in long-term care for
veterans. However, we believe that a literal interpretation of Public
Law 106-117, the ``Veteran's Millennium Health Care and Benefits Act of
1999'' will result in less than optimal solutions for increasing our
long-term care capacity. The number of individual veterans who received
care in VA increased from more than 3 million veterans in 1998 to more
than 4 million veterans in 2001, due primarily to VA's efforts to
expand access for primary care. During that same time period, efforts
have been made to meet the increased demand for long-term care.
Although the average daily census in VA nursing homes declined,
veterans mandated under Public Law 106-117 to receive such care are
being served in VA and contract community nursing homes. VA is also
supporting a significantly increased census of veterans in State
veterans nursing homes. At the same time, VA has been expanding care
for veterans in home and community-based extended care, consistent with
the mandates of Public Law 106-117. Indications we have received from
veterans show that they are pleased with options providing long-term
care closer to home, as well as alternatives to more traditional
skilled-nursing environments. We look forward to working with Congress
to pursue the best options to provide veterans with long-term care.
Our rapidly aging veteran population requires more health care
services. Our request includes $817 million to address this rising
demand. These funds will support our emphasis on access and service
delivery, pharmaceutical support, prosthetics, CHAMPVA for Life, and
information technology. Management savings of over $316 million will
partially offset resource needs. For example, I am establishing a
program across the VA system that will implement ``best practice''
standards for dispensing and prescribing pharmaceuticals.
The 2003 budget supports our cooperative efforts with the
Department of Defense (DOD) to improve Federal health care delivery
services. Over the past year, we have undertaken unprecedented efforts
to improve cooperation and sharing in a variety of areas through a
reinvigorated VA and DOD Executive Council. VA and DOD entered into a
Memorandum of Understanding (MOU) in December 1999, with the objective
of reducing contract duplication. The first addendum to that MOU
resulted in the conversion of DOD's Pharmacuetical Distribution and
Pricing Agreements (DAPAs) to reliance on VA's Federal Supply Schedule
(FSS) contracts for pharmaceuticals, which was completed in December
2000. The second addendum is an agreement to convert DOD's DAPAs for
medical/surgical products to reliance on VA's FSS. This effort was
completed in December 2001. To address some of the remaining
challenges, the Departments have identified four high-priority items
for improved coordination: veteran enrollment, computerized patient
records, cooperation on air transportation of patients, and facility
sharing instead of construction.
medical and prosthetic research
VA's clinical research program is funded at the highest level in
history with a partnership of government, universities and the private
sector. Over $1.46 billion will be invested in 2003: $409 million in
direct appropriation; $401 million in support from the VA Medical Care
appropriation primarily in the form of salary support for the clinical
researchers; $460 million from Federal organizations such as DOD and
NIH; and $196 million from universities and other private institutions.
This investment will allow VA to expand knowledge in areas critical to
veterans' and other citizens' health care needs including
schizophrenia, diabetes, further implementation of cholesterol and
other guidelines, aging, renal failure treatment, and clinical drug
treatment evaluations. This investment is relevant to the medical needs
of the entire Nation and will enhance future quality of life.
capital asset realignment for enhanced services (cares)
We continue our effort to transform the veterans' health care
system under the Capital Asset Realignment for Enhanced Services
(CARES) initiative. We are evaluating the health care services we
provide, identifying the best ways to meet veterans' future medical
needs, and realigning our facilities and services to meet those needs
more effectively.
Madam Chair, this initiative is not a perfunctory exercise. The
CARES process has already had a significant impact on our planning
process. Last week, I announced my decision on realigning VA health
care facilities in VISN 12. For example, we will shift inpatient
services to a remodeled Chicago West Side Division, and maintain a
Lakeside Division multi-specialty outpatient clinic in the downtown
area. The Hines VA Medical Center will be renovated, including the
Blind Rehabilitation and Spinal Cord Injury Centers. Sharing
opportunities between the North Chicago VA Medical Center and the
adjacent Naval Hospital Great Lakes will be enhanced.
CARES is critical to the future of VA health care. It will allow us
to redirect funds from the maintenance and operation of facilities we
no longer need to direct patient care. I am prepared to make the
difficult choices necessary to ensure accessible care to more veterans
in the most convenient and appropriate settings. We will complete CARES
studies of our remaining health care networks within two years. Any
savings that result from CARES will be put back into the community to
provide higher quality care and more services to veterans. Changes will
affect only the way VA delivers care--health care services will not be
reduced.
major and minor construction programs
For all capital programs (construction and grants) this is the
largest request since 1996. Specifically for major construction, new
budget authority of $194 million is requested. We are requesting funds
for four seismic projects in exceptionally high-risk areas: two in Palo
Alto, one in San Francisco, and one in West Los Angeles, CA. These
projects involve primary care buildings and a consolidated research
facility--all of which will be part of any service delivery option
resulting from the CARES process. Seismic improvements will ensure
veterans and their families, and VA staff, will continue to be cared
for, and work in a safe environment. The 2003 Major request also
addresses critical National Cemetery needs. Resources are included for
new cemeteries in Pittsburgh, PA and Southern Florida and a columbaria
and cemetery improvements project at the Willamette National Cemetery,
OR. Design funds are provided in the amount of $3.4 million for the
design of new cemeteries in Detroit, MI and Sacramento, CA. We are also
requesting funds to remove hazardous waste and asbestos from
Department-owned buildings, perform an emergency response security
study, reimburse the judgment fund, and support other construction-
related activities.
To date, we have received $80 million in Major Construction funding
to support the design and construction of projects that result from
CARES studies. Our Major request for 2003 includes $5 million to
continue efforts to realign our facilities.
New budget authority in the amount of $211 million is requested for
the Minor Construction program. Particular emphasis will be placed on
outpatient improvements, patient environment, and infrastructure
improvements. A total of $35 million is earmarked for CARES-related
design and construction needs. These funds have been proposed to allow
VA to immediately implement CARES options that can be accomplished
through the minor construction program (i.e., capital projects costing
more than $500 thousand and a total project cost less than $4 million).
In addition, $20 million is dedicated to a newly created category to
fund minor seismic projects, which will allow VA to further address its
seismic corrections needs.
veterans' benefits
For the administration of veterans' benefits, we are requesting
$1.2 billion and an additional 125 employees over the 2002 level. The
President has promised to improve the timeliness and quality of claims
processing. Last year, I established a claims processing task force to
recommend changes that would improve the time it takes to process
claims. The results of that task force, as well as implementation
plans, have been presented to me and we have already begun to execute
many of the recommendations.
I have set a goal of reaching 100 days to process compensation and
pension claims by the summer of 2003. While the annual average number
of days for these claims is projected to be 165 for 2003, we expect to
achieve the 100-day goal by the last quarter of the year. Four months
ago, we began a major effort to resolve 81,000 of the oldest
Compensation and Pension claims. A key element of this effort involves
a ``Tiger Team'' at the Cleveland Regional Office that will tackle many
of these claims over an 18-month period. The team became fully
operational in November 2001. Additionally, consolidation of pension
benefit maintenance at three sites will allow VBA to free up employees
to focus on rating compensation claims.
At the same time we are reducing the time it takes to process
claims, we continue to improve the quality of claims processing. During
2003, the national accuracy rate for compensation and pension claims is
projected to grow to 88 percent--a significant improvement from the 59
percent rate evidenced in 2000. This budget contains $3.5 million to
support 64 additional employees dedicated to the Systematic Individual
Performance Assessment (SIPA) initiative. This is an important
contribution to enhance internal control mechanisms and bring
accountability to the accuracy of claims processing.
This budget provides additional staff and resources to continue the
development of information technology tools to support improved claims
processing. Over the last several years, VBA has developed and
implemented major initiatives, established cooperative ventures with
other agencies, and used technology and training to address accuracy
and timeliness. This budget continues to focus on initiatives in these
high payoff areas. For example, this budget requests $6 million in
support of the Virtual VA initiative. This effort, when complete, will
replace the current intensive paper-based claims folder with electronic
images and data that can be accessed and transferred through a web-
based application.
Our budget also addresses the mandate to ensure that Montgomery GI
Bill (MGIB) education benefits provide meaningful transition assistance
and aid in the recruitment and retention of our Armed Forces. Recent
legislation has improved these benefits and our priority is to deliver
them as efficiently as possible. I am pleased to report that the
Imaging Management System (TIMS) is now functioning in all four
Regional Processing Offices. The electronic folders that result from
this effort have expanded access points, improved data access, and
enhanced customer satisfaction. This budget requests $6.2 million to
develop and install the Education Expert System (TEES). Among other
benefits, this expert system will enable us to automate a greater
portion of the education claims process and expand enrollment
certification. In 2003, we will continue to improve the accuracy and
timeliness of education claims and improve blocked call rates.
Madam Chair, I would like to take this opportunity to mention one
of VA's great success stories--the administration of more than 4
million insurance policies in force. The American Customer Satisfaction
Index (ASCI) and the University of Michigan conducted a study of the
insurance death claims process and the satisfaction of beneficiaries
who received awards. This study gave the VA's insurance program a score
of 90 on a scale of 100. This is one of the highest scores ever
recorded for either government or private industry. This budget
provides funding to continue the Insurance Center's history of
excellence. Our request includes a paperless processing initiative,
which improves timeliness and quality of service while reducing the
cost to policyholders.
new veterans employment grants program
Veterans represent a unique and invaluable human resource for
American society and the economy. Service personnel leave the military
knowing they have made a vital contribution to their country. Veterans
want to continue making meaningful contributions as they return to
civilian life. However, in 21 States, fewer than 10 percent of veterans
between the ages of 22 and 44 were placed in employment after seeking
job search assistance from State service providers; during 2001, there
was an average of 519,000 unemployed veterans, and in the same time
period, 32 percent of unemployed veterans experienced 15 or more
consecutive weeks of unemployment.
America's labor exchange market has evolved in the time since the
foundation for current programs was laid. This budget proposes
legislation that will allow VA to create a new competitive grant
program to help veterans obtain employment. VA is working with the
Department of Labor (DOL), veterans' service organizations and others
to propose a veterans' employment program tailored to the needs of 21st
century veterans seeking assistance in finding suitable employment. The
details of the legislative proposal to implement this initiative are
not yet final. If authorized by Congress, the new program will broaden
our ability to assist veterans with employment and training services.
Our first priority will be serving unemployed service-connected
disabled veterans and those recently separated from military service.
We will also help other veterans searching for employment. Our budget
request for discretionary programs includes $197 million for the grant
initiative.
We have the flexibility to design a program that will incorporate
elements currently contained in the DOL grant program--transition
assistance; disabled veterans' outreach; local veterans' employment
representatives; and homeless veterans reintegration. Veterans look to
the VA for education benefits, home loan assistance and, in some
instances, rehabilitation and employment, medical care and compensation
benefits in the transition years after leaving active duty. Later in
life, many veterans may return to the VA for health care and ultimately
burial benefits. Adding an enhanced employment opportunity program to
the spectrum of care and services provided by VA would provide veterans
with a single access point to a full continuum of benefits and services
throughout their lifetime.
I know there are many questions left unanswered regarding this new
program. We are in the process of finalizing our legislative proposal
within the Administration and will submit it to you in the near future.
At that time, we will be prepared to address your questions in greater
detail.
national cemetery administration
The budget proposal includes $138 million to operate the National
Cemetery Administration. The request preserves our commitment to
maintain VA's cemeteries as National shrines, dedicated to preserving
our Nation's history, nurturing patriotism, and honoring the service
and sacrifice of our veterans. It provides a total of $10 million to
continue renovation of gravesites, as well as clean, raise, and realign
headstones and markers.
As noted earlier in my testimony, our budget request for Major
Construction includes funds for the development of two new national
cemeteries in the vicinity of Pittsburgh, PA and Miami, FL. Operating
funds also are requested to prepare for interment operations in 2004 at
these two locations and to begin interment operations at new cemeteries
at Fort Sill, OK, and near Atlanta, GA.
management improvements
Madam Chair, last year I stated my commitment to reform VA's use of
information technology. I am pleased to report that we have made
substantial progress in this area and will continue our reform efforts.
As VA moves forward with implementation of the One-VA Enterprise
Architecture developed in 2001, we will manage information technology
resources to account for all expenditures and ensure our scarce
resources are spent in compliance with this Enterprise Architecture. A
strong program is under development for Cyber Security. We are re-
engineering our IT workforce to ensure we have the proper skill sets to
support our program needs. I have recently approved a comprehensive
change in how we manage our IT projects to ensure they deliver high
quality products, meet performance requirements, and are delivered on
time and within budget.
VA is bringing enterprise-wide discipline and integration of our
telecommunications capability to increase security, performance, and
value. Command and control capabilities are being established to
support the Department in times of emergency. Electronic government
will be expanded and internet capabilities will be enhanced to improve
the delivery of services and the sharing of knowledge for the benefit
of the veteran. All of these efforts will focus on meeting the
objectives of the President's Management Agenda.
We are pursuing other important initiatives that will promote
better management practices throughout the Department. For example, I
recently convened the VA Procurement Reform Task Force to examine our
acquisition process and develop recommendations for improvement. The
Task Force has presented 60 recommendations to accomplish several major
goals that will enhance our ability to: 1) leverage purchasing power;
2) obtain comprehensive VA procurement information; 3) improve VA
procurement organizational effectiveness; and 4) ensure a sufficient
and talented VA acquisition workforce. Mandatory use of the Federal
Supply Schedule, reorganization and elevation of the VHA logistics
function to more quickly standardize medical and surgical supplies, and
establishment of a National Item File are some of the more prominent
recommendations being made in order to maximize savings in our medical
care procurements. We are well on our way to achieving savings and
increased effectiveness in VA's acquisition arena.
Finally, our 2003 request includes funds for a new Office of
Operations, Security and Preparedness (OS&P). Since the tragic events
of September 11, 2001, we have made substantial investments to address
the Department's security and preparedness, and to meet our primary and
critical emergency response missions. VA is the only pre-deployed
nationwide health care system. We must be prepared for any disaster
response. OS&P will play an important role in the Federal government's
continuity of operations in the event of an emergency situation. The
new office is formed with the specific intent of improving VA's ability
to respond to any contingency with minimal disruption to services for
veterans and their families. This office will coordinate all VA
involvement with the Office of Homeland Security, FEMA, the Department
of Health and Human Services and DOD.
Madam Chair, that concludes my formal remarks. Although many
challenges lie ahead, I am proud of the accomplishments that have taken
place over the past year. Our budget request for 2003 is a good budget
for veterans and positions us for continued success. I thank you and
the members of this Committee for your dedication to our Nation's
veterans. I look forward to working with you. My staff and I would be
pleased to answer any questions.
SENATOR MIKULSKI'S COMMENTS
Senator Mikulski. Well, thank you very much, Mr. Secretary,
for that testimony and really the very serious both policy and
appropriations issues that are raised in the course of
appropriations testimony to policy and the changing nature of
the enrollment in the veterans health care system.
In my enthusiasm for wishing Senator Bond a happy birthday,
we did not go to opening statements. But also, I am just going
to ask unanimous consent that all Senators' opening statements
go into the record. And then we can move very promptly to
questions, knowing that other subcommittee hearings are
pressing other colleagues.
I would also like to ask unanimous consent that the letter
from the veterans organizations that--every year they do an
analysis of the Veterans Administration budget request. They do
an outstanding job and, I believe, a service to the Nation.
Their covering letter to the committee and appropriate people,
I would like to have those introduced into the record just as
their views. And then we will be meeting with them separately
on another occasion.
[The information follows:]
Letter From The Independent Budget
January 7, 2002.
The Honorable George W. Bush,
President of the United States, The White House, Washington, DC.
Dear Mr. President: On behalf of the co-authors of The Independent
Budget, AMVETS, Disabled American Veterans, Paralyzed Veterans of
America, and the Veterans of Foreign Wars of the United States, we are
writing to strongly urge your Administration to fully fund veterans'
medical care spending to $24.5 billion in fiscal year 2003.
The brave men and women called to service after the tragic events
of September 11, to defend our interests here and abroad, will be
tomorrow's veterans. We implore you to ensure that these service
members and those who have served before them in defense of our nation
will have the health care and benefits they have earned and deserve
from the Department of Veterans Affairs (VA).
The fiscal year 2002 VA medical care budget falls $1.5 billion
short of what is recommended by The Independent Budget. We are
extremely disappointed that the Administration and Congress have gone
forward with a VA appropriation that will not even fund the pending
mandated wage increase for VA's employees. We are especially concerned
about reports of VA facilities having significant waiting lists for
initial services once a veteran is enrolled in the system, as well as
closed enrollment at some hospitals. Most disturbing are reports of
severely disabled veterans having to wait for health care services and
specialized services such as home health care.
We understand that VISN directors were recently informed health
care allocations for fiscal year 2002 include a two percent
``efficiency'' cut. One medical center director reported his VISN must
slice $80 million from its budget to help make up for the deficit in
the budget. He added that the VISN was required to submit its plan to
reduce spending to the VA by December 28, 2001. It is outrageous that
hospital directors, already struggling to meet demand, are now being
forced to make further cuts. New mandates coupled with an insufficient
budget, will undoubtedly result in rationed health care and closed
enrollment. VISN directors will have no choice but to close beds,
consolidate services, and reduce the number of full-time employees.
This two percent cut could equate to a loss of 13,000 full-time
employees. This pressure on the system will especially hurt sick and
service-connected disabled veterans and affect their access to timely
health care.
We appreciate the Administration's decision to provide additional
funding to allow the Department to continue to enroll all veterans in
its health care system for next year. Unfortunately, the fiscal year
2002 budget shortfall and continued open enrollment have stretched the
Veterans Health Administration to its limits, making it extremely
difficult for VA to provide timely, quality health care services
veterans deserve. Current spending is a least $400 million below needs
according to Secretary Principi. We understand the deficit is actually
closer to $750 million if you factor in inflation and maintain workload
at current levels. At the very least, in order to continue enrollment
of all veterans, Congress and the Administration must find the
additional funds necessary to address this shortfall.
Without additional funding, VA is unable to meet veterans' health
care needs and provide the high quality care it is capable of
delivering. The Veterans Health Administration (VHA) is a national
treasure, responsible for training most of the nation's medical care
workforce. It is also responsible for great advances in medical science
due to VA research. These advances in medical science have benefited
all Americans, not just veterans. Finally, VHA is the most cost-
effective application of Federal health care dollars. Research shows
VHA provides care for at least 25 percent less than comparable Medicare
services. Given the proper resources, VA can effectively function as a
backup to the Department of Defense during a time of conflict or to the
Federal Emergency Management Agency during a national emergency.
Therefore, it is an excellent investment, and it makes good fiscal
sense to keep this system functioning well, especially now while our
nation is at war. Our treasured way of life and freedom is a result of
the sacrifices and commitment made by the men and women serving in our
armed forces.
The Administration can no longer ignore the serious financial
problems VA is now facing and its negative impact on sick and disabled
veterans. Mr. President, the Administration must increase VA medical
care spending to $24.5 billion in fiscal year 2003 to ensure a secure
and stable future for those who have served our nation through military
service.
We urge you to continue to support our nation's veterans by
providing VA with the funding needed to maintain a viable health care
system now and in the future.
Sincerely,
Robert Jones,
Executive Director.
Robert E. Wallace,
Executive Director, AMVETS Veterans of Foreign Wars.
Delatorro L. McNeal,
Executive Director.
David W. Gorman,
Executive Director, Paralyzed Veterans of America Disabled American
Veterans.
SENATOR MIKULSKI'S GOALS FOR THE HEARING
Senator Mikulski. Mr. Secretary, my goals for this hearing
are two-fold: one, to ensure that in fiscal 2003 promises made
are promises kept; and that, at the same time, to be good
stewards of the taxpayers' dollars. I am concerned about
several major issues. But the two most dominant are those where
we know that the VA told us that they had a $400 million
shortfall in 2002 after the subcommittee had provided $350
million over the President's request, and actually $1 billion
more. I--and then that somehow or another Congress is at fault.
I am going to come back to that.
Then there is the issue of the priority 7 veterans and the
deductible that you are proposing. I think you raise very
challenging issues. But we really do not want a moat. It is one
thing for there to be policy priorities. But we really do not
want a money moat around veterans health care. And these are
other areas that we will want to pursue. And, of course, I know
the issues around construction and the maintenance of
facilities are a significant issue, as well as the CARES.
$400 MILLION BUDGET SHORTFALL
But let me go right on to my first set of questions here.
Last year, when we provided more money, there was an
announcement by you that there was a $400 million shortfall and
that actions were going to be taken, which essentially would
have very much limited veterans' health care. And somehow or
another, it looked like it was our fault that we did not give
you enough money, when we gave you more money than the
President asked and more money than this subcommittee gave last
year.
Could you tell us why you had this shortfall? And I do
not--this is not to be brusque or a spring hazing. I have so
much respect for you. But was it that the VA could not count? I
mean, we had a hearing; we had a discussion. And then we got
this $400 million shortfall and a letter going out to the
veterans, really limiting their access. So could you tell us
why, number one; number two, how you made it up; and number
three, how we do not get into a jackpot this coming year after
we have done what we think is our job in trying to help you do
your job to protect our veterans?
Secretary Principi. Yes. I fully understand, Madam Chair.
Our workload projections for fiscal year 2002 were based upon
the workload growth that we had seen for the period 1998
through the year 2000. We had been seeing a 5 percent growth in
workload during that period of time and projected that the
growth would remain around 5 percent.
Well, it doubled. It doubled in 2001 and then again in
2002, 11 to 12 percent a year. I think that is attributable to
many factors. One, a little bit of a fluctuating economy, so
more and more veterans are coming to us for care. With open
enrollment, any veterans, irrespective of service-connected
disability or not, income, poor, or middle income, can come to
us any day of the year; and indeed they have.
Senator Mikulski. Well, Mr. Secretary, excuse me. Are you
saying that the shortfall, the $400 million shortfall, that you
announced, I believe, last summer--am I--when did you make that
announcement?
Secretary Principi. In the fall.
Senator Mikulski. Excuse me. In the fall. Was that due to
the fact of the increased enrollment from priority 7? Or was it
just that, taken over in the transition, there were so many
loose ends? And I am going to acknowledge, you overtook a
situation that had not been well-managed for a significant
amount of time. So I am going to acknowledge that when you
walked in, you had your hands full. But was it because of more
people or because the estimates were not proper?
Secretary Principi. No. I think the estimates were not
proper for the most part. There may have been some other
smaller issues. At that time, we also thought that the TRICARE
for Life Program enacted into law by Congress, was a great
program for military retirees and they would leave VA at age
65, but have some 600,000 military retirees enrolled in our
health care system.
When Congress passed TRICARE for Life, so that these
military retirees could now receive their care through the
TRICARE Program, we estimated that a significant number would
go to Tricare. We did not see that early on in the program.
Their pharmacy benefit is a little bit more generous than our
pharmacy benefit. It is only $9 for a 90-day supply. We thought
that the transition would be a lot faster.
I think the shortfall really had to do with inaccurate
projections of workload.
Senator Mikulski. Well, are we going to have--do you think
you have estimated right this time? See, I have my doubts. And
then again, let me tell you why I have my doubts. And I would
like you to come back.
Number one, there are certain assumptions in your request,
one of which is that you are going to be able to recover a
significant amount of money from third parties. The VA has
never been able to meet their own targets. That is number one.
$1,500 DEDUCTIBLE FOR PRIORITY 7 VETERANS
Number two, you are proposing a $1,500 deductible for
priority 7 veterans. That is an assumption which the Congress
has not agreed to and, as you know, is enormously
controversial. It gives many of us great pause about--in other
words, if you can afford--my own--if you can afford the $1,500,
would you be in another program? In other words, is this really
the cost of what you think their prescription drugs are?
But those two items there tell me that you really--that I
really question the--I really question your request, because I
believe the assumptions are faulty. Would you like to comment?
Because I really do not want a jackpot this fall for our
veterans or for this committee.
Secretary Principi. You are absolutely right, Madam Chair.
It is a dilemma. Without the deductible, we, in my view, are
over $1 billion short, $1.1 billion. That is why the deductible
was proposed. We have a 7 percent increase of $1.5 billion
requested which, relative to other Federal programs, is a good
increase. But without the deductible, we cannot get there from
here.
MCCF, medical care cost recovery. On the one hand I am
pleased to see a 13-percent improvement in our collections. We
are 13 percent ahead of our projections. But we have a long way
to go.
MEDICAL CARE FUNDING NEEDS
Senator Mikulski. So what do you think you are really going
to need? And then I am going to defer to Senator Bond.
Secretary Principi. Madam Chair, it depends on whether we
work out some cost-sharing arrangement for the priority 7s.
Congress directed that I make an enrollment decision every year
on who we can afford to care for. Without some form of
deductible or some form of cost-sharing, I would probably make
the decision to limit enrollment for priority 7s, rather than
reduce the quality of care and the timeliness, which is getting
worse.
So my choices are very narrow. Limit enrollment, as the
Congress asks the VA Secretary to decide annually, because this
is a discretionary program, or work with Congress to see if
there is a cost-sharing arrangement that can be worked out for
the priority 7s.
Senator Mikulski. Or ask for more money in the
appropriations.
Secretary Principi. Yes, more money in the program.
Senator Mikulski. Well my time has expired. I know other
members would want to pursue this.
Senator Bond?
OPENING REMARKS BY SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you, Madam Chair. And I want to thank
you for the birthday gift. I would have to say that the
greatest gift I have throughout the year is the fact that we
have such a good working relationship, whether it is ranking
member and chair or chair and ranking member. I have my
preferences. We are not going to get into that today.
Senator Mikulski. We do not get a veterans preference here.
Senator Bond. I would say to my colleagues that my high
regard for the Senator from Maryland is well known. I am going
to be roasted by a charity in Kansas City this spring. And they
all wanted Senator Mikulski to come out, because they have
heard so much about her and figured that she would probably do
the most effective job on me that anybody could do.
But I do want to turn to our leader on the Republican side,
who has to go to another hearing. So it would be my pleasure to
yield to Senator Stevens for his questions.
Senator Stevens. Well, Madam Chair, if you go, I will go
and turn the spit. All right?
Senator Mikulski. Okay.
Senator Bond. Oh, that is dangerous.
ALASKAN VETERAN ISSUES
Senator Stevens. And I am grateful to both of you for
allowing me to participate quickly. We have a defense hearing
this morning, and I hate to interrupt a birthday party. You all
do know it is Senator Bond's birthday, right?
Senator Bond. Oh, yes. That is what----
Senator Stevens. All right. Let me say that I am grateful
to you for a conversation we had the other day about the
homeless problems in Anchorage. And I do hope that we can find
some way to work on that outreach center. I do not know if you
all know but we have the largest number of veterans per capita
in the United States. And it is becoming increasingly difficult
to deal with that high portion of that population under some of
the limitations we have.
For instance, that 30-year rule, it applies to those who
have been involved in the rate reduction program, the bond
program we have. As I understand it, there is a provision that
cuts off veterans who served in Vietnam and the Persian Gulf
and other conflicts. But those lapse in 2007. Those people
would no longer be eligible unless they have been out of the
service for more than 30 years. I do not understand that 30-
year rule. I would urge you to take a look at that.
And I would also ask if you would help us on another
problem. I am really not asking questions. I would just make a
statement, if I can. We have States, 5 States, that are
eligible for a program on housing. As I understand it, it is--
we have a cap on these States. My State is one that has, as I
indicated, so high a percentage of veterans, it is hard for us
to work under that cap.
Are you familiar with that? We are allowed to--we are told
that we are down to a level of--let me be sure. The current
allocation for Alaska is $303 million limit under the AHFC
program. That is the Alaska Housing Finance Corporation dealing
with the VA bond cap. I want to talk to you about whether or
not we could find some way to either put an escalator for
States that have a high percentage of veterans in their
population. Either that or lift the cap. It has been in place
for a long time and it is not relevant to our program.
We are prepared, through the Alaska Housing Finance
Corporation, to assist veterans. But we cannot do it unless we
can issue bonds for veterans housing under the Federal
authorization. I would urge you to take a look at that.
Secretary Principi. I will do that, sir.
[The information follows:]
Alaska Housing Finance Corporation
We are aware that the basic criteria for Alaska Housing Finance
Corporation (AHFC) Veterans Mortgage Program (VMP) are that the veteran
must have entered the service prior to 1977 and cannot have been
discharged for more than 30 years. AHFC requires that when veterans
apply to them for a loan, they submit a VA issued Certificate of
Eligibility along with their DD214 so that it can be determined when
they went into the military and what date they were discharged.
However, this program is administered by AHFC, not VA. Therefore, we
have no authority over the provisions of the program.
maximum federal bond rate
VA has no knowledge of or authority with respect to a Federal cap
that may exist on bond issues.
Senator Stevens. Lastly, when I was in Juneau, I was made
aware of an issue there. The Juneau VA replaced a long-serving
staff member there. And the replacement staffer has 25 years
with the VA but is not authorized to approve medical treatment.
It is now my understanding that--that a problem is near
solution, but it is on your desk. Is that right?
Secretary Principi. I have not seen it.
Senator Stevens. Are you familiar with that?
Secretary Principi. I have not seen that issue, but I will
look for it as soon as I return.
Senator Stevens. Well, I am sure you know that for someone
who is in Southeastern Alaska to have to go either to Anchorage
or Seattle for authorization, when there is a staffer that has
25 years experience in VA but is not authorized to approve
medical treatment, is a difficult situation.
Secretary Principi. I will find out and I will report to
your office.
Medical Services in Alaska
The Alaska VA Healthcare System and Regional Office (AVHSRO)
operates a one employee VA office within the federal building in
Juneau, Alaska. A Contact Representative GS-11 employee staffs this
office. Her duties include general health care and benefits information
and assistance to veterans in southeast Alaska. One major customer
service area for this position is support to the Fee Basis
authorization program. Juneau, Alaska is 550 air miles from Anchorage
and is not accessible by ground transportation. Juneau is the capital
of Alaska and VA has a long history of providing a VA office there.
The individual who currently is staffing the VA office in Juneau,
Alaska reported for duty there December 4, 2001. The employee was
previously on staff at our Anchorage facility working within the
Veterans Benefits Administration (VBA) Regional Office component of our
operation.
The AVHRSO is currently addressing the training and technical
support needs of our new VA representative. During the week of February
11-15, 2002, the employee returned to Anchorage for training on the
medical care authorization process. During this visit we also had a
lengthy discussion of the computer problems she had been experiencing.
As a result of this training visit to Anchorage it was determined
that a visit by our Technology Management Service (TMS) staff was
necessary to fix her computer and printer problems. These are necessary
fixes in order for her to provide the level of service expected by our
Juneau area veterans. The TMS staff traveled to Juneau during the week
of February 25, 2002 to March 1, 2002. Computer related access issues
were corrected during this visit to allow our employee to process
medical authorizations.
Throughout the training cycle and during periods of computer
outage, staff in Anchorage is providing service regarding the
authorization of medical claims. In fact our Coordinated Care
Department has organized along regional boundaries and one team is
dedicated to Southeast Alaska. Statewide veterans are able to reach VA
by a toll free number and receive service via the Southeast Alaska
Regional Team. Our Juneau representative will soon be an additional
source of assistance for the Juneau area veterans.
It is important to recognize that the employee on staff now in
Juneau, Alaska has many years of VA experience; she spent the past ten
years working in the VBA Regional Office. The authorization of a Fee
Basis Medical Claim often requires a clinical decision. It was never
intended that this employee would be able to independently authorize
all the medical care that Juneau area veterans will need. However, when
the decision can be made based upon reasonable judgment and the care
will obviously be approved, the Juneau office is delegated authority to
issue such an authorization. This is a local operational issue
regarding support and training for a new employee. It does not
represent a new process in Alaska and does not require action in VA
headquarters. During the training and development process the amount of
direct service provided in Juneau has been more limited than under her
predecessor. This should improve quickly as the Contact Representative
gains experience and familiarity with the authorization process.
Senator Stevens. Thank you. Thank you for your courtesy.
Senator Mikulski. Senator Johnson?
MEDICAL CARE SUPPLEMENTAL
Senator Johnson. Thank you, Madam Chairwoman. And thank
you, Secretary Principi and your staff, for joining us today. I
am also very appreciative of your willingness to spend some
time just the other day with me, talking through some of the
budget issues that veterans in South Dakota have raised with
me.
Very quickly, again, you announced a $400 million shortfall
for the current fiscal year last fall. Would you share with us,
very briefly, the prospects for a supplemental appropriation
and at what level you anticipate that supplemental might be
requested for?
Secretary Principi. Yes. I was prepared again to suspend
enrollment for new priority 7s, because I felt that the funding
was not adequate to maintain the quality that we desired. In
the eleventh hour, so to speak, I received a commitment for
supplemental funding of $142 million. And I believe that--
supplemental is being worked on. It should be coming up to the
Hill very, very shortly, possibly as part of the DOD
supplemental that is being prepared. We expect the request for
supplemental funding to be forthcoming very, very soon.
We have taken management actions to offset the balance of
the $400 million through efficiencies in centralized funding.
We have recently distributed $162 million to the field, so the
actions we are taking in conjunction with the $142 million
supplemental will allow us to get through 2002 without
eliminating enrollment to anyone who comes to us.
Senator Johnson. If the shortfall is $400 million and the
supplemental is $142 million, that is a significant difference.
So what you will not be able to do that you would have done had
you had the full $400 million?
Secretary Principi. We re-estimated the impact of the new
CHAMPVA for Life Program, a health care program for spouses of
deceased service-connected men and women. We have re-estimated
that program, and there is a $94 million saving there.
There are certain information technology procurements that
we felt we could defer to out-years. There are a number of
centrally controlled programs, all of which have yielded
resources that we have been able to distribute to the field to
meet more high priority items.
There is a combination of management actions, some of which
do result in deferrals of information technology programs, but
that yield resources we can apply to needed areas.
HOT SPRINGS, MSD SURGICAL UNIT
Senator Johnson. With a budget shortfall within VISN-23, it
is beginning to have a negative impact on patient care. For
example, there are some discussions now regarding the surgical
unit at the Hot Springs VA Medical Center in South Dakota. The
Hot Springs surgical unit has had difficulty recruiting and
retaining professional staff. And one of the proposals under
consideration is to close that surgical unit to all but minor
outpatient procedures and move the remaining surgeries to Fort
Mead Medical Center.
Can you update me at all on the current situation with the
Hot Springs surgical unit? And are there any solutions to how
we can keep the surgical unit fully operational?
Dr. Murphy. Sir, we just received that proposal from the
network in Headquarters. Our routine is that--that proposal
would be reviewed by the surgical service. And we will look at
not only their proposal but alternatives to maintain the
services to veterans. And we will be happy to provide you
information once we have had a chance to fully look at that
proposal and all the alternatives.
[The information follows:]
Hot Springs Surgical Unit
The surgical unit at Hot Springs Medical Center is currently short
two nurses; one operating room nurse and one nurse manager. The VA
Black Hills Health Care System has developed a very aggressive and
creative plan to fill these positions. In addition to the typical
markets where the VA Medical Center in Hot Springs normally recruits
nurses, the facility has expanded its search for nurses to wide ranging
markets such as Sioux Falls, South Dakota; Omaha, Nebraska; Denver,
Colorado; and Minneapolis, Minnesota. In addition, the VA Black Hills
HCS is offering a $5,000 sign-on bonus for the nurse manager and a
$2,000 sign-on bonus for the Operating Room nurses. VA Employees are
being offered a $500 ``finders fee'' if they assist in the successful
recruitment of operating room personnel at the VA Hot Springs medical
facility. The community of Hot Springs has also been helpful in the
search for VA staff. The Job Service office is engaged in local (Rapid
City area) recruitment at no cost to VA. Every effort is being made to
assure uninterrupted surgical service at the Hot Springs VA Medical
Center. VA officials are optimistic that the positions will be
successfully recruited.
$1,500 DEDUCTIBLE PROPOSAL
Senator Johnson. Well, thank you. And I appreciate any
effort you can do to retain full service wherever possible at
our VA's.
As we discuss priority 7s--and I share the concern
expressed by my colleagues here this morning about the need for
full services to all veterans. But one of the concerns I have,
particularly one that we have in rural States, where assets,
such as land, are included in the calculation of income, we
have a lot of farmers and ranchers in my State who own land
that, on paper, is worth a fair amount, but whose annual actual
income, whose revenue flow, is far, far below the VA threshold.
The administration's proposal to impose a $1,500 co-pay on
category seven vets is going to be particularly onerous on
these people who simply do not have a lot of cash income,
despite the fact that they do have some land. Do you support
changing the law regarding eligibility standards to address
that problem, or do you have any ideas about how to address the
people who fall under this circumstance?
Secretary Principi. I know it is an issue in rural America,
and I think it is an issue in urban America, too, where
veterans own small businesses, and they have a lot of their
assets tied up in a little shop or dry cleaners or whatever it
might be. Those assets count toward their overall assets. It is
a real problem.
We could take a look at the income thresholds. Maybe they
need to be revised; different thresholds at which certain co-
payments would kick in or not. We could look at the percentage
of reasonable charges as a way of keeping the co-payments and
the deductible down.
Again, if our costs, for example, for an outpatient visit
are $100, we would go to the insurance company first for that
$100 to be applied toward the deductible. If the veteran does
not have insurance, then the deductible for which the veteran
is responsible would be a percentage of that. We started at 45
percent. We are looking at 20 percent. So it could be $20 or
$45, which would be applied to the deductible.
And many, many veterans would not come anywhere near the
$1,500 limit, which would not be applied to the pharmacy
benefit. Prescriptions would still be $7 each. And there would
not be any further co-payment that would have to be paid.
If veterans could not afford it, we would never turn them
away. We would have a repayment plan. So we tried to take as
many steps as possible, recognizing that people with incomes of
$25,000 to $30,000, and maybe assets tied up in the ranch or
the farm, do not have disposable income. Whether it be $10 a
month, or whatever the veteran could afford, we would work out
some kind of payment plan. The fact of the matter is that we
need to address this growth.
Senator Johnson. In the end, you would need better funding.
But in the meantime----
Secretary Principi. Oh, yes.
Senator Johnson [continuing]. As long as you have these
priority issues that you have to grapple with, I hope that you
will be sensitive----
Secretary Principi. Sure.
Senator Johnson [continuing]. To the actual resources
available to many of our veterans.
Thank you, Mr. Secretary.
Senator Mikulski. Senator Bond.
Senator Bond. Thank you very much, Madam Chair. I would
like to submit, for the record, the questions that Senator
Domenici left for the Secretary.
Senator Mikulski. Without objection.
OTHER FUNDING OPTIONS FOR MEDICAL CARE
Senator Bond. Mr. Secretary, we congratulate you on the
steps you have taken. I know that you are making real progress
trying to tackle the claims benefit processing problem.
You are addressing problems of homeless veterans. I think
certainly veterans in my State are excited about your
leadership. I congratulate you on this. There are problems,
obviously, with funding. You have continually, the Department
of Veterans Affairs continually, from year to year, has
received the greatest increase in any budget from our
subcommittee. And we are going to continue to do so, but we
need to look at some of the other alternatives.
VA, I guess, has sought the authority to bill private
insurers and Medicare. And the tax-writing committees do not
want to approve that. A lot of people have focused on the GAO
reports that concluded, when compared to the private collection
efforts, private sector collection efforts, the VA is not
collecting enough money. We need to find out if there are ways
that you can improve the collections.
But beyond that, I look at the numbers on priority seven
participants. And it is obvious that your suggestion of a
$1,500 deductible was not well received, I think, might be a
happy euphemism for the response it got. But if you look down
the road, if the cost of medical coverage for priority 7s
continues to grow from an increase of $1.1 billion this year to
$5 billion on top of all the other needs, we are going to be
very fortunate in this subcommittee if we can get anything like
the allocations we would need to keep up with that.
So I would ask what steps you are taking, first with
respect to priority 7s. Are you meeting with the veterans'
service organizations, the authorizers and others? Are there
options that you can pursue that may not be as Draconian but
might assist?
Secretary Principi. Yes, I have met with the leaders of all
of the service organizations. We have discussed this issue. I
have explained the rationale. I have opened up the door to any
recommendations they might have on how this deductible can be
modified to address our needs, at the same time making sure
that veterans can continue to access the system. I have engaged
in high-level discussions with Secretary Tommy Thompson,
talking about the issue of coordination of benefits, and
Medicare subvention. We are working on that. I do not see that
happening for the reasons you indicated. The tax-writing
committees have been very, very reluctant to make any changes
there.
So yes. We will meet day or night, whenever, to sit down
and address this important policy issue, because it is getting
to crisis proportions. It really is. And we are failing
veterans if we cannot provide care to them in a timely manner.
I think some good decisions were made in the mid-1990's, but
all were premised on additional funding outside of the
appropriation process. Those decisions were premised on
Medicare subvention and on increased MCCF collections.
And guess what? It never happened. And we continue with
open enrollment. We continued opening clinics. We continued
giving people expectations. And we did not do too much about
it. And now I find myself in the situation of having to tell
veterans, ``I am sorry, there is no more room.''
As I was telling Madam Chair, when a 100-percent service-
connected veteran combatant takes a bullet to the spine and
goes to Florida, he is treated just like any other veteran who
is non-service-connected or who may be wealthy; but by law they
are both equal. To me, that is wrong. And we need to do
something about it. But that is the way the law is structured
by the authorizing committees.
It seems to me that we have to address this in such a way
that gets people to understand and attempts to meet their
expectations, but to put some management processes in place to
take a look at this growth and manage it appropriately, like
any private sector health care company would. They have the
same challenges we do.
With our MCCF, we are making progress, but I am to the
point of being totally frustrated. I am looking to bring in
loaned executives from the private sector to tell me how we
should do our billing and collection. We struggle with it. We
do it in 163 hospitals around the country and at some networks.
It seems to me there is a better way to do our collections. And
we just continue to do the same things and we just do not get
there. I do not want to be critical, but we just do not get
there.
I am at the point now where I really need to bring in some
experts from the private sector; not consultants, per se, but
experts in business, to come here and tell me how to fix this
problem once and for all. Then go from there.
Senator Bond. Well, Mr. Secretary, my time has run out. But
I commend you for your willingness to address the much broader
problem. We are going to do everything we can in this
committee. We have always done as much as we can. The forces
from the outside who keep thinking there are unlimited funds
are absolutely, you know, in the wrong ball park; they are on a
different planet.
We have to focus on the severely wounded, service-wounded
veteran. We have to focus on those who are poorest. And I am
concerned that, if we do not get a handle on some of the lower
priority ones, we are going to hear stories today about lack of
care or delayed care and inadequate care for veterans who
really are needy, whom we are not treating as well as we should
because the resources are too short. And this is a problem that
the authorizing committees, as well as some of the other
committees on the Hill, need to be aware of. They think they
can offer more benefits to everybody without providing the
resources.
And we will work with you. And I commend you for carrying
that message.
Senator Mikulski. That was good, very good.
Senator Kohl?
KENOSHA, WI, CLINIC
Senator Kohl. I thank you, Madam Chairman.
Mr. Secretary, the significant increase in the medical care
spending proposed in your budget, I believe, is well justified.
I must also say, however, that in addition to what you have
heard from the other Senators, I have heard from veterans who
are concerned over your proposed $1,500 deductible initiation
for priority seven veterans. In seeking new funding sources, I
know you would agree that the VA must be careful not to erect
new barriers for veterans who are seeking VA care.
Mr. Secretary, as you may know, the State of Wisconsin's VA
facilities are part of Veterans Integrated Service Network 12,
known as VISN-12, which is the first network to undergo the
VA's CARES for structuring process. The realignment package for
VISN-12 that you recently approved will include the
establishment of several new community-based outpatient clinics
in my State of Wisconsin. The timely construction of these
clinics will be critical in the effort to bring VA health care
closer to the rural areas, where many of Wisconsin's veterans
live.
Over the past year, the VA has had difficulty in finding
the money to construct a clinic authorized to be built in
Kenosha, Wisconsin. Can you walk me through the clinic funding
process and assure me that, with the budget that you are
proposing, the VA will have the funding to build these clinics
on schedule in my State of Wisconsin?
Secretary Principi. Yes. Dr. Murphy can talk about the
specifics, but with regard to Kenosha, that decision has been
made. That clinic will open; we made a commitment to open that
clinic. Some later decisions seemed to run counter to that, but
I felt that, in view of the commitment, we needed to move
forward. The network director has been so informed, and steps
are being taken to ensure that the funding will be there for
the clinic.
Dr. Murphy can talk about Green Bay and Wisconsin Rapids.
Senator Kohl. Yes.
Dr. Murphy. You are absolutely correct, sir, that there
were two community-based outpatient clinics that were proposed
by the contractor as part of the CARES process and that
Secretary Principi has approved options. We are moving forward
very aggressively to develop an implementation plan within the
network to get all of the changes that were approved in place
in the shortest time possible.
Some of the major changes that will be implemented will be,
you know, the closure of inpatient beds at Lakeside. We will
need to renovate the West Side facility in Chicago in order to
do that transfer. There will be significant savings in terms of
personnel and other management efficiency that will result from
that. And those resources will go back to delivery of health
care services for services within Network 12, including those
in Wisconsin.
So we expect to be able to implement those changes as
quickly as possible. The implementation plan should be
delivered to headquarters within the next several months. We
would be happy to brief you on that when it is available.
[The information follows:]
Clinic Funding Process
Funding for VA Community-Based Outpatient Clinics (CBOCs) comes out
of the budget allocated to the VISN. Each medical center within the
VISN is then provided with an annual operating budget to support the
full range of services and staff they provide. Clinics under their
jurisdiction must be funded out of their operating budgets. The
directive governing the establishment of CBOCs has a provision that
requires the VISN to have sufficient operating funds to open and manage
the clinic. The original business plan for the Kenosha clinic is being
updated to reflect workload projections based on utilization of
surrounding clinics and medical centers that was not included in the
original plan. The clinic is expected to open later this year. Based on
the outcome of the business plan and sizing model, we anticipate that
North Chicago VA Medical Center will have the funds necessary to
activate the Kenosha clinic later this year and anticipate future
budgets will support on-going operations. The other clinics in the
CARES Implementation Plan are to be funded with the saving by the
realignment of inpatient services from Lakeside to West Side and Hines.
In addition there would be operating funds generated by the Enhanced
Use Lease of the Lakeside property.
Senator Kohl. I thank you and I am encouraged by what you
said about Kenosha. I would like to hope I could also be
encouraged with what you said as it reflects Green Bay and
Wisconsin Rapids.
Dr. Murphy. Yes.
Senator Kohl. Thank you.
CLAIMS PROCESSING
Mr. Secretary, one of the major commitments made to
veterans by the President was the reform of the inefficient
claims processing system. Veterans in Wisconsin and across the
country continue to wait too long, I am sure you would agree,
to receive decisions on their claims for benefits earned. In
your statement, you have emphasized that it is your goal to
reduce the current claims processing time to 100 days for
compensation and pension claims by the summer of 2003.
Too often, I hear complaints from Wisconsin veterans that
new and reopened claims are often taking as much as a year to
process. While 100 days is worthy goal, can you outline what
you are doing to achieve this goal in such a short period of
time?
Secretary Principi. Senator, as you may know, shortly after
coming on board I convened a claims processing task force to
recommend practical hands-on solutions. And I was not
interested in recommendations that would deal with changes in
law to curtail benefits or abstract theories of veterans'
benefits. I just wanted practical hands-on solutions of things
we could do to reduce the backlog.
I am proud that that group, including leaders of the
veterans service organizations, gave me 34 very concrete
recommendations, like triaging when claims come in. A group of
people decide which ones can be decided immediately and which
ones need more claims development work, so that those that can
be decided immediately can be signed off, rather than sitting
on somebody's desk for 6 months before the file is even opened.
Other recommendations called for more specialization, more
accountability and performance standards.
I created a tiger team specifically to address the claims
of veterans over the age of 70 years old, whose claims had been
pending more than a year. Since the tiger team has been in
existence about 4 months in Cleveland, Ohio, with 9 additional
sites around the country, they have decided 13,000 of the most
complex claims that have been sitting on someone's desk for a
year or 2 to 3 years.
I think the totality of these steps, including a lot more
focus and discipline on what we have to do, has resulted in a
dramatic increase in the number of decisions to 62,000 each at
the past 2 months, compared to 29,000 per month a year ago. We
need to continue to do that. We also need to keep our eye on
quality to make sure we are not making a lot of mistakes in the
process of expediting these claims.
I really do think, that by staying the course, we are going
to get claims processing time down to 100 days, maybe less,
maybe a little bit more, but we are going to stay on that
track.
Senator Kohl. Well, I thank you. And I am much encouraged
by what you have said this morning.
Secretary Principi. Thank you, Senator.
Senator Kohl. Thank you so much.
Thank you, Madam Chair.
Senator Mikulski. Thank you.
Senator Shelby.
Senator Shelby. Thank you.
DISCRETIONARY FUNDING NEEDS
Mr. Secretary, we appreciate you coming here today. And I
think you feel the environment here is one to help you. We know
you have a lot of problems confronting you, mainly in
resources, funding. For example, I have had a couple to come to
my attention recently. In a meeting with members from the
disabled American veterans in my office here, two examples of
the problems that you have questioned surfaced. And I am sure
you have them all over the country.
One veteran from Birmingham had fallen and knocked one of
his teeth out. He was told it would be 4 months to receive a
new tooth. Another veteran from Athens, Alabama, made an
appointment for a routine eye exam. That exam is 6 months away.
I think a lot of it is inability to provide you the
resources you need. Do you agree?
Secretary Principi. Yes, sir, I do agree. Again, it is
infinite demand, finite resources. So yes, part of it is, the
dollars we have available. Part of it is how well we manage our
system. It is a complicated issue. I think, in the final
analysis, it is dollars that we request of you and that you
give us. I think the Congress has been extremely generous to
us, but the workload continues to grow.
And I think there are unfunded mandates, too. And again, I
am not trying to take a shot at the authorizing committees.
Senator Shelby. I think you are being honest.
Secretary Principi. I grew up on an authorizing committee
as a staffer. But as was said yesterday in the House, I think
it is my curse.
Senator Shelby. Welcome to the appropriations world.
Senator Mikulski. Very good.
Secretary Principi. I think, when the authorizers mandate
some programs with no increased funding specifically for those
programs, we have to take the resources for the new programs
from existing programs. And it makes it difficult, because
there is only so much of the pie to divvy up.
Senator Shelby. Absolutely.
Secretary Principi. It becomes a problem we have to deal
with.
Senator Shelby. Well, I guess sometimes the authorizers
want to be Santa Claus. And we certainly do not want to be the
Grinch. You know we want to help you and you understand that.
Some of us also grew up on some of the authorizing committees.
But at the end of the day, the resources have to come out of
this committee. And we know you have a tough job. I know our
leaders on the committee do, too. I believe all of us want to
help you solve this job, because we are committed to the
veterans.
But I think you point out a good example. I think maybe
they are relative commitments, you know, to the disabled, to
the people who are disabled and wounded in combat. I think we
owe them first; I do.
Secretary Principi. I agree. The service-connected disabled
followed by the poor.
Senator Shelby. Absolutely.
Secretary Principi. The system was designed for them. And
to a degree it has always historically been as long as I can
remember, that the higher income, non-military medical
condition veterans were always treated on a space available
basis. Again, I hope we can treat as many veterans as possible.
I do not think we can treat all 25 million. The system is not
built for that. We are up to almost 5 million now, 20 percent
of the total.
We have to concentrate and make sure that the service-
connected disabled and the poor have access to our system,
because they are the ones that usually do not have other places
to turn, either because they need the specialized programs of
the VA, such as spinal cord injury, blind rehabilitation,
mental health, and PTSD, or, of course, who are poor and who do
not have insurance.
AVERAGE AGE OF WARTIME VETERANS
Senator Shelby. Mr. Secretary, what is the average age of
the Second World War veteran today, roughly?
Secretary Principi. They are well into their 70's, I would
think mid- to late 1970's.
Senator Shelby. Towards the 1980's, are they not?
Secretary Principi. Probably. Maybe even 1980's. Clearly,
there are only 5 million remaining of the 16 million who
fought.
Senator Shelby. What is the average age of the Korean War
veteran? I know it is a little below, but not much, is it?
Secretary Principi. I think Korean has to be in the 65-to-
70 range, as well.
Senator Shelby. And how many would that be, roughly?
Secretary Principi. I will have to provide it for the
record.
Senator Shelby. You furnish it.
Secretary Principi. We have about eight to nine million
Vietnam veterans, five million World War II veterans. I think
Korea is in the neighborhood of four to five million.
Senator Shelby. What is the average age of the Vietnam
veteran?
Secretary Principi. The average age is probably 57/58 years
old.
Senator Shelby. You are using your measurement, right? That
is good.
Secretary Principi. I think I am 1970 vintage from Vietnam.
So yes, probably about in the mid- to late-50's.
Senator Shelby. Okay.
Madam Chairman, thank you.
Senator Mikulski. Thank you, Senator Shelby. And thank you
for your sentiments to the Secretary that, really, we are
troubled about what the VA is facing. And we can just see
today, you yourself seem so troubled. But you are not alone
here. And the veterans are not alone. And we really have to
solve these issues.
Senator Craig?
PREPARED STATEMENTS
Senator Craig. Thank you, Madam Chairman. Let me ask
unanimous consent that my opening statement be a part of the
record.
Senator Mikulski. That is without objection and we will
also include statements from Senator Bond and Senator Domenici.
[The statements follow:]
Prepared statement of Senator Larry E. Craig
Mr. Chairman, it is indeed a pleasure to welcome the VA Secretary
Tony Principi and members of his staff. I applaud you and your team in
your efforts to ensure our government honors our commitments to
Veterans while implementing the most beneficial and cost effective
programs. To do this, we must continually look for opportunities to
reform the VA health care system, while maintaining as our number one
priority, our combat veterans with disabilities and our veterans with
low incomes who often rely exclusively on the VA for their care.
The VA's Budget proposal totals $56.5 billion for Veterans'
benefits and services, $30.1 billion for entitlement programs and
includes $26.4 billion in discretionary spending, for medical care,
burial services, and the administration of Veterans' benefits. This is
an increase of almost $6 billion over last year's budget, and it
clearly demonstrates the President's commitment to Veterans' Health
Care.
I strongly support a VA which is committed to providing accessible,
high quality medical care and other Veterans benefits and services in a
timely and effective manner. However, we must expand and improve the
delivery of service and benefits so that all Veterans have equal access
to high quality medical care, particularly in under served rural areas
such as Idaho. I believe that a more localized care approach as opposed
to a regionalized approach is most appropriate for areas of the country
such as Idaho. Currently, the Veterans in Lewiston of my State have
challenges getting appointments at facilities in Washington,
specifically Walla Walla, and Spokane, as well as tremendous burdens
trying to get to these facilities. I believe this area is a prime
candidate for a Veterans Clinic. In the Southeast portion of my State I
have major concerns with the doctor shortage we are currently
experiencing in our Pocatello facility. It is of utmost importance that
the long list of Veterans waiting to receive various services,
especially medical care, are able to get it in a timely, courteous
manner with a minimal amount of necessary travel time. In recent years
there were tremendous staff reductions that resulted in reduced
services. The necessary steps must be taken to reverse this trend. I
invite the Secretary to come out to Idaho and discuss these issues with
me and the Veterans of my State sometime soon.
In closing, Mr. Chairman, there is no way to over emphasize the
honor and respect this nation owes the military men and women who
sacrificed so much to accomplish a strong national defense. I believe
that this proposed budget is a good beginning for ensuring our Veterans
will receive high-quality health care, that we keep our commitment to
maintain Veterans' cemeteries as national shrines, and we have the
resources to process Veteran Benefit claims in a more timely and
accurate manner. I look forward to working with Secretary Principi to
meet the many challenges that the VA will face in the coming years.
______
Prepared Statement of Christopher S. Bond
Thank you, Madam Chair. I also welcome back Secretary Tony Principi
to our subcommittee. I am pleased to have Secretary Principi here today
to discuss the fiscal year 2003 budget for the Department of Veterans
Affairs. Even though you have been in your position for a little over a
year, saying that a lot has changed over the past year would probably
be an understatement.
As the Secretary of VA, you face a number of daunting challenges
that have plagued the Department for several years. I applaud your
efforts to tackle the claims benefits processing problems and address
the problems of homeless veterans, to name a few.
However, my statement focuses on two other major challenges: (1)
addressing the escalating growth of the so-called Priority 7s and (2)
transforming VA's medical care infrastructure and services to better
meet the needs of veterans.
As you know, the most pressing budgetary problem facing the
Department and the Congress is the cost of maintaining an open
enrollment policy for the Priority 7 veterans without compromising the
quality of health care services for all veterans served by the VA
system. The fastest growing veteran group are those that have incomes
above $24,000 annually and have no service-connected disabilities.
These are defined as ``Priority 7'' veterans. VA projects that if no
change to current policy is enacted, the costs of providing medical
care services to this category of veterans will rise from $2 billion in
fiscal year 2002 to over $5 billion in fiscal year 2007--a 126 percent
increase! Currently one-third of VA's six million enrollees are
Priority 7s and if no change in policy is enacted, this percentage is
projected to increase to 42 percent by 2010.
We can all be proud that VA is successful in attracting so many
veterans to its services due to the recent improvements made in its
delivery system and its generous benefits packages. However, there are
significant costs for operating VA's medical care system, which must be
addressed or else the system may collapse and become a victim of its
own success. To address this issue, the Administration has proposed a
new deductible or cost-share arrangement where Priority 7 vets would be
charged at a rate of 45 percent of the reasonable charges, up to $1,500
annually. VA proposed this deductible to not only stem the rapid growth
in Priority 7s, but to insure that timely, high quality care can be
provided for VA's higher priority veterans--those that are low-income
and those with service-connected disabilities--without having to stop
enrolling Priority 7s.
Mr. Secretary, I am sympathetic to the Department's dilemma and you
have my commitment that I will work with you to protect the long-term
viability of VA's health care system. But I realize that you have
already heard from the veteran service organizations and the
authorizing committees that they will not support your proposal. And to
further box you in, they have demonstrated their objection to any
attempt to stop enrolling Priority 7s.
Where does that leave us? Clearly, at the appropriators' door step.
VA estimates that it will need an additional $1.1 billion for fiscal
year 2003 to maintain open enrollment for Priority 7s, but there is
more than just this one year cost as I stated earlier. If we do not
make a policy decision this year on Priority 7s, then we will be
looking at an additional $5 billion by fiscal year 2007. I believe that
it is too optimistic and risky to expect that the appropriators will
come up with $1.1 billion this year. The VA medical care account has
been and always will be the top funding priority for this subcommittee
but it cannot be at the expense of gutting other critical programs for
affordable housing and disaster relief.
We must work constructively with the VSOs and the authorizers to
come up with a fair, balanced approach to ensure that the VA health
care system continues to provide quality care for all of our veterans.
And, Mr. Secretary, we need your commitment to improve VA's efforts in
collecting funds due to VA from other health insurance programs. Your
budget request is projecting collections totaling $1.45 billion, but I
have heard that VA has more than $700 million in outstanding
receivables. VA can obviously do a better job.
The other daunting challenge for VA that also has major cost
implications is realigning the VA medical care infrastructure. I
congratulate you, Mr. Secretary, for your leadership in moving forward
the Capital Asset Realignment for Enhanced Services or ``CARES''
program in network 12. I think I know as well as anybody that it was a
difficult decision to implement CARES in that region but I cannot
emphasize enough that it was the right thing to do.
Many oppose CARES, including some members on Capitol Hill, but I am
convinced that CARES is the right approach that is badly needed. CARES
is critical in developing a long-term strategic plan to ensure that
VA's capital infrastructure meets the healthcare needs of veterans in
the most cost-effective manner while assuring the highest quality care
system. For too many years, VA did not have a clear capital asset plan
that would justify the need for new construction projects or address
the massive excess infrastructure in the system. Before CARES, VA
hospitals had been treated as trophies for members to bring home to
their States or districts, built with too many beds and too much gold-
plating. Not too many years ago, new VA hospitals were opening with
entire floors empty because they were not needed.
It is also troubling to me that some VA facilities seem to exist
primarily to serve the research and financial interests of the medical
schools. This is an important part for VA as both research sites and
teaching schools. However, in too many cases, veterans' medical care
has become a secondary concern in justifying those hospitals. I was
frankly appalled by the efforts of Northwestern University to block
CARES in Chicago. While I appreciate the medical research work done by
fine institutions such as Northwestern and am a big supporter of VA
medical research funding, we all know in this room that medical schools
have more resources at their disposal than the veterans who need
medical care. Your decision, Mr. Secretary, was important because it
sent out a signal that VA's first and most important priority is
meeting the needs of the veteran.
You took a major step with implementing CARES in VISN 12 but I
believe that we are at a critical juncture. Chicago was a pilot in some
respects but now we must tackle the Bostons, New Yorks, and San
Franciscos of the country. You have shared with me some details of your
plan to complete CARES for the rest of the Nation but there are some
important questions that we--the Department and this subcommittee--need
to work out. For example, I am concerned about the availability of
resources needed to perform the studies and the expertise of those
staff performing the work. Further, it is important that the process be
objective and independent. I am concerned that if a VISN director is in
charge of his or her own CARES study, there may be a conflict-of-
interest in carrying out the review. And, as demonstrated with Chicago,
I am concerned about medical schools pressuring the network to retain
facilities at the expense of the veterans and the taxpayer. In GAO's
testimony to this subcommittee back in 1999, it reported that ``Medical
schools' reluctance to change long-standing business relationships, for
example, has sometimes been a major factor inhibiting VHA's asset
management.''
Lastly, we need to fund adequately CARES. We provided $100 million
for fiscal year 2002 to fund CARES but your budget request for fiscal
year 2003 only asks for $40 million. I do not understand why more CARES
studies cannot be completed in fiscal year 2003. I am further puzzled
by the budget request's inclusion of $94 million for seismic repairs at
four California facilities, without any CARES review. You need to
provide us a comprehensive, strategic plan on how CARES will be carried
out in a timely, efficient manner and how we should fund the
construction of new projects and disposal of old projects.
Mr. Secretary, I look forward to our continued working relationship
in addressing the needs of our veterans. Before I close, I want to
express my sincere thanks for your visit to my State. The veterans in
Missouri appreciate your hard work and efforts. Thank you.
______
Prepared statement of Senator Pete V. Domenici
Mr. Secretary, it is a pleasure to see you again. Thank you for
being here today to discuss the enormously important issues that are of
concern to our nation's veterans.
We all have a great responsibility to assure that the needs of
veterans throughout this country are being met, and I want to
compliment you for the job you are doing to meet this challenge.
People from all walks of life in New Mexico have a long and proud
tradition of answering our nation's call to duty.
Just last week about 40 members of the 49th Communication Squadron
from Holloman Air Force Base in Alamogordo, New Mexico shipped out as
part of Operation Enduring Freedom.
I am personally very proud of them, and I know all of New Mexico
is, as well.
At this time when our nation is actively engaged in conflict
abroad, and we hear reports of the danger our troops face everyday, we
come away with a real sense of the sacrifice our brave men and women in
uniform are making.
For me, and I am sure this is true for you, too, Secretary
Principi, the conflict in Afghanistan also evokes memories of the great
sacrifices that our military servicemen and women made throughout the
last century in order to preserve our liberty.
And so it is vitally important that we provide our patriots with
the very best care available and I am committed to doing that.
As I travel around New Mexico, no matter where I go, I always meet
a veteran who says, ``Senator, I served my country as part of the
military. I am so proud to have sacrificed for my country, and the VA
has truly been a great provider for my health needs. But in a rural
State like New Mexico, I am forced to travel great distances to access
a VA facility for the care that I require. What can be done?''
Mr. Secretary, I know you, too, have traveled all around this
country to listen to veterans, including the rural parts of the country
and heard similar concerns. In my questioning today, I will be
interested to hear what steps the VA will take to address this problem.
Another issue that is very important to all veterans is that of
having a fitting resting place, where the memory of their service to
country will be preserved in an honorable and dignified manner.
In New Mexico, this issue is manifesting itself in the reality that
by 2008, the Santa Fe National Cemetery will run out of sufficient plot
space.
Last year, I sought a solution to this problem by introducing
legislation calling on the VA to initiate a planning study that would
lead to the establishment of a National Cemetery in Albuquerque.
I will continue to pursue this highly important issue because I
believe it is a pressing problem that needs to be addressed soon in
light of our aging veteran population. It is critical that they have a
place where they can be laid to rest alongside their comrades.
So I will seek your thoughts on this, as well, Mr. Secretary.
And with that, I would, again, like to welcome you Secretary
Principi, and thank you Chairman Mikulski for calling this hearing.
Thank you.
PHYSICIAN FOR POCATELLO, ID CLINIC
Senator Craig. Mr. Secretary, thanks for your passion. I
think we all feel it here and appreciate it. I get sensitized
by it on a regular basis, and I am sure some of my colleagues
have the same experience. I had to call a mom and a dad in
Idaho yesterday, because I was tracking their injured son in a
hospital in Turkey, who was involved in that firefight last
weekend and got beat up pretty badly. A young man from
southeastern Idaho, who some day is probably going to need the
help of the Department of Veterans Affairs, because he got beat
up pretty badly.
And I think about the time we think periods of population
transition occur by age and reality. We just went through with
Senator Shelby the litany of, of course, World War II and Korea
and Vietnam. And while this current peace effort we are
involved in is going to bring less veterans, too, I hope, that
need care to the system, it is going to bring some.
And many of my colleagues have covered the issues, the
priority 7 issues, and how we deal with that medical
deductibility. Yes, veterans in Idaho are reacting the same
way. And I know you are trying to resolve that. With resources,
it would be easier to do.
Let me give you an example, though, of a problem that is
current in southeastern Idaho. We, out West, ask our veterans
to travel phenomenal miles. And when World War II veterans and
Korean War veterans get in their cars and drive 300 miles to
the clinic, over snow-covered roads, not to get the services
they need, finding that they may need to stay overnight, to go
back the next day, that kind of thing, often times is very
frustrating.
Pocatello, Idaho, a facility there, lost one of its doctors
3 years ago; and, at that time, convinced me that--that doctor
deficit could be dealt with through a nurse practitioner. That
has simply proven not the case. Now those veterans, who were
once serviced on that 250-mile drive from Salmon to Pocatello--
or I guess it is about 200, now have to add another 150 miles
to go on to Salt Lake.
They are out recruiting. They say they cannot find at least
someone to meet that. We have a residence program in the
vicinity. And it appears there is ample supply of willing and
able medical professionals. I think that is something we ought
to focus on in the Pocatello facility. It is of need there.
Secretary Principi. Yes. Dr. Murphy has some information
specifically on that.
Dr. Murphy. Senator Craig, I am happy to report that we
have just hired a physician for the Pocatello clinic.
Senator Craig. Hallelujah.
Dr. Murphy. Pardon?
Senator Craig. Hallelujah.
Dr. Murphy. Hallelujah. That physician is scheduled to
begin work in July of 2002. We are hoping that we will be able
to bring them on board sooner than that. But that will--that
will bring the staffing level up at Pocatello----
Senator Craig. Good.
Dr. Murphy [continuing]. And hopefully resolve some of the
issues that are very important to veterans in Idaho.
Senator Craig. Well, I try to get into all those facilities
at least once or twice a year to see how they are doing. And it
is very important that those clinics, outside the major
facilities, service because of the distances involved. It is
not just a drive across town. Back here it is a drive across
several States to get to a facility, comparatively speaking.
And that is something that is just very, very important.
CLAIMS PROCESSING
You have walked through how you are approaching the claims
issue. I will leave that question alone. I was--I just wondered
why you chose 100 days. I think it is probably the conclusion
of the group recommendation--when I would have suggested, gee,
maybe 90 days or even 30 days, Tony, would have been the right
way to go here. But maybe 165 days down to 90 days is in itself
a substantial accomplishment.
Secretary Principi. Indeed. I think that was done in
consultation with the leadership of the Veterans Benefits
Administration and the task force. And we felt 100 days was a
very aggressive goal, to shoot for that. I certainly would like
to see it 90 or 60 days.
But, you know, sometimes it takes us so long to get the
medical and military records from DOD, or the archives, and
then to schedule exams. So you are building in a delay right at
the outset. But we are taking steps to deal with that, too. And
I am making progress in working out memorandums of
understanding with the Records Processing Center in St. Louis
to get those records much, much quicker. And we are making good
progress.
Senator Craig. Well, Madam Chairman, thank you very much. I
have other questions I will submit for the record.
We appreciate you being here. We are certainly going to do
all we can do. And I know that it is the commitment of the
chairman and our ranking member to make that happen within all
of the allocation we can grab hold of. And your anticipated
budget increase is certainly respectable. We hope we can get
there. Thank you.
Secretary Principi. Thank you, sir.
Senator Mikulski. Thank you, Senator Craig. And, you know,
we do not have mountains in Maryland like you have. And even
though we welcome the President to Camp David, I do not know if
he calls them mountains, but they are mountains to us. And our
own veterans up there, when you know that you have got--you are
old or you are sick and you have a colostomy bag and you are
riding over these very rugged terrains somewhere, that we are
very sympathetic to your situation.
Senator Craig. I have had the privilege now of being to
Camp David. It is a nice little rise in a flat place, you know.
Senator Mikulski. I am being sympathetic to you. Do not----
Senator Craig. Thank you.
Senator Mikulski. Do not push it.
PRIORITY 7'S VETERANS
Senator Mikulski. Mr. Secretary, first of all, what you
hear from the Senators is that we are on your side. We know
that when you took over the administration of VA that you
faced, in some ways, an administrative brown field. It had been
long neglected, and so we know that you have--that you are
dealing with a very big job.
And that would even be the usual and customary systems.
Now, this demographic explosion that you are facing is just
eclipsing everything. There are so many other questions that I
would like to pursue today, like facilities, the issue of long-
term care, home health care, the work force shortage--like,
related to nursing, that I would like to be able to bring up.
But the priority 7 issue, I think, is eclipsing everything.
And your testimony on page 6, I think, is really a bombshell.
When you talk about--since 1996 the priority 7 veterans
increasing 500 percent when they were 33 percent earlier, now
they are 33 percent of the workload. They are projected to
increase to 42 percent by 2010 with an enormous increase of,
well, between now and 2007 of $20 billion. That is almost
doubling what we currently have, which would take us to about
$45 billion. Now, this is no finger-pointing to the priority 7
veterans. There is a reason that they are coming. And I am
talking about the reasons. But before I do, I just want to
alert the committee that it could get worse. Senator Bond and I
represent industrial workers. You know we are facing a big
crisis right now, with something called legacy cost.
If that steel industry goes down the tube, we have over
600,000 retirees in the steel industry. Okay? They will lose
their health care. As you know, there were no draft counseling
or draft dodging lines at the steel mills. You know that. The
movie ``Deer Hunter,'' I think, told us and taught us a lot.
Secretary Principi. Sure.
Senator Mikulski. Just as between us. This all could come
to the VA. These men who fought, if they lose their health
care, they are going to find it another way. And this is not
dire predictions. So let me go to the priority 7. I am a data
driven--we have to be data driven here.
DEMOGRAPHIC PROFILE OF PRIORITY 7 VETERANS
My question is: Have you, with the priority 7 coming in, do
you have a demographic profile of the priority 7 veterans
entering the system related to geography, age, income, and the
reason they seek you out? Because my hypothesis is that the
lack of a universal health care policy, lack of health
insurance for some, the lack of a prescription drug benefit for
the older veterans, and then also the lack of a national long-
term care policy, which is quite piecemeal, could you--let us
start with the demography. Do you have--because I think if they
knew the age--first of all, the geography. Is this focused on
particular geographic area?
Second, what are their ages? And are they rich, or are they
just kind of working stiffs who do not have the money or is--or
do not have health insurance? Do you see where I am heading?
That for the younger veteran it might be one reason; for the
older it might be another.
Dr. Murphy, do you have a demographic profile? You do not
seem to have it handy.
Dr. Murphy I am searching for it.
Senator Mikulski. While you are looking----
Secretary Principi. We will provide the precise information
for the record.
Senator Mikulski. But do you even have it now, in terms
conceptually?
Secretary Principi. I think it is fair to say first that,
many priority 7s are coming to us for prescriptions only.
Senator Mikulski. But is that like 60 percent, 70 percent,
10 percent?
Secretary Principi. I would be speculating, Madam Chair,
and I apologize for that.
Dr. Murphy, perhaps you can.
Dr. Murphy. We do know that about 57 percent of the
priority 7 veterans use less than $400 worth of health care.
And that would be their primary care visits plus other
medication or----
Senator Mikulski. So 57 percent will come. But you see what
I am getting at? Can you tell me why they are coming and how
old they are? And is this the absence of other national
policies? Again, we are not passing judgment here. We are
trying to get the data.
So, you are saying 57 percent use less than $400 worth of
care?
Secretary Principi. Yes.
Senator Mikulski. But why do they come?
Secretary Principi. I think they are----
Senator Mikulski. And how old are they?
Secretary Principi. I think they are older. I think they
represent the veteran populations generally coming to us. I
think they tend to be older, World War II veterans. This is
based upon all the town hall meetings that I have attended over
the past year. They are using our primary care facilities, our
clinics, a great deal. I think they are in the age range of 65-
70 years old.
Their incomes tend to be a little bit higher than the
threshold for priority 7, but I do not think they are rich
people. We do have a few who are wealthy and come to VA for
their prescriptions. They are eligible. And rather than paying
$400 a month, they pay $7 a month.
Senator Mikulski. Okay. Well, I understand that, but--go
ahead. I am sorry. Go ahead.
Secretary Principi. I think the vast majority of priority
7s that come to us have incomes around $30,000. They are not
making a lot of money. They are ordinary Joes, who are working
in the factories and on the farms, who have lost their health
care coverage or who do not or may not have it.
Senator Mikulski. But do we have a natural demographic
profile, Dr. Murphy?
Dr. Murphy. We do. And I----
Senator Mikulski. You do not have it with you.
Dr. Murphy. I apologize, Madam Chairman. I thought I had
that data with me. And I know that we can pull it. Some of the
income data that we have is based on a survey that was done in
1999. In my memory of the income profile of priority 7 veterans
is that approximately 30 percent of them, about one-third, have
incomes above $35,000 a year. So the majority----
INCOME PROFILE OF PRIORITY 7 VETERANS
Senator Mikulski. Wait, wait, wait. Incomes above what?
Dr. Murphy. Incomes above $35,000 a year. But I can get
those specific statistics.
Senator Mikulski. Well, let me tell you what the committee
wants and--because, again, we need to be data driven to also
help you parse out our recommendations, knowing that the
recommendations are a stopgap. First of all, the $1,500 is a
non-deductible, is a non-starter. And we will not do it unless
the authorizers pass it.
At the same time, we know that there is a crisis here. It
is a crisis for the people who are turning to you, and it is
therefore a crisis for those of us who have to provide the
service and pay the bills. They are not coming to you because
it is a leisure choice option. They are coming to you for a
reason. Some, if they--they might like the--but most of all, I
think it is the lack of policy in other areas.
So we need data. We need a demographic profile, first of
all, of geography. Is it concentrated in, say, the rural areas?
This is going to help us get to our management solutions while
we look to more long-term systemic. We need geography.
Second, we need age. And I am really interested,
particularly, under the age of 65, the whole issue of every 5
years, if I could. One of the policies would be people,
primarily men, who had jobs but are now not working after 60,
either the collapse of an industry or whatever, but they are
too young for Medicare, but they cannot get health care
anywhere else.
So, you see where I am heading in terms of the age? Or are
young men coming, younger men, because of the lack of health
insurance? So you see, one is the age; then, the other will be
income, because I think we have to face it. If it is people
with incomes over $70,000 coming to you for a prescription drug
benefit, that is very different than somebody coming for
$27,000 or $32,000, the combined pension maybe, et cetera. And
then that would be the age-income.
And then, if you could, even anecdotally, do a survey of
why are they coming. Is it they like the Veterans--particularly
now, when there seems to be longer waiting times, work force
shortages, other challenges that you are facing in the system?
So you see where we are heading?
Secretary Principi. Yes.
Senator Mikulski. Because that, I think, will tell us a lot
about what we need to do. You know, do we do an age--and I am
not talking about what is the methodology for containing this
issue.
Secretary Principi. Sure.
[The information follows:]
Priority 7 Demographic Profile
The following information is provided for the record (fiscal year
2001 information is provided except as noted):
--Priority 7 Enrollees and Users by VISN fiscal year 1999-fiscal year
2001 with comparisons to growth rates for Enrollees and Users
in Priorities 1-6
--Priority 7 Enrollees and Users by VISN also shown as a Percentile
of all Priority 1-7 Enrollees and Users, fiscal year 1999-
fiscal year 2001
--Average Ages of Priority 7 Enrollees and Users by VISN fiscal year
1999-fiscal year 2001 with comparisons to the Average Ages of
Enrollees and Enrolled Users in Priorities 1-6
--Fiscal year 2001 Priority 7 Enrollees and Users by VISN and Age
Group with comparisons to Priorities 1-6
--Priority 7 Average Annual Cost Per User fiscal year 1999-fiscal
year 2001 with comparisons to Average Annual Cost Per User for
Priorities 1-6
--Priority 7 Average Overall Cost Per User and Average Outpatient
Pharmacy Cost Per User with Comparisons to Average Costs for
Priorities 1-6
--Priority 7 Average Cost of Users Under 65 Years Old compared to
those Age 65 and Over with further comparisons to Average Costs
for Priorities 1-6
--Priority 7 Average Cost and Age comparisons with comparisons to
Average Cost and Age for Priorities 1-6
--Priority 7 Inpatient and Outpatient Reliance with comparisons to
Inpatient and Outpatient Reliance for Priorities 1-6
--Projections of Priority 7 Health Care Users (Unique Patients) by
VISN and Age Group--fiscal year 2002-fiscal year 2010 with
comparisons to Projections for Priorities 1-6
--Projections of Priority 7 Enrollees by VISN and Age Group--fiscal
year 2002-fiscal year 2010 with comparisons to Projections for
Priorities 1-6
VA will provide a more in-depth analysis by May 27, 2002, to
include distributions of the above data by State and information on:
--Average income by priority group and State
--Employment status by priority group and State
--Insurance status by priority group and VISN
--Health status by priority group and VISN
Senator Mikulski. Now my time is up, but--because I want to
come back to the veterans' prescription drug benefit. I think
we have a lot of lessons learned as we ponder what to do about
Medicare. But let me turn to my colleague and I will come back
to talk about a prescription drug benefit.
Senator Bond. Thank you very much, Madam Chair. And I
really appreciate your pursuing this line of questioning,
because I think it is very important. And you were talking
about steel workers being laid off. I have to tell you that
heavy industry in Northeast Missouri, where I come from, used
to be refractories. It is a high-quality ceramic products that
line the furnaces of steel and for aluminum. They are all being
shut down because of asbestos litigation; 300,000 asbestos
claims. All of the plants, heavy industry plants, in Northeast
Missouri are being shut; they are in bankruptcy. And they are
going to move the industry to Canada or Mexico.
And we are going to have an additional load on the
Department of Veterans Affairs, because there are many veterans
who have been employed in those industries. And they are--as I
said, they are all in bankruptcy. So, we are getting it in a
number of areas, as well.
But we have a lot of things to cover. I am going to have to
leave. And I am going to leave some questions. But, Mr.
Secretary, there are a couple of things that are very important
that I wanted to touch on.
CARES
First, I congratulate and I thank you for making the
capital asset realignment for enhanced service, or CARES,
program work. That is not the most popular thing especially
worth a lot of folks on Capitol Hill. But I am convinced that
CARES is the right approach. It is badly needed. There was no
capital asset plan before CARES. VA hospital had been treated
as trophies for members to bring home to their States or their
districts, often built with too many beds, too much gold-
plating. VA hospitals were opening with entire floors empty
because they were not needed.
Well, I think we are beginning to turn that around,
although there is opposition here on the Hill. But one of the
things that is really troubling me, and I want to lay it out on
the table. Some VA facilities seem to exist primarily to serve
the research and financial interests of medical schools. It is
an important part of the VA to work as research sites and
teaching schools. This works very well together.
In too many cases, or in some cases at least, veterans'
medical care has become a secondary concern in justifying those
hospitals. I was frankly appalled by the efforts of
Northwestern University to block CARES in Chicago. I appreciate
the medical research work done by fine institutions such as
Northwestern. And it is one of the very good ones. And I am
very big supporter of VA medical research programs. But we all
in this room know that medical schools have more resources at
their disposal than the veterans, who need medical care, the
ones that Senator Shelby mentioned, the examples you set out.
Your decision, Mr. Secretary, was important because it sent
out a signal that VA's first and most important priority is
going to be meeting the needs of veterans. And for that, I give
you sincerest thanks.
Now, by closing this, you are going to construct a new $40
million spinal cord and blind rehabilitation center and
creating new community-based outpatient clinics. You are going
to save money, adding these new facilities, because you were
able to close one of the four VA hospitals in Chicago.
Secretary Principi. Correct.
Senator Bond. You are going to be able to provide more
specialized care, open community clinics, and still save money?
Could you tell us how that works?
Secretary Principi. That is correct. It was the right
decision. It was a difficult decision, and we were very
sensitive to the concerns of our veterans and our employees. I
appreciate the important role that medical schools play with
the VA, but at the same time, our first mission is treatment of
veterans in modalities that make sense for the 21st century.
The Chicago CARES decision was the right decision for the
veterans of that area. I intend to implement the decision
aggressively, thoughtfully but aggressively. We need to get on
with the modernization of the West Side facility, including an
expansion of the number of beds, get Lake Side closed down and
get an outpatient clinic built in the downtown area to address
the outpatient needs of our veterans in that area.
We are going to move forward and we are going to move
forward with the next phase of CARES, because we need to
rationalize the infrastructure of the VA system and make sure
that we are properly structured for going forward and not back
to the century gone by.
CARES STUDY
Senator Bond. A few questions about the next phase. Do you
have the in-house expertise and staffing resources needed to
perform the CARES study? And two, how will you ensure the
studies are objective? Because on that second part I am worried
that if the division directors who are in charge are conducting
their own studies, there may be a conflict. If you bring it up
to your level, Mr. Secretary, you are not going to have an
outside consulting firm to blame it on. You are going to get
the heat, all the heat, without being able to shuffle it off.
Secretary Principi. That is correct. I sincerely believe
that we have the talented people, the skills and the right
disciplines to develop a national plan for the future. The VISN
directors will play a role in providing data and input into the
process, based upon a template, and upon a specified data call.
But that plan will be developed with our team in Washington. We
will rely upon outside experts on an as-needed basis.
I do not want to spend $20 million to $40 million on a
consultant, most of whom will contract with former VA
employees. I think we can do it. But you are absolutely right
that we need to ensure that the data is validated. The process
and the data have to be absolutely perfect. People who do not
want to see a facility closed or its mission changed will take
shots at us. The data is so terribly important, and we are
going to take great pains to ensure that the data are
validated.
I intend to keep the process objective. I intend to stay
out of it until such time as the recommendations of the
commission come to me. And then I will approve or disapprove
those recommendations. We have an aggressive timetable. I think
it can be done. And I think it is absolutely necessary to
address the category seven problem, for example. There is an
awful lot of money there that can be used to treat more
patients.
Senator Bond. Well, Madam Chair, if I might impose for one
more question.
LEGISLATIVE MANDATES
And I congratulate, Mr. Secretary, because you have to--we
have to cover up the shortfalls in the care, in the health
care, for the highest priority. And you have touched on it, but
let me go back to it one more time.
Based on new benefit requirements authorized over the last
few years, I understand that--that has put a big hit on your
budget. And I am concerned that we are still short of the money
we need to provide health care. And I thought, maybe, you could
outline for us some of the new mandates affecting veterans'
health care services. What are the costly new requirements? And
what impact do these have on the basic health care that you can
provide that we discussed earlier?
Secretary Principi. Clearly, there have been a number of
mandates that we have been required to fulfill. For example the
Millennium Health Care Benefits Act, placed a floor on VA
nursing home beds. I agree we need to maintain a level of VA
nursing home beds because they are much needed beds. But, we
need to also rely upon our State veterans' homes and our
community nursing homes, which are closer to where the veterans
live, and to the non-institutional programs, which also are so
beneficial to keeping veterans in their homes: hospital-based
home care, adult day care, respite care.
We could do so much more, treat so many more veterans that
way, than we can by putting them into an institutional bed. The
way the law is constructed, it requires me to have 13,400 VA
nursing home beds. We are currently 1,200 beds short of that
floor. We have requested that the floor include State veterans
nursing home beds and community nursing home beds and the non-
institutional care census. But the committees have been
reluctant to do that.
That means I have to find somewhere in the neighborhood of
$150 million out of existing programs, maybe the State veterans
home program or other programs, to achieve that floor, as set
by statute.
The wonderful provision about emergency room care, to allow
veterans who are enrolled in the VA system to go to any private
hospital for emergency room care, when fully implemented, will
cost us $441 million. I do not know where the money will come
from. It may have to come out of the community-based outpatient
clinics, because it is a zero-sum game.
We operate wonderful programs for the homeless. I think we
are doing great things for the homeless. But the new bill that
came out of the last session will cost hundreds of millions of
dollars for new homeless programs. Again, where do I get the
money from?
I think it is that kind of laws that do, in fact, impede
our ability to address some other programs.
Senator Bond. Thank you, Madam Chair.
DEMOGRAPHICS PROFILE OF PRIORITY 7 VETERANS
Senator Mikulski. Thank you, Senator Bond. You raised,
again, very important questions.
I want to come back now again, in terms of the demographic
profiles that I have asked for; Dr. Murphy, we would like to
have, really within 2 weeks, a demographic profile of the
information you currently have. I do not know if you are
keeping the data the way I have just said it, but we would like
it to us the way we asked for it, in addition to any other way
you want to get it to us. But I need to know the geography, the
age, and the income. Okay? So, that is one thing.
And then we would like to have another report around
Memorial Day where you have had a chance to even take a better,
more in-depth probing look. So, we want to have a first look-
through. And then--and hopefully, Mr. Secretary, you will then
keep these type of records, so that we can then get our handle.
Because I think they are coming for different reasons and
different age groups. And we should not have a one-strategy-
fits-all.
The failure to have a long-term--my dear dad died of
Alzheimer's. We used geriatric evaluation. We did not use the
veterans. Dad was not a veteran. He had 2 children when the war
began. But we used geriatric evaluation to get appropriate care
for him. We used adult day care that had a cognitive stretch-
out program for an Alzheimer's person. Then we had to turn to
long-term care.
When we look at our aging population--and we had means.
When we look at veterans, many of them do not have anything. So
they are coming to you exactly for what you said. The
prescription drug issue is another. The younger vet or the in-
between vet, the 60-to-65 who has lost everything through no
fault of his own, because of a factory closing or the loss of
the family farm.
PRESCRIPTION DRUG BENEFIT
So, this is what we are going to look for. But let us go to
the prescription drug benefit. Because the long-range solution
is national policies to address universal health care, a
prescription drug benefit for our seniors, and a long-term care
policy that does offer a continuum of care so you use it
appropriately for the patient and appropriately for the person
paying for the care.
Now, according to December, 2000, the VA's Inspector
General said the use of the prescription drug benefit was due
to the fact that 90 percent really did not have a prescription
drug benefit, either because they were on Medicare or because,
if they were not on Medicare, their health insurance did not
pay for a prescription drug benefit. And not only might they
have a catastrophic situation needing drugs, but they might
have a chronic situation that required--let us take diabetes.
You have to buy the equipment, the daily testing, the
medications, et cetera.
So let me get to where I am getting. Could you tell me--
could you give me a description of the veterans' prescription
drug benefit? And what does that cost you every year? And who
are most likely to use it?
Secretary Principi. I will start out and then I will let
Dr. Murphy add, if I err or if I am not complete. Any veteran
enrolled in VA health care is entitled to have their
prescriptions filled by VA for a cost of $7 per prescription
per month. That has gone up from $2. It had not been increased
since its enactment some 10 to 12 years ago, when the co-
payment went into effect.
We spend in the neighborhood of $2.5 billion for
ingredients only and approximately another $600 million in a
very large pharmacy program, the consolidated mail-out pharmacy
program. Our pharmacy benefit is in the neighborhood of $3
billion a year and growing. It was $750 million some years ago,
and it is now up to $3 billion.
I think we have done a tremendous job. Our country and HHS
and others can learn much by the way we have managed our
pharmacy program through our national formulary. Clinical
judgment is always the overriding issue. We do sensitize our
physicians to costs. I think it is important that they be
sensitized, but that they make the clinical judgment about what
they consider to be the right drug.
I think we manage the pharmacy budget very well. We do a
lot of national contracting. Our formulary lets us do that, so
we can drive the prices down.
Senator Mikulski. What does national contracting mean?
Could you elaborate on that?
Secretary Principi. It means that we will buy through a
national contract, if you will. Through the large volume that
we purchase, we command a discount off the price of the drug.
Although we do very, well in our pricing, the law that was
passed back when I was deputy secretary, and played a very
small role in enacting, gave the VA very favorable pricing for
pharmaceuticals, a 24-percent discount off of the manufacturers
average drug price. In some cases, we negotiated even a greater
discount off of manufacturers' average price, so we command
excellent pricing in pharmaceuticals.
We also procure pharmaceuticals for the Indian Health
Service, the Public Health Service, and the Bureau of Prisons.
In many cases, we are the procurer of pharmaceuticals for the
Department of Defense, so our procurement activity is very
large. Through that consolidated program, we are able to
command even better pricing.
I think we are also the model for the government in a
pharmacy program that utilizes generic drugs.
PHARMACEUTICAL COSTS
Senator Mikulski. Well, yes. First of all, I think the cost
speaks for itself. And I am going to come back to how--what is
the majority of the use, for what purpose? But the Nation has
to consider a prescription drug benefit for its seniors; it
just has to. When Medicare was invented under Lyndon Johnson,
it was to deal with--but people were afraid that if you had a
heart attack, you could lose everything. You would stay in the
hospital for a month.
Dr. Murphy, you remember, I am sure----
Dr. Murphy. Yes.
Senator Mikulski [continuing]. In your studies. You were
not practicing then.
Now, it is really--it is Part--B that is the big issue. And
it is the management of chronic illness or the chronic
progressive illness, whether it is the diabetic, the heart
person, et cetera.
Now, coming--so we are getting these kinds of estimates for
a garden variety, okay, Chevy Lumina/Ford Taurus prescription
drug benefit. They are talking about $400 billion a year over
10 years. Looking at TRICARE, what TRICARE is spending; at the
rate that it is going, it could be $720 billion. So, we are
looking, but I believe that there are lessons learned. I
believe that there are lessons learned from VA. I believe that
there are lessons learned from TRICARE. I believe that there
are lessons learned for what we Federal employees get. I have a
prescription drug benefit.
MEDICAL SUPPLY COST CONTAINMENT MEASURES
And the lessons learned, which is how do we do a formulary
that also allows clinical flexibility--because it is not one
drug fits all. That is why you see a doctor and not the coin-
operated dispensers--and at the same time do cost containment.
Now as I listen to you, the cost containment measures have been
mail order and consolidated discounts and then an awareness on
the part of the physician that, given 2 choices with the same
safety and efficacy appropriate to the patient, that one might
be a little bit cheaper than the other.
But could you furnish, then, for the committee what your
cost containment measures have been and how you regard them
with success? For example, on mail order, what does it work
best for? Because there are those who say sometimes this
results in waste and inappropriate use. But I know, coming back
to my own dear mother, who was a diabetic, it would have been
very appropriate for her to get her diabetic testing strips in
the mail, to get her lancets, in other words, but not if she
had her--she was very susceptible to urinary tract infections,
a well-known complication issue with diabetics.
She needed to be able to go without a big surcharge on her,
to really get her--when she had an infection usually related to
the chronic situation. So you see where I am heading here?
[The information follows:]
Pharmaceutical Costs
A physician's ability to have access to necessary pharmaceuticals
is unquestionably an essential component of any clinically sound
formulary management process. There are at least four acceptable
mechanisms that can be designed into a formulary system; (1)
encouraging the appropriate use of drugs, (2) reducing the unit-cost of
drugs, (3) streamlining distribution of bulk drugs, and (4) increasing
prescription dispensing efficiency.
Inappropriately restricting access to medically necessary drugs and
unnecessarily shifting drugs costs to the patient are unacceptable cost
containment practices that are unfortunately sometimes used. This is
not to say that a properly administered tiered co-payment structure is
unacceptable. On the contrary, if well designed and properly
administered, a tiered co-payment system can be an effective formulary
management tool that does not impose an unnecessary financial burden on
the beneficiary.
Encouraging the Appropriate Use of Drugs: By far, the cost
containment strategy that has the potential to yield the most
significant cost containment while assuring quality medication therapy
is the use of evidence-based clinical guidance to encourage appropriate
drug utilization. Guidance should be aimed at encouraging the cost
effective and appropriate use of pharmaceuticals and discouraging their
inappropriate or cost ineffective use. Such guidance should be
evidence-based, relevant, up-to-date and easily accessible by
prescribers. Providers should be actively encouraged to provide input
into guidance development to ensure greater acceptance of the final
documents. Further, efforts must be made to educate prescribers on the
evidence-based criteria if it is to be accepted into their clinical
practice. Regular feedback should be provided to prescribers regarding
their prescribing patterns. Physician awareness of cost differences
among alterative therapeutic regimens is also critically important. VA
experienced this success when coupled with the plan to ensure the
electronic medical record is available throughout the healthcare
system. As the patient need changes from ambulatory care to acute care,
home based primary care and nursing home care, the access to the
electronic medical record provides a continuous medication history and
the clinical reasoning for use of appropriate drugs.
Reducing the Unit Cost of Drugs: In high-volume, high-cost drug
classes where therapeutic interchange opportunities exist, significant
cost containment can be achieved only by driving market share to a
subset of all of the available products; therefore, limiting physician
flexibility to some degree is unavoidable. While there are several ways
to drive market share within a therapeutic class, and each has its own
advantages and disadvantages, the most effective approaches require
limiting access to pharmaceuticals within a drug class to some number
of drugs less than all commercially available products and negotiating
discounts with drug manufacturers in exchange for increased market
share for their products. Regardless of which method of market share
manipulation is employed, medically necessary clinical flexibility can
be achieved by assuring that a non-formulary or waiver process is in
place. A good non- formulary request process should be timely and final
decisions should be based on medical evidence as opposed to prescriber
``preference'' (which can be highly influenced by pharmaceutical
manufacturer's marketing practices) or the payer's cost containment
goals.
The use of generic products must be encouraged and should rely on
Food and Drug Administration guidance regarding product acceptability.
Mandatory contracts for generic products can also help ensure adequate
product availability to meet the market share and inventory management
goals. It is important to reduce the dispensing of multiple generic
brands to the same patient, as this practice is likely to lead to
patient confusion. A good formulary process allows for the prescribing
of brand name products, when patients have any adverse drug events to
generic products. Patients should not be charged a higher co-payment
when a brand name product is deemed necessary to achieve a desired
clinical outcome. A higher co-payment may reduce patient compliance and
increase potential for a poor outcome.
Streamlining the Distribution of Bulk Drugs: Opportunities exist
for large integrated health care systems that purchase bulk drugs to
reduce their distribution costs by contracting with a single
Pharmaceutical Prime Vendor (PPV) for reduced distribution fees. The
reduced fees are possible if the purchaser uses a ``prompt pay''
mechanism whereby the PPV invests the purchaser's payments in short-
term financial markets before it is required to pay the manufacturer
for the goods delivered. In addition, it is possible to negotiate with
the PPV to charge the purchaser contract prices, rather than commercial
prices when the purchaser has contracts in place with pharmaceutical
manufacturers. The PPV can then complete a ``charge-back'' to the
manufacturer to recapture the difference in its wholesale cost of the
drug versus the contract price. Lastly, contracting with a PPV reduces
inventory carrying charges because the PPV can provide ``next-day''
deliveries and there is no need to keep a large amount of product on
the pharmacy shelves.
Increasing Prescription Dispensing Efficiency: Improvements in
prescription dispensing efficiency can be achieved through the use of
automation, such as that seen in VA's Consolidated Mail Outpatient
Pharmacies (CMOPs). In addition, automation of prescription dispensing
has been demonstrated to positively impact quality by introducing
significantly fewer dispensing errors than manual processes. For this
discussion, it is important to differentiate between the mechanical
aspects of prescription dispensing versus the clinical aspects of
patient education and counseling. How the prescription is filled is not
nearly as important clinically as is making sure the patient is
thoroughly educated and knowledgeable about his or her drug therapy.
When VA designed its CMOPs, it purposefully uncoupled the
mechanical aspects of prescription dispensing from the provision of
patient education and counseling so that each aspect of drug delivery
could be optimized (i.e, make filling prescriptions as efficient as
possible, and make sure patients have access to pharmacist counseling
and education as part of a multidisciplinary, integrated health care
delivery process). Medication counseling is best performed in person,
by a pharmacist so that the pharmacist can gauge a patient's
understanding of his or her medication therapy. Further, face-to-face
interaction is important so that the pharmacist can ask probing
questions about over the counter drugs use, use of dietary supplements,
alternative medicine, etc. This type of patient-pharmacist encounter is
critical to assure that drugs are used appropriately and effectively
and to obtain information about side effects, intolerance, etc., which
if not attended to can reduce the effectiveness of prescribed
medications, or lead to drug induced morbidity.
Systems which use automated prescription dispensing, with an
appropriate level of patient education can reduce the overall costs of
prescription dispensing. In addition, dispensing chronic medications
for patients that are stabilized on them in multi-month quantities
(i.e., up to 90 day supplies) can also reduce the cost of processing
prescriptions. VA has conducted analyses which show the cost associated
with unusable multi-month supplies (lost prescriptions, changes in drug
therapy, patient death, etc.) are more than offset by reduced
production costs. A carefully designed Medicare drug benefit, which
uses a Federal CMOP could avoid a significant amount of necessary cost
while increasing the quality of the dispensing process.
A flexible formulary that incorporates cost containment should:
--Be clinically rather than financially driven
--Be developed with input from end user clinical staff
--Be evidence-based
--Rely on the use objective drug use criteria
--Minimize the impact of marketing practices on clinical decision-
making and prescribing patterns
--Use generic drugs products whenever appropriate
--Leverage purchasing power by using therapeutic interchange whenever
clinically feasible
--Leverage distribution by using PPV contracts and good inventory
management practices
--Optimize prescription dispensing efficiency by using automation.
--Integrate patient education and drug therapy counseling to the
greatest extent possible
--Have a non-formulary waiver process
--Measure outcomes and provide feedback to prescribers
Secretary Principi. Absolutely.
Senator Mikulski. So we are looking at mail order, but mail
order does not solve everything, et cetera. So we are really
want--I need you, and I believe the Nation--and I know the
Nation needs you right now to tell us what works and, quite
frankly, what has fizzled and flopped or that gives you yellow
flashing lights around the efficacy of both patient care and
cost containment. Sometimes they are like this. Sometimes
exactly efficacy is good cost containment, because it manages
the disease.
Secretary Principi. I am half smiling. I am always a little
concerned that we are so good it will ultimately drive our
prices up somewhat at the VA, that if HHS replicates our model.
Senator Mikulski. Maybe those priority 7 guys or gals--
remember we cannot forget the China Beach women--that this
might ultimately save money, because they are not coming to
you.
The second thing is that, also, the better access you have
for the management of chronic disease that is systematic,
regular, and monitored, ultimately saves that kidney failure
and heart disease and all these other complications from
chronic disease.
Secretary Principi. I think the pharmacy management program
is really one of the great success stories of the VA. They have
done great work, but there are other things we can do. We need
to export what they have done in the pharmacy program to
medical-surgical supplies and high-tech equipment. That is the
next avenue we are going to look at: why do we need 300
different styles of surgical gloves? Surgical gloves are
surgical gloves. And we do not command the best pricing because
we just buy locally.
We buy using credit cards. We need to do in med-surg and
equipment what we have done in pharmacy. I think there are so
many dollars there that we are leaving on the table.
Senator Mikulski. Yes. And I believe some of our excellent
academic centers of excellence can offer you a tremendous
number of lessons learned. The reason I go to the academic
centers is they face the variety of patients that you do, and
very often, because they are academic centers, they are in
urban areas serving a tremendous, often very poor, population
that is uncompensated.
In other words--and they cannot raise their rates or their
fees. So I believe that they offer tremendous lessons for you.
Secretary Principi. I think so.
Senator Mikulski. And without--because they are academic
centers of excellence, they do not sacrifice patient care or
the worker safety issues. Which takes me to another issue. I am
going to talk about workers.
RECRUITMENT AND RETENTION
You know, I am so impressed with the dedication of the
people who work for the VA, particularly in the health care
area. And I remember when we had shut downs at all some years
ago in the midst of ice storms. Those men and women were
showing up at Baltimore VA and the clinics, even though they
were told they were unnecessary, they were not getting paid.
And you know what? They just showed up, even though they had
child care and so on. So they were just fabulous.
But I am concerned, how are we doing in being able to
attract and retain particularly the nurses, the pharmacists,
the others that are so important to the team? I am particularly
worried about the nurses' shortage. And we are also facing a
shortage in other health professionals that are critical to the
team.
Dr. Murphy?
Dr. Murphy. I think that there is a national shortage of
health care providers across the country. It is not a problem
that is unique to VA as a department. And it starts with
nurses, physicians, physicians' assistants, all mid-level
providers, pharmacists, technicians of all kinds.
One of the things that we have proposed is that a number of
our professional groups that provide health care need to be
switched from Title 5 to Title 38, to allow us to more
effectively and quickly----
Senator Mikulski. What is that? What is Title 5 and Title
38?
Dr. Murphy. Title 5 is the regular GS schedule. Title 38
gives us more flexibility in recruitments and some additional
flexibility in salary scale. And we think that--that would
certainly help us with our recruitment.
There was legislation passed last year that did give us
some improvements in our nurse recruitments and our education
programs for nurses, that we believe will allow us to better
retain and give career progression to nurses in the VA.
I think patient safety is an important issue. And I was
recently talking with the dean of the School of Nursing at
Johns Hopkins. And Sue said that she tells all of her graduates
in the School of Nursing to go apply to VA. And the reason she
does that is she believes that we are at the forefront of
medical innovation; that the quality, the occupational health
and safety, the patient safety programs that we have in the VA
are second to none, that it is an exciting place to work.
So, our focus on quality and safety have really positioned
us to be able to recruit and retain the best health care
professionals.
Senator Mikulski. Well, what we would like, as part of our
work--and I know I speak for Senators Rockefeller and Specter
on authorizing, as well as Senator Bond. We, of course, believe
that we rely upon our physicians, but the physicians rely upon
a team. And if the team is not there, you cannot have--I mean,
the doctor is not able to give the highest and best care that
we want.
So, we would welcome what we could do on the Appropriations
Committee to be able to give you the tools to be able to both
recruit and retain. Because the best way to recruit is through
the people you have now, who are very satisfied, who tell their
classmates, et cetera, to do this.
The second thing is that, also speaking for the
authorizers, because I know they are very keenly interested in
this, is what other authorizing frameworks that we need--we
need to do. And we are working on this in another committee.
GRANTS FOR VETERANS EMPLOYMENT
Let me then switch gears, though, to the job training item
in there. This is somewhat controversial. The move from the job
training programs that you spoke of in your testimony from DOL
back to VA or to VA, could you tell us what you are going to do
and why you want to do it? And that will be our last question
for today.
Secretary Principi. I tried to articulate, Madam Chair, the
deficiencies in the current program that have led to a high
unemployment rate among veterans who are seeking employment. I
think the Department of Labor has many missions. And they are
responsible for labor programs for veterans and non-veterans
alike. I am not sure that veterans receive the priority that
they deserve.
VA was established to address the needs of veterans. And
just like our education programs, our health care programs
could sit in other agencies, but they are consolidated in the
VA because our focus is on veterans' issues. That priority is
very, very important to everyone in VA.
I want to create a short fuse commission to make
recommendations to me on how we can adopt this program to the
new century, to the new way of employing people, Internet-
based, with outreach to Fortune 500 companies, not just to
McDonald's and Burger King, where veterans can find jobs; but
rather good, meaningful jobs in corporate America. I think that
linkage needs to be there.
But most importantly, Madam Chair, I would make it
outcomes-based. The program is very process-oriented today.
Congress appropriates $200 million; appropriations are divvied
up and sent to the States. Whether they perform well or not,
the following year another grant is going to be made. I would
send a grant to the governor of the State and have the governor
decide how that money should be allocated. It could be to the
States' Department of Veterans Affairs or the States'
Department of Labor. I would put performance standards on the
grant to say that grant recipients are expected to find
suitable employment for x percentage of the veteran population.
Through establishing standards and accountability, I think
we could improve the outcomes of the program.
Senator Mikulski. Well, Mr. Principi, I think, first of
all, in the President's budget he said he would send us
legislation on this.
Secretary Principi. Yes.
Senator Mikulski. So, I know it will go to the authorizer.
We, too, are troubled by the same issues that you are troubled.
And I hope that we could see this as an opportunity for
veterans for the new century. One of which I would like to just
put on the table for discussion is lifetime learning, which is
not use it or lose it, but if you do not use it--because many
of our veterans come out, but they reach a point in their life
where, in order to really be a viable member of the work force,
that is when they go back to school.
So--and I am not say let us do this. I am saying let us
look at it----
Secretary Principi. Sure.
Senator Mikulski [continuing]. In the context of what we
are doing.
Secretary Principi. Absolutely.
JOB TRAINING VETERANS
Senator Mikulski. And second, for those who need initial
training, but also those who need retraining. So that, for
example, the veteran who might have worked in a factory and
that factory is closing, but who had--maybe he was an
electrical technician, maybe this is the time that they can at
a community college become a Microsoft engineer, which is a
certificate program, not a degree program, and go into $65,000
a year.
Do you see how I want new thinking in this area? And we
have this.
The other thing is, I really--and I say this because I am a
member of the Health, Education, Labor Committee--I do not have
a lot of confidence in a lot of these job training programs. I
do not. I think they were process driven. I do not think that
they are related to the work force shortages in communities.
And, you know, I am a big believer in the community
college, not only for a degree program but for these
certificate programs. And they welcome all ages, et cetera. So
I think we need new thinking. And let us do it through the VA.
Secretary Principi. Sure.
Senator Mikulski. And let us view this as an empowerment
initiative----
Secretary Principi. Absolutely.
Senator Mikulski [continuing]. For the veteran, where those
who right now might not be able to make the highest and best
use of the talents God gave them, but we really have an real
opportunity matter. And I am ready to shake up the
establishment on this.
Secretary Principi. I am grateful for your position.
Senator Mikulski. Really.
Secretary Principi. Yes.
Senator Mikulski. I am--you know, my own social work
background says we have lessons learned from welfare reform,
which you might be able to learn. But in welfare reform, for
years it was very process-oriented. How many this, and the
workshop, and did you comb your hair. I mean, these men are
veterans. They already had authority training. What they need
is real training----
Secretary Principi. Sure.
Senator Mikulski [continuing]. For real jobs where they are
really needed. Let us look at the unions. Let us look at
apprenticeship programs. We have a terrible work force shortage
right now for plumbers, for electricians, and so on. And what
about that? Because right now, if you are really a master
electrician in Maryland, you can earn over $40,000 a year. And
the ads are just all the way down.
Secretary Principi. That is right.
Senator Mikulski. So, you see, let us not just say, ``Oh,
let us give it to a governor, let us give it to these
agencies.'' I am not so sure the best job training programs are
job training for the people wanting the job training. And they
are going to be really upset when they hear what I am saying
here. But we have new ways. Maybe we have to contract out to
technical schools, but not the sham schools that ripped us off
on the tuition benefit.
So we have a lot of lessons learned. But at the end of the
day, when a veteran walks into a job training program, I want
them first to get the training and then get the job. And that
is what the emphasis needs to be on. Are we on the same broad
band here?
Secretary Principi. Oh, we certainly are and look forward
to working with you. I think it is very exciting. I am also
thinking, as you were speaking, Madam Chair, about licensure
and certification. We have so many skilled people in uniform.
When they come out, there is the whole issue of their getting
licensed in the State and getting certified so that they can
get that job as an aviation mechanic or in the trades with the
unions. There is just so much that needs to be done and should
be done. And I welcome the opportunity to work with you on it.
VETERANS EMPLOYMENT OPPORTUNITIES
Senator Mikulski. And I want to give you an idea today, as
we wrap this up, right now, as you know the United States
Government and its Federal aviation security is under a
significant mandate to federalize airport security. For those
veterans that are coming to you that are unemployed, who have
already demonstrated their patriotism, already demonstrated
their commitment to defend America and took an oath to do so,
why do we not see if there can be a referral to the Department
of Transportation where these veterans--we could use, one---
first of all, we can use their patriotism. It deals with the
citizen issue.
But also, these are going to be Federal jobs. Think about
that.
Secretary Principi. To me, it is a no-brainer, Madam Chair.
I cannot think of a better population, than skilled, motivated,
team workers, a drug-free workforce:, people that would make
better Federal security officers than the men and women who are
leaving active duty. It is mind boggling to me that we do not
take advantage of these highly trained individuals.
Senator Mikulski. Well, why do you not look at that? Why do
you not leave here and go call up Norm Mineta and see----
Secretary Principi. I am going to be with him Friday night
at a banquet honoring our Japanese-Americans. I am absolutely
going to sit next to him and talk to him about this issue and
tell him that we talked.
Senator Mikulski. Yes; and there you go.
Secretary Principi. I am going to do it.
Senator Mikulski. Okay.
Secretary Principi. I will be with him.
Senator Mikulski. Okay. And when I am going through
Baltimore-Washington Airport and somebody says, you know, I was
Corporal So-and-So, thanks for this idea, I will look forward
to shaking their hand.
Secretary Principi. I am going to do it; we will do it.
Senator Mikulski. Okay. This committee stands in recess----
Secretary Principi. Thank you so much.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Barbara A. Mikulski
$400 million budget shortfall
Question. Why is there a $400 million shortfall in VA Medical Care
in 2002, even though the Subcommittee provided $350 million more than
requested?
Answer. The 2002 shortfall is the result of increased usage of VA's
health care system, some of which we could not have anticipated. Some
Medicare Health Maintenance Organizations (HMOs) have withdrawn from
participation in the Medicare program, and VA is now treating some
patients who previously relied on these HMOs for their health care
needs. VA health care is now more accessible, due largely to the
opening of many new community-based outpatient clinics. We are
experiencing an increase in patients as a result of the Department's
continual improvements in the quality of the care provided. Where
comparable data exist, VA outperforms the private sector for all
indicators in health promotion and disease prevention. It is notable
that VA has been able to achieve these improvements in the quality of
care while simultaneously achieving year-to-year decreases in the
average costs per patients treated.
In an effort to improve our workload projection capability, VA has
enlisted the support of a well-known actuarial firm, Milliman USA, to
provide us with assistance in making forecasts of the patient
population. This has placed us in a much stronger position to evaluate,
and account for, the impact of a variety of different factors on the
size and distribution of our future patient population. The
Department's fiscal year 2003 budget is the first to present workload
projections that reflect the expert assistance of this actuarial firm.
Question. Are you aware that the Statement of Administration Policy
(SAP) for the 2002 VA-HUD Conference Report said that this increase was
not necessary to ``optimize Federal resources?''
Answer. Yes, I am aware that the SAP for the 2002 VA-HUD Conference
Report said that the increase of $350 million was not necessary to
``optimize Federal resources.'' Subsequent to the SAP, the VA health
care system experienced increased usage, some of which could not have
been anticipated. We continue to experience increases at unexpected
rates due to HMO withdrawals from the Medicare program; access to new
community-based outpatient clinics; and improvements to the quality of
care in the VA health care system.
Question. Did the VA underestimate the number of veterans who would
use the VA healthcare system? By how much?
Answer. Yes. The fiscal year 2001 estimate used for the fiscal year
2001 budget was 3,894,864 unique patients; the actual number was
4,247,204 unique patients. The fiscal year 2002 estimate in the fiscal
year 2002 budget submission was 4,118,565 unique patients. The current
fiscal year 2002 estimate in the fiscal year 2003 budget submission is
4,737,518. As mentioned above, among the factors responsible for the
increase are the withdrawal of many Medicare HMOs, improved access to
VA health care, and the Department's continual improvements of the
quality of care provided.
Question. The SAP also said that VA would get a $235 million
savings because military retirees would move over to the DOD healthcare
system. Was this savings realized?
Answer. The TFL benefit became effective on October 1, 2001. It is
still too early to determine the full impact on VA. We will be happy to
share this information with Congress when we have analyzed the
information.
Question. How has VA made up for this shortfall? Specifically, what
changes are included in the VA's 2003 operating plan to address this
shortfall? Will VA have a Supplemental funding request?
Answer. Based on the continuation of full enrollment, VHA
determined there would be a shortage of about $441 million in fiscal
year 2002. Approximately $300 million in management savings is
anticipated in fiscal year 2002. We expect that these savings will be
generated from a multi-year effort to improve standardization and
compliance in the procurement of equipment, pharmacy, and medical
supplies. Other savings are expected from program efficiencies related
to new criteria to assess community-based outpatient clinics and
centrally managed programs. The balance of the fiscal year 2002
shortfall, $142 million, associated with the continued enrollment of
new priority 7 veterans, is anticipated as an fiscal year 2002
supplemental. The request for the supplemental was forwarded to
Congress in on March 21, 2002.
Answer. As previously stated, the Department's fiscal year 2003
budget is the first to present workload projections that reflect the
assistance of the actuarial firm, Milliman, U.S.A. The President's
budget for fiscal year 2003 incorporates a ``Base Health Care Demand
Adjustment'' initiative that identifies and requests the resources
required to support an actuary estimate of the demand and case mix
changes needed for all seven patient priorities in fiscal year 2003.
Based on this initiative, the budget estimates should better account
for the relationship of planned workload requirements and the full
funding needed.
Question. Are the VA's networks being asked to make staff cuts as a
result of this shortfall?
Answer. At this time, we are not aware of two any networks that are
considering have performed reductions-in-force (RIFs) due to budgetary
constraints. Based on the continuation of full enrollment, VA
determined there would be a shortage of about $441 million in fiscal
year 2002. Approximately $300 million in management savings is
anticipated in fiscal year 2002. The balance of the fiscal year 2002
shortfall, $142 million associated with the continued enrollment of new
Priority Group 7 veterans, is anticipated as an fiscal year 2002
supplemental.
Question. How do VA's estimates about its workforce compare to
reality?
Answer. A comparison of the estimated and actual Medical Care full-
time equivalent (FTE) employment for fiscal year 1999, fiscal year
2000, fiscal year 2001, and fiscal year 2002 is provided below:
----------------------------------------------------------------------------------------------------------------
Fiscal year
Medical Care FTE ---------------------------------------------------------------
1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Estimate........................................ 180,411 179,206 181,500 179,300
Actual.......................................... 182,661 179,520 182,946 \1\ 181,500
Percent Change.................................. 1.2 0.2 0.8 1.2
----------------------------------------------------------------------------------------------------------------
\1\ Current Estimate.
Question. How can the VA-HUD Subcommittee help VA get its estimates
on target?
Answer. In an effort to improve our workload projection capability,
VA has enlisted the support of a well-known actuarial firm, Milliman
USA, to provide us with assistance in making forecasts of the patient
population. This has placed us in a much stronger position to evaluate,
and account for, the impact of a variety of different factors on the
size and distribution of our future patient population. The
Department's fiscal year 2003 budget is the first to present workload
projections that reflect the expert assistance of this actuarial firm.
$1,500 deductible for priority 7 veterans
Question. Tell us about Priority 7 veterans--How many veterans are
Priority 7? How old are they? What is their average income? Where do
they live?
Answer. The attached table shows the distribution of Priority 7
veterans by State as projected for the end of fiscal year 2002.
Priority 7 Veteran Population Projection by State as of 9/30/2002
STATE Priority 7
ALABAMA................................................. 238,715
ALASKA.................................................. 36,494
ARIZONA................................................. 253,924
ARKANSAS................................................ 119,483
CALIFORNIA.............................................. 1,265,007
COLORADO................................................ 218,009
CONNECTICUT............................................. 158,201
DELAWARE................................................ 44,777
DISTRICT OF COLUMBIA.................................... 23,635
FLORIDA................................................. 883,266
GEORGIA................................................. 394,607
HAWAII.................................................. 54,943
IDAHO................................................... 57,864
ILLINOIS................................................ 502,354
INDIANA................................................. 304,172
IOWA.................................................... 128,495
KANSAS.................................................. 115,323
KENTUCKY................................................ 189,955
LOUISIANA............................................... 185,842
MAINE................................................... 76,289
MARYLAND................................................ 296,798
MASSACHUSETTS........................................... 280,784
MICHIGAN................................................ 488,031
MINNESOTA............................................... 229,020
MISSISSIPPI............................................. 106,360
MISSOURI................................................ 296,595
MONTANA................................................. 45,363
NEBRASKA................................................ 70,768
NEVADA.................................................. 122,256
NEW HAMPSHIRE........................................... 71,330
NEW JERSEY.............................................. 348,246
NEW MEXICO.............................................. 87,946
NEW YORK................................................ 672,474
NORTH CAROLINA.......................................... 376,443
NORTH DAKOTA............................................ 24,869
OHIO.................................................... 551,307
OKLAHOMA................................................ 162,889
OREGON.................................................. 181,727
PENNSYLVANIA............................................ 610,029
RHODE ISLAND............................................ 47,412
SOUTH CAROLINA.......................................... 214,241
SOUTH DAKOTA............................................ 36,322
TENNESSEE............................................... 267,954
TEXAS................................................... 866,942
UTAH.................................................... 72,624
VERMONT................................................. 30,251
VIRGINIA................................................ 373,058
WASHINGTON.............................................. 313,182
WEST VIRGINIA........................................... 92,669
WISCONSIN............................................... 253,582
WYOMING................................................. 24,412
PUERTO RICO............................................. 70,328
--------------------------------------------------------
____________________________________________________
Total............................................... 12,937,564
household income of priority 7 enrollees
In 1999, VHA Office of Policy and Planning conducted a survey of
veteran enrollees, ``The 1999 Survey of Veteran Enrollees' Health and
Reliance Upon VA''. The major purpose of the survey was to provide
national and VISN level input into actuarial enrollment, utilization
and expenditure projections for use in the Secretary's annual
enrollment level decision analyses and other policy analyses. There
were some 20,000 respondents to the telephone survey and results were
weighted to be representative of all 3.6 million veterans who were
enrolled as of February 1999. Surveyed veterans were asked to say which
income group their total household income fell within: <$16k, $16,001-
$25K, $25,001-$35K, or $35,001 or over, and most surveyed veterans
provided a response.
The following table shows the results from the 1999 Survey of
Enrollees for Priority 7 enrollees responding to the question of total
annual household income. This table does not include data on assets,
which is also used to determine eligibility for Priority Level 7
status.
TOTAL ANNUAL HOUSEHOLD INCOME
------------------------------------------------------------------------
Cumulative
Income Percent Percent
------------------------------------------------------------------------
<$16K................................... 14.11 14.11
16K-25K................................. 24.28 38.39
26K-35K................................. 23.01 61.40
>35K.................................... 38.60 100.00
------------------------------------------------------------------------
NOTE: Generally, income of enrollees is self-reported to VA and has
not been validated recently, and income reporting is only required of
veterans who must be means tested. Priority 7 veterans do not have to
report income if they agree to make copayments. Thus, surveys are often
good sources for more complete and accurate data on veteran incomes.
Question. VA tells us that the number of Priority 7 veterans in the
VA system is skyrocketing. Do you think this is because of VA's
Prescription Drug benefit?
Answer. VA is currently looking at this issue and is also working
with the General Accounting Office who is conducting an independent
study of this issue. It is recognized that VA fills the gap by
providing uncovered services such as prescriptions for many of our
nation's veterans. For many Priority 7 enrollees, the VA health care
system is a ``safety net'', costing nothing to enroll and paying for
services as they are needed/used. VA has realized a tremendous increase
in demand for health care services from veterans in recent years. The
total number of patients has increased by over 11 percent from fiscal
year 2000-2001. The growth rate for Priority 7 medical care users has
averaged more than 30 percent annually for the last 6 years, and they
now comprise 33 percent of enrollees in the VA health care system.
Based on current law, this percentage is expected to increase to 42
percent by 2010. These increases reflect the fact that very few
Priority 7 veterans were treated before eligibility reform. In
addition, many Priority 7 veterans rely on the VA for only a portion of
their care and pharmacy accounts for a greater portion of their overall
cost of care than that for all other priorities. VA's pharmacy benefit
and co-payment structure remains an attractive choice for these
veterans.
Question. Do you think that VA is faced with absorbing this new
demand because of a lack of national policies to address the aging of
America and the collapse of many HMOs?
Answer. We believe these are two of the significant factors
affecting veteran's desire to access VA health care. VA health care
integrates a full continuum of care for veterans of all ages, including
mental health services and prescription drugs. VA also emphasizes
preventive care and leads the nation in many measures of performance in
this regard. VA also provides many services that are tailored to meet
the needs of service-disabled veterans. So, in addition to the economic
factors, we believe many patients come to VA because of the quality of
care that we provide.
Question. Does VA know how many Priority 7 veterans have other
health insurance?
Answer. Currently, we have identified that approximately 18 percent
of all veteran users of VA health care have billable health insurance.
This reflects the fact that VA is prohibited by law from billing
Medicare and Medicaid. In addition, Health Maintenance Organizations
(HMOs) and Preferred Provider Organizations (PPOs) do not recognize VA
as preferred providers and consequently do not usually pay. Of the
billable insurance identified, one-third is generated from Fee for
Service policies and two-thirds from Medigap policies. This information
reflects the findings from a national contracted survey. Although we do
not have priority-specific information from this survey, based on the
higher incomes of Priority 7 veterans, we suspect they have a higher
percentage of billable insurance than average. We are examining ways to
obtain more accurate information about insurance coverage by all
veterans.
Question. Are veterans required to tell the VA if they have other
health insurance?
Answer. Veterans are asked, but not legally required, to disclose
health insurance information to VA. Legislation is under consideration
within the Administration to require veterans to disclose health
insurance information.
Question. What authority does VA have to require this deductible?
Answer. VA does not currently have authority to require this
deductible and has thus proposed legislation that, if enacted, would
authorize the deductible.
Question. Does it require a specific change to the authorizing
statutes?
Answer. Yes, and VA has proposed legislation to make the change.
Question. VA estimates that it will collect an additional $400
million as a result of this new cost share proposal, and that this
funding will go back into the system to pay for veterans' care. But VA
couldn't accurately estimate its total number of patients for this
year. How can we be sure that VA is able to accurately estimate this
savings?
Answer. In an effort to improve our workload projection capability,
VA enlisted the support of a well-known actuarial firm, Milliman USA,
to provide us with assistance in making forecasts of the patient
population. This has placed us in a much stronger position to evaluate,
and account for, the impact of a variety of different factors on the
size and distribution of our future patient population. The
Department's fiscal year 2003 budget is the first to present workload
projections that reflect the expert assistance of this actuarial firm.
Milliman USA projected the reduced workload usage associated with
this cost sharing proposal. Approximately 10 percent fewer Priority 7
patients will likely use VA health care services altogether. There will
be an overall 31 percent reduction in workload expenditures, since many
patients who remain will use fewer VA services when faced with this
charge. We project $885 million in savings directly related to the 31
percent workload reduction. Collections in fiscal year 2003 from the
proposed cost sharing initiative are estimated at $260 million.
Question. The VA also tells us that if Congress rejects the cost
share proposal, we will have to appropriate an additional $1.1 billion.
Again, if VA couldn't accurately estimate its total number of patients
for this year, how can we be sure that VA is able to accurately
estimate this cost?
Answer. In an effort to improve our workload projection capability,
VA enlisted the support of a well-known actuarial firm, Milliman USA,
to provide us with assistance in making forecasts of the patient
population. This has placed us in a much stronger position to evaluate,
and account for, the impact of a variety of different factors on the
size and distribution of our future patient population. The
Department's fiscal year 2003 budget is the first to present workload
projections that reflect the expert assistance of this actuarial firm.
In addition, this budget does incorporate a ``Base Health Care Demand
Adjustment'' initiative that identifies and requests the resources
required to support an actuarial estimate of the demand and case mix
changes needed for all seven patient priorities in fiscal year 2003.
Because of this initiative, the fiscal year 2003 budget estimates
should better account for the relationship of planned workload
requirements and the full funding needed.
prescription drugs
Question. Can the VA quantify how the lack of a Medicare benefit
impacts the VA health system?
Answer. As mentioned above, VA and the GAO are looking at the
impact of the lack of a Medicare benefit for prescription drugs on VA
health care. More than 50 percent of VA users are Medicare enrolled.
Priority 7 Medicare enrollees increased 138 percent between fiscal year
1999 and fiscal year 2001. Based on fiscal year 2000 data, age 65+
Priority 7 pharmacy costs accounted for 29 percent of their total cost,
compared to 13 percent of the total cost for Priority 1-6, age 65+.
Question. What is the VA's Prescription Drug benefit? How does the
VA's program work?
Answer. VA provides medically necessary pharmaceuticals to enrolled
veterans if prescribed by a VA authorized physician. This includes
prescription and over-the-counter medications (OTC), as well as medical
and surgical supplies. For over 50 years, VA has used drug formularies
or drug lists. Over the years, the VA formulary has evolved from a
static list of drugs that are available to VA physicians and patients
to a dynamic process where the use of drugs is actively managed using
the objective evidence culled from the medical literature.
Today, drug use in VA is managed through the VA National Formulary
(VANF) process. The VANF process has a centrally managed drug list
which is considered its core formulary (i.e., drugs listed on the VANF
must be made available at VA medical treatment facilities, however,
each VISN has the option of establishing a VISN formulary which can be
used expand the list of drugs available through the VANF to meet the
unique needs of a VISN). The VANF also incorporates a non-formulary
request or waiver process whereby medically necessary drugs which are
not included on the VANF or on the VISN formularies may be requested by
individual physicians to meet the needs of individual patients.
Except for a very small number of exceptions, outpatient
prescriptions are filled exclusively in VA operated pharmacies. Mail
prescription service is provided through VA Consolidated Mail
Outpatient Pharmacies (CMOPs), while in other cases, prescriptions are
made available for pick-up at pharmacies located in VA medical
treatment facilities. Maintenance medications are generally supplied in
90-day quantities though the VA CMOPs.
VA's pharmacy benefit also includes a co-pay system. In February
2002, the co-pay was increased from $2 for each 30-day supply of
medication to $7 for each 30-day supply. Medical and surgical supplies
and any medications used to treat a service-connected condition are
generally exempt from co-payment. In addition, some veterans are exempt
from all prescription co-payments (i.e., veterans that fall below the
means test threshold and veterans who are greater than 50 percent
service connected.
Question. How much does VA spend each year on pharmaceuticals?
Answer. In fiscal year 2000 VA spent $2.2 billion on
pharmaceuticals, and $2.5 billion in fiscal year 2001. The estimate for
pharmaceutical expenditures in fiscal year 2002 is $2.9 billion and
fiscal year 2003 is $3.3 billion. VA manages costs by utilizing generic
drug products whenever possible, by encouraging the appropriate use of
drugs through the VANF process, by lowering unit costs through
standardization contracting, by decreasing the cost of the distribution
of bulk drugs products through a Pharmaceutical Prime Vendor, by
lowering the cost of dispensing prescriptions through the use of VA
CMOPs, and by dispensing chronic medications in 90-day supplies.
Question. In December 2000, VA's Inspector General (OIG)
recommended changes to make VA's prescription benefit more efficient.
One of the recommendations is for the VA to fill privately written
prescriptions. The Inspector General estimated that this would save VA
over $1 billion per year. What is VA's response to this recommendation?
Answer. VA does not support the OIG's recommendation. OIG
recommended that VA stop providing medical care and only provide
pharmaceuticals. VA contends that this recommendation would lead to
fragmentation of care and that it is not in the best interests of
veterans. Additionally, if VA were required to fill privately written
prescriptions for any veteran, the system would be overwhelmed due to
insufficient infrastructure and resources to accommodate the additional
workload. Using current expenditures, it is estimated that for each one
million veterans who are provided the pharmacy benefit, VA's costs
would increase by $1 billion annually. Further, VA would need to
increase its staff of pharmacists by a very large number in an
environment where they are in short supply and are able to command
increasingly high salaries.
Question. What mechanisms does VA use to manage: drug use?
distribution of drugs? costs?
Answer. To manage the appropriateness of drug therapy, the
distribution of drugs, and the costs of drugs, VA uses a variety of
formulary management mechanisms and techniques. VA created a Service
Line call the Pharmacy Benefits Management (PBM) Strategic Health Care
Group in 1995 to coordinate the VANF process and encourage the
appropriate use of drugs by veterans. The VANF process involves several
tools designed to encourage the appropriate use of medications and to
positively impact the unit cost of drugs. Some of the tools include the
development and dissemination of evidence-based clinical guidance [Drug
Use Criteria, Pharmacologic Management Algorithms, Drug Monitoring
Criteria, Drug Class Reviews and other clinical guidance documents,
managing drug utilization data to impact prescribing behavior,
performing national standardization contracting, encouraging
improvements in inventory management, and engaging in pharmaceutical
outcomes research.
To manage the distribution of pharmaceuticals to VA treatment
facilities, VA uses a Pharmaceutical Prime Vendor, which distributes
products to VA facilities at prices that are negotiated with the drug
manufacturers. The current contract results in savings of over $50
million per year for VA below the VA contract price for
pharmaceuticals. Distribution of drug products to individual veteran
outpatients is accomplished by dispensing at VA treatment facilities
and through VA mail prescription service. Over 50 percent of all VA
prescriptions dispensed are mailed to veterans.
As a result of these initiatives, the average cost of a 30-day
supply of medication in VA has increased very little over the past 3
years.
Question. And VA is able to do this without compromising the
quality of care for veterans?
Answer. Yes, all indicators of care reflect improvements in
veterans care. These include but are not limited to measures in the
care of diabetes and blood cholesterol. In the Congressionally mandated
study on the VA National Formulary, the Institute of Medicine concluded
that there is no indication that the quality of care in VA has
decreased as a result of the VANF process. Additionally, in its studies
of the VA formulary management process, GAO concluded that the VA
formulary process is clinically sound and that it meets the needs of
veterans.
Question. VA's formularies help contain cost, while still ensuring
that veterans have access to the best medical care. How are these
formularies developed?
Answer. The foundation for formulary management decisions is a
comprehensive review and analysis of the published medical literature.
These reviews and analyses, performed by VA clinical staff, result in
evidence-based decisions regarding which products should be included on
the VANF, how those products should be used, and the place in therapy
of those products relative to alternative drug therapies. The review
processes focus primarily on a drug's safety and effectiveness, as well
as on other measures of quality. Cost considerations, while important,
are secondary to quality considerations when determining a drug's
formulary status and place in therapy in VA.
Final decisions on formulary management are made by two groups of
field-based clinical staff in VA. These two groups are the VA Medical
Advisory Panel (MAP) and the VISN Formulary Leaders Committee (VFL).
The first group is comprised of 12 VA practicing physicians and one
Department of Defense physician. This group provides physician
oversight of the VANF process. The second group is comprised of 21
pharmacist or physician representatives from each of the 21 VA VISNs,
the Director of the VA CMOP program, a National Center for Patient
Safety pharmacist representative, a pharmacist representative from VA's
National Acquisition Center (NAC), and a pharmacist representative from
the Department of Defense's Pharmacoeconomic Center (PEC). VA physician
subspecialty representatives groups are often invited to provide input
on issues of interest prior to MAP and VFL formulary decisions.
VA offers one of the most generous pharmacy benefits and does so at
an affordable cost, due to the managed formulary process. With rare
exception, all available therapeutic drug classes of drugs available in
the United States are represented on the VANF. The VA formulary
management process provides a high level of access to pharmaceuticals
for VA clinicians and veteran patients. VANF drugs comprise
approximately 92 percent of all drug dispensing in VA, while VISN drugs
comprise an additional 6 percent. Considering that VA provides medical/
surgical items and OTC products, it is inarguable that the VA formulary
process meets the needs of veteran patients and VA clinical staff.
Question. In January 2001, GAO reported some networks were not
applying the formularies in a standardized way. Some networks were
adding and omitting drugs on an ad hoc basis. What is VA doing to
ensure that there are national standards for all VA networks--so that
all veterans have access to the same drugs--no matter where they are?
Answer. VA has rewritten its policy on the national formulary
process to address GAO's concerns, has made adherence to the VHA
Directive on the VANF a topic for discussion in many forums with VA
pharmacists and clinical leaders, and has made explicit requirements in
the Directive for national, regional, and local clinical and
administrative staff.
VA has taken the following specific actions: development of a
template for VISNS to use for considering drugs for inclusion on their
VISN formularies; review of all formulary actions taken by VISNS and
distribution of that information among VISNS, requiring a national
review of all New Molecular Entities approved by the FDA before a VISN
can add it to its formulary, and a requirement that if a medication is
added to 10 or more VISN formularies, a national review and decision
will occur. Additionally, VA has added a requirement that if a veteran
has therapy initiated in one VISN and transfers his care to another
VISN, that the therapy will not be changed due to any variations with
VISN formularies. Lastly, VA has started to review access to
pharmaceuticals (down to the individual facility level) where there
could be potential problems (i.e., drugs which are high cost, under
used, over used, etc.) and is reporting that data to VISNs on a regular
basis with a request for follow-up.
Question. How could VA's pharmacy benefits management initiatives
serve as benchmarks for a future Medicare drug benefit?
Answer. VA's comprehensive approach of addressing the contracting,
distribution and clinical use of drugs clearly demonstrates that
evidence-based formulary management can reduce cost while maintaining
or improving the quality of care and access to pharmaceuticals.
Evidence-based formulary decisions and contracting within a
therapeutic class can manage cost and not compromise the quality of
care. VA has been able to achieve high compliance to both the formulary
and contracts. Utilization management through the use of disease and
drug treatment guidelines also has application. Key to the success of
either program is organizational buy-in. VA utilizes practicing
physicians within the VA system as decision makers. Additionally, VA
uses experts within the health care system when decisions are to be
made in specific diseases, i.e., HIV/AIDS, diabetes.
Additionally, the use of a Pharmaceutical Prime Vendor, a
Consolidated Mail Outpatient Pharmacy and clinical pharmacists who can
help manage individual patient care would positively impact the system.
Of course, considerable opposition to the inclusion of some of these
tools in a Medicare drug benefit by various stakeholder groups should
be anticipated.
Question. VA recently increased the Prescription Drug copayment
from $2 to $7. How did the VA arrive at this amount?
Answer. VA may not require a veteran to pay an amount in excess of
the actual cost of the medication and the administrative costs related
to the dispensing of the medication. VHA conducted a study of the
pharmacy administrative costs relating to the dispensing of medication
on an outpatient basis and found that VA incurred a cost of $7.28 to
dispense an outpatient medication even without consideration of the
actual cost of the medication. This amount covers the cost of
consultation time, filling time, dispensing time, an appropriate share
of the direct and indirect personnel costs, physical overhead and
materials, and supply costs. It was thus determined that $7.00 would be
an appropriate co-payment.
Question. Does the VA plan further increases or adjustments to the
co-pay? What process will be used to determine any future changes to
the co-pay?
Answer. The amount of the medication co-payment will be reviewed on
an annual basis. Increases will be based on the Prescription Drug
Component of the Medical Consumer Price Index.
nursing shortage
Question. Does the VA agree that a quality work environment for VA
nurses translates directly into quality of care for our veterans?
Answer. VA agrees that a quality work environment for nurses
translates into quality of care for our veterans. Research has shown a
strong link between positive nursing work environments (including the
involvement of nurses in decisions that can have impact on patient
care) and enhanced patient outcomes.\1\
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\1\ Aiken, L. et al. ``Nurses' Reports on Hospital Care in Five
Countries,'' Health Affairs, May/June 2001, 43-53.
Havens, D. S., & Aiken, L. H. (1999). Shaping systems to promote
desired outcomes: The Magnet Hospital Model. JONA, 29(2), 14-20.
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The American Nurses Credentialing Center's (ANCC) Magnet Hospital
Recognition Program is designed to recognize excellence in nursing care
based on a quality work environment.\2\ Research has shown that magnet
hospitals demonstrate outstanding outcomes in patient and staff
satisfaction, staff productivity, and reduced length of hospital stay
for patients. The Tampa VA Medical Center is the first in VHA to have
attained Magnet status.
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\2\ ANCC refers to Magnet status as representing a culture of
excellence that includes: nurses who have the status needed to
influence people and procure necessary resources; good collaboration
between nurses, physicians, and administrators; and established systems
needed to insure nurse participation in policy decisions.
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Question. More and more, VA nurses are asked to perform duties that
are not directly related to the care of veterans--like administrative
and janitorial duties. But the VA doesn't allow nurses to negotiate
over these duties. How does this affect retention of VA nurses? The
quality of care for our veterans?
Answer. The Report of VHA's Nursing Workforce Planning Group
states: ``In VA, nurses are routinely required to ``substitute'' for
absent allied or ancillary staff, such as laboratory or clerical
support, simply because in the past there have always been nurses
present in the care environment to do so. This substitution for other
workers diminishes nurses' capacity to provide nursing care and worsens
the effect of the nursing shortage.''
VA recognizes that while the quality of our veterans care remains
high, such utilization takes nurses and other healthcare providers away
from patient care processes and results in strong employment
dissatisfaction that impedes both retention and recruitment of staff.
Question. Would giving nurses collective bargaining authority
provide a ``double value'' by both increasing the ``quality of life''
for nurses, and ``quality of care'' for veterans?
Answer. The Congress, in section 7422, title 38, U.S.C. extended
collective bargaining rights to title 38 personnel to include nurses.
VA nurses currently have and utilize all collective bargaining
authorities available to Federal employment. In addition, VA nurses are
active participants in partnership councils at all levels of the
organization.
Question. The VA Nurses Recruitment and Retention Act created a
National Commission on VA Nursing. What is the status of this
Commission?
Answer. The membership of the Commission has been appointed. The
Commission will hold its first meeting in May 2002.
Question. Could the Commission look into the collective bargaining
issue?
Answer. Yes. The Commission has been charged to consider
legislative and policy changes to enhance recruitment and retention of
nurses, and to make recommendations in these areas as appropriate.
Question. What other steps is the VA taking to recruit and retain
nurses?
Answer. Understanding the gravity of the future nursing shortage
situation, VA recognized the need to bring together nursing and health
care management experts to fully explore all issues that have an impact
on VA's ability to maintain a highly qualified nursing workforce. As a
result, the Future Nursing Workforce Planning Group (Planning Group)
was established in August 2000.
In January, VHA released A Call to Action--VA's Response to the
National Nursing Shortage. The report is the product of VA's National
Nursing Workforce Planning Group whose membership was made up of nurses
from a variety of positions, labor partners, VA medical center
administrators, and Human Resources experts. This group consulted with
national experts in nursing, government and academe, conducted an
extensive review of the literature and met with VA employees. What
emerged as a result is a frank discussion of VA's ability to compete in
today's nursing labor market and the barriers that impede nurse
retention, recruitment and utilization. Recommendations for diminishing
these barriers are presented; they range from the need for legislative
initiatives to the need for flexibility and respect in the work
environment.
To disseminate the Report's content, VHA has held policy level
briefings and produced a national broadcast for all employees using the
VA Knowledge Network. The report and its recommendations will be the
subject of national meetings and will be considered by the VA Workforce
Task Force and the National Commission on VA Nursing.
VA has placed significant emphasis on the education and training of
its nurses. The National Nursing Education Initiative (NNEI),
implemented in March 2000, is a VA established subcomponent of the
Employee Incentive Scholarship Program (EISP) that supports educational
opportunities for VA's registered nurses to expand their formal
education. It helps ensure that VA nurses are educationally prepared to
provide the highest quality of health care to veterans across the full
range of clinical practice roles. Additionally, the NNEI will prepare
nurses for their new and evolving roles as VA continues its
transformation from a hospital-based system to one that focuses on
primary care and care management in outpatient, home, and community
settings. As of September 30, 2001, the NNEI accounted for nearly 90
percent of all the EISP participants. Academic year 2000-2001 was the
first full year of operation of the NNEIEISP. At the conclusion of
fiscal year 2001, 2,087 VA employees had been awarded EISP
scholarships, including 1,870 registered nurses under the NNEI
subcomponent. The total cost of these scholarships, many of which are
multi-year awards that in some cases continue into academic year 2005-
2006, is approximately $23.3 million. The portion of the EISP funding
that was specifically for the NNEI amounted to $21.3 million.
Additionally VA has increased its emphasis on recruitment outreach
for registered nurses. In fiscal year 2001, VA has more than doubled
the number of the number nursing conventions, job fairs and other
recruitment forums where it sponsors exhibits to promote VA as an
employer of choice. Similarly, VA has increased its nationwide
advertising which includes eye-catching display ads prominently placed
in major newspapers and professional journals and internet advertising
with links to VA's health care recruitment web site.
VA is in the process of implementing the Education Debt Reduction
Program (EDRP) that provides the authority to implement to help
recently appointed health care employees such as nurses reduce the
interest and principle on government and commercial loans that they
obtained to fund their health care education. It appears that some
concerns with the National Partnership Council have been resolved and
that the award process will begin in the very near future. The EDRP is
expected to be a highly effective tool for recruiting nurses.
As another initiative, a senior VA nurse executive is now a member
of the staff of the Healthcare Staff Development and Retention Office
to facilitate the utilization of existing recruitment and retention
programs and the creation of new programs.
Question. What will the VA spend on these initiatives in 2003?
Answer. Up to $10 million will be spent on the NNEI in fiscal year
2003 and $1.7 million is in the budget for VA Learning Opportunities
Residency Program (VALOR). About $5 million is available for the EDRP.
The lion's share of the VA's national health care advertising budget,
which totals about $1.5 million, will be shifted to nursing.
Question. How can the VA-HUD Subcommittee help bolster these
initiatives?
Answer. It is critical that VA be a competitive employer of new
nursing graduates. The VA Learning Opportunities Residency Program
(VALOR) \3\, which has had a positive impact on nurse recruitment in
the past and has won national acclaim, is a rich source of new nurses.
VA will promote a positive work environment for nurses and all
employees and will continue to develop recruitment and retention
strategies that enable competitive employment of a qualified nursing
workforce.
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\3\ The nationally acclaimed Veterans Affairs Learning
Opportunities Residency Program (VALOR) is an honors program
administered by local VA facilities but funded centrally. VALOR
provides specialized summer educational and clinical experiences to
nursing students with GPA's of 3.0 or higher. Participants are paid 80
percent of RN pay and if they elect VA employment after graduation they
are given special salary consideration. In fiscal year 2001 there are
267 VALOR students being supported in 77 VA medical centers.
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collections
Question. The 2003 budget assumes that VA will collect $1.4 billion
in 2003, an increase of about $500 million above the 2002 level. How
much of this amount does VA estimate would come from the proposed
$1,500 deductible?
Answer. An estimated $260 million revenue increase is expected to
come from the $1,500 deductible proposal. This proposal is also
expected to generate an overall net workload expenditure reduction of
$885 million, for an overall reduction in the appropriation request of
$1.145 billion for veterans' health services in fiscal year 2003.
Question. Last month, the VA's Inspector General reported on missed
billing opportunities, backlogs of claims worth a billion dollars, and
poor follow-up on bills. GAO has found similar problems about VA's
collections efforts. What is VA doing to collect what veterans and
taxpayers are owed?
Answer. For the past 4\1/2\ years VA has contracted with a private
vendor to follow-up on third parties receivables over 90 days old. This
contract has resulted in collections totaling $200 million at a cost of
a little more than $4 million. This contract required the contractor to
submit 5 additional follow-up letters to an insurance company for
payment to VA for the service provided.
Additionally, the VHA Revenue Office is in the process of
``testing'' the concept of outsourcing follow-up activities between one
VISN and the Allied Interstate Company (a collection company). For a
period of 120 days, the company will attempt to resolve aged billing
claims while on location in a VISN facility. This test will provide
insight into how well a private sector billing company can provide
outsourcing for billing services.
We have simultaneously encouraged VISNs to identify outsourcing
opportunities, not only for follow-up activities, but also for coding
and billing. A number of VISNs are in the process of developing
statements of work for outsourcing and several others have issued
solicitations.
Question. How much does VA spend on its collections efforts? For
example, for every dollar spent on collections, how much does VA
actually collect?
Answer. VA's cost to collect from third-parties is very difficult
to compare with private industry's cost to collect. VA's measurement
for this process is a cost to operate. VA's data systems cannot provide
data for collections and costs to differentiate between first and
third-parties. The cost accounting system records only total
collections and cannot identify cost expenditures to the first and
third-party level. There have been cost assessment studies done in
prior years by contractors and one currently underway; both of which
have shown (show) how the cost to collect/operate has declined over the
past few years. This decrease in cost to operate can be attributed to a
number of improvements in the process for billing and collecting of
first and third-party receivables. These enhancements include the
electronic generation of patient statements from one location, the
receipt of payments for first party charges through a lock box bank,
and the automatic posting of those payments to a patient's account.
Additionally, improvements made to the third-party billing process
include facilities using an Electronic Data Interchange (EDI) in the
near future to submit bills to insurance companies electronically,
centralization/consolidation of like collection functions, and
outsourcing/contracting out follow-up activities.
Systems Flow, Inc., has been contracted to study and develop annual
reports to Congress on an assessment and an interim evaluation of
alternative business models presented in VHA's Business Plan for
Revenue Collection. Systems Flow, Inc. reviewed three VISNs on various
subject matters including cost to collect data. A draft based on
preliminary data results (using December 2001 data) was issued February
12, 2002. The cost to operate on average for three VISNs for third-
party collections averaged 22 cents to collect $1 and averaged 16 cents
to collect $1 of total collections (first and third-party).
Question. Does the VA know to what extent it is owed by deadbeat
third parties? Is VA able to estimate how much?
Answer. We are unable to systematically identify payers that
routinely or frivolously deny payment of our claims. However, field
staffs occasionally provide anecdotal information on the subject.
Therefore, to provide an accurate response will require substantial
systems development for monitoring and reporting on such occurrences.
We anticipate a greater capacity to monitor such activity with advent
of the Electronic Data Interchange (EDI).
Question. Why has the VA chosen to keep billing in-house, rather
than contracting it out to the private sector, which has more
experience in billing issues?
Answer. VA is in the unique situation of dealing with service
connected and non-service connected veteran patients for billing
purposes. Due to the various rules and regulations that deal with this
situation, many private sector billing companies will have to modify
their software in order to bill for VHA services. VHA's study of
commercial-off-the-shelf billing products identified several vendors
that could provide billing outsourcing with effective training and the
upfront work with the VistA software to extract the episode of care
information. To that end, the Office of Information's Software Design
and Development section is in the process of making the VistA software
``billing aware'' so that it can be integrated with potential private
sector billing companies. Another issue hindering the outsourcing of
billing is obtaining security clearances for individuals performing
billing work for a potential contractor. Security clearances must be
obtained for each individual accessing the VHA computer systems.
Further, the contractor must be physically located on VA property to
stay within the VA computer systems firewall to preserve the security
of the data. Another issue hindering the outsourcing of billing is the
lack of consistent documentation and use of the Computerized Patient
Medical Record System (CPRS) at all clinics within a medical center.
These issues are being addressed by VHA management.
The VHA Revenue Office is in the process of ``testing'' the concept
of outsourcing follow-up activities between one VISN and the Allied
Interstate Company (a collection company). For a period of 120 days,
the company will attempt to resolve aged billing claims while on
location in a VISN facility. This test will provide insight into how
well a private sector billing company can provide outsourcing for
billing services. The Revenue Office will be conducting weekly
conference calls on the status of this initiative with VISN 12, as well
as receive monthly progress reports on the amount collected by Allied
Interstate Company.
In addition, we have simultaneously encouraged VISNs to identify
outsourcing opportunities, not only for billing, but also for coding
and accounts receivable management. In fact, several VISNs have such
outsourcing situations in progress and several others have issued
solicitations. The VHA Revenue Office maintains a list of VISN/Medical
Center contracts from across the country. This listing will be
available to VISN/Medical Centers for information on contracts
available.
The foregoing activities indicate a desire and commitment within VA
to outsourcing options.
Question. Has VA been able to develop a list of ``lessons learned''
to maximize collections?
Answer. VHA has identified 24 action items to enhance revenue
operations. Project Teams are pursuing the implementation of these
action items in the areas of Billing, Coding, Insurance, Utilization
Management and Accounts Receivable Management. These project teams will
make recommendations for improvements to the Revenue program and
develop training programs for facilities to implement best practices.
We are consolidating information into a central resource vehicle to
assist field revenue staffs in maximizing their collection efforts.
waiting times
Question. What can the VA tell us about current waiting times? How
long do veterans wait to get a doctors appointment? How long do they
sit in the waiting room?
Answer. Eighty seven percent of primary care appointments and 83
percent of specialty care appointments are scheduled within 30 days of
desired date. This measure includes ALL patients seeking an
appointment. For new non-emergent patients seeking an appointment to
primary care, the current waiting times is 58.7 days. In addition, 71
percent of patients reported that they waited 20 minutes or less to see
their provider.
VHA tracks and monitors other information on waiting time to
provide a richer context for evaluating performance. Information on
performance for February 2002 is included in the table below. VHA
tracks performance on these monitors over time to assess the
effectiveness of corrective actions as well as to monitor the effect of
other factors, such as eligibility changes and budgetary impacts on
waiting times. Attachment A provides data on general trends of
nationwide improvements for VHA's average wait times for primary care
and specialty clinics.
OTHER VHA WAITING TIME MONITORS--FEBRUARY 2002
------------------------------------------------------------------------
Actual/
Measure Specialty Clinic Plan/days days
------------------------------------------------------------------------
Average next available primary (Primary)........ 30 38
care appointment.
Average next available Audiology........ 30 31.8
specialty appointment waiting Cardiology....... 30 35.8
time. Eye Care......... 30 61.7
Orthopedics...... 30 34.4
Urology.......... 30 41.1
Average primary care new (Primary)........ 30 58.7
appointment waiting time.
Average specialty new Audiology........ 30 53.5
appointment waiting time. Cardiology....... 30 35.7
Eye Care......... 30 77.4
Orthopedics...... 30 38.6
Urology.......... 30 45.5
------------------------------------------------------------------------
Question. What are the goals for patient waiting time?
Answer. The Department level goals for waiting time for fiscal year
2003 are provided below.: The strategic goal for each of the
performance measures below is 90 percent by 2006.
--89 percent of primary care veterans appointments will be scheduled
within 30 days of desired date (excludes new enrollees who are
pending scheduling of their first appointment);
--87 percent of specialist appointments will be scheduled within 30
days of desired date (excludes new enrollees who are pending
scheduling of their first appointment); and
--72 percent of patients will report being seen within 20 minutes of
their scheduled appointments at VA health care facilities.
Note: pending scheduling is defined as a patient who has requested
their first appointment and is waiting to be scheduled.
Question. How were these goals developed?
Answer. In 1995, a survey was conducted for actual wait times, by
clinic. The data were analyzed to determine which clinics had the most
problematic wait times. Measures were prioritized for those clinics
with the highest wait times. Targets were set based on community
expectations based on literature searches and discussions with other
managed care groups.
Question. What is the VA doing to develop a system to accurately
quantify the current situation?
Answer. VHA has identified some immediate issues that must be
addressed:
--The current ``30 days measures'' do not accurately reflect the
experience of new patients.
--The present data exclude the wait time experience of new enrollees
whose application for enrollment has been received but not
processed and new enrollees who indicate a desire for primary
care appointment that has not been scheduled.
VHA recognizes that data credibility is compromised as the current
``VHA-OMB 30 day wait measure'' appears to be far better than
anecdotally reported wait experiences. Whether due to absence of
available slot or other reasons, ``waiting lists'' of Veterans to be
entered into the scheduling system are known to exist. ``Waiting
times'' is an area of intense concern among facility and Network
leadership.
In January 2002, VHA's Policy Review Board recommended and VHA's
(Acting) Under Secretary for Health approved the following proposed
actions:
--Improve construction and communication of current measures to
better reveal wait experiences of both new and established
patients in primary and specialty care.
--Transition OMB/GPRA/VA Strategic Measures to either supplement or
replace ``percent with 30 days'' with average wait times for
primary or specialty care categorized by ``all patient'' and
``new patients''
--Include new patient wait data in primary and specialty care in all
VHA wait times performance reporting
--Improve business processes to support improved data:
--Standardize the entry process for new enrollees, building on
processes developed in VISN 8. This should include standard
``pre-triage'' questions to determine basic preference and
reveal urgency of clinical needs at the time of enrollment.
Consider use of triage clinics, if primary care slots not
available. Incorporate principles of advanced access, including
recommendations for primary care panel size range into standard
entry process design.
--Formalize ``electronic wait list'' in VISTA to more consistently
and accurately reflect demand across VHA, and reduce risk of
enrollees lost to follow-up due to clerical error.
--Conduct periodic survey of new enrollees at defined periods after
enrollment to assess their experience with waiting times.
Question. How much funding does VA anticipate devoting to quantify
this problem in 2003?
Answer. The fiscal year 2003 budget includes a request for $159
million to improve access and service delivery.
claims processing times
Question. What is the current processing time for claims?
Answer. The current (through February 2002) average completion time
for rating claims is 222 days.
Question. What is the goal?
Answer. The fiscal year 2002 goal is 208 days.
Question. What lessons has the VA learned from past efforts to
improve processing times?
Answer. Because of concern over the increasing VBA workloads and
the length of time veterans were waiting for decisions on their claims,
the Secretary established the VA Claims Processing Task Force. The Task
Force was charged with assessing VBA's current operations and the
impact of efforts to improve claims processing. The Task Force was
asked to recommend measures and actions that would increase the
efficiency and productivity of VBA operations, shrink the backlog, and
reduce the time it takes to decide a claim.
The Task Force found that previous efforts to improve processing
times had focused on the ``back end'' of the process--from preparation
of the rating decision to award and decision notification. Nearly all
clerical positions had been eliminated and replaced with additional
``decision makers.'' The Veterans Services Representative (VSR)
position was created, which has been assessed to include over 10,900
separate tasks (including clerical functions), any combination of which
a VSR could be expected to perform on any given day.
It was the assessment of the Task Force that the broad scope of
duties coupled with the administrative ``clerical'' functions actually
reduced the time available for the VSR and the Rating Veterans Services
Representative (RVSR) to make decisions. Little attention was paid to
assuring proper and complete evidence development. As a result, claims
were delayed time and time again as essential evidence was not
solicited until months after the claim had been received.
We have learned that our attention must focus on the entire claims
process, from the date the claim is received in the Regional Office to
the time the final decision is made on the claim, including any appeals
that might have been filed. The Task Force recommended specialization
of claims processing in order to ensure complete and timely
development, reduction of cycle time delays, improved quality of
decisions and awards, and complete and understandable notification to
claimants. In addition, the Task Force recommended re-establishment of
a clerical position to handle the administrative function, thus freeing
up more direct labor hours for the VSR and RVSR. We are confident that
these actions will improve both the timeliness and quality of VBA
decisions.
Question. How much funding does VA anticipate devoting to improving
claims processing time in 2003?
Answer. For fiscal year 2003, $50 million has been budgeted for
initiatives to improve claims processing. These initiatives focus not
only on timeliness, but also on quality and other aspects of claims
processing, and are not all short term initiatives. Examples are
Virtual VA (VBA's imaging initiative), Systematic Individual
Performance Assessment (SIPA), and Compensation and Pension Evaluation
Redesign (CAPER).
Question. How many new employees?
Answer. These initiatives will require 106 additional FTE (20 for
Virtual VA, 64 for SIPA, 6 for CAPER, and 16 for other VBA-wide
initiatives).
Question. How will VA train new employees so they will be able to
make a real difference?
Answer. Training programs have been created for delivery through a
variety of media, but the cornerstone of training for both RVSRs and
VSRs is the Compensation and Pension (C&P) Training and Performance
Support System (TPSS). For RVSRs, formal training occurs over a period
of 26 weeks. TPSS is supplemented with training by student and
instructor guides that includes a variety of practical exercises. A
great deal of time is also allotted for work with mentors, where
students are expected to demonstrate application of the knowledge they
have obtained through success with live cases. For VSRs, formal
training is outlined in the ``VSR Field Guide''. The Field Guide to VSR
training website contains 48 weeks of training materials including the
course curriculum, schedules, and all materials for instruction. Last
year's VSR course design called for 12 weeks of initial instructor-led
training. The purpose was to deliver uniform training in a compressed
timeframe with as little impact as possible to the resources of the
individual Service Centers. Stations would then continue training the
remainder of the 48-week curriculum as trainees became more productive.
Question. How have the VA's new duty to assist requirements
impacted processing times?
Answer. The Veterans Claims Assistance Act (VCAA) required that VBA
readjudicate more than 98,000 previously denied claims, as well as
review the 230,000 claims in our pending inventory at the time VCAA was
enacted to ensure compliance with the Act. This major increase in our
workload had a significant impact on the average processing times.
All VCAA claims have now been added to the inventory. At the same
time, we have taken aggressive steps to increase rating production,
which is the key to reducing the claims backlog and improving the
timeliness of our decisions. From October 2001 through February 2002,
VBA decided over 294,000 cases for a 5 month average of 58,800. This
represents a 47 percent increase over fiscal year 2001 production
levels. We expect our production to continue to increase as many of our
recently hired employees gain additional experience and we begin to
implement the recommendations of the Claims Processing Task Force.
We believe our increased production levels and the Task Force
initiatives will now enable us to make major inroads into the pending
inventory. Our goal is to reduce the pending rating inventory to
315,000 claims by the end of this year. Even though we project major
reductions in our pending inventory, the average days to complete will
continue to increase as we focus on completing the oldest claims in our
inventory.
Question. Is the VA developing safeguards to ensure times won't get
worse as it does more to help veterans develop their claims?
Answer. We have taken several steps to ensure our focus remains on
timeliness and accuracy. We have developed output targets for each
regional office, and established national standards for Veterans
Service Representatives and Rating Veterans Service Representatives. We
have established performance standards for regional office directors
that include specific goals for improvement in the timeliness of rating
claims, reduction in the pending inventory of claims, etc. These
performance plans also state that if any goals are not met, the
director must provide compelling mitigating reasons and identify
actions being taken to improve the performance.
Wellness plans have already been requested of some station
directors who have thus far failed to achieve goals specified in the
performance plan. The wellness plan is a detailed analysis of the
current situation, causes for the non-performance, and development and
implementation of countermeasures. If wellness plans do not result in
performance improvements and no mitigating reasons exist, appropriate
administrative action will be taken.
We are currently piloting a recommendation from the Claims
Processing Task Force to establish specialized teams within the claims
processing functions of Triage, Pre-determination, Rating, Post-
determination, Appeals, and Public Contact. The Triage team will assign
work to the appropriate team or work the case in the Triage unit if an
issue can be quickly resolved. The Pre-determination team will ensure
complete and timely development of rating claims received from the
Triage team. By addressing the current cycle time delays at the front
end of both the rating and non-rating claims process, we expect
significant improvement in the overall timeliness of claims processing.
National implementation of this pilot will be complete by the end of
this summer.
long term care
Question. What is the status of VA's implementation of long term
care?
Answer. VA has implemented a number of the major long-term care
provisions of the Millennium Act. Section 101(a), Nursing Home Care
Eligibility, as implemented in February 2000. Further guidance was
provided in November 2000 with issuance of VHA Directive 2000-044.
Section 101(c), Extended Care Services and Extended Care Copayments,
has been partially implemented with issuance of VHA Directive 2001-061
in October. This directive notes that VA will amend the regulations
establishing the benefits package to include outpatient geriatric
evaluation, adult day health care and home and community-based respite
care. Home care, hospice/palliative care and inpatient respite were
included in the benefits package under prior authority. The amended
Medical Benefits Package, Copayments for Extended Care Services
proposed regulation was published October 4, 2001. Final regulations
were forwarded to OMB on March 14, 2002.
Section 102--Long--Term Care Pilots-are in progress at three VA
sites (Dayton, Columbia, SC, and Denver, CO). The first veterans were
enrolled in the pilot in mid-2001 and the final report to Congress will
be submitted in April 2005, 9 months following the conclusion of the
pilots. Section 103--Assisted Living Pilot--is in progress in VISN 20,
Pacific Northwest. The first veterans were enrolled in this pilot in
January 2002 and the final report to Congress will be submitted in
October 2004, 90 days prior to the conclusion of the pilot. Lastly,
implementation of Section 207--State Home Construction Grants--is
nearly completed. Proposed regulations were published June 26, 2001 and
were utilized to establish the fiscal year 2002 State Home Construction
Priority List. Publication of final regulations is expected in April
2002.
Question. How much will VA spend on long term care in 2003?
Answer. VA projects that it will spend approximately $3.6 billion
on long-term care in 2003. Of this amount, $3.2 billion is for
institutional long-term care and $0.4 billion is for non-institutional
long-term care.
Question. What is the status of the assisted living pilots?
Answer. VA's Assisted Living (AL) Pilot being conducted in Network
20 (Washington, Oregon, Idaho, Alaska) started admitting veterans in
the pilot study group to AL facilities in January 2002. Contract issues
and Institutional Review Board issues delayed implementation of this
pilot program from the planned start of mid-2001, but all of these
issues have now been resolved. The pilot will be conducted for 3 years,
and the report to Congress on the outcomes will be provided 90 days
prior to the completion of the pilot as required in the Millennium Act.
VA's Health Services Research Centers of Excellence are conducting the
evaluation of this pilot.
fort howard
Question. Will the VA continue to move forward with the Mission
Change and Enhanced Use project underway at Fort Howard?
Answer. Yes. The Mission Change is currently in progress. The
estimated date to complete the Mission Change is September 2002. In
addition, the planning process for the revitalization of the Fort
Howard campus into a ``Continuum of Care Retirement Community''
utilizing Enhanced-Use legislation has been initiated. There is a lot
of interest in the project. This community concept would be a first in
the VA, and may likely prove to be a model for other VA sites
nationally where aging buildings and abundant property are a capital
burden on the VA system.
Question. What changes can veterans, their families, and VA
employees expect in the coming months?
Answer. The changes that veterans, their families, and employees
will see in the upcoming months will be the progressive relocation of
inpatient programs and administrative functions to other VAMHCS sites
where excess capacity exists. The planned relocations will provide a
better environment and accessibility for serving the health care needs
of Maryland's veterans. No current program offered at Fort Howard will
be eliminated. As most of the program moves are dependent upon various
construction projects, the estimated date to complete the Mission
Change is September 2002. The 32-bed Substance Abuse and Residential
Rehabilitation Treatment Program (SARRTP) was relocated to Perry Point
in February 2001. The Medical Care Cost Fund (MCCF) Office, also known
as the Revenue Office, was relocated to Perry Point in June 2001. The
Ventilator/Respiratory Therapy beds (12-bed unit) were relocated to
Perry Point in December 2001. Other planned relocations and
construction projects will follow this spring and summer. When the last
of the inpatient moves are completed, the current Fort Howard primary
care outpatient clinic will be relocated from the main hospital
building to Building 249, which is located behind the existing hospital
building and adjacent to the main parking lot.
Question. Will the outpatient services continue at the Fort Howard
campus throughout the entire transition?
Answer. Yes. As noted above, when the last of the inpatient moves
are completed, the current primary care outpatient clinic will be
relocated from the main hospital building to Building 249. Veterans who
are currently receiving primary care outpatient services will continue
to receive these services without interruption during the transition.
Although Building 249, which was built in 1992, is the newest building
located on the Fort Howard campus, construction is scheduled to begin
in April 2002 to make the space more functional for the needs of the
primary care outpatient clinic.
Question. Veterans with inpatient needs will be referred to the
Baltimore VAMC. What is the VA doing to prepare the Baltimore facility
for its expected increase in workload? What facility improvements are
being made? What is the VA doing to ensure that healthcare workers at
the facility are able to provide quality customer service to an
increased workload?
Answer. There will be no increase in inpatient workload at the
Baltimore facility as a result of the Fort Howard Mission Change. The
Baltimore facility supports the acute and critical care needs of
veterans for the entire VAMHCS. Fort Howard is a sub-acute care
facility. Upon completion of the Mission Change, the Fort Howard
inpatient programs will be relocated to more modern and comfortable
accommodations at the Perry Point and Loch Raven facilities. Over $7
million has been allocated for construction projects to accomplish the
planned relocations (see attached list). The transfer of patient
workload and staff from Fort Howard to the Perry Point and Loch Raven
facilities will increase workload at these two locations; however, the
overall system workload will not increase. Employees have been given
the option to relocate with their programs, as appropriate. We believe
that the veteran population will benefit from the planned relocations,
and the current level of quality care and customer service will be
maintained.
FORT HOWARD MISSION CHANGE PROJECT COST SUMMARY
------------------------------------------------------------------------
Project
Site Project title Project number cost
------------------------------------------------------------------------
Fiscal Year 2000 Funding:
LR Renovate BRECC1 For 512-00-166............... $179,650
Rehab Therapy
(Design/
Construction)
PP Relocate Cardiology 512-00-321............... 246,372
To 19H
LR Rehab/Admin Bumpout 512-00-168............... 52,500
Addition (Design)
LR Renovate Animal 512-00-167............... 83,000
Facility For
Orthotics (Design)
PP Renovate 22H For 512-00-320............... 44,843
SARTP (Design)
PP Add Bathrooms 23A 512-00-322............... 27,880
(Design)
PP Renovate 13H For 512-00-323............... 0
Admin Svcs (Design)
--------------
Subtotal ......................... \1\ 634,245
PP Renovate 14A & B 512-319.................. \2\ 3,920,0
00
--------------
Fiscal Year 2000 ......................... 4,554,245
Total
Fiscal Year 2001 Funding:
PP Add Bathrooms 23A 512-00-322............... 152,500
FH Renovate Bldg 249 512-00-120............... 51,500
(Design)
--------------
Subtotal ......................... 204,000
Fiscal Year 2002 Funding:
LR Rehab/Admin Bumpout 512-00-168............... 378,854
Addition
(Construction)
LR Renovate Animal 512-00-167............... 400,000
Facility For
Orthotics
(Construction)
FH Renovate Bldg 249 512-00-120............... 375,000
(Construction)
PP Renovate 13H For 512-00-323............... 390,071
Admin Svcs
(Construction)
PP Renovate 22H For 512-00-320............... 379,222
SARTP (Construction)
--------------
Fiscal year 2001 ......................... \3\ 1,923,1
and 2002 total 47
Funding Pending:
BT Provide A&MMS Space SB-01-104................ 359,000
in Warehouse
BT Renovate 2nd Floor ......................... 20,000
Audiology
LR Renovate B-4 basement ......................... 75,000
area for EMS Offices
& Linen Carts
LR Convert EMS Linen ......................... 25,000
Cart Rm In BRECC to
Offices
LR Add Offices In B-4 ......................... 75,000
Near Security (w/o
bathroom)
LR Expand Dental Suite @ SB-02-202................ 80,000
BRECC
--------------
Funding pending ......................... 634,000
total
Grand Total ......................... 7,315,392
------------------------------------------------------------------------
\1\ $486,000 received in FCP 073 in fiscal year 2000.
\2\ $3,920,000 approved for 14H.
\3\ $2.0M received in FCP 1934 in fiscal year 2002.
Question. Will the VA stick to the current timetable that calls for
the Mission Change to be complete by September 2002, and for the
Enhanced Use to be complete by January 2003?
Answer. The VAMHCS is doing everything possible to ensure the
timelines presented to date are maintained. As most of the program
moves are dependent on the completion of various construction projects,
the estimated date to complete the Mission Change is September 2002.
The Enhanced-Use portion of the project is a more complex and difficult
process to forecast. A contract was awarded to a consultant to conduct
an Environmental Assessment and the historical, marketing, land
planning, and financial feasibility studies for the Enhanced-Use
portion of the project. These studies are necessary to properly
validate the proposed concept and identify any potential concerns. The
marketing, land planning, and financial feasibility studies have been
completed. The historical study is currently under final review by the
Maryland Historical Trust and the Historic Preservation Officer, VA
Central Office. At or near completion of the Environmental Assessment,
a formal request to continue pursuit of the Enhanced-Use portion of the
project will be forwarded to VA Central Office for review and approval.
Based on current estimations by the Office of Asset Enterprise
Management, VA Central Office, the Enhanced-Use process takes
approximately 12 months to complete which results in the awarding of a
contract to a developer. It is unlikely that the formal Enhanced-Use
process will be completed by January 2003 as previously planned.
Question. Has the VA bid the Enhanced Use portion of the project in
January 2002 as planned? If so, was notice provided to the Committee?
If not, what is the delay?
Answer. No. The formal Enhanced-Use process of the project was
expected to begin in January 2002 with the submission of a Business
Plan. This Business/Concept plan is the first step in the formal
process leading to execution of an Enhanced-Use project. Subsequent
steps necessary prior to ``bidding'' include plan approval, conducting
a public hearing, and notification to Congress of the Department's
designation of the site for an Enhanced-Use lease. As noted in the
response above, prior to submission of the Business Plan (formal
request to continue pursuit of the Enhanced-Use project) there are
several studies that must be completed to properly validate the
proposed project and identify any potential concerns. Most of these
studies have been completed with the exception of the Environmental
Assessment. At or near completion of the Environmental Assessment, a
formal request to continue pursuit of the Enhanced-Use process will be
forwarded to VA Central Office.
Question. If the State does not authorize a new State Veterans Home
at Fort Howard, what impact will it have on the Enhanced Use plan?
Answer. If the State of Maryland does not authorize a new State
veterans Home at Fort Howard, there will be no impact on the enhanced-
use plan. If the State does not build at Fort Howard, the land will be
utilized to further enhance the retirement community, as appropriate.
major construction
Question. The 2003 budget request includes 4 seismic projects in
California totaling $94 million. While each of the 4 projects are on
VA's priority list, the request skips over projects that are identified
by VA as a higher priority--for example, projects in Cleveland and
Anchorage are of higher priority to VA, yet they are not requested.
What is the rationale for this?
Answer. All of the mentioned projects are important to VA, however,
when putting together recommendations for the President's fiscal year
2003 budget request the concern for the life and safety risk associated
with potential seismic related structural failure of the listed
facilities outweighed the Cleveland and Anchorage projects.
Question. What is the authorization status of each of the projects
on the VA's fiscal year 2003 Priority Major Medical Construction
Projects list? For each project that is authorized, please provide: the
date the project was authorized, the legislative citation, and when the
authorization expires. Please note each project that is not authorized.
Please also note the CARES status of each project.
Answer. The proposed SCI/Blind Rehabilitation Project for Hines is
the only project on the List of 20, which is currently authorized for
expenditure of funding. This is also the only project associated with a
completed CARES study.
Question. What are the VA's plans for the CARES process?
Answer. The VA's current plans for Phase II of the CARES process
will begin in Spring 2002. Phase II will call for all of the remaining
Networks to develop CARES plans based on actuarial projections
provided, space and facility assessments and other guidance and
criteria provided to them by VACO. Preparations in VACO have begun to
initiate this process. All studies and decisions should be completed
within the next 2 years.
minor construction
Question. The Committee has not yet received notification of the
fiscal year 2002 minor construction projects. Please provide this list
to the Committee.
Answer. Attached are VHA minor projects that were approved by a
Department wide workgroup (as required by the Committees) and included
in the fiscal year 2002 operating plan. This plan may be revised as
needed. VA will forward the operating plan to the Committees as
revisions are made.
Question. In fiscal year 2002, the Committee provided $32 million
above the budget request for minor construction projects. Please
identify the projects funded as a result of this increase.
Answer. VHA received $17.2 million of the additional funds. Out of
the $17.2 million, $6 million has been allocated to seismic projects
and $11.2 million was distributed to the VISNs in support of their
greatest minor construction needs. NCA received an additional $2.8
million, VBA an additional $10 million, and Staff Offices obtained an
additional $2 million over the original 2002 request.
Question. What percentage of funding is for minor construction will
support improvements to VA medical research facilities?
Answer. Based on the fiscal year 2002 minor construction
applications and operating plan, only one project was identified for
research. That project totaled $3.7 million and equates to 2.3 percent
of the appropriation of $161.5 million.
Question. In fiscal year 2002, the Committee provided $25 million
for CARES approved minor construction projects. How will VA allocate
this funding?
Answer. VISN 12 received $17.5 million in CARES funding with $1.5
million set aside to fund design work for additional VISN 12 CARES
projects. The remaining $6 million will be allocated to other approved
CARES projects.
homeland security
Question. VA's Fourth Mission is to serve as a backup to the DOD
healthcare system in times of national emergency. What does VA propose
to spend in 2003 to prepare for this mission?
Answer. VA's Preparedness Review Working Group identified a need to
provide direct interface and exchange of data with the DOD patient
evacuation system to be better prepared to assess hospital capability
and capacity, track active duty casualties transferred to VA, and
maintain casualty data within VA's VISTA system while military active
duty patients are receiving treatment within VA's healthcare system.
The report also recommended providing 1-800 access capability for
information and location of military patients.
geriatrics
Question. The fiscal year 2002 Senate VA-HUD Report directed VA to
report on the feasibility of extending geriatric fellowships to 2
years, and to make additional recommendations to make geriatric
fellowship more competitive with the private sector. The Committee
appreciates receiving this report.
While the report noted that VA had created a specialized 2 year
geriatric fellowship, but did not address the issue of making all
geriatric fellowships 2 years. What is the VA's response to this
specific issue?
Answer. VA supports two programs for physician training in
geriatrics. The first of these is geriatric medicine residency (or
fellowship) positions in Accreditation Council for Graduate Medical
Education (ACGME)-accredited subspecialty residency training programs.
The second program that VA supports is its Post-residency Special
Fellowship Program in Advanced Geriatrics. VA established this program
when some VA and non-VA geriatric leaders expressed concerns that 1
year of geriatric medicine subspecialty residency training was
insufficient to educate leaders in geriatrics. They asked VA to
continue its residency training and to develop advanced geriatric
medicine training opportunities. VA agreed. Continuing to fund ACGME-
accredited geriatric medicine and geriatric psychiatry residency
training positions, it also established a 2 year VA Special Fellowship
Program in Advanced Geriatrics.
VA believes that it is important to support both of these programs
to meet the clinical needs of geriatric patients as well as to develop
leaders in geriatrics for academic centers and health systems. The 1
year clinical residency programs accredited by the ACGME provide the
credentials necessary for practice in the specialty of geriatrics. The
program length is set by the accrediting agency. The 2 year, VA post
residency Advanced Geriatrics Fellowship Program develops geriatrics
leaders for VA and the Nation.
Question. What is the VA doing to actually implement the
recommendations of the report?
Answer. VA established its Post-residency Special Fellowship
Program in Advanced Geriatrics in 2000. This program is for post-
residency physicians who have completed ACGME-accredited subspecialty
residency training in geriatric medicine or geriatric psychiatry and
want to lead geriatrics in academic centers and health systems. Fellows
receive 2 years of additional training in geriatric research, advanced
education, and advanced clinical care. Fellows spend approximately 75
percent of their time in geriatrics research and education and 25
percent in advanced clinical care. In 2000, VA competitively selected
seven Geriatric Research, Education, and Clinical Center (GRECC) sites
to implement the Advanced Geriatrics Fellowship Program. The West Los
Angeles/Sepulveda GRECC was selected as the hub site to coordinate
fellowship activities. The first fellows were selected in 2001, and the
second cadre will begin in 2002. The Hub site has coordinated
curriculum development, recruitment and evaluation at the selected
sites. Accomplishments include:
--A coordinated series of recruitment activities has been undertaken.
--A cadre of fellows have been recruited and participated in a
nationally coordinated curriculum of geriatrics education.
--A series of two-way interactive videos has been initiated.
--Fellows have been provided with travel and tuition assistance to
attend at least one national geriatrics meeting a year.
--As fellows enter their second year of fellowship training, special
attention will be paid to mentoring in career development and
leadership development.
--A plan for evaluation of the program has been developed and is
underway
medical research
Question. The budget request is $394 million. What does that buy?
Answer. The 2003 request of $409 million will allow VA to fund
2,780 research and development projects and 2,907 full-time
equivalents. After adjusting for the CSRS and FEHB accruals of $15
million, the request is $394 million. This request consists of a
program increase of $23 million. This program increase includes $12
million for payroll and inflation adjustments and $11 million for new
research initiatives. The new research initiatives include the
following:
--Two new Quality Enhancement Research Initiative Centers.
--Chronic disease management for Myocardial Revascularization On and
Off Cardiopulmonary Bypass and Open Versus Endovascular Surgery
for Abdominal Aortic Aneurysms.
--New studies focused on ensuring homeless and minority veterans in
rural areas receive equal access to health care and ensuring
quality of care outcomes for primary care for diseases of
particular importance in woman.
--Diseases of the brain (e.g., Alzheimer's and Parkinson's) to
include the following initiatives:
--New Parkinson's Disease projects include stem cell and fetal
transplantation research in animal models, advances in
neuroimaging technology to monitor the progression of the
disease, the role of neurotransmitters other than dopamine
in Parkinson's Disease, gene therapy, and mechanisms of
damage to nerve cells.
--Neurorehabilitation researchers continue to capitalize on new
findings surrounding the brain and its ability to
reorganize following injury-ischemic or traumatic. Initial
success utilizing constraint-induced therapies for
restoration of upper limb functions in hemiplegic patients
requires evidence to assure optimal clinical
implementation. In addition, premliminary research into
motor therapy for lower limb function and speech-language
recovery, although not as advanced, is showing cause for
optimism in the neurorehab community. The coupling of
pharmacotherapies with physical therapy remains a course
towards recovery of function that is promising, although
not yet fully understood. An additional adjunctive therapy
with promise is functional electrical stimulation (FES),
which has only begun to be explored. Although intensive
physical therapy shows promise for recovery, it also
requires inordinate and expensive clinical resources.
Robotic technology is seen as a solution, not only in
response to manpower issues, but to delivering precise and
consistent therapy, thereby enhancing improvement.
Technology for the upper limb is under development with VA
sponsorship. Similar lower limb technology is not as
advanced. Finally, application of neurorehab approaches has
only just begun to be studies for Parkinson's Disease, ALS,
and Alzheimer's Disease.
Other important areas that may receive additional funding include
aging, micro technology, stroke, multiple sclerosis, chronic viral
diseases, and patient outcomes in rehabilitative care.
In addition to the $409 million in the Medical and Prosthetic
Research appropriation, the Medical and Prosthetic Research program is
supported with $401 million from Medical Care and $656 million from
other Federal and private medical research organizations such as the
Department of Defense, National Institutes of Health, and
pharmaceutical companies. The $1.5 billion in total funding will allow
VA to maintain research centers in the areas of Gulf War illnesses,
diabetes, heart disease, chronic viral diseases (e.g., HIV/AIDS),
Parkinson's disease, spinal cord injury, prostate cancer, depression,
environmental hazards, and women's issues, as well as rehabilitation
and Health Services Research and Development field programs.
Question. How does VA prioritize research?
Answer. VA currently focuses more than 99 per cent of its Medical
and Prosthetic Research budget on its nine designated research areas:
Aging and Age Related Changes, Acute and Traumatic Injuries, Chronic
Diseases, Health Services and Systems, Mental Health, Military
Occupational and Environmental Exposures, Sensory Disorders and Loss,
Special (Underserved, High Risk) Populations, Substance Abuse.
The Office of Research and Development receives input from multiple
sources to prioritize research that will best meet the needs of the
veterans population: the National Research Advisory Council, veterans
service organization, other VA and VHA offices.
Question. The budget request supports 3,167 FTE, the same as the
2002 level. Why is the current estimate significantly lower--2,983 FTE?
Answer. VA submitted a fiscal year 2002 budget request of $360.2
million and 3,167 full-time equivalents (FTE). The fiscal year 2002
current estimate of $371.0 million and 2,983 FTE is the result of
fiscal year 2002 Congressional action, which supports the proposed
increase in the fiscal year 2002 pay raise from 3.6 to 4.6 percent. The
reduction of 184 FTE reflects the staffing requirement to maintain the
mix of projects estimated for fiscal year 2002.
______
Questions Submitted by Senator Christopher S. Bond
collections
Question. I believe that VA must improve its collections from
veterans' private health insurers. GAO recently testified that ``long-
standing problems in VA's revenue operations appear to persist, and
when compared to private sector standards, VA's collections performance
is poor.'' In fact, VA has over $700 million in outstanding
receivables. First, how is VA improving its collection efforts? Second,
what is VA doing to collect its outstanding receivables?
Answer. For the past 4\1/2\ years VA has contracted with a private
vendor to follow-up on third parties receivables over 90 days old. This
contract has resulted in collections totaling $184 million at a cost of
a little more than $4 million. The VHA Revenue Office is in the process
of identifying requirements to develop a Request for Proposals (RFP) to
outsource accounts receivable management of third-party accounts. We
anticipate that multiple awards would be forthcoming from this effort
and expect a September 2002 award. Several VISNs have outsourcing
efforts in progress and others are in the process of soliciting bids.
In addition, VHA has identified twenty-four action items to enhance
revenue operations. Project Teams are currently implementing action
items in the Billing, Coding, Insurance, Utilization Management and
Accounts Receivable Management areas.
Question. Some believe that VA should be able to collect more than
$1.4 billion as projected in your budget request. Is this possible?
Answer. The projected $1.4 billion includes $260 million for the
proposed $1,500 deductible. If the $1,500 deductible is not
implemented, the projected collection figure should be revised downward
to $1.2 billion.
[Dollars in Millions]
----------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal year
October-February 2002 projected 2003 projected
fiscal year 2002 collections collections
----------------------------------------------------------------------------------------------------------------
MCCF.......................................................... 380 805 1,084
HSIF.......................................................... 1 225 364
Extended Care Revolving Fund.................................. 0 20 40
-------------------------------------------------
Total................................................... 381 1,050 1,488
----------------------------------------------------------------------------------------------------------------
cares--visn 12 implementation
Question. Last month, you made an announcement recommending the
realignment of facilities in VISN 12. Your recommendation includes the
closure of one of four Chicago medical centers and the construction of
a new $40 million spinal cord and blind rehabilitation center at Hines.
Your recommendation also includes other costs such as the creation of
new community-based outpatient clinics. Do you have a cost estimate of
the total amount of funds that VISN 12 will need to implement your
recommendation?
Answer. The costs for each option were identified in the VISN 12
report. The three approved options have costs of: Option B--$71.4
million, Option G--$33.8 million, and Option I--$7.6 million, for a
total of $112.8 million. This figure reflects the order of magnitude
costs for easily identifiable major capital needs. It will be upwardly
adjusted as a result of the implementation plan. That plan will include
the full spectrum of capital investment requirements to put into
operation the approved options B, G, and I.
Question. One of your press releases stated that VA expected to
save an ``estimate $720 million over the next 20 years.'' Can you
explain this cost savings estimate? How will the appropriations
committee see the impact of these savings in future budget requests?
Assuming no additional legislative mandates are enacted, can the
appropriators expect the savings from CARES to translate into lower
budget request needs?
Answer. A substantial portion of the estimated savings will be
generated through the eventual closure or substantial downsizing of the
Lakeside VAMC facility. Operating costs for utilities and the buildings
and grounds, salaries for in-direct patient care staffing, and clinical
program efficiencies all contribute to the savings. In addition, there
is a potential for a revenue income if VA can successfully identify an
Enhanced Use Lease partner for the property. Other savings accrue
through a comparison of the life cycle costs for each option over the
20 year period calculated. Cost savings will be re-invested throughout
the VISN 12 facilities and CBOCs in order to increase clinical staffing
(reduction of waiting times) and provide otherwise limited or difficult
to obtain services to veteran patients. Two new CBOC's are planned to
be established in order to provide more accessibility to VA health care
services for Veterans.
cares--next steps
Question. With the completion of CARES in VISN 12, I would like to
hear about the next phase of CARES. VA's original plan was to implement
the CARES studies in three phases. VA's fiscal year 2003 budget
justifications specifies that after completing VISN 12, Phase II would
be carried out, covering 8 networks, and then complete CARES for the
rest of the Nation. Are your current plans to still carry out CARES in
these Phases? What are your expected timeframes in completing these
Phases?
Answer. VA's current plans are to complete the CARES planning
process in all of the remaining Networks in Phase II. The current
expected timeframes call for the planning process to be initiated in
the Networks in 2002. Networks would develop their proposed plans under
guidance from VACO and with actuarial and other data. At the end of
October, their proposed plans would be sent to VACO. Following a period
of review in VACO, a CARES commission would review the plans, hold
public hearings, take public comment and ultimately provide final
recommendations to the Secretary. The Secretary would then make
decisions on those recommendations and announce them sometime in Summer
2003.
Question. I am concerned about VA's in-house ability to perform the
studies. Two questions: one, do you have the in-house expertise and
staffing resources to perform the CARES studies and two, how will you
ensure that the studies are objective? I am worried that if the VISN
directors are in charge of conducting their own studies, there will be
a conflict-of-interest.
Answer. The VA will contract for actuarial studies to project
veteran enrollment for 20 years for each Network and facility. The VA
has the in-house capability, which may in some specific situations or
issues that arise, have to be supplemented by contractors in the other
areas required for the CARES plans. Staffing in VACO has been approved
by VA, and recruitment is underway.
The studies will be objective for several reasons. First, the
Networks will be given specific guidance and criteria which they must
use in order to complete their plans. Secondly, the VA CARES Office
will be reviewing Network plans to make sure that the guidance has been
followed. Thirdly, VA is planning to use a CARES commission, which will
also review all the plans, hold hearings and allow for public comment.
funding for cares
Question. The last area of CARES that I would like to ask you about
is funding. Your budget request only proposes $40 million to fund
CARES. This is a $60 million reduction from the fiscal year 2002
enacted level. I am concerned that when the CARES studies are
completed, there will not be adequate funding available to pay for the
realignment costs. Based on the small funding request for CARES, is it
your expectation that very little if any at all CARES studies will be
completed and implemented in fiscal year 2003? If you expect the
studies to be completed in fiscal year 2004, can we expect a major
budget request for CARES projects? Do we need to examine any changes in
the funding process to take care of current and future CARES project
needs?
Answer. Implementation of the VISN 12 CARES study options will be
fully underway in fiscal year 2003 and the requested funding is
expected to be sufficient to cover any design or design and
construction initiatives expected to be obligated during that fiscal
year. The remaining CARES service delivery options are expected to be
developed in fiscal year 2003 so only minimal design dollars for a few
of those selections are expected to be needed. It is expected that
fiscal year 2004 and future budget years will be when the major funding
needs for CARES initiatives will result. There are no changes in the
funding process for CARES needs known at this time. As always, ensuring
that initiatives are both authorized and adequately funded will require
clear and open communications between VA and both authorizing and
appropriations committees.
construction funding
Question. I am puzzled by the request for $94 million in the major
construction account to fund four new seismic repair projects in
California and another $130 million in the minor construction account
to fund other projects. VA is proposing to rehabilitate these
facilities without any CARES review. Further, in its February 2002 list
of priority major medical construction projects, the four California
facilities are ranked 1, 3, 5, and 8. (#2 is for an ambulatory care
project in Cleveland and #4 is for general upgrades in Anchorage). To
add to my confusion, VA justified the inclusion of these four seismic
projects because they were ranked #1, #2, #3, and #7 on its list of 73
identified ``Exceptionally High Risk'' facilities based upon a
government-wide seismic review. Your staff has also indicated that,
despite the expected decrease in patient population, visits, and bed
needs at these four facilities, the main structures proposed to be
upgraded will survive a CARES review.
First of all, can you explain why VA continues to propose funding
for capital improvements in Major and Minor Construction accounts while
we are awaiting the restructuring plans from the CARES assessments? Why
do we even have these separate priority lists instead of having one
just based on CARES? Can you explain to me how these four projects were
included in the budget request even though they do not all rank in the
top four of any VA construction list I have seen? Second, what criteria
are you using to make these exceptions to the CARES process? How big is
this ``exceptions to CARES'' universe? Lastly, how do you plan to
reconcile the funding of these exceptions with the planned CARES
studies? Will an area such as San Francisco have any incentive to
perform a legitimate CARES study if they believe that their projects
will get funded outside the process?
Answer. There are many large veteran population areas that are
currently only served by single VA facilities. VA fully expects to
maintain a viable presence in these areas even though the type of
services may change over time as the veteran population ages and
demands changing services. Infrastructure projects, like the seismic
structural projects or projects that upgrade the electrical
distribution system within an aged facility are meant to ensure a
continued viable presence for whatever functional need is defined
through the CARES process. The CARES process will assist in defining
the types and quantities of services these facilities should be
configured to house. In the case of a campus facility with a large main
building and multiple smaller buildings, the expectation is that as the
workload at those facilities decreases over the next 20 years, that
services will be consolidated into the main facility structures, making
many of the ``out buildings'' unneeded by VA. The `` incentive'' for a
facility like San Francisco is that they will need future projects
other than the seismic upgrade to reconfigure their internal spaces to
efficiently meet the changing missions they will be assigned through
the CARES ``enhanced services'' realignment.
va-dod cost-sharing
Question. Another area that I believe needs some further
exploration is cost-sharing arrangements with the Department of
Defense. I am aware that VA and DOD have made some joint arrangements
such as in the pharmaceutical area. GAO reported last year that VA and
DOD saved more than $40 million in fiscal year 2000. I understand that
you created your own internal task force to examine VA-DOD cost-
sharing. Further, a Presidential Task Force was created last May by
President Bush to improve coordination of health care delivery
activities between VA and DOD in order to improve benefits and services
for veterans. Could you elaborate on these cost-sharing efforts? What
did your own internal task force accomplish? Also, I would like to hear
your views on the Presidential Task Force and how you are supporting
it.
Answer. Section 3(e) of the VA-DOD Health Resources Sharing Act (38
USC 8111) requires that ``any funds received through earnings in VA-DOD
sharing agreements shall be credited to funds that have been allotted
to the facility that provided the care or services.'' VA has followed
this policy since the law was implemented. The law provides an
incentive for VA facilities to enter into agreements with DOD and has
benefited veterans by allowing facilities to provide services to
veterans that would not otherwise have been available.
While the primary focus of the law is to allow facilities to expand
services for its beneficiaries, cost savings (cost avoidance) to the
budget do occur, especially in the purchase of services. By spending
less on goods and services facilities have more money available. VA
purchased $22.6 million from DOD in sharing agreements in fiscal year
2001 and estimates purchases of $22.9 million in fiscal year 2002 and
$23.2 million in fiscal year 2002 and fiscal year 2003. VA provided
reimbursement for VA/DOD sharing services of $38.6 million in fiscal
year 2001 and estimates reimbursement of $39.6 million in fiscal year
2002 and $41.3 in fiscal year 2003. However, VA purchases in facility-
to-facility sharing are difficult to quantify and are quite small. For
fiscal year 2001, VA purchased $20.4 million from DOD in local sharing
agreements (about .09 percent of VA's fiscal year 2001 budget).
VA-DOD cost savings can be documented through joint procurement
efforts, primarily in pharmaceuticals. As of the end of February 2002,
there were 54 joint VA/DOD joint contracts for pharmaceuticals; 37
additional joint contracts are pending award. Sixteen joint contracts
were not awarded due to the lack of cost savings to the government
through their award. The total estimated cost savings in fiscal year
2001 for both Departments from these contracts were $98 million ($80
million for VA and $18 million for DOD.
The VA/DOD Executive Council, co-chaired by the VA Under Secretary
for Health and the Assistant Secretary of Defense for Health Affairs,
serves as an umbrella organization for coordinating policy decisions
between the two departments. Last year the Executive Council
established a new Financial Management Work Group to review and make
recommendations to reduce financial and billing practice barriers to
interagency coordination. The Work Group meets regularly and has
conducted a detailed review of reimbursement policies and practices
between the VA and DOD. The Financial Management Work Group has
identified those VA and DOD policies and practices requiring
clarification or modification to remove reimbursement barriers and
disincentives and developed recommendations for streamlined financial
processes and practices.
One of the identified barriers to increased Departmental
collaboration, execution of agreements and contracts has been the
negotiation process, more specifically pricing issues. During the
1990's, flexibility was given to VA and DOD personnel to establish
locally developed rates for medical sharing agreements. This resulted
in the proliferation of rate setting mechanisms, as well as many
independent rate structures for these agreements. To streamline
practices between the two Departments the Financial Management Work
Group is exploring development of a single payment schedule for
exchange of services between the two departments. The discussions
center on developing a national pricing methodology that would be
regionally adjusted. The Work Group recently reported its progress to
the VA/DOD Executive Council and the Joint Executive Councils meeting
hosted by the VA Deputy Secretary and the DOD Under Secretary for
Personnel and Readiness. A final recommendation on the policy and
proposed methodology is anticipated in late 2002.
As you know, President Bush established the President's Task Force
to Improve Health Care Delivery for Our Nation's Veterans (PTF) by
Executive Order 13214 on May 28, 2001. The PTF is comprised of 15
commissioners led by two co-chairs. Support includes a professional
staff headed by an Executive Director and the PTF has established seven
work groups to review specific areas of interest. VA provides staff,
administrative and budgetary support to the PTF, as well as requested
briefings and information. Both VA and DOD have provided detailees as
subject matter expert staff to the PTF.
The PTF conducts monthly open meetings attended by the Task Force
members and the public. VA and DOD have appeared before the PTF and
have presented overview briefings on the VA and DOD health care
delivery systems benefits packages and the DOD TRICARE program. The VA/
DOD Executive Council Work Group Co-Chairs have provided the PTF staff
with joint briefings on work group activities as requested. PTF members
and/or staff have toured VA/DOD joint venture facilities in Alaska,
Nevada, New Mexico, and Florida and plan multiple site visits around
the country in the coming months.
homelessness
Question. I do not understand why there exists a significant
population of homeless veterans on our streets. To address
homelessness, I have been working with a number of my Senate
colleagues, such as Senator Specter on the VA committee, to develop a
more holistic Federal approach to prevent and end homelessness. One of
the group's recommendations that was recently enacted was the
reactivation and funding of the Interagency Council on the Homeless. I
am please that Secretaries Martinez and Thompson are participating in
this council but it is important that other agencies, including VA play
a active role. Can you tell me how VA plans to participate in this
Council? HUD Secretary Martinez is the current chair but the position
rotates annually. Is this something that you would be interested in
chairing?
Answer. On December 21, 2002 President Bush signed the
Comprehensive Homeless Assistance Act of 2001 into law (Public Law 107-
95). Among the provisions this law calls upon VA, Housing and Urban
Development (HUD) and the Department of Labor (DoL) to take cooperative
actions to more fully address the problems of homelessness among
veterans.
Section 11 mandates that the Interagency Council on Homeless (ICH)
..''shall meet at the call of its Chairperson or a majority of members,
but not less often than annually.'' The ICH held its first meeting and
HUD Secretary Mel Martinez was elected Chair, Health and Human Services
(HHS) Secretary Tommy Thompson was elected Vice Chair and Mr. Phillip
Mangano was selected as ICH Executive Director. I look forward to
working on the ICH and plan to both actively participate and will take
a leadership role with its work.
I would like to inform you that on April 9-11, 2002 VA-HHS and HUD
co-sponsored a policy academy for State-level planning teams to improve
coordination within State planning efforts to end chronic homelessness.
This type of effort is exactly the kind of joint Federal and State
coordination that will make meaningful progress toward ending chronic
homelessness in America. VA will continue to support these types of
activities that will improve coordination of service delivery.
Public Law 107-95 also creates a fifteen member homeless advisory
committee to provide recommendations to the Secretary of Veterans
Affairs. I have appointed the committee members and we expect that
committee to hold its first meeting in June, 2002. In addition, ex-
officio members from the Departments of Defense, Labor, Housing and
Urban Development, and Health and Human Services will actively
participate. I am extremely pleased that these efforts, along with the
tens of thousands that receive medical care and benefits from my
Department is making a real difference in the lives of veterans and
their family members.
veterans equitable resource allocation (``vera'')
Question. GAO recently reported that VA can make several
improvements to its funding allocation to its networks. Although you
concurred with GAO's findings and recommendations, it was unclear when
you would make some of these improvements. Can you give me a sense of
what changes to VERA you are considering and when they might go into
effect? I would especially like to hear if you plan to include Priority
7s in the formula and how you plan to address GAO's concerns about the
use of the National Reserve Fund to supplement networks' funding
allocation.
Answer. The VERA Patient Classification Workgroup is currently
reviewing the following potential VERA refinements for fiscal year 2003
implementation and beyond:
--Inclusion of Priority 7c veterans in the Basic Vested Care
component of VERA,
--Use of multiple pricing groups, expanding from 3 to 10 price
groups,
--Use most recent 1 year workload versus 3 years for Basic Care and 5
years for Complex Care,
--Update the fiscal year 1995 allocation split between Basic and
Complex Care Price Groups to reflect changes in the
distribution of actual costs between the two groups,
--Use of reinsurance threshold for high cost patients, and
--Use of Diagnostic Cost Groups with reinsurance threshold and
Complex Care flags.
The workgroup is expected to evaluate the above issues and complete
its recommendations for refinements to the fiscal year 2003 VERA
methodology for review by the VHA Policy Board by July 2002.
Each year since fiscal year 1999, a supplemental funding process
has adjusted VERA allocations. The need for adjustments to the VERA
model does not necessarily mean that the model is flawed or that a
particular VISN is inefficient or mismanaged. This does not mean that
incentives to improve do not exist, however; a VISN could be very
effectively managed but still require a VERA adjustment because of one
or more factors. The reasons for the supplemental funding adjustments
vary by network. However, some of the factors involved include: Amount
of VHA budget relative to its workload; policy changes in the VERA
model, workload changes in the VERA model, and variation in actual
budget year execution from planning estimates for: (1) other revenue
from 1st and 3rd party health insurance collections, (2) other
anticipated reimbursements, (3) projected workload changes and
estimated expenditure, and fixed infrastructure costs that cannot be
changed in the short-term.
Additionally, during the course of the fiscal year, VHA reviews the
status of each network in terms of its projected workload and revenues;
including VERA, 1st and 3rd party collections, and reimbursements;
relative to actual and projected workload and expenses.
Over the course of this year, and the next 5 years, the refinements
to VERA should respond to various stakeholder concerns; be more
consistent with enrollment policy; improve an existing system that is
widely understood and independently validated; and continue to tie
resources to clinical performance (i.e., patient workload). VHA is
committed to ensuring that efficiently managed networks are not
disadvantaged as a result of anticipated VERA changes and those that
are not as efficiently managed will improve over time.
claims processing
Question. Over the past 2 years, VA has hired hundreds of new staff
to improve the processing of claims benefits. But, despite the new
staff, VA still projects the average number of days to process claims
to increase from 181 days in 2001 to 208 days in 2002. Can you explain
why your projection is expected to increase?
Answer. The primary reason for the increase in the average number
of days to process claims is a significant increase in the volume of
incoming work. The increased volume is attributed to the following
factors:
--The review of more than 98,000 previously-denied cases, as well as
230,000 claims in our pending inventory to ensure compliance
with the Veterans Claims Assistance Act (VCAA).
--VA's expanded outreach efforts to separating service members
(Benefits Delivery at Discharge initiative).
--Receipt of 66,000 Type 2 diabetes claims based on exposure to Agent
Orange.
--The requirement to review 13,000 previously-adjudicated diabetes
claims under the Nehmer stipulation. (In the case of Nehmer v.
VA, plaintiffs' attorneys and VA agreed, in a 1991 Stipulation
and Order, on a process for applying an earlier than usual
effective date for certain claims for benefits based on Agent
Orange exposure. As a result of court decisions in the Nehmer
case, VA is required to re-adjudicate over 13,000 diabetes
claims.)
All of the VCAA claims have now been added to the inventory.
Following the initial surge of Type 2 Diabetes claims, the incoming
volume of Diabetes claims is expected to taper off. We have also
completed a significant portion of the Nehmer reviews.
At the same time, the aggressive steps we have taken to increase
rating production have had a positive result. In the latter months of
fiscal year 2001 and into this year, production of rating decisions
significantly increased--which is the key to reducing the claims
backlog and improving the timeliness of our decisions. From October
2001 through February 2002, VBA decided over 294,000 cases for a 5-
month average of 58,800. This represents a 47 percent increase over
fiscal year 2001 production levels. We expect our production to
continue to increase as many of our recently hired employees gain
additional experience and we begin to implement the recommendations of
the Claims Processing Task Force.
We believe our increased production levels and the Task Force
initiatives will now enable us to make major inroads into the pending
inventory. Our goal is to reduce the pending rating inventory to
315,000 claims by the end of this year. Even though we project major
reductions in our pending inventory, the average days to complete will
continue to increase as we focus on completing the oldest claims in our
inventory.
Question. Do you believe that VBA has enough staff or do you
anticipate more hiring in the next few years?
Answer. VBA secured funding during fiscal year 2001 to support the
hiring and training of more than 1,000 new employees. The addition of
this many employees in such a short period of time was critical to the
Administration's ability to manage the increased workloads resulting
from the Veterans Claims Assistance Act and the addition of Type 2
diabetes to the list of Agent Orange presumptive conditions. A hiring
initiative of this magnitude strains VBA's training infrastructure and
places a burden on its core of senior-level field employees.
VBA must now continue to focus on maximizing the impact of this
hiring and ensure employee retention. As these recent hires are
assimilated into the organization and gain experience, we fully expect
these employees to make a significant contribution toward achievement
of our claims processing goals. Essentially, this is a period of
stabilization as VBA assesses the recent hiring and training of the new
employees and implements the Task Force recommendations. Once we
achieve a more stable situation, we will be able to make a reasoned
assessment of our future staffing needs.
However, we do know that our hiring and training will continue
based on the large numbers of decision-makers eligible to retire over
the next few years. Therefore, although our fiscal year 2002 and fiscal
year 2003 budgets maintain relatively stable staffing levels, our plans
call for significant hiring to replace losses due to retirement and
other factors. Even with our aggressive hiring over the past 2 years,
26 percent of VBA's current workforce (nearly 3,350 employees) are now
eligible or will be eligible to retire in the next 3 years. Based on
experience, we know that at least 25 percent of those eligible to
retire will do so, and that a certain percentage of non-eligible
personnel will leave the Department as well. These figures demonstrate
how critical our succession planning efforts remain.
physicians pay and medical school affiliations
Question. With changes being considered for physicians pay in order
to recruit and retain these professionals to meet the health care needs
of veterans, how does the dual compensation of many of these physicians
by the VA and the universities affect the achievement of VA's health
care mission? As you prepare a legislative proposal for physicians pay,
are there any changes you are considering that might affect this
relationship?
Answer. The working relationship between the Department and our
university affiliates is a close one, resulting in numerous benefits to
VA and its veterans, as well as the universities. Among the advantages
that VA derives are the exposure to and the availability of the latest
developments and innovations in health care treatments, technology,
medical research, and procedures. The compensation that physicians
receive for their work as faculty appointments is fair compensation for
their duties in resident education and supervision, and assists VA in
offering competitive salaries, as well as a recruitment tool to attract
those professionals with an interest in academic medicine and teaching.
At the same time, VA is aware of the potential for divided
loyalties, or at least the perception that VA's interests are not
paramount. The affiliation relationship is indeed a matter for review
and consideration in developing a legislative proposal. If physicians
are not able to receive compensation from the universities, VA must be
able to offer significantly higher salaries in order to recruit and
retain high quality clinicians, teachers, and leaders in many
locations.
homeland security
Question. What preparedness initiatives are underway and how much
do you expect VA to spend in fiscal year 2002 and 2003 for these
initiatives? Do you expect to receive any funds from HHS or FEMA? How
much money do you need to address adequately VA's homeland security
needs?
Answer. Based on recommendations contained in the Preparedness
Review Working Group report, the Department is pursuing the following
critical initiatives:
--Pharmaceutical and medical supply caches
--Personal Protective Equipment and training for VA medical centers
--Education, training and exercises for staff to respond to WMD
attack
--Upgrade and train VA security forces
--Establish a centralized Incident Reporting Center
--Upgrade and test back up systems of Veterans Benefits
Administration's three technical centers and upgrade
communications
--Establish mirror ITSS server farm to maintain mission readiness
--Establish an Office of Operations, Security and Preparedness to
coordinate Departmental emergency preparedness programs
--Plan to replicate VBA IT infrastructure
--Upgrade VA primary continuity of operations site
--Develop web-based tracking system and establish 1-800 number for
information on location of military patients
--Develop web site or toll free number for referral of severely
disabled service members to Vocational Rehab & Employment
Services
VA will be spending $54.54 million in fiscal year 2002. We have
projected funding requirements of $92 million for fiscal year 2003.
VA's fiscal year 2003 Budget Request includes $55 million for Emergency
Preparedness in Medical Care. VA has been meeting with officials at HHS
and will meet with FEMA officials to brief them on VA emergency
preparedness capabilities.
intellectual property rights
Question. What is the status of the agreements being reached with
medical schools? How many are there? Are they in compliance with the
law (Bayh-Dole Act)? Will these be put into place with all schools?
Answer. VA continues to seek Cooperative Technology Administration
Agreements (CTAA) with its affiliated universities. These agreements
permit co-ownership between VA and its affiliates for inventions
resulting from research that used VA assets (appropriated dollars,
including grants to investigators; salaries; and laboratory
facilities). VA has established CTAAs with 36 universities since it
began this initiative less than 2 years ago. These agreements are
consistent with the requirements of the Bayh-Dole Act. Inventions
developed through NIH and VA funded research can be assigned jointly to
VA and the affiliated university.
VA would prefer to establish CTAAs with all affiliated universities
because these agreements facilitate local cooperation, strengthen long-
term affiliations, and recognize fairly the VA's role in research and
innovation. However, these agreements on intellectual property are not
a required component of the local VA and individual university
affiliations. The Administration is considering legislation that would
codify CTTAs between VA and its affiliate universities.
______
Questions Submitted by Senator Tom Harkin
Question. Mr. Secretary, in the past year all the veterans
hospitals and clinics in Iowa have either stopped taking new patients
or had delays of several months in scheduling new appointments. Can you
tell me the current wait for appointments for new (non-emergent)
patients at each of Iowa's facilities, the current plans for improving
the situation, and how long you anticipate waits will be when those
plans are implemented?
Answer. To date, the Iowa City VAMC has allocated resources to
activate plans developed to meet the unprecedented veteran care demand.
Additional exam room space has been created, providers have been hired,
and other numerous actions are currently taking place to enable the
Iowa City VAMC and its associated CBOCs to see the veterans on the
waiting list as soon as possible. Existing providers have been able to
absorb additional patients into their current panels. A New Patient
Clinic at the Iowa City VAMC started seeing patients on January 28,
2002, where two providers continue to see 16 new patients per day.
Three new providers have been hired, and recruitment is currently
ongoing for a fourth provider for Iowa City and/or the CBOCs.
Contracting options are also being considered at some of the smaller
CBOCs. We expect all veterans on the waiting list to have an initial
appointment by the end of September 2002.
The VA Central Iowa Health Care System Primary Care Service Line
continues to clinically review new enrollees for emergent and non-
emergent care at the Des Moines, Iowa division. Every effort is made to
accommodate the veteran's choice for the primary site of care, i.e., a
community based outpatient clinic (CBOC) or the VA medical facility in
Des Moines or Knoxville, Iowa. The average wait time for non-emergent
care at the Des Moines VAMC is 73 days; the Knoxville VAMC is 64 days;
the Mason City CBOC is 67 days; and the Fort Dodge CBOC is 56 days.
Primary care staff continues to manage unprecedented growth within
appropriated funding by evaluating systematic approaches to reduce wait
times using advanced clinic access' concepts to help predict and
respond to daily demand for care and by maintaining adequate staffing
levels through recruitment of employees as vacancies occur and the use
of Locum Tenens staff when employee recruitment is not successful.
Question. Can you also compare the waits for appointments for new
non-emergent patients in each of the VISN's?
Answer. The following information on new patients is provided for
each VISN as of February 2002.
----------------------------------------------------------------------------------------------------------------
COMBINED
VISN AUDIOLOGY CARDIOLOGY PRIM/CARE EYE CARE ORTHOPEDICS UROLOGY
----------------------------------------------------------------------------------------------------------------
1.......................................... 55.2 27.3 53.8 64.1 38.3 34
2.......................................... 39.2 30 39.3 48.4 25 39.7
3.......................................... 47.5 52.6 57.3 66.4 24.4 36.6
4.......................................... 49.5 33.7 55.9 101.7 52 42.8
5.......................................... 26.8 27.7 39 43.1 27.6 27.6
6.......................................... 30.2 34.4 60.6 95.7 48 51.5
7.......................................... 34.2 33.3 65.9 61.8 30.9 36.2
8.......................................... 109.4 37.4 67.9 73.8 34.7 47.1
9.......................................... 56.8 30.7 81.7 78.8 39.8 49
10......................................... 38.4 32.6 49.1 79.5 41.2 74
11......................................... 43.5 36.4 64.2 72.2 38.1 37
12......................................... 59.6 39.8 55 103.7 31.9 55.3
15......................................... 57.2 30.6 63.3 91.4 50.5 40.5
16......................................... 44 33.1 53.3 70.4 28.5 41
17......................................... 19 38.4 52.8 64.5 58.3 54.4
18......................................... 28.5 41.3 69.6 89.7 50.5 43.5
19......................................... 47 36.1 61.1 57.1 54.2 40.8
20......................................... 34.8 21.4 35 51.7 28.9 55.5
21......................................... 37.2 32.4 55.4 66.4 61.7 40.1
22......................................... 64.2 47.3 43.9 64.1 19.4 60.3
23......................................... 37.6 35 76.8 161.1 45.4 41
Nat'l...................................... 53.4 35.7 58.7 77 38.6 45.5
----------------------------------------------------------------------------------------------------------------
Question. A recent GAO report found that the VERA model is unfairly
hurting several VISN's and examined the effects of including Priority 7
patients, using more patient categories, and using more recent data to
determine the distribution. A RAND study looked at other issues in the
VERA model. Can you tell me what changes, if any, you plan to make to
the VERA model in distributing fiscal year 2003 funds? Please also give
me any analysis the VA has done on how changes to the VERA model would
affect the distribution of health care funds.
Answer. The VERA Patient Classification Workgroup is currently
reviewing the following potential changes to VERA for fiscal year 2003
that will address the issues raised in the recently completed (February
2002) GAO evaluation of VERA. The workgroup is expected to finalize its
recommendations for refinements to the VHA Policy Board by July 2002.
--Inclusion of Priority 7c veterans in the Basic Vested Care
component of VERA
--Use of multiple VERA pricing groups, i.e., increase from three to
10 pricing groups
--Update the fiscal year 1995 allocation split between Basic and
Complex Care Price Groups to reflect changes in the
distribution of actual costs between the two groups
--Change the basis for estimating VERA Basic and Complex Care
workload to a 1 year actual compared to the current 3 year for
Basic and 5 year forecast for Complex
--Use of a re-insurance threshold in the VERA methodology for high
cost patients
--Use of Diagnostic Cost Groups (DCGs) with a reinsurance threshold
and Complex Care flags
In addition, the RAND Corporation's VERA study is in its second
phase and is to be completed by September 2002. The Phase II VERA study
is addressing a quantitative analysis of the VERA issues identified in
its Phase I study to include: improved case-mix adjustment; geographic
differences in prices paid for non-labor inputs and contract labor
costs; the impact of teaching and research; and, the impact of the
facilities' physical plants.
Various VERA simulations for fiscal year 2003 are being estimated
based on potential refinements. Definitive fiscal year 2003 VERA
distributions will depend on the Medical Care appropriation passed by
Congress and the VERA refinements approved by the VHA Policy Board.
Question. I often hear reports that while the veterans' health
facilities in Iowa and nearby States have severe shortfalls of funds,
other areas have (and are keeping) large surpluses. Can you tell me
what the shortfall or surplus was for each VISN in fiscal year 2001 and
what is anticipated in fiscal year 2002?
Answer. To determine whether a network has a shortfall or surplus,
if any, VHA reviews each network's financial status in terms of
projected revenues including VERA, 1st and 3rd party collections and
reimbursements, relative to actual and projected workload and expenses.
This analysis is what drives the VERA adjustment process. In fiscal
year 2002, as a result of this process, the five networks received a
VERA adjustment (supplemental): VISNs #1, #3, #12, #13 and #14 (VISN#
13 and VISN #14 are now VISN #23).
The ``Summary of the VERA Adjustments, fiscal year 1999-fiscal year
2002'' table indicates Iowa's network (previously VISN #14; now VISN
#23) received supplemental funding in each of the past 3 fiscal years.
SUMMARY OF THE VERA ADJUSTMENTS, FISCAL YEAR 1999-FISCAL YEAR 2002
[Dollars in millions]
------------------------------------------------------------------------
Fiscal year
VISN Name -----------------------------------
1999 2000 2001 2002
------------------------------------------------------------------------
8 Bay Pines, FL $4.0 ....... ....... .......
9 Nashville, TN 5.0 ....... ....... .......
3 Bronx, NY ....... $66.2 $73.8 $128.5
13 Minneapolis, MN ....... 14.7 44.7 43.9
14 Lincoln, NE ....... 9.8 48.3 32.9
1 Boston, MA ....... ....... 53.2 41.3
12 Chicago, IL ....... ....... ....... 20.8
-------------------------------------
Total 9.0 90.7 220.0 267.4
=====================================
Percent of Total System-Wide 0.1 0.5 1.2 1.5
Allocation
------------------------------------------------------------------------
The VERA methodology is workload driven and networks receive
funding allocations commensurate with three workload components, i.e.,
Basic Vested Care, Basic Non-Vested Care, and Complex Care. A Network's
total revenues include VERA distributions derived from the Medical Care
appropriation, 1st and 3rd party health insurance collections, and
other anticipated reimbursements. A network can retain all collections
and reimbursements, and has the incentive to increase non-appropriated
revenues each year. As shown in the fiscal year 1996-fiscal year 2002
VERA Allocations with Adjustments and Estimated Receipts'' table, VISNs
#13 and #14, now VISN #23, are rated at about the national average
increase for the period fiscal year 1996-fiscal year 2002. The national
average increase of VERA allocations with
adjustments and estimated receipts for fiscal year 1996-fiscal year
2002 is 32.89 percent; VISN 13 had a 32.78 percent increase and VISN 14
had a 29.52 percent increase.
TABLE 20: FISCAL YEAR 1996--FISCAL YEAR 2002 VERA ALLOCATIONS WITH AdJUSTMENTS AND ESTIMATED RECEIPTS
[Dollars in millions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Percent Changes
1996 year year year year year year ----------------------------------------------------------------------------
VISN Network Allocations 1997 1998 1999 2000 2001 2002 Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
And VERA and VERA and VERA and VERA and VERA and VERA and year 1996- year 1997- year 1998- year 1999- year 2000- year 2001- year 1996-
Receipts Receipts Receipts Receipts Receipts Receipts Receipts 1997 1998 1999 2000 2001 2002 2002
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1Boston $856 $848 $854 $821 $853 $936 $965 -1.02 0.78 -3.89 3.91 9.72 3.09 12.68
2Albany 438 435 441 431 478 516 527 -0.68 1.32 -2.12 10.81 7.94 2.18 20.38
3Bronx 1,024 1,019 1,021 994 1,010 1,038 1,094 -0.48 0.16 -2.61 1.57 2.84 5.38 6.87
4Pittsburgh 776 781 819 828 901 988 1,004 0.53 4.85 1.21 8.72 9.71 1.61 29.31
5Baltimore 426 444 484 489 527 575 590 4.21 9.00 1.15 7.74 9.17 2.48 38.48
6Durham 687 713 749 754 828 893 924 3.68 5.12 0.67 9.77 7.88 3.50 34.49
7Atlanta 781 819 896 922 983 1,057 1,113 4.54 9.83 2.88 6.62 7.49 5.27 42.52
8Bay Pines 962 1,021 1,113 1,161 1,339 1,427 1,535 6.06 9.03 4.34 15.34 6.56 7.59 59.54
9Nashville 691 703 741 746 811 857 897 1.76 5.37 0.69 8.74 5.58 4.76 29.86
10Cincinnati 513 533 558 574 639 682 717 3.86 4.78 2.95 11.32 6.66 5.14 39.87
11Ann Arbor 656 659 665 687 726 794 805 0.39 0.97 3.36 5.58 9.38 1.43 22.72
12Chicago 839 832 840 820 868 928 948 -0.78 0.91 -2.38 5.87 6.95 2.13 13.02
13Minneapolis 420 428 443 455 474 536 557 1.96 3.43 2.69 4.17 13.28 3.91 32.78
14Lincoln 293 290 294 301 324 374 380 -1.18 1.35 2.59 7.64 15.50 1.39 29.52
15Kansas City 587 618 645 635 669 717 760 5.25 4.41 -1.56 5.36 7.23 6.00 29.54
16Jackson 1,077 1,139 1,245 1,283 1,434 1,497 1,555 5.76 9.30 3.08 11.73 4.39 3.90 44.40
17Dallas 592 630 688 687 774 831 883 6.32 9.17 -0.13 12.72 7.39 6.21 49.04
18Phoenix 495 528 579 597 715 752 766 6.58 9.67 3.16 19.64 5.25 1.84 54.62
19Denver 368 386 412 407 449 488 512 4.82 6.79 -1.27 10.28 8.70 4.95 39.05
20Portland 589 626 681 704 789 834 870 6.38 8.64 3.51 11.95 5.73 4.36 47.77
21San Francisco 690 724 755 773 850 929 977 4.93 4.29 2.29 10.00 9.35 5.13 41.54
22Long Beach 903 921 966 957 1,000 1,076 1,106 2.00 4.88 -0.95 4.51 7.60 2.84 22.54
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VHA Totals 14,664 15,092 15,886 16,028 17,439 18,726 19,487 2.92 5.27 0.89 8.81 7.38 4.06 32.89
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Note: The fiscal year 1998 MCCF totals include fiscal year 1997 4th quarter collections. The fiscal year 2002 MCCF and Reimbursement figures represent projected collections. The numbers
may not add due to rounding. Fiscal year 1999 includes VERA plus 20 million earmarked by the Congressional Appropriations Conference Committee for Network 3. Fiscal year 1999 includes
VERA plus adjustments for newly decentralized programs for networks which exceed the 5 percent limitation. Fiscal year 1998, fiscal year 1999, fiscal year 2000 and fiscal year 2001
include supplemental funding adjustments. Fiscal year 2000 figures have been adjusted to reflect the centralized funding of Prosthetics for fiscal year 2001. Fiscal year 2002 includes
the VERA adjustments for 5 networks. Fiscal year 2001 figures have also been adjusted to reflect the rescission (43 million).
Question. According to press reports last year, the VA health care
system was short $400 million for fiscal year 2002. President Bush
reportedly promised to make up some of that shortfall, but has not sent
us a request for additional funds or reprogramming of funds. Can you
tell me how large is the current estimated shortfall, whether you will
be requesting additional funds for fiscal year 2002, how those funds
will be distributed, and how else you will make up the shortfall?
Answer. Based on the continuation of full enrollment, VHA
determined there would be a shortage of over $400 million in fiscal
year 2002, after available resources were subtracted from projected
expenditures. By taking additional management actions that will lessen
expenditures, it is estimated that the shortage will be reduced to $142
million, which is the amount related to the decision to continue
enrolling new Priority 7 veterans. To make up the difference between
any shortfall and the anticipated supplemental, VHA anticipates savings
from a multi-year effort to improve standardization and compliance in
the procurement of equipment, pharmacy, and medical supplies. Other
savings are expected from program efficiencies related to new criteria
to assess community-based outpatient clinics and centrally managed
programs.
VA made a request to the Administration for supplemental funding of
$142 million that was forwarded to Congress in on March 21, 2002. VA
can provide health care to an estimated 143,039 Priority 7 new
enrollees during fiscal year 2002 with $142 million in supplemental
funding. This will ensure VA has health care funding consistent with
the President's decision to keep VA veterans' enrollment open for all
veteran health care. The $142 million will be distributed based on each
VISN's updated Priority 7 Basic Vested workload.
Question. Many of our veterans seek care at VA hospitals because of
the excellent pharmacy benefits, sometimes even if they have another
primary care physician. As you know, our elderly on Medicare do not
have coverage for prescription drugs. Would it relieve some of the
burden on the VA if Congress passed a real prescription drug benefit in
Medicare?
Answer. Providing a prescription drug benefit for Medicare
beneficiaries would certainly have some impact on the VA, however exact
impact is currently unknown. Veterans come to the VA for a number of
reasons besides the fact that VA provides services that aren't covered
by Medicare. VA health care integrates a full continuum of care for
veterans of all ages, including mental health services and prescription
drugs. VA also emphasizes preventive care and leads the nation in many
measures of performance in this regard. VA also provides many services
that are tailored to meet the needs of service-disabled veterans. So,
in addition to the economic factors, we believe many patients come to
VA because of the quality of care that we provide.
______
Questions Submitted by Senator Ted Stevens
Question. First, to qualify for the veterans home purchase rate
reduction, a veteran must have left active duty military service prior
to 1977. This provision cuts off many younger veterans who served in
the Vietnam and Persian Gulf Wars and other conflicts such as Granada
and Panama. In addition, I am told the provision will lapse in 2007 so
that many veterans will no longer be eligible for the program after
2007 unless they have been out of the service for more than 30 years.
This 30-year limitation needs to be removed so that the five States
currently participating in the program can serve more veterans and to
end this discrimination against younger veterans. Can we get your
support in trying to rectify this discriminatory treatment for younger
veterans who need the one percent rate reduction allowed under the
program to be able to afford homes?
Answer. We are aware that the basic criteria for Alaska Housing
Finance Corporation (AHFC) Veterans Mortgage Program (VMP) are that the
veteran must have entered the service prior to 1977 and cannot have
been discharged for more than 30 years. AHFC requires that when
veterans apply to them for a loan, they submit a VA issued Certificate
of Eligibility along with their DD214 so that it can be determined when
they went into the military and what date they were discharged.
However, this program is administered by AHFC, not VA. Therefore,
we have no authority over the provisions of the program.
Question. My next question deals more directly with Alaska. Alaska
will soon reach the maximum amount it can bond for under the veterans
rate reduction program based on both State and Federal law. We need the
Federal cap lifted so that we can serve more veterans in our State.
Alaska State officials tell me that the issue of the State's internal
bonding limit will go before the voters of Alaska this fall as a bond
vote to increase the State authorization level. However, we also need
the overall Federal cap lifted. Alaska has the most veterans per capita
of any State and we are competing with huge States like California and
Texas for these limited dollars. Can we expect your support in trying
to raise the amounts that can be bonded for under this program?
Answer. VA has no knowledge of or authority with respect to a
Federal cap that may exist on bond issues.
______
Questions Submitted by Senator Tim Johnson
Question. There is growing concern in South Dakota about budget
shortfalls in the VA for fiscal year 2002. While there have been
attempts to address the budget shortfall through management
efficiencies, it appears very unlikely these steps will be enough to
address the budget deficit. With this in mind, will there be an
Administration request for a VA health care supplemental for fiscal
year 2002? If so, how much will the Administration request? Will this
request cover the entire budget shortfall in States like South Dakota?
Answer. When the President made the decision to continue open
enrollment, it was understood that adequate funds would be made
available to support his decision. Therefore, VA made a request to the
Administration for supplemental funding of $142 million, which was
forwarded to Congress in on March 21, 2002. VA can provide health care
to an estimated 143,039 Priority 7 new enrollees during fiscal year
2002 with $142 million in supplemental funding. This will ensure VA has
health care funding consistent with the President's decision to keep VA
veterans' enrollment open for all veteran health care. If received, the
$142 million will be distributed based on each VISNs updated Priority
7c Basic Vested workload.
To make up the difference between any shortfall and the anticipated
supplemental, VHA anticipates savings from a multi-year effort to
improve standardization and compliance in the procurement of equipment,
pharmacy, and medical supplies. Other savings are expected from program
efficiencies related to new criteria to assess community-based
outpatient clinics and centrally managed programs. In addition, on
February 25, 2001, the Acting Under Secretary for Health approved the
transfer of $162 million of centrally managed program funds for
distribution to all VISNs. Of this amount, VISN #23 received $7.2
million (of which old VISN #13 received $4.4 million and old VISN #14
received $2.8 million in additional funds).
Question. I am very concerned that efforts to address the budget
shortfall within VISN 23 is starting to have a negative impact on
patient care. For example, there are ongoing discussions regarding the
surgical unit at the Hot Springs VA Medical Center. The Hot Springs
surgical unit has had difficulty recruiting and retaining professional
staff. One of the proposals under consideration is to close the Hot
Springs surgical unit to all but minor, outpatient procedures and move
the remaining surgeries to Ft. Meade VA Medical Center. Can you update
me on the current situation with the Hot Springs VAMC surgical unit and
can you offer solutions as to how we can keep the surgical unit fully
operational?
Answer. The surgical unit at the VA Black Hills Health Care System
(BHHCS), Hot Springs division, is currently short two nurses; one
operating room nurse and one nurse manager. The VA BHHCS has developed
a very aggressive and creative plan to fill these positions. In
addition to the typical markets where the VA Medical Center in Hot
Springs normally recruits nurses, the facility has expanded its search
for nurses to wide ranging markets such as Sioux Falls, South Dakota;
Omaha, Nebraska; Denver, Colorado; and Minneapolis, Minnesota. In
addition, the VA Black Hills HCS is offering a $5,000 sign-on bonus for
the nurse manager and a $2,000 sign-on bonus for the OR nurses. VA
Employees are being offered a $500 ``finders fee'' if they assist in
the successful recruitment of operating room personnel at the VA Hot
Springs medical facility. The community of Hot Springs has also been
helpful in the search for VA staff. The Job Service office is engaged
in local (Rapid City area) recruitment at no cost to VA. Every effort
is being made to assure uninterrupted surgical service at the Hot
Springs VAMC and VA officials are optimistic that the positions will be
successfully recruited.
Question. As you know, the Independent Budget for fiscal year 2003
calls for approximately $1.7 billion more for VA health care needs than
what is included in the President's request. Will the President's
fiscal year 2003 request for VA health care be sufficient to fund all
VA facilities and functions? If not, how much do you estimate the VA
will be short for fiscal year 2003?
Answer. There are many variables that impact health care in general
(new diseases, new treatments, inflation changes, etc.) and that impact
veterans use of VA health care (other health care alternatives,
availability and accessibility of VA services, etc.)., it is very
difficult to be certain that the fiscal year 2003 budget will be
adequate to support the health care demand of all enrollees. However,
this budget incorporates a ``Base Health Care Demand Adjustment''
initiative that identifies and requests the resources required to
support an actuary estimate of the demand and case mix changes needed
for all seven patient priorities in fiscal year 2003. Based on this
initiative, this year's budget estimates should better account for the
relationship of planned workload requirements and the full funding
needed.
Question. As you and I have discussed, there have been several
attempts to cap enrollment at South Dakota CBOCs in the last few
months. Can you assure me these clinics will stay open and available to
all veterans who need service?
Answer. Since 1995, VA has activated over 700 new CBOCs to bring
health care closer to veterans' homes. Recent evaluations show CBOCs
provide high quality heath care and are effective in improving access
to VA services. Since their inception CBOCs have been very popular with
veterans. The number of CBOCs in VISN 23 totals 35 and to meet the
growing number of veterans seeking care at a CBOC, VISN 23 has steadily
increased capacity. However the number of new veterans seeking VA care
at CBOCs in VISN 23 has exceeded expectations, which has resulted in
some CBOCs reaching capacity. Following is a status on CBOC capacity in
South Dakota, which is managed by the VA Black Hills Health Care System
(BHHCS). CBOCs in Pierre, Winner, Rosebud, and Eagle Butte are open to
new enrollments and will continue to enroll veterans as long as there
is capacity. The CBOC in Rapid City, which is staffed by VA with two
physician and two mid-level providers has approximately 2,615 veterans
enrolled. One physician provider is not able to see patients at this
time and this has resulted in the clinic being at capacity for new
patients. Veterans interested in enrolling for VA care at the Rapid
City CBOC are being referred to the Fort Meade or Hot Springs VA
Medical Centers. VA BHHCS is working on plans to resolve the physician
issue at the Rapid City CBOC so that enrollment can be resumed.
Question. What was the purpose of the merger between VISN 13 and
VISN 14? What will be the impact on patient care? Will there be any
budgetary savings? If so, how much?
Answer. The merger of the two networks should be transparent to
veterans. Each medical facility within the Veterans Integrated Service
Network (VISN 23) fulfills important missions for VA and there are no
plans to reduce or eliminate VA programs or services in any of the
States served by the network. The new Network will continue to face a
number of challenges including managing unprecedented growth within
appropriated funding; exercising stewardship of all resources;
increasing market share; continuously improving quality of care and
veteran satisfaction with that care; fully integrating administrative
and clinical programs and processes; investing in capital improvements
and information technology; and effectively communicating with veteran
groups, labor partners, educational affiliates and other stakeholders.
And when you look at the challenges faced by the two relatively small
networks, it makes good sense to form one integrated health care
delivery structure in order to enhance service and improve access
across the Midwest. Individually the two VISNs excel in many areas;
both rank high in patient satisfaction; both maintain excellent Joint
Commission for Accreditation of Health Care Organizations (JCAHO)
scores; and both are proven strong performers in quality measures.
Together they share many commonalities. The two VISNs are in close
geographic proximity and encompass veterans' populations residing in
largely rural areas. Significant financial challenges and small,
declining veterans' populations create urgency for improving
coordination of care and collaboration between health care providers.
Following are some examples of what we can expect to gain from
integrating the two Networks.
Improved Coordination and Collaboration.--The new VISN brings
together a richer mix of experience and greater flexibility in
allocating resources. Individually, VISNs 13 and 14 excelled in
practices which, when shared, will enhance the performance of both
Networks. For example, VISN 14 excels in the coordination and
completion of compensation and pension exams. By sharing exemplary
practices across the Midwest, it is expected that compensation and
pension exams will be completed in a more timely manner. In mental
health, we are seeing the benefits of integration by the two mental
health staffs working together to develop a proposal for establishing a
Mental Illness Research and Education Center (MIRECC) in VISN 23. In
prior years, proposals submitted by former VISNs 13 & 14 were not
approved. The new network, VISN 23, offers the opportunity to study and
treat a larger veteran population and has improved chances for the
Network to be selected as a MIRECC. Other areas benefiting from
combining experience and resources are cardiac services, telephone
triage, pharmacy formulary and pharmaceutical purchasing, laboratory
contracting, and the exploration of opportunities for successfully
managing the large rate of growth in our community based outpatient
clinics.
Budget Flexibility.--Combining the budgets of former VISN 13 and 14
will give VISN 23 greater flexibility in allocating the estimated one
billion dollars on VA programs and services. There will be
opportunities to implement management efficiencies and exemplary
practices by integrating fiscal services, consolidating business
offices, and materiel service functions, such as contracting,
logistics, supply, and warehouse functions. An integrated senior
leadership team will work cooperatively to prioritize and coordinate
health care programs in order to assure equitable access to care across
the Midwest. While the merger, in and of itself, will not bring
financial stability to the Networks, the merger is expected to generate
cost savings through economies of scales and reduced administrative
overhead. The estimated $1-6 million saved, over a period of time, will
be redirected into expanding access and enhancing services for veterans
throughout the Midwest.
Quality.--VISNs 13 & 14 are strong performers in quality measures.
Both demonstrated excellent performance in fiscal year 2001 and ranked
exceptional within the Veterans Health Administration (VHA) in the
areas of clinical practice guidelines and 30-day mental health follow-
up scores. Overall inpatient and outpatient satisfaction scores for
both Networks were among the best in VHA. Network leaders will build on
these successes and seize opportunities for enhancing quality,
expanding access, gaining efficiencies and improving veteran
satisfaction in areas that are less than exceptional.
Question. Veterans in my State are very concerned about the current
eligibility standards for Priority 7 veterans. Priority 7 veterans are
those who lack a disability related to their military service or whose
income is higher than the current VA eligibility standards. The current
income standard is $24,000 annually for a single, or $28,000 for a
couple, and applies to 40 percent of the veterans in South Dakota.
Assets, such as land, are included in the calculation of income. This
is a concern for many farmers and ranchers in my State who may own land
worth a considerable amount, but whose actual yearly income is well
below the VA threshold. The Administration's proposal to impose a
$1,500 co-pay on all Priority 7 veterans would be particularly onerous
on these veterans. Do you support changing the law regarding
eligibility standards for Priority 7 veterans to address this problem?
Answer. We examined many options for implementing the deductible,
including the cost impact on Priority 7 veterans. We believe the
proposal in the President's Budget will ensure that VA will be able to
provide high-quality care to our nation's veterans in the most cost-
effective manner.
______
Questions Submitted by Senator Pete V. Domenici
veterans department and dod coordination
Question. According to the President's budget submission, the
Veterans and Defense Departments historically has shown little
cooperation between these departments. In the status report on selected
programs for the Defense Department, DOD received an ``ineffective''
rating in coordination with the Veteran's Affairs Department.
Veterans switch back and forth between VA and DOD Hospitals with
Doctors not informed as to what care the patient received at the other
hospital. The president's budget submission suggests that
communications between the VA and DOD Hospitals would improve the
quality of care veterans receive.
In what areas, other than medical care, would the two departments
benefit from sharing resources? In areas where the VA & DOD has been
sharing resources, what have the results been in terms of savings to
the budget?
Answer. Medical Care.--Section 3(e) of the VA-DOD Health Resources
Sharing Act (38 USC 8111) requires that ``any funds received through
earnings in VA-DOD sharing agreements shall be credited to funds that
have been allotted to the facility that provided the care or
services.'' VA has followed this policy since the law was implemented.
The law provides an incentive for VA facilities to enter into
agreements with DOD and has benefited veterans by allowing facilities
to provide services to veterans that would not otherwise have been
available.
While the primary focus of the law is to allow facilities to expand
services for its beneficiaries, cost savings (cost avoidance) to the
budget do occur, especially in the purchase of services. By spending
less on goods and services facilities have more money available.
However, VA purchases in facility-to-facility sharing are difficult to
quantify and are quite small. For fiscal year 2001, VA purchased $20.4
million from DOD in local sharing agreements.
VA-DOD cost savings can be documented through joint procurement
efforts, primarily in pharmaceuticals. As of the end of February 2002,
there were 54 joint VA-DOD joint contracts for pharmaceuticals; 37
additional joint contracts are pending award. Sixteen joint contracts
were not awarded due to the lack of cost savings to the government
through their award. The total estimated cost savings in fiscal year
2001 for both Departments from these contracts were $98.3 million
($80.1 million for VA and $18.2 million for DOD).
Veterans Benefits Administration.--In an effort to explore
opportunities and common areas of interest, the Acting Under Secretary
for Benefits recently initiated dialogue with the Assistant Secretary
of Defense for Force Management Policy to create a VA/DOD Joint
Benefits Council. As planned, the council will foster a formal
partnership between our respective departments and serve as a standing
forum for expanding interagency collaboration to ultimately improve the
delivery of benefit services to veterans and service members.
Preliminarily, expanded data and information sharing, refinement of
transition/separation procedures and protocols, and collaborative
pursuit of improved access to military records have been identified as
``top tier'' objectives.
There are no data presently available to quantify any budget
savings which may have been realized by VBA as a result of our expanded
partnership with DOD. We believe it would be extremely difficult, if
not impossible, to identify and track such savings. However, we can
assure you that efficiencies resulting from continued and enhanced
collaboration between VA and DOD would be applied to further improve
the claims process.
National Cemetery Administration.--The National Cemetery
Administration (NCA) purchases headstones and markers to mark the
graves of veterans, not only in VA national cemeteries, but also in all
other Federal national cemeteries, State veterans cemeteries, and when
requested, in private cemeteries. NCA has an automated, on-line system
for ordering headstones and markers. The Department of the Army's
Arlington National Cemetery also orders its headstones and markers
through this on-line, automated system. This sharing of resources has
resulted in increased efficiencies in the ordering process.
Question. What steps would need to be taken, with respect to
information technology, in order to break down the wall that exists
between the two departments?
Answer. There are three principle areas where effective data
exchange between the Department of Defense (DOD) and the Department of
Veterans Affairs (VA) would significantly improve service for our
nation's military personnel and our veterans:
--Military personnel information provided to VA by DOD;
--Military eligibility and enrollment data provided to VA by DOD;
and,
-- Exchange of medical information between VA and DOD.
Efforts are underway between the two Departments to address these
areas. Additionally, DOD and VA have established an Executive Steering
Committee (ESC) co-chaired by the VA's Deputy Secretary and DOD's Under
Secretary for Personnel and Readiness. This ESC is addressing not only
those issues where information technology would help break down
barriers, but also other areas where both Departments could achieve
performance improvements, such as reduced cost for bulk purchasing of
pharmaceuticals. With respect to the three areas where information
technology could be an enabler, details of efforts that are underway
are discussed below.
--DOD is developing the Defense Integrated Military Human Resources
System (DIMHRS) as a future replacement for legacy military
personnel systems. The Veterans Benefits Administration (VBA)
and the Veterans Health Administration (VHA) have provided DOD
with functional requirements as part of the design phase of
DIMHRS. We will continue to follow up with DOD to ensure data
currently received by paper documents is received
electronically in the future.
--As part of the fiscal year 2004 budget formulation process, VA will
sponsor a One-VA Eligibility and Enrollment initiative for
obtaining necessary data from the DOD Eligibility and
Enrollment system called DEERS/RAPIDS. An analysis of
alternatives (AOA) will be conducted as part of the budget
formulation process. Alternatives to be considered include
reusing the DEERS/RAPIDS system to meet VA's eligibility and
enrollment requirements, including VA requirements in the
DEERS/RAPIDS system so that VA can obtain required data
directly from DOD, implementing a Commercial Off the Shelf
(COTS) Customer Relations Management (CRM) software package
that would interface with DEERS/RAPIDS, as well as other
potential alternatives. The results of the AOA will produce a
recommended approach for the fiscal year 2004 budget.
--VA and DOD have developed the Government Computer Patient Record
(GCPR) system that allows VA to have access to clinical data
from DOD hospitals. GCPR is in the final stages of testing and
we anticipate full fielding of GCPR within VA during the next
90 days. GCPR is a one-way interface from DOD to VA. VHA is
working with DOD's Health Affairs to determine how to expand
this capability for two-way data exchange. A key element of
determining the way ahead is in establishing common data
definitions between DOD and VA for health data. This work is in
process.
Additionally, VA and DOD have formed a close collaborative
partnership, under the titles of the Federal Health Information
Exchange (FHIE) and HealthePeople (Federal), to exchange data and
develop a common health information infrastructure and architecture
comprised of standardized data, communications, security, and high
performance health information systems.
This two phase effort will exchange patient data and will result in
computerized health record systems that ensure interoperability with
DOD's CHCS II and VA's HealtheVet strategy for VistA (HealtheVet-
VistA). The first phase, FHIE, of this plan focuses on DOD providing
information to VA clinicians and includes the Federal Health
Information Exchange (FHIE, formerly Government Computer-Based Patient
Record) effort, already in testing as of the end of calendar year 2001.
The second phase, HealthePeople (Federal), is a joint VA and DOD effort
to:
--Improve sharing of health information,
--Adopt common standards for architecture, data, communications,
security, technology and software,
--Seek joint procurements and/or building of systems,
--Seek opportunities for sharing existing systems & technology, and
--Explore convergence of VA & DOD health information applications
consistent with mission requirements.
Question. When veterans apply for benefits at the VA they must
submit pages of information on paper, which in many cases are available
on DOD computers, what steps should be taken so that this information
would be available electronically to the VA?
Veterans Health Administration.--When veterans apply for medical
benefits from VHA, they only need to fill-out the Application for
Health Benefits, VA Form 10-10EZ. An application can be completed at
any VA health care facility, community based clinic or on-line at
http://www.va.gov/. The electronic application has been very well
received in the veteran community. While some of the information
required, e.g., basic demographic data would be available from DOD,
other information, e.g., income, eligibility status would not. In
addition, VA is working with DOD to examine potential collaborative use
of DEERS/RAPIDS for VA health, benefits, and other services.
Veterans Benefits Administration.--Every effort should be made to
fully leverage the data and technology capabilities of DOD to enhance
delivery of services to veterans. The availability of accurate military
service information is critical to accurate and timely VBA eligibility
determinations and benefit decisions. Current data and information
exchange processes between VBA and DOD are often fragmented. However,
improvement efforts are underway. For example, to facilitate the
automated collection of essential military information, VBA has entered
into an interagency agreement with the Defense Manpower Data Center to
establish an electronic exchange of demographic and military history
data from the Defense Enrollment Eligibility Reporting System (DEERS).
In addition, VA is working with DOD to examine potential collaborative
use of DEERS/RAPIDS for VA health, benefits, and other services.
Question. Of the 1.8 million persons in New Mexico's population,
veterans make up nearly ten percent of all New Mexicans. We know that
the average age of these veterans is rising sharply, and that despite
the expansion program I initiated in 1999 for the use of flat markers
at Santa Fe National Cemetery, given the current rate of interments,
the Cemetery will run out of space by 2008.
Could you provide an update on the planning study that my
legislation directed the VA to undertake to determine the efficacy of
establishing a National Cemetery for Veterans in Albuquerque?
Answer. Section 613 of the Veterans Millennium Health Care and
Benefits Act of 1999 (Public Law No. 106-117) required the Department
of Veterans Affairs to contract for an independent demographic study to
identify those areas of the country with the greatest number of
veterans that will not have reasonable access to a burial option in a
national or State veterans cemetery within 75 miles of their residence.
The report will provide an assessment of the number of additional
cemeteries needed to ensure that a national or State veterans cemetery
is within 75 miles of the residence of 90 percent of veterans beginning
in 2005 and projecting out to 2020.
The study will address the concerns raised in the Conference Report
accompanying the fiscal year 2002 appropriations bill for VA. The
analysis will take into account the future burial needs of veterans
throughout the United States, including the needs of veterans in the
area of Albuquerque, as well as all of New Mexico's veterans. The
Honorable Robin L. Higgins, Under Secretary for Memorial Affairs, has
met with Congresswoman Heather Wilson regarding this study and will
continue to work with members of Congress to ensure that the burial
needs of veterans are met. We anticipate that the final report will be
completed and delivered to Congress later this spring.
Question. I have worked very hard to bring more VA clinics to New
Mexico to meet the blooming health care needs of our veterans. Still,
our veterans have many pressing health care concerns and they need
better access to VA facilities. Indeed, the only VA hospital in the
State is in Albuquerque, yet by land mass, New Mexico is the fifth
largest State. Geographically, this makes it very difficult on veterans
who need care.
The reality is, we need more VA clinics in New Mexico, or a better
delivery system for providing care to veterans. How will the VA
approach this problem and enhance the ability of veterans who reside in
rural areas to more easily access the care they need? Could you provide
some suggestions specifically tailored to the needs of New Mexico
veterans on this matter?
Answer. VHA currently operates 13 Community Based Outpatient
Clinics (CBOCs) in the State of New Mexico. Present locations include:
Alamogordo, Artesia, Clovis, Espanola, Farmington, Gallup, Hobbs, Las
Cruces, Las Vegas, Raton, Santa Fe, Silver City, and Truth or
Consequences. In addition, two of these sites--Las Vegas and Espanola--
provide services at an additional 10 access points through a
contractual arrangement. These additional locations include: Chama,
Coyote, Embudo, La Loma, Penasco, Roy, San Miguel, Springer, Truchas,
and Wagon Mound. Thus, a total of 23 sites provide veterans in New
Mexico with convenient, local access to VA outpatient services
throughout the State. Later this fiscal year, the New Mexico VA Health
Care System (NMVAHCS) plans to open an additional CBOC in Durango,
Colorado that will expand service to approximately 1,800 veterans
residing in Northwestern New Mexico and Southwestern Colorado.
During the past 5 years, the number of veterans treated in New
Mexico CBOCs has risen by over 40 percent, from 11,700 unique patients
in fiscal year 1997 to over 16,500 in fiscal year 2001. The largest
annual increase (12.1 percent) occurred between fiscal year 2000 and
fiscal year 2001 with the opening of the Alamogordo and Truth or
Consequences CBOCs.
Although there are no plans to open additional CBOCs in fiscal year
2003, the NMVAHCS has made specific plans to increase the number of
veterans served in the Silver City CBOC (expanding services to
accommodate 2,000 patients up from 1,600), in Raton (expanding services
to accommodate 1,800 patients up from 1,000), and in Gallup (expanding
services to accommodate 1,800 patients up from 1,000).
Furthermore, plans are underway to expand the scope of mental
health services provided in New Mexico CBOCs. Additional resources will
initially be targeted initially for CBOCs that have an enrollment of at
least 1,000 veterans and a veteran mental health penetration level of
less than 10 percent. Mental health services will be expanded at
Espanola, Gallup, Hobbs, Raton and Silver City. Counseling and
psychiatric services will be increased to an appropriate level and the
use of telemedicine and fee basis will also be increased where
feasible. These actions will enable the network to increase the number
of days per week that counseling, psycho-social services, and
psychiatric medication services will be available to New Mexico
veterans.
Question. I regularly meet with veterans groups from New Mexico who
tell me that they are facing a critical direct care shortage. They
simply cannot find enough nurses or certified nursing assistants to
meet health care demands. What is your assessment of the root cause of
this problem?
Answer. The national nursing shortage stems from a variety of
factors. In its report of August 2001, VA's Future Nursing Workforce
Workgroup cited the following factors that contribute to the shortage:
--A decline in enrollment in schools of nursing.
--Aging of the nursing workforce (average age nationally, 45.2 years,
VA 46 years.).
--Average age of a new graduate in nursing has climbed to 30.5 in
1995--2000 versus 24.3 in 1995 or earlier.
--Poor image of nursing as a career choice and more career choices
for women.
--Pay inequities.
--Perceived negative work environments.
--Inadequate numbers of qualified faculty to educate the numbers of
nurses needed.
--Projected increase in aging veterans who will require more complex
care by increasingly greater-skilled nurses.
While the New Mexico VA Health Care System did experience nursing
shortages in 2000 and 2001, they currently have a nurse vacancy rate of
4.4 percent, with only 11 positions unfilled (3 of which have been
selected and are pending a start date). The health care system has been
successful in recruiting and retaining enough nurses to adequately
staff their operating beds and clinic operations in all areas except
for the Spinal Cord Injury (SCI) Center.
Question. Does the VA have a plan to address this shortage of
nurses?
Answer. Yes. To help recruit and retain nurses in general, the
NMVAHCS has taken several actions:
--On-site critical care courses are provided.
--Reimbursement of past nursing education expenses is provided to
qualifying nurses.
--Tuition reimbursement is provided to staff seeking to obtain
nursing degrees.
--Participation in the Veterans Affairs Learning Opportunities
Residency Program (VALOR).
--Monthly advertisements in local newspapers for new nurses.
--Attendance at Health Career Fairs
--Attendance at Career Fairs for new graduates.
--Advertisement on the VA Intranet for nurse transfers to the
NMVAHCS.
To help recruit nurses for the Spinal Cord Injury Center, the
following additional actions have been taken:
--Recruitment Bonuses are offered.
--Through close collaboration with the University of New Mexico, a
SCI nursing course has been developed and was offered at the
University in November 2001. A second offering of the SCI
nursing course will occur in April 2002.
______
Questions Submitted by Senator Larry E. Craig
Question. Currently, your budget contemplates moving the VETS
program from the Dept of Labor to VA. In my State there is some unrest
about the potential ramifications to Veterans that may be harmed by
such a move. The details I understand are still in process of being
worked out; once the details are finalized I would appreciate your
office coming over to brief my staff and I on the details of how this
will impact the Veterans of Idaho.
Answer. I will be happy to arrange for you and your staff to be
fully briefed on the details of this initiative as soon as the
Administration submits its bill to Congress.
I want to share with you, however, two essential elements of the
Administration's proposal that will be beneficial to all veterans. The
new grant program will be competitive and performance-based. These are
two essential components directly affecting grantee performance.
First, VA intends to set clear, obtainable and easily measured
outcome performance standards. Measures such as the number of veterans
who obtain a job and duration of employment are examples of such
outcome measures.
Second, there must be something at risk for the grantees in order
for VA's grant oversight to be effective. Simply stated--rewards for
exceptionally high performance and a costs for failing to deliver
agreed upon outcomes. Quite frankly, a new grant program that is not
competitive in nature can only fare marginally better than the existing
programs. This is not to suggest that the competition must be at the
national level, competition within States can be just as effective.
Question. Three years ago we lost one of our two doctors from our
Pocatello facility. Initially VA informed me that they would be able to
address the doctor deficit via nurse practioners. Over time it has
become apparent that this is not sufficient. Over a year ago VA
initiated a doctor search for the Pocatello facility. VA indicates to
my staff that they can't find a willing doctor in the area, though
there is a residency program in the vicinity with an ample supply of
willing and able medical professionals. Currently, because of the
doctor deficit there at Pocatello, we have some Veterans who commute
from Salmon to Pocatello that now have to go to Salt Lake City which is
a 5 hour drive in order to obtain treatment. When do you anticipate
resolving the doctor deficit in Idaho?
Answer. We have recently resolved this issue with the selection of
Dr. Walaliyadda for the physician position. The selection of Dr.
Walaliyadda is currently in the approval phase. Dr. Walaliyadda is
expected to start in this position by July 1, 2002, or sooner if
possible.
Question. Your 2003 Budget proposes imposing a $1500 medical
deductible for Priority 7 veterans. What other alternatives have you
reviewed and dismissed before deciding on this approach?
Answer. We also considered such alternatives as imposing an
enrollment fee, a first-user fee, other deductible options, and
limiting enrollment.
Question. Could you provide me some details and background on the
$1.5 billion in collections that you anticipate? How does this compare
with what has been collected over the past 5 years? What do you
anticipate collecting over the next 5 years, will it be collected at a
comparable rate or will it increase or decrease?
Answer. The projected fiscal year 2003 revenue collection is $1.488
billion, which represents a 42 percent increase over the projected
fiscal year 2002 revenue collection of $1.050 billion. The primary
reasons for the increase in fiscal year 2003 to $1.488 billion are $260
million projected as collections for the $1,500 deductible; a $364
million full-year estimate for the $5 increase in medication co-payment
(from $2 to $7); and $40 million representing a full-year estimate for
the long-term care co-payment.
REVENUE COLLECTIONS BY FISCAL YEAR
[Dollars in Millions]
------------------------------------------------------------------------
Percent
Fiscal year Amount Inc.
------------------------------------------------------------------------
Actuals:
1997.......................................... $520 .........
1998.......................................... 560 7.7
1999.......................................... 574 2.5
2000.......................................... 573 -0.2
2001.......................................... 771 34.6
Projected:
2002.......................................... 1,050 36.2
2003.......................................... 1,488 41.7
2004.......................................... 1,627 9.3
2005.......................................... 1,739 6.9
2006.......................................... 1,881 8.2
2007.......................................... 1,981 5.3
2008.......................................... 2,039 2.9
------------------------------------------------------------------------
Question. In the recently submitted President's Budget, one of your
goals is to reduce the process time of processing claims from 165 days
down to 100 days. Why did you choose 100 days vs. say, 90 or even 30
days? What is the comparable amount of time it takes for industry to
process a claim?
Answer. The goal of 100 days on average to process rating-related
claims was chosen for several reasons. VA is required by Federal
regulation and the Veterans Claims Assistance Act (VCAA) to afford
veterans every opportunity to notify us of any evidence they feel is
relevant to their claims. VA is obligated to exhaust all efforts to
obtain that evidence, whether the evidence comes from within VA,
another Federal agency, or a private source.
When attempting to obtain evidence from private sources, VA must
allow 60 days for a response before performing any action on the claim.
Private sources are under no obligation to submit evidence to VA in a
timely manner. Additionally, a physical examination is required in most
cases to ascertain the extent of a disability and determine the
veteran's overall disability compensation rating. While it is in the
best interest of the veteran and VA to process the claim as quickly as
possible, the reality is that most claims require some type of
evidentiary development that adds to the time it takes to process the
claim.
VA is required to establish that the claimed disability was
incurred in, aggravated by, or otherwise determined to be a result of
military service. In addition, VA must determine the percentage at
which a veteran's disability detracts from his or her overall ability
to function. Finally, VA must determine the amount of compensation
based on a combined disability rating evaluation, as well as processing
any ancillary benefits to which the veteran may be entitled.
Given these realities, the goal of 100 days is thought to be a
challenging yet attainable goal.
It is difficult to compare the VA's claims processing function to
private industry. The closest comparison would probably be disability
determinations that take place in the insurance industry. However, most
disability determinations by the insurance industry are made without
the requirement to establish a link between the claimant's disability
and the working environment. Evidentiary requirements are also much
more exhaustive for VA.
Question. When do you anticipate eliminating the backlog?
Answer. VA's goal is to reduce the inventory to approximately
250,000 rating-related claims by the end of fiscal year 2003. Our
interim goal for the end of this fiscal year is to reduce the rating
inventory to approximately 315,000 pending claims.
Our efforts to achieve these goals are showing positive results.
VBA significantly increased its production of rating decisions in the
latter months of fiscal year 2001 and into this year, which is the key
to reducing the claims backlog. From October 2001 through February
2002, VBA decided over 294,000 cases for a 5 month average of 58,800.
This represents a 47 percent increase over fiscal year 2001 production
levels. We expect our production to continue to increase as many of our
recently hired employees gain additional experience and we begin to
implement the recommendations of the Claims Processing Task Force.
Even with the increased production, our current pending inventory
remains unacceptably high. This is due to a significant increase in the
volume of incoming claims, attributed to the following factors:
--The review of more than 98,000 cases under the Veterans Claims
Assistance Act (VCAA).
--VA's expanded outreach efforts to separating service members
(Benefits Delivery at Discharge initiative).
--Receipt of 66,000 Type 2 diabetes claims based on exposure to Agent
Orange.
--The requirement to review 13,000 previously-adjudicated diabetes
claims under the Nehmer stipulation. (In the case of Nehmer v.
VA, plaintiffs' attorneys and VA agreed, in a 1991 Stipulation
and Order, on a process for applying an earlier than usual
effective date for certain claims for benefits based on Agent
Orange exposure. As a result of court decisions in the Nehmer
case, VA is required to re-adjudicate over 13,000 diabetes
claims.)
All of the 98,000 VCAA claims have now been added to the inventory.
Following the initial surge of Type 2 diabetes claims, the incoming
volume of diabetes claims is expected to taper off. We have also
completed a significant portion of the Nehmer reviews. We therefore
believe our increased production levels and the Task Force initiatives
will now enable us to make major inroads into the pending inventory.
Question. Under the Veterans Benefits Administration, specifically
the Housing program, you are currently in the process of completing an
A-76 study for potentially contracting out the property management
function. How significant is this activity as far as dollars and
people, and what is the breakdown by State?
Answer. At the inception of this A-76 cost comparison the Property
Management Operation involved 276 FTE at 46 regional offices around the
country. There are currently 185 FTE at those offices. A breakdown of
the 276 FTE and the current 185 FTE is provided below along with pre A-
76 local program expenditures for management brokers, repair cost, and
sales brokers. Unfortunately, final program modifications and savings
cannot be determined until the A-76 award decision is rendered.
VA PROPERTY MANAGEMENT ACTIVITIES
----------------------------------------------------------------------------------------------------------------
Avg.
State VA Regional Office 1999 FTE Jan-02 Expenditures
Per Property
----------------------------------------------------------------------------------------------------------------
Alabama..................................... Montgomery.................... 4 5 $4,113
Alaska...................................... Anchorage..................... 1 0.5 11,020
Arizona..................................... Phoenix....................... 10 8 8,258
Arkansas.................................... Little Rock................... 4 1 5,831
California.................................. Los Angeles................... 24 8 8,222
California.................................. Oakland....................... 13 7 12,364
California.................................. San Diego..................... 14 3.5 11,477
Colorado.................................... Denver........................ 3 4 8,967
Florida..................................... St. Petersburg................ 13 12 9,822
Georgia..................................... Atlanta....................... 16 14 10,960
Hawaii...................................... Honolulu...................... 1 0 6,308
Idaho....................................... Boise......................... 1 2 11,151
Illinois.................................... Chicago....................... 11 4 7,854
Indiana..................................... Indianapolis.................. 2 2 9,402
Iowa........................................ Des Moines.................... 2 2 5,703
Kansas...................................... Wichita....................... 3 2 12,146
Kentucky.................................... Louisville.................... 2 1 6,271
Louisiana................................... New Orleans................... 6 4 6,788
Maryland.................................... Baltimore..................... 4 3 17,474
Michigan.................................... Detroit....................... 11 7.5 8,967
Minnesota................................... St. Paul...................... 6 5 8,807
Mississippi................................. Jackson....................... 3 2 6,560
Missouri.................................... St. Louis..................... 7 3 7,334
Nebraska.................................... Lincoln....................... 1 1 10,205
New Hampshire............................... Manchester.................... 4 4.5 16,663
New Jersey.................................. Newark........................ 3 5 10,816
New Mexico.................................. Albuquerque................... 1 3 10,337
New York.................................... Buffalo....................... 1 1 5,913
New York.................................... New York...................... 3 5 5,477
North Carolina.............................. Winston-Salem................. 11 4.38 10,495
Ohio........................................ Cleveland..................... 4 5 6,269
Oklahoma.................................... Muskogee...................... 5 1 4,034
Oregon...................................... Portland...................... 1 2 8,000
Pennsylvania................................ Philadelphia.................. 3 4 7,697
Pennsylvania................................ Pittsburgh.................... 2 2 8,109
Puerto Rico................................. San Juan...................... 1 0 5,667
South Carolina.............................. Columbia...................... 7 1 6,263
Tennessee................................... Nashville..................... 5 1.25 5,522
Texas....................................... Houston....................... 17 13.1 12,852
Texas....................................... Waco.......................... 13 4 12,133
Utah........................................ Salt Lake City................ 0 1 11,910
Virginia.................................... Roanoke....................... 14 14 7,922
Washington.................................. Seattle....................... 7 5 13,579
Wisconsin................................... Milwaukee..................... 3 0 10,865
Washington DC................. 9 7 14,037
-------------------------------------------------------------------
National Total........................ .............................. 276 184.73 ............
----------------------------------------------------------------------------------------------------------------
Note: Some stations have jurisdiction over other States.
SUBCOMMITTEE RECESS
Senator Mikulski. The subcommittee stands in recess until
next week when we will take the testimony of Housing and Urban
Development.
Secretary Principi. Thank you.
Senator Mikulski. Thank you.
[Whereupon, at 11:22 a.m., Wednesday, March 6, and the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MARCH 13, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:35 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Bond, and Craig.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
STATEMENT OF HON. MEL MARTINEZ, SECRETARY OF HOUSING
AND URBAN DEVELOPMENT
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. Good morning, everybody, to HUD; The
subcommittee will come together.
This morning we are taking the testimony from our
Secretary, Mel Martinez. We look forward to hearing the
Secretary present the administration's appropriations request
and the priorities of the administration for the Department of
Housing and Urban Development.
I apologize for the Committee starting late. It took me an
hour and 45 minutes to get here from Baltimore today. So we are
going to move on quickly.
Mr. Secretary, let me start by once again thanking you for
the collegiality in which you have worked with the
Subcommittee. I believe both Senator Bond and I feel that we
have excellent response from you and your staff and that our
conversations have been candid and focused on empowering people
in neighborhoods. So we thank you for that and look forward to
that.
Secretary Martinez. Thank you.
Senator Mikulski. Mr. Secretary, I have three goals this
morning. I want to make sure that HUD continues to stay focused
on its core program, housing programs. And it also that it has
enough resources for them. I want to hear your views on how we
can also help communities that are under stress.
In terms of those communities that are under stress, it is
those that have also been stressed both by age, demographic
change, and the changing HUD programs. The stressed communities
I am talking about are particularly in cities where parts of
cities are what we call the ``middle ring'' of a city, that are
often are like little suburbs within a city. They were not the
inner core. They were not the neighborhoods under siege. But
right now they are feeling older. Predatory practices are
beginning to come, blight begins to come. But most of all,
using FHA programs, we are concerned that people buying homes,
cannot keep them up and keep them going.
The other part is in the suburbs where public housing was
not built. And there was the great thinking of using Section 8
so that people would have choice and mobility. But they went
into apartment buildings that then became public housing by
proxy. You and I visited some of those in Prince George's
County just a couple of weeks ago. By ``public housing by
proxy,'' I mean a privately held complex that rented to the
poor. That was a good idea. Then they abandoned their complex
while renting to the poor. They either abdicated their mortgage
requirements and certainly abdicated the service and
maintenance requirements.
And therefore, FHA subsidized, Section 8 subsidized by
tenants, all have become public housing by proxy with none of
the social services, none of the empowerment and, most of all,
these apartments have become incubators for the distressed
communities around them.
HOPE VI is expiring, and we are very interested in your
thoughts on HOPE VI and those issues, as well as issues related
to management and oversight. Without good HUD oversight, we see
HUD at its worst. Instead of helping poor and hard-working
families to get to a better life, HUD ends up lining the
pockets of scums so that they can have a better life.
So, we want to really look at these neighborhoods. We are
here to make sure that the poor have a way to a better life,
not the scums having a better life. So, I think we are all in
agreement on the priorities; and we look forward to working
towards them.
Some of the issues we are talking about are the $1 million
for home-owner counseling. We are committed to the American
dream. But often, people who are not prepared for home-
ownership nor have the resources to sustain home-ownership end
up not being able to fulfill their responsibilities. And it
does not work. We really need pre-purchase counseling. I want
to hear more about that.
I am also concerned about what has happened in some
community development corporations. The vast majority of CDC's
are great engines of redevelopment in our communities. But some
CDC's have now been created as almost faux corporations. Again,
skimming off the bucks and then leaving very little to show
results.
A recent article in The Washington Post about some
occurrences in the District of Columbia shows an example of
this. And this is not finger-pointing at the District of
Columbia or CDC's; I am a big believer in them. There was a guy
who was the chief executive of the Anacostia Economic
Development Corporation. He took $25,000 from the group and
invested in raw gold in Mali, nothing to do with investing in
the District of Columbia.
And another has taken nearly $40 million in public and
private funds and has yet completed 12 of its 37 projects in 10
years. So, we need to look at how we can work with those CDC's
and yet prevent waste, fraud, and abuse, so that the good ones
can really be what we call those public/private partnerships.
PREPARED STATEMENT
There is much more to be said in detail, as we go through
the hearings, the capital management programs, the details, the
budget, but those are my large area policy goals. And I am
going to now conclude my remarks and ask unanimous consent that
my full statement be in the record.
[The statement follows:]
Prepared Statement of Senator Barbara A. Mikulski
I would like to welcome Secretary Martinez to his second budget
hearing before this Subcommittee.
I have three goals for the hearing today. The first is to make sure
that HUD is committed to its core housing programs and has enough
resources for them. Second, we want to hear the Secretary's views on
how we can help communities that are under stress. I'd like to hear
from the Secretary about how the HOPE VI program can best serve these
communities, how we can help people who are ``aging in place'' stay in
their neighborhoods, and, how we can prevent concentrations of poverty
from destabilizing communities. Lastly, I'd like to address problems
that I see in the oversight of HUD programs. We want HUD to be a good
steward of the tax payer dollar and a good neighbor in our communities.
This subcommittee wants to help HUD achieve these goals.
The Administration's budget fully funds Section 8 renewals and
requests modest increases to HOME and CDBG block grant programs.
Unfortunately, the Administration proposes to cut the Public Housing
Capital Fund by $400 million, even though public housing units have a
$22 billion backlog in capital repairs.
HUD programs are seeing an increase in demand, but they don't get
increased resources in this budget. This is true for Elderly and
Disabled Housing programs and for permanent housing for the homeless.
And, there are still serious problems in the Section 8 program.
Working families moving from welfare to work depend on this program,
but some vouchers aren't being used, despite this high demand. Vouchers
can't solve all of our problems. Senator Bond and I believe that we
need to do more housing production; we'd like to hear your views on
housing production.
HOPE VI expires this year. In June HUD will submit a report to
Congress on lessons learned in the HOPE VI program. In the meantime, we
want to hear your thoughts on what the program has achieved. What
works? And what doesn't? I know in Baltimore they're gearing up to
start a new HOPE VI development, so they'd welcome guidance from the
Department. It's also time to take inventory. We want to know if we've
met the need out there for severely distressed housing. If we have, is
it time to sunset HOPE VI?
We have neighborhoods that are under stress. Oftentimes this is
because government walked away, or the landlords walked away. We have a
real problem of predatory lending in communities across the Nation. The
poor are being gouged, the taxpayers are paying for it, and scam
artists are profiting. And predatory lending has resulted in
neighborhoods that were once stable turning into neighborhoods under
stress.
Secretary Martinez and I have formed the Prince George's County to
combat the problems that we saw when we visited the inner beltway
communities of the County. There, we saw the effects of absenteeism. We
need to work together to build neighborhoods where people live, work,
shop, worship and raise their families.
Also of great concern to me are the needs of our aging population.
Our senior citizens, particularly our frail elderly, have special
needs. The housing stock for our elderly is out of date with today's
needs; the elderly need services and affordable housing in communities,
not just buildings.
In order to have a strong HUD, we need to have a well-managed HUD.
HUD must have good information technology systems, thorough oversight
of programs, and tough enforcement. Without good oversight we see HUD
at its worst: instead of helping poor and hardworking Americans to get
a better life, HUD is lines the pockets of scum so that they can have a
better life. HUD needs to turn this equation around.
The GAO has found serious deficiencies in the IT systems at HUD's
four Homeownership Centers. These deficiencies affect HUD's ability to
target high risk lenders and to investigate cases of fraud. These
deficiencies hurt the work we're doing on predatory lending with HUD.
Around the country communities are being hurt by these schemes.
Unscrupulous investors buy up foreclosed properties. They flip the
properties to unsuspecting homebuyers. They inflate the costs of the
houses, they hide fees and balloon payments. They gouge the poor, they
rip off tax payers, and they destroy communities. I'm pleased that the
budget includes $35 million for homeowner counseling.
Clearly, better oversight of programs could have prevented the
scandals being uncovered here in D.C. with Community Development
Corporations. We know that the vast majority of CDCs are great engines
of redevelopment in poor communities. But, these CDCs managed to scam
the government, and hurt neighborhoods.
We know that some of this money came from HUD programs. One of the
groups profiled was the Asset Control Area receiver for the City. This
is what the editorial board of the Washington Post has to say on
February 28:
``The articles . . . show how CDCs, charged with bringing stability
and development to scarred communities, have instead left a trail of
sick business districts, boarded-up apartment buildings and weed-filled
lots across the city . . . Albert R. ``Butch'' Hopkins Jr., chief
executive of the Anacostia Economic Development Corp. in Southeast
Washington, invested $25,000 from one of the group's for-profit
subsidiaries to buy . . . raw gold in Mali . . . Robert Moore's
Development Corp. of Columbia Heights in Northwest Washington has taken
in nearly $40 million in public and private funds, holds a large
portfolio of properties--some of which it received free from the city
and yet has completed only 12 of its 37 major construction projects in
the past decade.''
We know that Secretary Martinez shares these concerns with us. We
look forward to working with Secretary Martinez to help HUD fulfill its
mission and be a real partner to communities.
We'll look forward to your testimony.
Senator Mikulski. And I will turn to my colleague, Senator
Bond.
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you very much, Madam Chair. And I join
with you in welcoming Secretary Martinez to testify on the
budget request for 2003. Last year was the Secretary's first
opportunity to testify before this subcommittee. And I found
the Secretary's testimony frank and refreshing. But I look
forward to the second year of testimony now that he has a full
year of what I would call the ``HUD experience'' under his
belt.
About a quarter of a century ago, I lost a reelection race
I was supposed to win. And one of the most consoling things
that a friend of mine said was ``experience is what you get
when you expected to get something else.''
Senator Bond. And I have a feeling that Secretary Martinez
has been having a lot of experience. I had a little experience
yesterday, I just started to mention. There was a bill that, in
flush times with big budgets, might have been very nice. There
was the Murkowski-Daschle bill to create $100 million grant
program for a rural access to electric infrastructure, $100
million for a rural recovery community block grant program, $20
million in a grant program from community electrification
grants, all coming out of HUD.
I put a hold on it, and it was passed yesterday afternoon
by unanimous consent; and this is--it is just $220 million that
we do not have in the budget. So, Mr. Secretary, we need to
work with you on perhaps visiting that effort.
But let us get on to the things that are before us. We have
to do some tough battles in this subcommittee, balancing the
affordable housing and economic development needs against
priorities for veterans, environmental protection, continuing
investment in science, technology, the expanding, greatly
expanding, requirements of FEMA, particularly related to
homeland defense.
But there are special challenges in HUD. As we have said,
HUD has been troubled and dysfunctional for a long time. Its
primary program missions have some real questions about them,
as the Chair has already mentioned. I know you have taken some
steps to reform staffing requirements. You are following
through on contracts for the development of new computer and IT
systems. These are really not sexy, front-page stories. But I
think it is only through basic reforms like this that you will
be able to get a handle on the billions of dollars going
through the department.
I have a number of concerns with the budget. I understand
the department has requested almost $2 billion to cover all
renewing, expiring Section 8 contracts. But Section 8 is
probably one of the most troubling programs. Every year the
administration, be it Democrat or Republican, glosses over the
way many Section 8 programs are administered, while the costs
to the taxpayers continue to escalate.
The programs lose over $1 billion annually due to fraud,
neglect, and abuse. I think it is time to fix it so we ensure
Section 8 assistance really goes to the low income families to
find and obtain affordable housing. I am tired of the myth that
Section 8 vouchers mean freedom to rent where you want to live.
In too many parts of the country, that is a hollow promise.
There are not available rental properties. And to give out
vouchers in St. Louis County, for example, is a wasted effort.
Yet instead of addressing the shortage of affordable
housing, we continue to get OMB recommendations to convert
project-based Section 8 assistance to tenant-based Section 8
assistance, leaving low-income families without affordable
housing in many areas with a shrinking stock of housing. I am
especially concerned about the lack of affordable housing for
the elderly and for persons with disabilities. But we need some
support from OMB.
And in addition, OMB is pushing to cut, again, the funding
for public housing capital by over $400 million despite a
backlog of some $22 billion in needed repairs. The OMB suggests
capital resources can be made up through the borrowing of
private capital, which would then be supported by Section 8
project-based assistance. What HUD does not advertise is that
the proposal is designed to convert this project-based
assistance into vouchers and privatize the public housing
units. That means that the highest quality public housing units
will be lost to low-income use, without any guarantee that
needed affordable housing units will be preserved for low-
income families in tight rental markets.
In addition, the cost of this public housing proposal would
be carried by the Housing Certificate Fund, which already has
costs of some $20 billion per year. I think it is a shell game
especially shifting the costs from public housing capital to
the Housing Certificate Fund. And I really--I have a long way
to go before I can be sold on that turkey.
There are a number of other issues that I think we need for
HUD to address. I would like to thank OMB for proposing, once
again, to eliminate the Rural Housing and Economic Development
Program that I fought so hard to get established a few years
ago. It may be because I have said bad things about OMB in the
past. And I intend to continue.
We also need the Administration's help in re-authorizing
the HOPE VI program. It is slated for termination at the end of
the year. I think we need a comprehensive review and
reformulation of the program. But it is working. We want to
make sure that we improve it and make it continue.
Finally, real concerns about renewing expiring contracts
under Shelter-Plus Care, Section 811 housing. I do not think
the budgets for either are adequate. Shelter-Plus Care includes
no funding for the cost of expiring contracts and that is not
right.
Well, having said that, Mr. Secretary, we have a lot of
work to do. And I look forward to your testimony.
And I thank the Chair.
Senator Mikulski. Senator Craig, would you like to say
something now?
STATEMENT OF SENATOR LARRY E. CRAIG
Senator Craig. Thank you.
Mr. Secretary, it is obvious that we all share passion as
it relates to your agency. And I think you do, too. And we
appreciate you being here this morning.
Madam Chairman, I am sorry about your struggle to get here
this morning. What has happened is that Marylanders have seen
rain for the first time in, I guess, months. And it was such a
surprising occurrence, they all stopped to look at it.
Senator Mikulski. That is exactly right, instead of looking
at the road.
Senator Craig. Exactly. Now, you know what we who live in
desert States experience when the rain comes; we all rejoice.
And I think that is what folks in this area were doing this
morning.
Mr. Secretary, I share some of the same passions with some
different focuses than do my colleagues, in part because I do
not have some of the inner-city concerns that are expressed by
the Chairman or by the ranking member. They have those, and I
support their concerns. But let me thank you for the work you
have done with the U.S. Department of Justice to restore HUD to
what I think are some original goals and missions.
I was more than a bit incensed by the former practice of
reprogramming housing dollars for gun buy-back programs, funds
that were originally dedicated for house construction and
mortgage assistance programs. It was a detrimental and, I
think, reckless public policy, especially to the poor and the
under-served. It was a political statement made on the part of
a former Secretary of HUD and Administration. I believe it
served little value.
I think it is also important that HUD no longer serves as a
litigious tool against the manufacturers of firearms. Your
dissolution of HUD's role as a police agency to attack the
Second Amendment, I think, was a responsible, Constitutionally
tenable policy decision, not to mention a victory for taxpayers
who were wrongfully forced to unjustifiably subsidize an inter-
governmental political agenda that I have mentioned.
Next, I wholeheartedly acknowledge the necessity for access
to affordable housing for the disabled, the infirm, and the
elderly. HUD's effort to crack down on egregious violators and
those who callously disregard the rules should be applauded,
and I do it. And I know you are concerned about it.
However, despite HUD's programs to educate developers and
construction workers about the vague regulations and the
ambiguous guidelines under the Federal Fair Housing
Accessibility Standards, there are still incidents in my State
of Idaho where scrupulous, honest home builders and developers
are pursued in a manner that resembles bounty hunting. Now I
know you have changed that. You have changed the incentive
there. And that is the way it ought to be.
We need to be in the business of educating. And we need to
be in the business of searching for and evaluating compliance
directives and doing that in a way that is responsible, both
for those who would be subject to the directives and those for
whom access is a problem, because they are disabled or elderly
or infirm. We do not need to drive away responsible builders
who want to provide that kind of housing and want to comply,
only to find out that someone is going through their
facilities, whispering under their breath: If we search long
enough, we will find and file a violation.
That has happened too many times. I know you are working to
correct it; I appreciate it. HUD needs--has a responsibility
and a mission that I think you have it headed toward. It has a
lot of fine, responsible employees who want to do the right
thing. And it can be done without a visible, high-profile
political agenda.
With that, I thank you for being here. There are a variety
of questions that, if I stay long enough, we will visit about,
or I will submit them for the record.
Madam Chairman, let us proceed. Thank you.
Senator Mikulski. Thank you. Excellent points, Senator.
Yes, Mr. Martinez. Please go ahead.
STATEMENT OF HON. MEL MARTINEZ
Secretary Martinez. Thank you, Madam Chair and Ranking
Member Bond and Senator Craig. It is a pleasure to be back with
you today. And I think, as Senator Bond said, we are all a year
older and a year wiser, to be sure, Senator. But it has been an
exciting opportunity to serve in a Department where I think we
are at a very close heartbeat of what is the American dream for
so many families.
And so, Senator, I enjoyed our opportunity to visit in your
State, to see some of the problems that you are dealing with.
Amazingly enough, those very problems you are speaking of are
what were the middle-class suburbs of the 1950's and 1960's
that are now becoming areas under stress. It is something that
I am very familiar with from my home community.
But on to our budget, the 2003 budget, for the Department
of Housing and Urban Development. It is a $31.5 billion budget,
which represents a funding level increase of 7 percent over the
fiscal year 2002. At a time when dollars are especially
precious and the cost of homeland security is consuming many
Federal resources, this shows the President's commitment to
improving housing and communities.
By helping Americans to become home owners, ensuring
affordable housing opportunities for those who rent, and
renewing communities, and preserving a safety net for the most
vulnerable, this budget will enable HUD to make a tremendous
difference in the lives of millions of Americans.
The housing market in 2001 was extremely vigorous. And we
enter a new year with home ownership rates at a record high.
Because we know that home ownership gives families a stake in
their communities and creates wealth, the HUD budget makes
owning a home a viable option for even more Americans.
President Bush and I are committed to expanding home ownership,
especially among minority families.
As a first step, our budget quadruples the American Dream
Downpayment Fund to $200 million. This Presidential initiative
will help an estimated 40,000 first-time home buyers with a
high down payment and closing costs that are often a
significant obstacle to home ownership.
A tax credit for developers for single family affordable
housing will promote home ownership opportunities among low-
income households by supporting the rehabilitation or new
construction of homes in low-income urban and rural
neighborhoods.
Our budget proposes tripling funding for the Self-Help
Home-ownership Opportunity Program, the SHOP program, to $65
million, as committed by the President last spring. That will
make possible the construction of an additional 3,800 homes for
many disadvantaged Americans. SHOP is an excellent example of
Government maximizing its resources, working with the private
sector partners and community organizations like ``Habitat for
Humanity.''
Another exciting home ownership initiative targeted at low-
income families will allow them to put a year's worth of their
Section 8 rental vouchers toward a home down payment. And
because we consider it to be a invaluable tool for prospective
home buyers and renters, the HUD Budget process proposes also
making housing counseling a separate program. The increase in
sub-prime lending has made financial literacy more important
than ever; armed with the facts, a consumer is far less likely
to be victimized by predatory lending. We are funding the
Housing Counseling Program at $35 million, a $15 million
increase over the previous fiscal year.
While we consider home ownership to be an important goal,
we recognize that it is not an option for everyone. Therefore,
our Budget preserves HUD's commitment to expanding the
availability of affordable housing for many of Americans who
rent their homes. The Section 8 Tenant-Based Program, today,
assists 2,000,000 families. Our Budget provides an additional
34,000 housing vouchers. The Budget also dedicates $16.9
billion to protect current residents by renewing all expiring
Section 8 contracts.
To encourage the production of moderate-income rental
housing in under-served areas, the HUD Budget would reduce the
mortgage insurance premium for the Federal Housing
Administration multi family insurance. Three times over the
last 8 years, HUD has been forced to shut down our multifamily
mortgage insurance program because of a lack of credit subsidy.
We made a commitment to a comprehensive review of the
credit subsidy program. Through our review, we were able to
lower premiums, create a self-sustaining program, provide the
industry with stable financing at a much lower cost, and
provide thousands of new opportunities for rental housing
across the country.
Today I am happy to report that our FHA business is strong,
both for single family and multi family housing. In fact,
business is so strong that if our insurance commitments
continue at the current rate for the rest of the year, we will
exceed our statutory limits for both MMI Fund and the GI Fund.
If that continues, I will have to come back here and ask the
Congress to raise the statutory ceilings enacted last October.
I am particularly pleased with our multi family business
this year. Through the first 5 months of the fiscal year, FHA
has issued insurance commitments totaling close to $1.4
billion, compared to $900 million for the same period a year
ago; that is up 50 percent. Many in the industry and some in
Congress were worried that raising the insurance premium would
damage the multi family industry. Clearly, that has not
happened.
FISCAL YEAR 2003 BUDGET HIGHLIGHTS
The 2003 Budget gives HUD new resources to further our
mission of supporting the Nation's most vulnerable. This
includes low-income families, homeless men and women, the
elderly, individuals with HIV/AIDS, victims of predatory
lending practices, and families living in housing contaminated
with lead-based paint. Let me highlight some of those
proposals.
To better coordinate the work of the many Federal agencies
that reach out and provide continuum of care to homeless men,
women, and families, the Budget calls for doubling HUD funding
for the newly reactivated Interagency Council on the Homeless.
Additionally, converting three competitive homeless assistance
programs into one consolidated grant will eliminate the
workload and expense of administering three separate programs.
More importantly, it will give local jurisdictions new
discretion in how dollars are spent.
In addition to that, and something I really love, is that
it will take from 18 months, the grant process, and compress
that to 3 months before the money gets out the door.
HUD's Lead Hazard Program is a central element of the
President's effort to eradicate childhood lead poisoning in 10
years or less. The HUD Budget will fund the program at $126
million, a substantial increase over the previous year.
The HUD budget also proposes spending $251 million under
HUD's Section 811 program to improve access to affordable
housing for persons with disabilities. Many of the additional
34,000 Section 8 vouchers will be to assist non-elderly,
disabled individuals.
Initiatives, such as the HOME Investment Partnership
Program and the CDBG program, address the Nation's critical
housing needs and stimulate economic development and job
growth. Combined, these two programs will distribute an
additional $200 million formula dollars to State and local
governments.
We have increased the CDBG formula grants next year by $95
million to $4.4 billion. In addition, we have proposed changing
the distribution of CDBG formula funds by reducing the size of
grants going to some of our wealthiest communities. This will
help bring dollars into those areas where they can do the most
good and where they are needed the most.
I am also excited about our brand, new concept to address
the large backlog of repair and modernization projects in
public housing. The Public Housing Reinvestment Initiative
represents a new way of leveraging the value of public housing
by allowing Public Housing Authorities to borrow funds to make
needed capital improvements. This will unlock the value of
public housing assets by allowing PHA's to convert public
housing units to project-based vouchers.
Innovative thinking like this represents a departure from
the way things were done so often in the past. But being
effective does not mean spending more money, necessarily.
Government works best by being a good steward and facilitator
and looking for results.
I am pleased that the President's budget reflects our
commitment to efficiency, accountability, and the principles of
excellence expressed through the President's management score
card. When Government spends efficiently, the funds go much
further; and we reach many more citizens.
I am happy to tell you that, while virtually all agencies
of the Federal Government were given a red listing on the
President's score card, HUD already has moved out of the all
red. And we already enjoy a number of yellows and even some
greens. And so that is, Senator Bond, making us even more
popular at OMB. So we are very excited with that.
But let me just thank the committee for your cooperation
and your help and your support through this past year. I find
our interaction to be very positive in the bipartisan spirit in
which it is done. And I look forward to your continued guidance
as we go through this budget process.
I would like to take a moment to introduce several people
that are here with me today, because they might be important in
answering some questions. I just want to tell you that I am
extremely proud of the team we have assembled at HUD. In fact,
we have a team that I think is the best that HUD has ever had.
And I am proud to say we also have some additional members
of our team that are awaiting Senate confirmation, including
the very important Inspector General, which has, for several
months, been awaiting Senate final action. And I would urge the
Senators, if it is within your purview, to encourage the Senate
to move forward on all of HUD's pending nominees; most
specifically and most urgently the Inspector General.
But let me say that these folks are doing a terrific job
for the people of America. John Weicher, who is our Federal
Housing Commissioner; Mayor Roy Bernardi, who is in Community
Planning and Development; Michael Liu in Public and Indian
housing; and, of course, Melody Fennel in Congressional
Affairs, whom you know well.
And not to diminish the folks to the right, but we will
leave it at that. Anyway, these are the Assistant Secretaries,
I should say. And, of course, Rob Woodson, who is my new Chief
of Staff, and I am very proud to have him.
So with that, I would be pleased to attempt to answer your
questions.
Senator Mikulski. Well, thank you very much, Mr. Secretary.
[The statement follows:]
Prepared Statement of Mel Martinez
Chairwoman Mikulski, Ranking Member Bond, Distinguished Members of
the Committee:
Thank you for the opportunity to join you this morning to outline
the proposed fiscal year 2003 Budget for the Department of Housing and
Urban Development (HUD).
The $31.5 billion HUD budget represents a funding level increase of
7 percent over fiscal year 2002. At a time when dollars are especially
precious, and the cost of homeland security is consuming many Federal
resources, this shows the President's commitment to improving housing
and communities.
By helping Americans become homeowners, ensuring affordable housing
opportunities for those who rent, renewing communities, and preserving
a safety net for the most vulnerable, this budget will enable HUD to
make a tremendous difference in the lives of millions of Americans.
The housing market in 2001 was extremely vigorous, and we entered
the new year with homeownership at a record high. Because we know that
homeownership gives families a stake in their communities and creates
wealth, the HUD budget makes owning a home a viable option for even
more Americans. President Bush and I are committed to expanding
homeownership--especially among minorities.
As a first step, our budget quadruples the American Dream
Downpayment Fund, to $200 million. This Presidential initiative will
help an estimated 40,000 first-time homebuyers a year overcome the high
down payment and closing costs that are significant obstacles to
homeownership.
A new tax credit for developers of single-family affordable housing
will promote homeownership opportunities among low-income households by
supporting the rehabilitation or new construction of thousands of
moderately priced homes in low-income urban and rural neighborhoods.
This credit of $1.75 per capita matches in size the existing Low-Income
Housing Tax Credit and like the existing Credit would be administered
by the States. As these new homes are occupied by people who were
previously renting, their old apartments will become available for
others to rent, thereby effectively increasing the supply of affordable
rental apartments in many locations.
Our budget proposes tripling funding for the Self-Help
Homeownership Opportunity Program (SHOP) to $65 million, as committed
to by the President last spring. That will make possible the
construction of an additional 3,800 homes for disadvantaged Americans.
SHOP is an excellent example of government maximizing its resources by
working with private-sector partners like Habitat for Humanity.
Another exciting homeownership initiative targeted at low-income
families will allow them to put up to a year's worth of their Section 8
rental vouchers toward a home down payment. Because we consider housing
counseling a valuable tool for prospective homebuyers and renters, we
propose funding the program at $35 million--a $15 million increase over
the previous fiscal year. The increase in sub-prime lending has made
financial literacy more important than ever; armed with the facts, a
consumer is far less likely to be victimized by predatory lending.
While we consider homeownership to be an important goal, we
recognize that it is not an option for everyone; therefore, our budget
preserves HUD's commitment to expanding the availability of affordable
housing for the millions of Americans who rent their homes.
The Section 8 tenant-based program today assists nearly two million
families. Our budget provides an additional 34,000 housing vouchers, an
increase of one and one-half percent. The budget also dedicates $16.9
billion to protect current residents by renewing all expiring Section 8
contracts.
To encourage the production of moderate-income rental housing in
underserved areas, the HUD budget would reduce the mortgage insurance
premium for Federal Housing Administration (FHA) multifamily insurance.
Three times over the last 8 years, HUD has been forced to shut down
our multifamily mortgage insurance programs because of lack of credit
subsidy.
We made a commitment to a comprehensive review of the credit
subsidy program. Through our review, we were able to lower premiums,
create a self-sustaining program, provide the industry with stable
financing at a much lower cost, and provide thousands of new
opportunities for rental housing across the country.
Today, I am happy to report that our FHA business is strong, both
for single family and multifamily housing. In fact, business is so
strong that if our insurance commitments continue at the current rate
for the rest of the year, we may exceed the currently appropriated
limitations for both the MMI Fund and the GI Fund.
If that continues, I will have to come back here and ask Congress
to raise the statutory ceilings enacted last October.
I am particularly pleased with our multifamily business this year.
Through the first 5 months of the fiscal year, FHA has issued insurance
commitments totaling close to $1.4 billion--compared to $900 million
for the same period a year ago. That is up 50 percent.
Many in the industry and some in Congress were worried that raising
the insurance premium would damage the multifamily industry. Clearly,
that has not happened.
The 2003 budget gives HUD new resources to further our mission of
supporting the Nation's most vulnerable. This includes low-income
families, homeless men and women, the elderly, individuals with HIV/
AIDS, victims of predatory lending practices, and families living in
housing contaminated by lead-based paint.
Let me highlight just a few of our proposals.
To better coordinate the work of the many Federal agencies that
reach out and provide a continuum of care to homeless men, women, and
families, the budget calls for doubling HUD funding for the newly
reactivated Interagency Council on the Homeless. Additionally,
converting three competitive homeless assistance programs into a
consolidated grant will eliminate the workload and expense of
administering three separate programs. More importantly, it will give
local jurisdictions new discretion in how those dollars are spent.
HUD's Lead Hazard Control program is the central element of the
President's effort to eradicate childhood lead poisoning in 10 years or
less. The HUD budget will fund the program at $126 million, a
substantial increase over the previous year.
The budget also proposes spending $251 million under HUD's Section
811 program to improve access to affordable housing for persons with
disabilities. And many of the additional 34,000 Section 8 housing
vouchers will aid non-elderly, disabled individuals.
Initiatives such as the HOME Investment Partnerships Program and
the Community Development Block Grant (CDBG) address the Nation's
critical housing needs and stimulate economic development and job
growth. Combined, these two programs will distribute an additional $200
million in formula funding to State and local governments.
We have increased CDBG formula grants next year by $95 million, to
$4.4 billion. In addition, we have proposed changing the distribution
of CDBG formula funds by reducing the size of grants going to the
wealthiest communities. This will help bring dollars into those areas
where they can do the most good.
I am excited about a brand-new concept to address the large backlog
of repair and modernization projects in public housing. The Public
Housing Reinvestment Initiative represents a new way to leverage the
value of public housing by allowing public housing authorities (PHAs)
to borrow funds to make needed capital improvements. This will unlock
the value of public housing assets by allowing PHAs to convert public
housing units to project-based vouchers. The PHAs can obtain loans by
borrowing against individual properties--similar to private-sector real
estate financing.
Innovative thinking like this represents a departure from the way
things were done so often in the past--but being effective does not
have to mean spending more money. Government works best when government
serves as steward and facilitator, and measures success through
results. By facilitating the involvement of new local partners, the
Public Housing Reinvestment Initiative will breathe new life into
public housing communities.
I am proud of the HUD budget and the way it reflects the
Administration's commitment to efficiency, accountability, and the
principles of excellence expressed through the President's management
scorecard. When government spends efficiently, the funds go much
further. We reach more citizens. We help to change more lives.
The people of HUD know that the American Dream is not some
unattainable goal, because we see it achieved every day, so often by
families who never imagined owning their own home or reaching economic
self-sufficiency. Through our budget--and the continued commitment of
President Bush--citizens will have tools and opportunities they can put
to work improving both their lives and their communities . . . as they
travel the road to achieving their own American Dream.
I would like to thank each of you for your support of my efforts.
The Subcommittee's guidance throughout the appropriations process last
year was invaluable. I look forward to working with you in moving the
fiscal year 2003 HUD budget forward, and I welcome your continued
counsel as we work together on behalf of the American people.
Thank you.
CORE HUD PROGRAMS
Senator Mikulski. I know my colleague, Senator Bond, will
ask in great detail the Section 8 questions. It is an issue in
which we share identical concerns. And I know both of us are
concerned with what is happening to the renewals, the whole
issue of a database, and, most of all, the issues around
production.
Let me go to the core HUD programs. First of all, we know
that there is a modest increase in CDBG, which we appreciate.
But let me talk about the concerns I have in elderly, disabled,
and Shelter-Plus. I note that in the administration's request,
they did not fund Shelter-Plus Care. Estimates say that this is
a need for about a $100 million program. This is viewed as one
of the real effective programs to serve the homeless. Could you
tell us the rationale behind it not being funded? And what then
would be other alternatives to shelter-plus care?
We were blessed this year with a mild winter. But still, if
you are outside, no winter is mild.
Secretary Martinez. No, I understand.
Senator Mikulski. This was so much more comprehensive
because it was service empowerment connected, as well as the
temporary shelter one. Could you give us the thinking on that?
Secretary Martinez. Well, Senator, first of all, let me say
that I am, you know, very passionate about the homeless issue.
And I have, since this summer, been saying that we should
attempt to eradicate chronic homelessness in the next 10 years.
And I think this is a dual goal, if we look at chronic
homelessness as something that has much to do with problems
that are ancillary to an issue of shelter, but more are really
dealing with a person's mental state, or addiction issues, or
other problems which is going to take this combined effort of
the interagency council that we have put together to begin to
bring to bear all of the resources of the Federal Government on
this issue, so that we can make a difference and advance the
issue forward.
On the funding issue that you mentioned, though, what we
have is a proposal that consolidates funding for cities,
county, and State governments and would be based on a
streamlined approach. No unit of government would be
automatically entitled to these funds. Instead, eligible
recipients would have to prove that their performance in
expending funds met strong performance standards before a grant
recipient is allowed to continue to receive the funds.
But in terms of shelter care, the funding issue that you
mentioned is that it was double-funded. And the Administration
has had a policy of not forward funding. So the 2003 is funded
through the appropriations in the year 2002. And we are now
seeking to continue in that vein. But then, 2004 will present a
new challenge, and we will deal with that at that time. So our
goal is not to fund that, but simply to utilize the funding
that was provided in prior appropriations and that should take
care of 2003 expenditures.
HOMELESSNESS
Senator Mikulski. Well, Mr. Secretary, advocates for the
homeless would dispute the OMB analysis. First of all, I think
we are all agreed in a national goal. If we could work together
to really have a foundation for eliminating chronic homeless in
a decade, that would be a stunning achievement, because we have
at so many of these programs for so many years, even going back
to when----
Secretary Martinez. Sure.
Senator Mikulski [continuing]. Mr. McKinney slept on a
grate, Congressman McKinney. So, I think we want to do that.
The advocates for the homeless would dispute the whole
issue of the double-funding, and then they would analyze it, et
cetera. So why do we not just have our staffs get together----
Secretary Martinez. Yes. We would do that.
Senator Mikulski [continuing]. And talk about this----
Secretary Martinez. I think we can walk through----
Senator Mikulski [continuing]. So that we can assure that,
number one, we work towards this national goal, that a core
program in which there is experience and seasoning work. We
know these are competitive grants. They are not micro-
entitlements, which means it keeps everybody on their toes with
fresh thinking and, yet, accountability.
Secretary Martinez. If I might just assure you that the
intent is the same. It is an issue of the mechanics of funding,
but that there is no desire or intent to not continue to fund a
Shelter Plus Care program.
ELDERLY HOUSING
Senator Mikulski. Well, let us then go to the housing for
the elderly. As we understand it, the elderly housing request
is $783 million, the same as last year. And I believe that was
pretty much the same as the year before. I am concerned about
the whole issue of renewals and the increase in renewals.
My staff says the renewals this year will cost $15 million,
and that the renewal demand is growing. By their analysis of
what the renewal cost will be the renewal costs are more than
they were last year, which means----
Secretary Martinez. Which program are we----
Senator Mikulski. We are talking about elderly.
Secretary Martinez. A voucher--elderly--I am sorry, I am
not with you on this.
Senator Mikulski. We are talking about the elderly
vouchers; excuse me.
Secretary Martinez. Okay. I am sorry. Okay. I wanted to
make sure we are on the same page.
We are fully funding, although it is a flat funding level,
but it is fully funded from what it was in the prior year.
Senator Mikulski. You think you are going to have enough
money to meet the renewals and to also--they are nodding their
heads. Why?
Secretary Martinez. I believe--yes. We feel comfortable
with what we are requesting, that we will be able to fund all
renewals.
Senator Mikulski. Well, again, the sole renewal of
contracts, that is another area of concern that, I think,
requires further conversation.
Secretary Martinez. We should obviously----
Senator Mikulski. And the way we say further conversation
is that Senator Bond and I both have a very big amendment on
the floor this year, this minute.
HOPE VI
Let me get off the renewals and go to HOPE VI. HOPE VI is
scheduled to be re-authorized. Some people call it a big
success. Some people call it too costly. Some people say that
the poor have been displaced, not to be able to come back to
the very community that was helped or rebuilt. And also, HOPE
VI has now been here for a while. So the question is: Where are
we on the future of the HOPE VI? My question will be: What is
the Administration planning to do for analysis and
recommendation for the re-authorization? Senator Sarbanes and
I, Senator Bond, and I know Senator Graham want to work very
closely on this.
And then, is it really time to think totally different
than--have we been? HOPE VI was created to deal with severely
distressed public housing. It came out of a housing report more
than a decade ago. Could you give us a navigational chart for
where you want to go with getting us ready for re-
authorization?
Secretary Martinez. Well, first of all, we think----
Senator Mikulski. And should we re-authorize it at all?
Should it be sun seted?
Secretary Martinez. No. First of all, we think it should be
re-authorized. We think it is a very positive program and one
that has done a lot of good across the country. We believe that
there are some things that we should do, as we go forward with
the program, and some improvements that we think would make it
even better. I think that we need to be very cautious about the
dislocation issue and the way in which we administer that, to
ensure that people are treated with the best amount of not only
good intentions, but also good outcomes in terms of their
relocations.
We need to also be aware of the number of units that are
devoted to the people who are living in public housing. And it
can be done. We have a project here in the District where 100
percent of the residents of public housing are going to be
coming back to the new project in a new, reconfigured
development. And I think that is very positive.
We believe that we need to even out the playing field,
because I think that in the past there has been a great
accumulation of HOPE VI grants in certain communities who have
not the capacity to put out the projects because so much money
has come to them. And we need to make sure that we are allowing
other communities to participate in the HOPE VI program. In
other words, I think it was focused on some of the most
egregious mistakes of public housing. I think now we need to
make that more available to more places around the country.
Senator Mikulski. Well, are you doing an internal analysis?
Secretary Martinez. Yes, we absolutely are. And we will be
coming to you with recommendations. We believe a number of
these things can be done within the existing statutory
framework. But we want to have that discussion and present to
you what our recommendations will be.
Senator Mikulski. So you have an internal analysis going
on? And then you are also, I presume, working with the Urban
Institute, who has been conducting an almost ongoing
longitudinal study of lessons learned from HOPE VI? Because
what we wanted was not a real estate program. We did not want
to do real estate development. We wanted to do community
building----
Secretary Martinez. Right.
Senator Mikulski [continuing]. Both in terms of a fiscal
infrastructure, but also a social infrastructure that took the
people not only away from distressed public housing, but
through empowerment, job training, stakes in the community, et
cetera.
Secretary Martinez. There are some terrific examples out
there. And we are going to be working with the Institute. In
fact, I can recall being in Jacksonville, Florida, where they
have done not only a redevelopment of HOPE VI, but they have
also incorporated in it Habitat for Humanity housing within the
property of what was previously a public housing community.
And so, the public housing residents can then progress into
home ownership right there, in the same area as people who
built the house and then move on to a nicer house. So they have
a nice cycle of progression going on in the project in
Jacksonville, which I think is noteworthy. But yes, we are
definitely pursuing that and working with the Institute.
Senator Mikulski. Well, I am going to turn to my colleague,
Senator Bond. When do you think your analysis will be
completed?
Secretary Martinez. Well, I am told the Urban Institute
draft is now complete. So we should have a report--the Congress
had asked by June 15.
Senator Mikulski. That is fine. Thank you.
Secretary Martinez. I think that would be the target date
that we should use.
Senator Mikulski. Thank you very much.
Senator Bond?
Senator Bond. Thank you very much, Madam Chair.
And thank you, Mr. Secretary, about your kind words about
HOPE VI. As one of the fathers of the program----
Secretary Martinez. Yes, sir.
Senator Bond [continuing]. I am glad you did not trash it
totally out of the----
Secretary Martinez. You should be----
Senator Bond. And we are very proud. Murphy Park in St.
Louis, which really was the prototype, shows great promise. And
we are working on Darts-Webby and some of the others. But
having said that, we know that the costs are too great in many
areas. And the Federal Government winds up with significant
soft costs.
So we are, while we think the program is going in the right
direction, we really would like to reform it and make sure we
get our money's worth out of it. Because it has the potential,
it meets a great need, we want to make sure it does it in a
responsible manner.
CONFIRMATION OF INSPECTOR GENERAL
Turning now to your comment. I want to build on your
comment about the need to get an inspector general confirmed.
And I am very distressed with what is being held up. Because
with the Department going through the kinds of changes that you
are, you need a new broom to sweep clean. And I am very much
concerned that a couple of my colleagues--and I say this for
the record. And I will be more specific when I go to the
floor--several of my colleagues are holding up the nomination
of the HUD IG because HUD has refused to provide preferential
treatment and funding for HUD projects in Pittsburgh and
Indianapolis.
I have very strong concerns about the proposed resolution
of the issue, because it would hold a community group harmless
upon default of a HUD debt on a project it owns and for which
it has promised to maintain as low-income housing for some 30
to 50 years. I understand these projects are in poor shape and
may not be appropriate for where they are located. But I would
really hate to see HUD end up rewarding the community group
with future project funding arising from this very same
transaction, despite the failure of the group to meet its legal
obligations.
I do not believe it is appropriate that HUD provide
incentives for any number of owners to walk away from HUD
projects when it suits their convenience. And I intend to
provide support for HUD so it is not pushed into that position.
Would you care to comment?
Secretary Martinez. Well, Senator, I appreciate your
comments. I believe that having a confirmed Inspector General
is very, very important to HUD's work at a time when we are in
the midst of serious investigations dealing with Anti-
Deficiency Act violations by an agency under HUD tutelage,
which has been of great concern. It is an issue where that
Department, that agency, that entity needs the leadership of an
Inspector General and has been languishing for months.
The fact is that we have tried to be as flexible as we
could to provide assistance to communities by working with
them. And we have bent as far as we can bend in good
conscience. We will not go beyond good conscience. And at some
point the Senate, in its wisdom, will have to determine what
happens to the nominees of HUD.
The fact is that we are doing the best we can with the
people we have there. It would be great to have the nominees,
but at some point we have to do what we think is right for all
the American people. And then others will have to search their
conscience to do what they think is right.
Senator Bond. Stay with it, Mr. Secretary. I hope Senate
wisdom is not an oxymoron.
STAFFING ISSUES
Turning to HUD staffing, over the last few years, the
Department depended on community builders to administer most of
the functions of the Department, without regard to program
needs or staff expertise. You now issued a new realignment and
redevelopment plan. I think it is extremely important. This is
one of those non-sexy issues that is critical for the
successful management of your Department.
What is the status of it? Do you expect to have to hire
additional staff? And what will the impact on HUD's Salaries
and Expense account be?
Secretary Martinez. Well, first of all, let me say that
every function at HUD should be tied to a programmatic area.
And so therefore, we took about 800-and-some-odd community
builder positions and have redeployed them back within the HUD
system. What we have done is we have done this with no layoffs
and no firings. We have done it also with only a very minimal
number of upper management changes in terms of locations. So it
has been very, very little disruption to the work force, while
at the same time bringing people into focus to a specific
program area where they should be deployed. This is already
well under way, pretty well taking place. And as a result of
it, I think we will have some period of time to just see how it
all shakes out in terms of the number of FTE's that we have.
We had--last year, at the beginning of our budget process,
we had about--a number of vacancies.
How many vacancies? Several hundred?
So, we believe that we do not need new positions at this
point, because we are going to try to fill in those extra
several hundred vacancies that we had. And as we do that,
obviously in natural attrition taking place, we could not
really handle bringing in more people than that anyway, not
doing it prudently and judiciously.
Something else we are doing, Senator, is we are retraining
folks as we do this redeployment so that I do not hear the
stories I heard when I first visited in some communities. And a
HUD employee would tell me: I used to be in housing. Now I am
in public housing. I do not know anything about public housing.
So I do not know what to do on my job. Because there were no
dollars for training. So we are making sure that work force is
trained for the job to which they are assigned.
Senator Bond. Sounds reasonable.
If you would permit me, Madam Chair, I want to follow up--
--
Senator Mikulski. Senator, I know that you are the lead
sponsor with Carl Levin on this amendment. And I will be
joining you at that 11 o'clock meeting.
Senator Bond. Okay.
Senator Mikulski. But why do you not take your time, so you
do not have to worry about a second round? And then I will do
the wrap-up. Does that sound good?
Senator Bond. I tell you what, let me just ask the public
housing questions. I need to see a constituent outside. And I
will come back and take one more, maybe take one more round.
Senator Mikulski. Okay.
PUBLIC HOUSING CAPITAL FUNDS
Senator Bond. But let me focus, Mr. Secretary, on the
Public Housing Capital funds. A proposed $400 million reduction
in Public Housing Capital Funds, I think that is very
excessive. I would ask you how OMB justifies the reduction from
public housing.
Secretary Martinez. Well, first of all, Senator, I think we
made some very substantial changes in the way that Capital Fund
is utilized last year. And I think that the Congress ought to
be commended for that. I think it will be very, very positive
in the way that it assists the utilization of the dollars.
But--and better management of them as well.
I think the concept there was to try to initiate a new way
in which we could allow project funding to obtain financing to
redo these projects and allow them to be modernized by using
private financing. To the extent that may be successful, and we
think it can be successful, we believe it can advance the
opportunity for projects within a public housing unit to be
improved and modernized.
If that were not to work, I did not intend, in any of our
discussions with OMB, that there should be a penalty associated
with a capital fund for public housing. So I would be prepared
to come back to you and request additional funds, if, in fact,
the private financing options did not work and did not prove to
be successful.
Senator Bond. Well, Mr. Secretary, I think you got my drift
in my opening comments. What I see this as is a back door way--
and there have been some in past administrations, apparently
this administration, that want to voucher out public housing.
So once you get private funding in, I see this as the camel's
nose under the tent, that you take the best projects, you get
private funding for them, then you just support them on
vouchers. And you really change the nature. And you put the
burden--you move the burden to the Section 8 program to keep
these going, rather than funding them as public housing.
I think you either see your costs go up with Section 8 and
pay a lot more in Section 8 or, if you do not keep it filled
with Section 8 people, you are going to lose some of the best
quality public housing to market rate or to others.
So, I see this as a proposal shifting the cost of public
housing from the Public Housing Operating in Capital Funds to
the Certificate Fund. And I see the best units in public
housing converted to private housing with the inventory of
affordable housing in many market places shrinking. Why am I
wrong in that assumption?
Secretary Martinez. I am sorry, Senator. I am----
Senator Bond. What is wrong with my assumption? Can you
allay my fears and suspicions?
Secretary Martinez. Secretary Liu and I were just
discussing it, because I wanted to have a chance to have the
benefit of his thinking in how I should respond to your
question. I think that----
Senator Mikulski. His questions really express my
sentiments completely. We are like twins on this.
Secretary Martinez. I am going to ask Secretary Liu if he
could touch on this a little bit.
Mr. Liu. Senators, the proposal was by no means from HUD's
view, a back door way, nor intended to be a way to voucher out
the program. We clearly see this as another tool, similar to
what we have developed under moving to work, where housing
authorities have been very aggressive in utilizing that
mechanism to go into the bond markets to get very sizeable
investments from the private sector, as well as doing debt
financing.
But a key barrier that they have found is that our subsidy
methodology, whereby we give capital funds in the aggregate,
makes it much more difficult for them to target specific
project sites in which they can then bring in at a much more
reasonable time frame; i.e., in our lifetimes; the dollars to
deal with the needed backlog, which was mentioned by the
members in their opening comments.
We also see, in fact, that this is a methodology that could
possibly deal with the need to develop more affordable housing.
By project-basing a building, initially, say if you have 100
units, that does not mean that those 100 units need to be
locked into that physical setting for all time. It allows--it
gives the option. And again, this whole program is optional.
This is not something that we would be mandating any housing
authority to move into. It would allow a particular housing
authority to move a segment of units, or the value of those
units, to other properties that they might either acquire or
want to develop to create even more affordable housing.
So, we view this as another tool among many; not a panacea,
but another tool to give housing authorities greater
flexibility in which to attract their needed financing to deal
with their major rehab or potentially new development needs. We
have tremendous interest by a number of housing authorities. I
was out in Fairfax just 2 weeks ago. They would love to be able
to use this tool.
We have had calls from ``Moving-to-Work'' cities that right
now looked at the concept and felt that, boy, perhaps they
could do it under ``Moving-to-Work'' right now. So, we have had
very strong interest from housing authorities themselves, and
from resident groups.
Senator Bond. Well, obviously your objectives are similar
to our objectives. But, boy, we really have some questions
about that road. We really look forward to having further
discussions.
And, Madam Chair, I am going to turn the questions back to
you. Thank you.
Senator Mikulski. Well, thank you.
MILLENNIUM COMMISSION
Of course, the whole issue of affordable housing and the
best ways to do it, you know, are really also being addressed
by the Millennium Commission.
Secretary Martinez. Yes.
Senator Mikulski. And while we are pondering this year's
appropriation, from what I have heard from participants I know
on the commission, they are really working very hard, can meet
their deadlines. And it is this committee's intention to hold
some type of either hearing or round-table with them for these
discussions, because we know they are intractable.
But let me come back to----
Secretary Martinez. May I comment on that, Madam Chair----
Senator Mikulski. Yes. Please go ahead, sir.
Secretary Martinez [continuing]. Just to be sure you know
that we have been very closely monitoring their work.
Senator Mikulski. Yes.
Secretary Martinez. Chairman Ravich and I have met on a
number of occasions, and also Vice-Chair Molineri, or co-chair.
Senator Mikulski. Yes.
Secretary Martinez. And so we have been very much keeping
up with her work. And we would look forward to that kind of a
dialogue when it comes.
Senator Mikulski. That is why I say we really look forward
to that.
Secretary Martinez. Fine.
MANAGEMENT INFRASTRUCTURE AT PUBLIC HOUSING
Senator Mikulski. One of the things we talk about, though,
the issues of the Capital Fund, the shrinking Capital Fund is
troubling to me, the same as Senator Bond. What also, though,
is troubling to me is management infrastructure at public
housing. So whatever programs we do--and they go to the mayors
or the county executives, as our able secretary once was and
still thinks like one.
Secretary Martinez. Right.
Senator Mikulski. You know, from reports that I have
gotten, there are 237 out of close to 2,000 public housing
authorities that have been scored as ``troubled.'' I do not
know what ``troubled'' means. But I am troubled, because so
many of the public housing authorities do not seem to be able
to keep track of their Section 8s. They do not seem to know
what to recommend in terms of their backlogs. And I could go
on.
Could you tell us what, number one, HUD means when they say
a public housing authority is ``troubled''; what is its
criteria? And what is its plans to turn them around? Because so
much money ultimately comes to them. And if they do not know
what to do with the money, it certainly is not going to help
the poor, the communities, et cetera.
Secretary Martinez. Let me answer your question first in a
large, global sense. And then I am going to ask Secretary Liu
to answer in the more specific sense.
One of the things that I find most distressing in my job is
to get my morning clips and have my daily review of who has
been indicted and who went to jail and who was fired because
they were using HUD funds in the public housing arena.
Unfortunately, that happens all too often. And I find it to
be a number of issues with it that, I think, I should comment
on. First of all, I believe that there has been sort of a
``boys will be boys''--or ``girls will be girls,'' but a sort
of an understanding that--that is just part of what happens in
public housing, that it just often times ends up that way, and
so be it.
This Administration has taken an attitude that this is not
acceptable and that we have got to do better than that.
Because, you know, at any time, as you very well mentioned,
that a dollar is misused by a public housing agency and it is
going to some person whom it does not belong to, that is being
taken away from a single mother like we met that day at that
new house that she was so proud to be the owner of, trying to
raise a couple of young children. And it is about the way that
people live in America in ways that they should not live.
We recently have taken administrative action to completely
manage--or completely take over the management of the New
Orleans Housing Authority, a troubled housing authority for
many, many years. I believe that, along with whatever we can
tell you specifically as to what it means to be ``troubled''
and how we bring a housing agency back into better management,
that there is a tremendous amount of responsibility that rests
with the Nation's mayors and city councils and governing boards
of communities that ultimately have the responsibility for
their public housing.
And I want to make sure that we, as we go forward and do
whatever we can from the Federal level, that we do not forget
to put the responsibility where it certainly lies, which is
with the Nation's mayors, who appoint the people to the boards
of public housing, who in turn appoint their executive
directors.
So I think it has to be a shared responsibility, part of it
Federal, but a huge part of it has to be an understanding that
we will not put up with it and that the locals have got to do
better.
Now let me have Secretary Liu on the specifics.
PUBLIC HOUSING AUTHORITIES
Mr. Liu. Madam Chair, there are two evaluations that we
use, one specifically focused in on the management of the
Section 8 program and another which looks at larger issues
regarding performance for the public housing authorities. If
they score below certain levels, they then are considered
``troubled.''
Now even----
Senator Mikulski. What are the top three criteria, Mr. Liu?
Mr. Liu. Under Section 8, we have utilization rates, we
have reporting requirements to report in a timely fashion. Are
the vouchers that are issued actually issued in a timely
fashioned? Are people actually placed?
So, the main thrust of the measurement is the
Administration getting the vouchers out. And then second, are
they actually used? Those are the major items which we are
focusing on. And to put into context, 237 is not insignificant,
but there are close to 3,500 public housing authorities.
We have allocated approximately $10 million for the
provision of technical assistance to address those agencies
which are troubled, technical assistance in most cases in the
form of providing contractor help to the housing authority for
the specific problems that they might have.
Then within the categories of troubled agencies, there are,
of course, varying levels. There are some which are border
line, which might need just a little assistance. Perhaps they
are just not good in reporting back to us in a timely fashion
of what is going on. And then, of course, there are the more
egregious situations, where they need a tremendous amount of
assistance in providing counseling and providing education to
home owners, et cetera, apartment owners, et cetera, who are
involved in the program.
So that, in a nutshell, is our approach to dealing with
that and our plan to deal with that.
Senator Mikulski. Well, first of all, I appreciate that.
And I want to acknowledge what the Secretary said. Where there
is fraud, that is totally unacceptable. And I believe that HUD,
its Inspector General--and I believe we need one approved
expeditiously. We have to really prosecute. And I mean it in
the metaphorical sense, through the proper authorities.
In addition to the overt fraud, there are the concerns that
I have over incompetency. And then just complacency and being a
laggard. First, I am going to salute any public housing
authority that is doing a good job. It is really hard to work
with the poor, in poor neighborhoods, with crack cocaine
continuing to be an insidious virus in our communities.
So for those who are doing a good job, God bless you. But
for these others, there is this culture that you are talking
about that is corrosive. And it goes at every staff level. So I
believe that yes, the mayors or county execs, the local
governing body, have to take initiatives. But I would hope that
really what HUD does--and we need to look at this--is set
national standards and then training of these housing
authorities where they can also learn from their peers.
Secretary Martinez. Absolutely.
UTILIZATION OF VOUCHERS
Senator Mikulski. Because ``been there, kind of done
that,'' knowing what the struggles and challenges are. And that
is the training aspect.
I am going to go to the criteria, though. It deals with the
utilization of vouchers. That is one of the core aspects on
which they should be judged. But our concern is, are they just
dumping the vouchers? In other words, if they are measured by
just getting them out, are they just dumping the vouchers?
Number two, what are they dumping the vouchers on? A lot of
the places that I have seen that get Section 8 are really
dysfunctional housing units. Then we saw what the housing
Section 8 does by taking over an apartment building and, where
the poor have a voucher, and they think it means something, but
it means nothing else than what they had lived in.
And therefore, what is the criteria for the housing? I know
landlords do not always want to take the poor. There have to be
incentives. This is a really big issue about how public housing
authorities, what is our criteria? What should our criteria be?
And then also, it comes back to production.
Now, Senator Bond and I have a big amendment on the floor.
And we are going to be wrapping up in about 10 minutes. You see
how all this is linked? I am troubled about us not being able
to seem to get anywhere with this----
Secretary Martinez. Well, Senator----
Senator Mikulski [continuing]. Acknowledging your goodwill
and your administrative talents. So----
Secretary Martinez. Well, and let me say that we are
focused on the issues. And you raise some very good points. I
think, number one, we should give kudos to those good housing
authorities. And I know that sometimes the people in the
industry feel that I am always beating up on them because I
talk about these problems. We have to talk about the--you know,
unfortunately, it is the troubled ones that usually get our
attention. There are many, many hundreds and thousands of them
that are doing a great job.
But as to those that are troubled, we have got to pay
attention to them. You are absolutely right. We have dollars
that go to training. We have dollars that go to training of the
executives and the commissioners, as well. And we understand
the need for us not only to deal with what might be fraud, what
might be illegality, but also what might be just plain
management problems. And I think those are important issues to
focus on.
In terms of the Section 8 dumping, can you address that?
Mr. Liu. Madam Chair, as I mentioned, that is a concern, if
that is going on. But we link not only the issuing of the
vouchers, we also link the actual placement of people to get
the right picture, hopefully, across the board.
Senator Mikulski. I do not know what placement of people
means, Mr. Liu.
Mr. Liu. I mean, that once they get the voucher, they can
actually get into an apartment, that they are actually----
Senator Mikulski. A safe, sound apartment?
Mr. Liu. Yes. But then, of course, they have to also follow
inspection protocols. And they have to report to us on those
inspection protocols.
Senator Mikulski. I do not believe a lot of them do it.
Mr. Liu. Well, we----
Senator Mikulski. I do not believe they do it.
Mr. Liu. We hope that we catch them within the numbers that
you mentioned. And we will be taking the actions necessary,
remedial in those cases where they are open to that and where
that can happen, and, of course, prosecutorial, if in fact it
is required. You are absolutely right.
Senator Mikulski. Senator Bond. We could talk all day about
this.
Senator Bond. Thank you, Madam Chair.
Let me just add--I'll try to make these questions quick.
And I hope that the extensions can be for the record.
MARKET-TO-MARKET
Market-to-Market is obviously something we have worked on
for a long time, providing a mechanism to reduce the cost of
over-subsidized, expiring Section 8 contracts while preserving
the housing. I would like for you to supply for the record how
much Section 8 funding has actually been saved by the program,
how many projects have been preserved with Section 8, how many
projects have been removed from Section 8 inventories, who
opted out of their Section 8 project-based contracts.
And I would just ask if you can comment generally on the
program?
Secretary Martinez. Sir, we will provide you with the
information that you seek.
Senator Bond. Thank you.
Secretary Martinez. I think that we have--after a slow
start, that program, I think, has been hitting its mark, if you
will. And I think it is doing a good job of preserving the
Section 8 contracts. So, we feel good about where it is today.
We think it took a long time ramping up, but we do feel like it
is beginning to bear some fruit. And we will get you some
details.
OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT
Senator Bond. Okay. Something this Committee has been
working on for years is OFHEO. It took almost 10 years for the
Office of Federal Housing Enterprise Oversight to issue risk-
based capital standards for Fannie Mae and Freddie Mac, despite
a requirement that they be issued within 18 months of the
appointment of the director. I am very much concerned about a
proposal that would remove funding for this office from the
jurisdiction of the Appropriations Committee.
We see no good reason provided for the recommendation.
Frankly, it is because we have been on their case because they
have failed to do their job. We ought to kick them and stomp
them and make them do their job. And now somebody thinks that
they would be better if they did not have our kind in general
oversight.
A number of groups that do business with the GSE's and who
will be impacted by the regulation express concern that there
will be little accountability of OFHEO for possible decisions
that could damage financial markets. Do you have any views on
where OFHEO ought to be and what is the best way to ensure its
accountability?
Secretary Martinez. I believe that it should be under your
continued, gentle guidance. And I think that anything we can do
to strengthen OFHEO, to improve its ability to do its
regulatory work by having an OFHEO that is enhanced in its
ability to do what it does, staffing and otherwise, I think it
is to the good. I think that GSE oversight is a very, very
important thing to our markets and to our economy. And I
believe that the best place to do this is within the current
OFHEO frame work but with a strong, viable OFHEO.
INTERAGENCY COUNCIL ON THE HOMELESS
Senator Bond. And finally, a couple years ago, the
Subcommittee reactivated the Interagency Council on the
Homeless, because we were very much concerned that we needed
much better coordination in the programs and activities to
prevent and end the tragedy of homelessness. We made a number
of important changes in the operation to ensure that it was not
a HUD-driven process and that the council receives the support
it needs from The White House.
We are thrilled that Philip Mangano has been selected to
head the Council. But I want to make sure the Administration is
complying with the letter and intent of the legislation to
ensure that we have full participation from the various
agencies, and it is not solely a HUD-driven exercise.
Would you care to comment on that?
Secretary Martinez. Yes, sir. And let me assure you that is
the case. It is intended to be a White House-driven initiative.
Mr. Mangano was hired through The White House. He is going to
be housed at HUD physically, but it is going--that inter-agency
council, which had not convened since 1997, we are now bringing
it into full activity. We are doubling the budget for it. And,
in fact, the other departments that are asked to be
participants in that are going to be asked to participate.
Secretary Thompson and I have met on the issue of
homelessness before. We both sent together our people to work
together to try to come up with the kinds of interaction and
conversation that would lead to better outcomes and not just
bureaucratic turf protection. But I assure you that my intent
is not to dominate this debate but to share that opportunity
with my colleagues in the Cabinet.
Senator Bond. Thank you very much, Mr. Secretary. I will
have questions for the record on Section 8 fraud and abuse by
non-profits in D.C. and some more on the homeless issues. There
are so many things. Unfortunately, I have to leave. But I
appreciate it, Madam Chair.
Secretary Martinez. Thank you, Senator.
Senator Bond. Thank you very much.
Senator Mikulski. Senator Bond and I, along with Senators
Allen, Stabenow, and others, have an amendment on the CAFE
standards. And for us, it is a big job issue. And it is a
pretty intense day.
PREDATORY LENDING
Mr. Secretary, as we wrap up, I want to thank you for the
ongoing engagement of HUD and your able staff on the predatory
lending issues, both using Baltimore as the laboratory, and
also--continuing to address these on a national level. I also
note in the audience is Laurie Maggiano from HUD, and we want
to thank her for her ongoing involvement. We really appreciate
her professionalism and pragmatism in dealing with these
issues. So, we want to thank you for that, as well as we get
ready issues to work on the Prince George's issue.
NATURALLY OCCURRING RETIREMENT COMMUNITIES
I was so pleased to hear you say that you are having
ongoing conversations with Secretary Thompson, because another
issue I know the Committee shares is what they call the NORC's,
the Naturally Occurring Retirement Communities, that cannot be
solved with housing and cannot be solved with social services
by themselves.
And I know HHS is embarking on some demonstration projects
to look at how to deal with this. And I would ask your staff to
liaison very assertively with those. Because I think this is a
significant issue that is emerging. And with common sense and
creativity, I think we can really be doing some very good
things.
COMMUNITY DEVELOPMENT CORPORATIONS
And the last issue is, and it comes back to what we
discussed with public housing authorities, capacity building.
We need to be looking at building housing and promoting home
ownership. But the people issues, I think, are--not only the
poor people, but those who administer programs. I would really
encourage you to look at this for our public housing
authorities but, also, how HUD can work with Neighborhood
Reinvestment or some of the other groups can work to think
about how we can think about capacity building for our CDC's.
One of the things that is emerging in my own home town are
even certificates and programs now for non-profit management.
The non-profit sector is such a robust sector, as you know. And
we are public/private partnership----
Secretary Martinez. Sure.
Senator Mikulski [continuing]. We are a public/private
partnership group here. But CDC's are so uneven in terms of the
executives' abilities, background, and training. Again, this is
no fault.
Secretary Martinez. Right.
Senator Mikulski. And also, even their boards. You know, if
you are in a private sector, you have board scrutiny and
transparency and all those things; we are held accountable. But
non-profit boards, very often it is volunteer work.
Secretary Martinez. Right.
Senator Mikulski. And some of the board members, a lot of
the board membership are community-based people who have not
had experiences with accountability. They want to do these
things.
And I think that this whole issue of capacity building is
something that we need to think about. I am not looking to put
a line-item in the bill; I am not looking to do this. But
Neighborhood Reinvestment has done a lot of this thinking. And
I would like HUD to think about it, too.
I think we need to go over after the CDC types that really
skim the system or game the system. I think they are few. So,
should we have a CDC certification program, if you will? But I
am interested in those CDC's where the executive director is
either a bachelor of arts, maybe like in my own field of social
work, that did not have business training, or it could be a
community leader, who is charismatic, who is compelling, who
knows how to save a neighborhood, but wants to operate it like
out of a cigar box herself or himself and has not had that
background.
And things do not work out. And we want to be sure that
they do work out. And I know this has to be solved at the local
level. But I am looking, then, for creative ideas, because I
truly believe the Community Development Corporation could have
the same impact on communities as our small to mid-sized
business. It is where the new ideas are. It is closest to the
people. It should be governed in a way that reflects those
local needs and so on.
But I am really looking at ideas on how we can facilitate
empowerment and training initiatives at the local level. And it
might----
Secretary Martinez. I was just going to say, Senator, I
share your passion for that, because I think that is an engine
of ingenuity and----
Senator Mikulski. That is a great phrase.
Secretary Martinez. But I think in addition to that, that
HUD does a disservice to these organizations when we waive
rules and facilitate them getting in over their heads. And
clearly, that is what happened in the District of Columbia
example that we have been talking about today. I think when HUD
works best is when HUD forces the system to operate within the
guidelines that have been well laid out by the Congress and by
regulations, to ensure that the organizations receiving the
funding or receiving the housing opportunities are
organizations that have the capacity. And if they do not, we
can work with them to build them to that level.
But when we weigh the rules and pretend that is all going
to work out okay for some more immediate purpose, frankly, that
sometimes just does not work. And there was a tragic example
here in the D.C.; example, where a number of rules were waived
and they should not have been.
Senator Mikulski. Well, I think that is a very good point.
But again, along with that, because I think there is the
criteria of getting rid of the fraud and focusing on those
issues. But I really would hope you would also look within HUD,
the non-profit sector that I know you have an excellent
relationship with, and perhaps even--like Neighborhood
Reinvestment. That is only a suggestion.
ADDITIONAL COMMITTEE QUESTIONS
And it is this committee's intention to have a longer
conversation with you on some of these priorities. And I really
want to thank the President and your leadership. Because the
stresses of homeland security are indeed there, both from a
physical as well as a psychological standpoint in our
communities. And the fact that we could stay the course is very
good. And so we are going to look at how we can make even wiser
use of the money, empower the poor, build neighborhoods, and
build capacity.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Barbara A. Mikulski
incremental vouchers
Question. The fiscal year 2003 budget request includes 34,000 new
incremental vouchers. All of the vouchers requested are targeted to
specific populations. What is the justification for targeting versus
providing some of the vouchers on a fair share basis?
The Administration's budget proposes to make $40 million for people
with disabilities available from the request of $204 million for
incremental vouchers. This would allow for funding of approximately
7,900 vouchers for non-elderly people with disabilities that have lost
(or are expected to lose) access to public and assisted housing as a
result of projects being designated as ``elderly only.'' If Congress
accepts this recommendation, it would bring the 7-year total for this
effort to address the impact of ``elderly only'' designation to nearly
$300 million. Can you update the Committee on HUD's efforts to
implement and monitor this program?
Answer. The proposed budget legislation indicates that of the $204
million proposed for these vouchers, up to $40 million would be used
for non-elderly disabled; up to $6 million would be used for
initiatives related to the Olmstead decision, that allows the use of
vouchers for persons currently living in institutions to live
independently; and up to 500 units will be dedicated to homeless
veterans pursuant to the Homeless Veterans Comprehensive Assistance Act
of 2001. The rest would be split among the other uses including fair
share with particular emphasis on downpayment assistance.
Out of the $204 million designated for incremental vouchers, the
Department proposes to make $40 million available for non-elderly
persons with disabilities living in public housing units or other
subsidized housing units that are now being designated for occupancy by
``elderly only''. This $40 million will support approximately 6,700
vouchers.
From fiscal years 1997 through 2001, approximately $210 million has
been appropriated for non-elderly disabled vouchers under the Housing
Certificate Fund. Of the total $210 million, approximately $150 million
was used in connection with ``elderly only conversions'' based on the
applications received by HUD for such funding. The remaining $60
million was transferred to the mainstream program because HUD did not
receive sufficient applications from Public Housing Agencies (PHA) for
elderly only conversions to make full use of these funds. In fiscal
year 2002, another $40 million was enacted that are expected to support
additional 7,900 vouchers.
Question. Specifically, can you provide additional information
regarding: a) whether housing authorities receiving these vouchers are
making them available exclusively to people with disabilities after
their initial 1-year term,
Answer. PHAs are advised in the Notice of Funding Availability
(NOFA) that PHAs are required to initially make these vouchers
available only to non-elderly disabled households even if it takes more
than 1 year to initially issue these vouchers for this purpose.
Furthermore, the NOFA also directs PHAs that if any of these vouchers
are returned within the first year term of the annual contributions
contract, the turnover voucher must be made available to another non-
elderly disabled household. In the case of vouchers funded from Section
811 appropriations these vouchers may only be used for elderly
households with a disabled person, including the use of any turnover or
renewals.
HUD is in the process of developing the ability to track the actual
number of vouchers used by households having a person with disabilities
for which funding was specifically provided from the funds available
for ``elderly only conversions.'' This is in the initial phases of
development, and will be implemented within 1 year.
The most recent data shows that 39 percent of the households that
receive voucher assistance have at least one person with disabilities;
more than half (22 percent of the total households receiving voucher
assistance) are non-elderly households with a person with a disability.
Question. Are housing authorities using turnover generated from
these vouchers to serve non-disabled families?
Answer. After the first year is up, these vouchers are renewed and
the non-elderly disabled households under a lease continue to receive
the benefit of the voucher assistance. However, after the first year,
it is up to the PHA to continue the use of any turnover of these
vouchers for non-elderly disabled households based on local housing
needs. It is worth noting that once a disabled family uses its voucher
to lease a unit, the turnover of such units is very low.
Question. Is HUD providing protection from recapture of these
disabilities vouchers similar to the protection provided to ``welfare-
to-work'' vouchers?
Answer. In appropriating funds for families affected by ``elderly
only conversions'', the objective was to protect persons living in the
projects, or on the owner's or PHA's waiting list, from any injury that
would result in their loss of housing assistance as a result of the
``elderly only conversions.'' Once this initial protection was
provided, any other household with a disabled person may apply and be
placed on the waiting list for vouchers or public housing. Many PHAs
give preference for admission to households having a person with
disabilities.
Question. Are housing authorities that have had ``Allocation
Plans'' approved contingent on seeking vouchers under this program have
actually followed up and applied for them?
Answer. Welfare-to-Work (WtW) vouchers are afforded a longer
``protection'' in order for HUD to comply with the law. Specifically,
the law authorizing the WtW program requires that HUD conduct research
and evaluation concerning the effectiveness of this demonstration. In
order to have sufficient vouchers on which to base its evaluation, HUD
had to extend the protection given to households participating in the
WtW program,
HUD does not have this information at this time. We will conduct an
analysis of plans approved to date to identify those with approvals
contingent upon the receipt of designated housing vouchers. We will
also determine whether these agencies have applied for and received
designated housing vouchers through NOFAs.
community development block grants
Question. The fiscal year 2003 budget makes a change in the CDBG
formula in order to fund the $16 million Colonias Gateway initiative.
How did the Department come up with the new CDBG formula? Was this a
thorough review of the formula? Please detail the staff and outside
groups consulted as well as the process the department undertook in
recalculating the formula.
Answer. The Department's proposed budget for fiscal year 2003
requests $4.436 billion in budget authority for the formula CDBG
program to address locally identified community and economic
development needs. Although the CDBG program allocates funds by formula
in a way that targets most funds to our neediest communities, the
current formula distribution of these funds also provides grants to
higher-income communities. Because of the great disparity in per capita
income among our grantees, the budget proposal seeks to re-evaluate the
method of allocating the limited resources of the CDBG program.
A legislative change has been proposed for fiscal year 2003 to
reduce, by 50 percent, the amount of the grant to communities with per
capita income equal to, or greater than, two times the national
average. It must be noted that this proposed legislative change is
intended to further target limited CDBG funds to the neediest
communities. If this proposal is enacted, the Department will use data
on per capita income from the 2000 Census to identify the communities
whose funding would be reduced.
The funds captured by the 50 percent reduction would become
available to other entitlement communities with lower per capita
incomes and would not directly fund the Colonias Gateway Initiative.
However, the savings achieved by this movement of funds to more needy
communities would create room in the budget to provide resources for
the Colonias Gateway Initiative, which is designed to serve some of the
poorest communities in the Nation.
The Department does not consider this a new formula for CDBG. The
data from the 2000 census needed to do a professional and comprehensive
analysis of the CDBG formula should be available this fall. We expect
to do a study and present it to Congress for their consideration next
spring so that consideration could be made for the 2004 allocation of
funds. Rather than wait for the process and a full examination of the
formula, we chose to propose this adjustment to move a limited amount
of funds from very wealthy communities. The Administration did not do a
formal consultation on this issue.
shelter plus care
Question. The fiscal year 2003 HUD budget does not request funding
for Shelter Plus Care renewals, but the Department has given assurances
that these grants will be funded. Is the Department providing a
guarantee to SPC providers that their grants will be renewed?
Answer. Funding of renewals will be of the highest priority but
remain dependant on adequate Appropriation. Grantees must meet certain
capacity and threshold requirements in order to be eligible to have
these grants renewed. Funds were provided for contracts that expire in
fiscal year 2003 in the fiscal year 2002 Appropriations Act and were
given a top priority. Therefore, the fiscal year 2003 Budget request
did not include funds for contracts that will expire in fiscal year
2003. The Department intends to fund contracts that expire in fiscal
year 2004 from fiscal year 2004 Appropriations, reflecting both the
expected streamlining of the Homeless Assistance Grants program and to
be consistent with how renewals are handled in other HUD programs.
Question. Will the Shelter Plus Care grantees still be required to
compete and participate in the Continuum of Care?
Answer. SPC grantees have always been required to participate in
the Continuum of Care and must be included on the Continuum's project
priority list. We anticipate that they will be listed at the bottom of
the list, as they have in the past several competitions, and would be
funded non-competitively.
Question. If so, please provide an explanation of how the SNAPs
office will award and administer the renewals in advance of knowing
whether they've been funded.
Answer. The Special Needs Assistance Programs office could not
award renewals in advance of knowing whether they are funded. If funds
are appropriated in fiscal year 2004, they should be available for
award by the time the fiscal year 2003 competition is completed, which
we anticipate will be in the first quarter of fiscal year 2004.
Question. Why does HUD consider the SPC renewals to be ``forward
funded'' by the fiscal year 2002 VA-HUD appropriations act, but does
not consider the other expiring grants in the SHP program to be forward
funded?
Answer. Shelter Plus Care renewal grants have been funded over the
last several years on a non-competitive basis for 1 year only.
Supportive Housing Program (SHP) grants, on the other hand, are funded
competitively, are awarded conditionally, require additional
information before the grants may be executed, and may be multi-year
awards. Due to the competitive nature of the process and the length of
time it takes for a grant to be executed from the time the awards are
announced, it is necessary to award the SHP grants with funds from the
fiscal year prior to grant expiration.
Question. Does the fiscal year 2002 bill also fund SHP grants that
expire in fiscal year 2003?
Answer. Yes, the fiscal year 2002 bill funds Supportive Housing
Program grants that expire in fiscal year 2003.
empowerment zones/enterprise communities
Question. The fiscal year 2003 budget eliminates funding for Round
II empowerment zones, and justifies this cut by saying that ``current
available balances as well as CDBG and HOME formula funds are
sufficient to cover needs.'' What are the unexpended balances in the EZ
accounts?
Answer. Fiscal year 2002 awards of $3 million per EZ were just
recently made. Based on funds awarded between fiscal years 1999 and
2001, unexpended balances are:
----------------------------------------------------------------------------------------------------------------
Total Dollars Percent
State Grantee Name Awarded--Fiscal Total Disbursed Unexpended Drawn
years 1999-2001 (Drawn Down) Balance Down
----------------------------------------------------------------------------------------------------------------
MA Boston $18,972,866 $1,550,249.00 $17,422,617.00 8.17
OH Cincinnati 18,972,866 2,707,801.90 16,265,064.10 14.27
SC Columbia 18,972,866 3,863,989.72 15,108,876.28 20.37
OH Columbus 18,972,867 4,238,148.01 14,734,718.99 22.34
NJ Cumberland 18,972,867 6,444,368.78 12,528,498.22 33.97
TX El Paso 18,972,867 3,871,913.23 15,100,953.77 20.41
IN Gary/Hammond/E. Chicago 18,972,867 3,213,353.91 15,759,513.09 16.94
WV/OH Huntington/Ironton 18,972,867 9,073,969.86 9,898,897.14 47.83
TN Knoxville 18,972,867 3,413,759.00 15,559,108.00 17.99
FL Miami/Dade 18,972,867 2,431,148.00 16,541,719.00 12.81
MN Minneapolis 18,972,866 3,975,735.53 14,997,130.47 20.95
CT New Haven 18,972,867 2,982,801.67 15,990,065.33 15.72
VA Norfolk/Portsmouth 18,972,866 9,088,428.00 9,884,438.00 47.90
CA Santa Ana 18,972,867 6,283,208.00 12,689,659.00 33.12
MO/IL St. Louis/East St. Louis 18,972,866 2,755,961.00 16,216,905.00 14.53
---------------------------------------------------------------------
Total 284,592,999 65,894,835.61 218,698,163.39 23.15
----------------------------------------------------------------------------------------------------------------
Question. Have any of the EZ's failed to spend funds in the
allowable time frames?
Answer. There is no statutory or regulatory timeframe for spend
out. Thus, none of the grantees have strictly failed to spend money in
the allowable time frame but both Congress and the Department have
expressed concern with the pace of expenditures in the program. While
it is only one of many factors, the efficient use of resources is an
important one in evaluating a community's revitalization efforts. As
part of its efforts to improve oversight, HUD is considering a
timeliness policy for the Round II EZ grant modeled after other HUD
programs. HUD has learned from over 25 years administering CDBG that
timeliness of spend out is a risk factor in community and economic
development programs and has proactively shared this experience with
EZ/ECs in lieu of issuing a punitive policy. HUD is currently modifying
its performance measurement system to track grant obligations and
timely spend out so that the progress of the grantees can be better
monitored.
asset control areas
Question. The fiscal year 2001 VA-HUD Conference Report expressed
the Committee's concerns over HUD's implementation of the ACA program.
The report asked HUD to report on the disposition program by May 15,
2001. Where is this report?
Answer. This report was submitted to the Committees on May 31,
2001. A copy of the report is attached for you convenience.
Letter From Sean G. Cassidy
May 31, 2001.
Hon. Alan B. Molloban,
Ranking Minority Member, Subcommittee on Veterans, HUD, and Independent
Agencies, Committee on Appropriations, U.S. House of
Representatives, Washington, DC 20515-6022.
Dear Representative Mollohan: I am pleased to enclose a report on
the implementation of the Single Family property disposition reforms
enacted in Title VI of the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appropriations Act,
1999. The report is submitted in accordance with the requirements of
Conference Report 106-988 accompanying the Departments of Veterans
Affairs and Housing and Urban Development, and Independent Agencies
Appropriations Act, 2001. The report describes actions taken by the
Department to develop new Single Family claims payment and asset
disposition procedures and to develop a reformed process for the
disposition of Single Family HUD-owned properties in revitalization
areas.
If you need additional information, please let me know.
Sincerely,
Sean G. Cassidy,
General Deputy Assistant Secretary for Housing, Deputy Federal
Housing Commissioner.
Report on Implementation of FHA Single Family Property Disposition
Program
Background
Title VI of the Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1999
(the Act) made significant changes to the Federal Housing
Administration (FHA). single family insurance program.
Section 601 of the Act contained amendments to reform and make more
effective the methods for paying insurance claims and, disposing of
single family acquired notes, and properties: The section:
--reorganized and updated existing statutory authority to eliminate
obsolete or redundant provisions;
--authorized a new claims payment procedure under which HUD would be
authorized to pay a claim upon assignment of the mortgage
rather than upon conveyance of the property;
--authorized HUD to take assignment of notes and transfer them to
private parties for servicing, foreclosure avoidance,
foreclosure, property management and asset disposition; and
--authorized HUD to be an equity participant with private entities in
asset disposition.
The changes to the claims and asset management and disposition
procedures were intended to occur in the overall context of HUD's
existing procedures for encouraging lenders to perform loss mitigation
and for contracting to private entities the maintenance and management
of the HUD owned single family property inventory. Section 601 also
established certain enforcement mechanisms to ensure loss mitigation
would continue to be performed so that as many families as possible
would keep their homes.
Section 602 of the Act established special procedures for FHA
single family property disposition. These procedures were designed to
ensure that the FHA single family property disposition program, in
addition to providing returns to the insurance funds on an efficient
basis, could assist the Department in identifying and improving local
revitalization areas and in providing homeownership opportunities in
these areas. To do this, section 602:
--required the establishment of revitalization areas based on low
income, a high number of troubled assets, and a relatively low
rate of homeownership compared to the surrounding jurisdiction;
--distinguished between preferred purchasers (local governments and
non-profit organizations) and regular purchasers of assets
within revitalization areas and established a preference for
sale of properties to preferred purchasers;
--established discounts for preferred purchasers designed, among
other things, to facilitate upgrading or rehabilitating the
housing; and
--authorized the establishment of asset control areas (ACAs) within
which preferred purchasers, with a plan for revitalizing and
increasing homeownership in the area, would become responsible
for purchasing all eligible assets.
report requirement
The Conference Report (Report 106-988) accompanying the Departments
of Veterans Affairs and Housing and Urban Development; and Independent
Agencies Appropriation Bill, 2001, directs HUD to report to the
Committee on the implementation of the single family property
disposition program, enacted as part of the VA/HUD fiscal year 1999
appropriations bill, including the status of the program and an
analysis of all savings achieved to date and anticipated to be achieved
over the first 5 years.
status of implementation of section 601
Implementation of claims reform and asset disposition alternatives
is overseen by HUD's FHA Comptroller with assistance from the Office of
Single Family Asset Management. HUD secured expert help in structuring
this alternative disposition program, which is being called the
Accelerated Claims Disposition (ACD) Program.
Delivery and Presentation on ACD Program Design--Completed
In January 2000, HUD's program advisor, Federal Asset Advisory
Corporation (FAAC) delivered the final Program Design which was
subsequently reviewed and accepted by senior management. In May 2000,
FAAC finalized the Internal Control and Accounting Report portion of
the Program Design, which was subsequently reviewed and accepted.
Development of Proposed Regulations--Ongoing
In October 2000, HUD began developing regulations based on the ACD
Program design. HUD anticipates that proposed regulations will be
published by the end of September, 2001. The regulations will describe
and seek comments on the procedures for determining the disposition
alternative for individual high risk defaulted loans, and the
eligibility requirements and other matters relating to the program
framework. The disposition of individual loans will be determined in
large part by the probability or improbability that loss mitigation
will succeed. The disposition alternatives will include: (a) transfer
to a joint venture, which may proceed to foreclosure but will have
additional loss mitigation options to explore--such as partial write-
off, recasting and securitization, (b) transfer to a servicer
specializing in loss mitigation servicing, or (c) assignment of the
note to HUD in order to use the Department's non judicial foreclosure
authority.
Engagement of Transaction Advisor--Ongoing
In January 2001, HUD began the procurement process to hire a
Transaction Advisor to assist in implementing the ACD Program. HUD
anticipates having a Contractor engaged by June 30, 2001.
ACD Program Demonstration Project--Imminent
Before implementing the ACD Program, HUD will conduct a
Demonstration Project. The Demonstration Project will be limited to the
mortgage loans within the jurisdiction of the Philadelphia
Homeownership Center and will initially target 5,000 assets to be
transferred to a joint venture ``JV'' partnership. HUD's Transaction
Advisor will assist in assessing the defaulted loan portfolio;
developing procedures, guidance and quality assurance plans for the
program; marketing to potential JV partners; evaluating JV bids; and
assessing project results. HUD anticipates partnering in a joint
venture by March 31, 2002.
status of implementation of section 602
Revitalization Areas
Under section 602 of the Act, revitalization areas are low and
moderate income communities that are targeted by HUD, local
governments, and non profits for special assistance through the
property disposition program to effect stability in the community and
provide homeownership opportunities for the residents. The law expanded
the criteria for designation of a revitalization area, which required a
reassessment of the current guidelines and a consultation process with
stakeholders.
Undertake Consultation Process--Completed
The Office of Housing consulted with program participants,
Homeownership Center Directors, HUD REO Specialists, and others to
determine the guidelines which should be used in implementing the new
criteria to make the ACA desigations. Stakeholders, including non-
profits and local governments, worked, with HUD with the objective of
developing clear guidelines that provide uniformity without being
overly rigid.
Develop Field Guidance on Revitalization Areas--Completed
HUD developed and, on August 18, 2000, issued to the Field Housing
Notice H-00-16 with criteria for reviewing, selecting, and designating
revitalization areas. As of May 1, 2001, over 800 zip codes have been
designated as revitalization areas. Within these areas, HUD will work
with local governments and non-profit community partners to designate
asset control areas, as described below.
asset control area (aca) partnership program
Overview
The ACA Partnership Program assists in the revitalization of
designated neighborhoods by creating homeownership opportunities for
the residents through the sale of HUD-owned single family homes. In an
ACA Partnership, HUD sells 100 percent of its single family homes
located in designated revitalization zones directly to either local
governments or HUD-approved nonprofit organizations at discounts of as
much as 50 percent of appraised value.
The Local ACA partner selects an ACA territory and presents a
revitalization plan to HUD for the proposed territory. The ACA Plan
must demonstrate the local partner's ability to purchase, rehabilitate
and resell all of the vacant HUD homes in the designated area. The Plan
also must contain performance goals, rehabilitation standards, and
supporting services such as homeownership counseling and mortgage loan
financing. Once the ACA plan is approved, HUD and the local partner
enter into a formal contract that outlines the terms and conditions for
partnership.
Through discounted direct sales, the Partner receives instant
equity which is used to assist in the capitalization of the ACA. This
equity can be used to rehabilitate homes and implement homeownership
counseling programs that prepare potential purchasers for
homeownership. Additionally, HUD offers 90-day interest free financing
to the Partner on all of the homes purchased through an ACA Program.
Once rehabilitated, the Partner resells the home to a qualified
purchaser. All proceeds from the sale must be reinvested into the ACA
program. The ACA program empowers the Partners as a driving force in
the rehabilitation of their neighborhoods.
specific implementation steps
HUD developed a comprehensive five-step process designed to
implement pilot ACA Partnerships. The pilot partnerships create a
fertile environment where procedures are developed and tested,
operational processes are refined, lessons are learned, and best
practices are implemented consistently throughout the country. The five
steps are summarized below:
Hire & Deploy REO Specialists--Completed
HUD, identified REO Specialists to serve as the key coordinators
for the program. The REO Specialists are deployed in strategic cities
throughout the country and are assigned various territories. In this
capacity, these specialists identify areas that qualify for the program
and market the program to the potential partners. They assist the
partners in developing their proposals and working through the issues
of the contract. The specialists also present and gain approval of the
ACA Partnership proposals and coordinate all aspects of implementing
the partnerships with HUD's Homeownership Centers.
Create Model ACA Contracts--Completed
HUD created a model ACA contract for use in the program.
Market the Program--Ongoing
The REO Specialists performed a detailed analysis of HUD-owned
single family properties and compared this with the revitalization
criteria contained in the legislation. From this analysis, they
identified and assigned priorities to targeted areas for pilot
programs. The specialists built demand for the program by describing
the economic benefits to potential partners at various forums such as
neighborhood workshops and town meetings. Finally, potential partners
are added after they contact HUD directly and express the desire to
participate in the program.
Negotiate & Execute ACA Contracts--Ongoing
The REO Specialists serve as HUD's agents and negotiate all aspects
of the agreements. They coordinate closely with the appropriate
executive, legal and operational officials in Headquarters as well as
the Directors and REO Division Directors of the Homeownership Centers.
Monitor Implementation of ACA Partnership--Ongoing
Working together, HUD Headquarters, the REO Specialists and the
Homeownership Centers monitor the implementation of the ACA contracts.
The ongoing challenges and issues are shared and resolved through
appropriate workshops and forums.
Based upon the results of the steps outlined above, HUD implemented
the ACA Partnership Program, through Administrative means, in October,
1999. This is to be followed by rule making; which is in process and is
expected to be completed by November, 2001.
results
The three schedules below illustrate the Department's
implementation of the ACA Partnership program. To date, HUD has
implemented fourteen partnership agreements in major revitalization
zones, vs. five a year ago (Schedule 1). We also have nine partnership
agreements scheduled to begin within the next 150 days (Schedule 2).
Finally, seventeen other potential partners have expressed interest in
participating in this program (Schedule 3).
SCHEDULE 1.--CURRENT ACA AGREEMENTS IN PLACE
----------------------------------------------------------------------------------------------------------------
NBR of
Prop. NBR of Number of
Place (ACA Partner) Date of Agreement Exected Per Awaiting Properties
Year Closing Sold
----------------------------------------------------------------------------------------------------------------
San Bernardino, CA (County)............... October 1999................. 450 130 352
Miami-Dade, FL (County Housing Agency).... December 1999................ 60 6 53
Rochester, NY (City)...................... April 2000................... 300 256 154
Chicago, IL, (Hispanic Housing Develop./ May 2000..................... 200 35 78
Neighborhood Housing).
Fort Lauderdale, FL (City Housing May 2000..................... 30 2 14
Authority).
Cleveland, OH (Cleveland Housing Network.. July 2000.................... 75 35 82
Reading, PA (City)........................ September 2000............... 75 24 20
Washington, DC (Church Association of October 2000................. 200 75 0
Community Services).
Burlington, VT (non-profit)............... October 2000................. 5 1 1
Denver, CO (City)......................... October 2000................. 100 9 1
Los Angeles, CA (County).................. December 2000................ 500 6 0
Rhode Island (State Housing Authority).... April 2001................... 12 0 0
Hartford & Manchester, CT (Corp. for April 2001................... 50 0 0
Independent Living).
Bridgeport, CT (City)..................... April 2001................... 75 0 0
--------------------------------------
Total............................... ............................. 2,132 579 755
----------------------------------------------------------------------------------------------------------------
SCHEDULE 2.--ACA AGREEMENTS UNDER NEGOTIATION
------------------------------------------------------------------------
Expected
Date of Proposed Number of
City Agreement Properties Per
Year
------------------------------------------------------------------------
Prince Georges County, MD........ May 2001............. 60
Lancaster, PA.................... June 2001............ 20
St Paul, MN...................... June 2001............ 30
Montgomery County, MD............ July 2001............ 30
Norfolk, VA...................... July 2001............ 30
Allentown, PA.................... July 2001............ 40
Bakersfield, CA.................. August 2001.......... 35
Ontario, CA...................... August 2001.......... 30
Springfield, MA.................. August, 2001......... 50
------------------------------------------------------------------------
Schedule 3.--Expressions of Interest
Phoenix, AZ
Compton, CA
Fontana, CA
Rialto, CA
Riverside, CA
Sacramento, CA
Orlando, FL
Palm Beach, FL
Dekalb, County A
Harvey, IL
Yale/New Haven, MA
Baltimore, MD
Baltimore County, MD
Hartford County, MD
Detroit, MI
Coatesville, PA
York, PA
Status of Savings
HUD's Budget Request for fiscal year 1999 contained legislation for
claims and asset disposition reform. The budget justification indicated
that the proposal would allow FHA to maximize returns to the insurance
funds as well as have benefits to homeowners. The Department also
indicated that although the legislation was proposed for enactment in
1999, the program would not take full effect until fiscal year 2002 and
then phase in through fiscal year 2003. The time lag was to allow for
full development of complicated financial and other procedures, changes
in systems, and training both lenders and HUD staff. Savings were not
anticipated to be available under the program until fiscal year 2002.
At the time legislation was enacted, the present value of discretionary
savings attributable to the reforms was scored at $400 million: This is
included in HUD's baseline budget.
Question. When will HUD issue the pending rule on the pricing
structure of the ACA program?
Answer. On April 5, 2002, the Department announced that it would be
conducting a full review of the program, and that during the review
period, existing Asset Control Areas (ACA) agreements would be allowed
to expire. An important part of this review will be to accelerate
program rulemaking during the next 4 to 6 months.
Question. What are the Department's plans for this program?
Answer. As described above, on April 5, 2002, the Department
announced that it would be conducting a full review of the program, and
that during the review period, existing ACA agreements would be allowed
to expire.
accelerated claims process
Question. The Department's fiscal year 2003 Budget Summary notes
state that: ``In 2003 FHA will begin to move out of the single family
property management business and accelerate the claims process by
taking mortgage notes rather than requiring lenders to foreclose and
transfer single-family properties to FHA. FHA will sell defaulted notes
to the private sector for servicing and or disposition, thereby
eliminating most of the real property that HUD currently acquires'' (p.
3). Already HUD has proposed a new ``Accelerated Claim Disposition
Demonstration'' program (Federal Register, Tuesday, February 5, 2002)
to implement this policy. How will HUD ensure that these distressed
communities do not again become land banks for speculators who prey on
low-income families?
Answer. The ``Accelerated Claim Disposition Demonstration'' program
implements Section 601 of the fiscal year 1999 Appropriations Act as
authorized by Congress. The best way to ensure that these distressed
communities do not become land banks for speculators who prey on low-
income families is to maintain/retain the existing tenure of the
homeowner and financial investment/asset of the existing families. To
address its objective of increasing recoveries on the sale of assets,
the Accelerated Claims Disposition Demonstration will move more quickly
to address the homeowner issues of default and exhaust all
opportunities to reinstate the financial viability of the mortgage
instrument and the homeownership tenure. The simple fact that a period
of vacancy will be avoided in more cases than under the current process
and that occupancy will be sustained in more cases will work to help
fortify already distressed communities.
Maintaining the initial homeownership tenure and the mortgage
instrument most effectively thwarts any opportunity for speculators who
prey on low-income families and preserves the financial investment of
the asset of that community.
If foreclosure is unavoidable, the Department plans to include in
its Joint Venture Partnership Agreement a requirement to use servicing
and lending best practices that mitigate the risks of predatory lending
or unscrupulous speculation at the expense of low-income families.
Even in the few worst cases when foreclosure does occur by the
Joint Venture partner, it is anticipated that the results of Joint
Venture decision making will be to invest prior to resale in the
property making it more likely and suitable to be acquired directly by
a homeowner rather than an investor.
Question. What will happen to the ACA program if the Department
implements the proposed Accelerated Claims Disposition Demo?
Answer. The areas involved in the existing Asset Control Areas will
be excluded from the Accelerated Claims Disposition Demonstration in
2002.
hope vi
Question. How does HUD define ``severely distressed public
housing?''
Answer. HUD uses the definition set forth at section 24 (j)(2) of
the U.S. Housing Act of 1937 (42 U.S.C. 1437v(j)(2)) to define
``severely distressed public housing.'' The Department has
operationalized this definition by requiring PHA's who apply for HOPE
VI to certify through a independent third party architect that the
criteria identified in the statue have been met and that the subject
development is indeed severely distressed.
Question. How many units of severely distressed housing currently
exist?
Answer. The Department has over the past decade identified public
housing units that meet various standards of severe distress and
obsolescence through the implementation of Section 18, Section 202
Mandatory Conversion and the HOPE VI program. As a result of this
combined effort, public housing authorities and HUD have identified as
of May 1, 2002, 142,392 units that meet the basic criteria for
demolition. As of May 1, PHAs have demolished or disposed of 80,945
units. Thus, 61,447 units have been approved for demolition and
disposition that remain in inventory. In addition, the Department
received 66 HOPE VI Revitalization applications in fiscal year 2001.
Together, these applications certified the severe physical distress of
approximately 18,000 public housing units. (Note that some of these
18,000 units already received demolition approval and thus are included
in the 61,447-unit figure.)
elderly and disabled housing
Question. The Administration is requesting $251 million for the
Section 811 program for people with disabilities for fiscal year 2003.
This represents a $10 million increase over the fiscal year 2002
funding. However, according to estimates included in the budget
request, renewal of all expiring 811 ``mainstream'' tenant-based rent
subsidies will cost $32 million in fiscal year 2003--consuming more
than the entire proposed increase for the program--both tenant-based
and capital advance/project-based. Similarly, the budget requests $783
million for the elderly housing program, the same amount funded in
fiscal year 2002, but a greater percentage is designated for renewal
contracts. What are the estimated costs of renewing contracts in the
elderly and disabled programs for the next 5 fiscal years?
Answer. See tables below:
OUTYEAR PRAC/PAC RENEWAL ESTIMATES
----------------------------------------------------------------------------------------------------------------
Unit Avg Per Unit 1-yr Renewal
Fiscal year Expirations Unit Renewals Cost BA Costs
----------------------------------------------------------------------------------------------------------------
2003............................................ 4,037 6,360 $3,403 $21,641,140
2004............................................ 3,570 9,930 3,455 34,307,905
2005............................................ 4,429 14,359 3,512 50,435,756
2006............................................ 2,977 17,336 3,569 61,873,929
2007............................................ 2,236 19,572 3,704 71,122,000
----------------------------------------------------------------------------------------------------------------
RENEWALS OF MAINSTREAM VOUCHERS (SECTION 811)
----------------------------------------------------------------------------------------------------------------
First Time Total Units to Avg Cost per 1-yr BA
Fiscal year Expirations Unit Renewals Renew Unit Renewal Cost
----------------------------------------------------------------------------------------------------------------
2003............................ 1,845 3,510 5,355 $6,005 $32,156,775
2004............................ 1,455 5,355 6,810 6,131 41,752,110
2005............................ 2,383 6,810 9,193 6,260 57,548,180
2006............................ 2,383 9,193 11,576 6,391 73,982,216
2007............................ 1,993 11,576 13,569 6,525 88,537,725
----------------------------------------------------------------------------------------------------------------
Question. How is the Department planning for growing renewal needs?
Answer. The full cost of renewing current rental assistance
contracts are included in the Department's out-year budget estimates
that are projected for 5 years beyond the budget year and are a part of
our budget baseline.
housing counseling
Question. I am pleased that the fiscal 2003 HUD budget includes
increased funding for housing counseling assistance. The budget
justification includes an estimate that 150,000 additional clients will
be served by the increased funds. How many people will receive pre-
homeownership counseling? How many will receive post-homeownership
counseling? How many of the people assisted receive other?
Answer. Although we cannot say definitively how many clients will
request any specific type of counseling, recent past experience has
shown us that a little over a third of counseling clients seek out pre-
purchase counseling and a little under a third seek post-purchase
counseling (the other third seek rental, homeless, HECM, and ``other''
counseling assistance). However, we based our 2003 estimate on the
assumption that counseling agencies will see an increased volume of
customers seeking default/post-purchase counseling. The significant
number of layoffs that resulted from the events of September 11 and
some slowing of the economy over the past year suggest that more
families will be seeking assistance with managing their household
finances to prevent foreclosure. Even in the last few months, anecdotal
evidence suggests this shift in counseling needs is already occurring.
Therefore, we expect that the numbers of clients seeking pre-purchase
counseling will be approximately 50,000 to 55,000 and the number
seeking post-purchase counseling will be approximately 65,000 to
75,000. The remaining 20,000 to 35,000 clients would be seeking
``other'' types of counseling.
home downpayment assistance initiative
Question. If the HOME down payment assistance initiative is funded,
will prospective homeowners assisted by this program be required to
undergo homeownership counseling?
Answer. Consistent with the block grant nature of the HOME Program,
the decision as to whether prospective homeowners will be required to
undergo homeownership counseling resides with the local agencies
administering the program, and many communities do in fact require pre-
and post-purchase counseling. Consequently, while counseling will not
be required, homebuyers receiving assistance through the American Dream
Downpayment Initiative will have the same opportunities to receive
housing counseling as provided for those who currently receive
downpayment assistance through the use of regular HOME funds. Should
the local HOME program managers decide that a family being assisted to
purchase a home requires or would benefit from pre- or post-purchase
counseling, they may use some of their regular HOME allocation to pay
for it or fund this counseling from other resources, including the
separate assistance provided by HUD specifically for this purpose.
departmental grants management system
Question. As you know, Congress has long had concerns over HUD's
management information systems, specifically, its inability to assess
program expenditures, outputs and outcomes. The Department recently
cancelled its plans to implement the Departmental Grants Management
System. What are your plans for implementing a department-wide grants
management system? When can we expect to see such a system, and what do
you estimate the cost of development will be?
Answer. The Department of Health and Human Services has the lead
for developing a common system to be used by all Federal agencies under
the President's e-grants initiative. Under the e-grants effort, HUD has
been working closely with the 26 other Federal grant making agencies to
develop a system that would allow the public to find, apply for funding
opportunities and then report progress in the implementation of its
programs. The timetable for deployment of this system as agreed to by
all the Federal agencies is October 2003.
HUD has proposed that many of the elements developed for the
Department's Grants Management System can be implemented as part of
this larger governmentwide system and has been actively discussing this
with HHS and other agencies. Under the e-grants, initiative every
Federal agency would contribute to the effort. The full cost estimates
for the e-grants system have not been determined at this time.
______
Questions Submitted by Senator Herb Kohl
downpayment assistance program
Question. I am concerned that the set-aside for down payment
assistance within the HOME program is not the best use of HOME funds.
HOME currently gives States the flexibility to address the housing
needs that are most pressing in their communities. I am always
reluctant to endorse a one-size fits all approach because I usually
find that Wisconsin loses out. Now, the goal of helping families own
their own homes is laudable and the State of Wisconsin is already using
about one-third of the funds it receives through the HOME program for
homebuyers assistance, leveraging the Federal funds with State, local
and private funds to get families into homes.
While I realize this program has yet to be authorized, does the
Administration propose that the set-aside for downpayment assistance be
limited to communities with 20 percent poverty levels? I ask because I
am concerned that this program could direct HOME funding away from
those who may need it but are not clustered in poor communities. While
Wisconsin has some significant numbers at the poverty level, our low
income families are spread out across the State and are not in
identifiable clusters or pockets in most cases.
Answer. The concept of ``20 percent poverty communities'' is not
one that is used in the HOME Program even though, as one might expect,
a significant number of HOME Participating Jurisdictions (PJs) would
meet this standard. Consequently, American Dream Downpayment (ADD)
Initiative funds will not be limited to such communities.
American Dream Downpayment Initiative funds would be allocated by a
formula that considers both community need (i.e., the current HOME
formula) and the past efforts of PJs in providing downpayment
assistance through their regular HOME program funds. In addition, in
order to maximize the number of PJs participating in the American Dream
Initiative, no PJ would receive more than 2 percent of the ADD
appropriation. Funds made available through use of this 2 percent cap
would be reallocated to all uncapped PJs. In addition, since PJs that
have not done homebuyer projects in the past 10 years would be unlikely
to start now if their share of ADD funds is any less than $25,000, the
final step of the allocation determination process is to zero out
allocations for PJs where: (1) the adjusted formula allocation amount
is less than $25,000; and (2) they have not undertaken any homebuyer
activities using regular HOME funds during the life of their program.
Implementing this allocation process for the $50 million fiscal
year 2002 ADD appropriation will result in Wisconsin PJs receiving
approximately 2.18 percent of the ADD funds available, while they
receive about 1.88 percent of the regular 2002 HOME appropriation. The
allocation process used under ADD actually works to Wisconsin's
benefit.
Question. How will the downpayment assistance program address the
needs of these families?
Answer. Obtaining the resources to meet upfront downpayment and
closing costs is the most significant obstacle to homeownership among
lower income groups. By providing a dedicated stream of funding for
homebuyer assistance, the American Dream Downpayment Initiative would
eliminate this obstacle for tens of thousands of additional families
each year while enabling jurisdictions to increase homeownership rates,
broaden their tax base, and stabilize neighborhoods.
In a 2000 research report by the Local Initiatives Support
Corporation (LISC) entitled Mind the Gap: Issues in Overcoming the
Information, Income, Wealth, and Supply Gaps facing Potential Buyers of
Affordable Homes, it was determined that 30 percent of low-income
buyers cannot afford to buy a modestly priced home because they lack
sufficient funds for the downpayment while under 3 percent could not do
so because they could not afford the monthly payment. Since the average
amount of cash needed for downpayment on a modestly priced home in 1999
was approximately $3,500 according to the report, the American Dream
Fund would be providing just the amount necessary at just the right
point in the homebuying process to accomplish its goals. Like the
successful Self-Help Homeownership Opportunities Program (SHOP) that
targets assistance at the main obstacle to ``Habitat for Humanity''
type development--land acquisition--by targeting assistance
specifically at overcoming the downpayment hurdle, the American Dream
Fund would complement the use of regular HOME funds and would result in
a significant increase in the number of low-income homeowners.
In regard to those who do need assistance with their monthly
payment, ADD funds can be used as well to buy down the current interest
rate available to the homebuyer or the principal loan balance, thus
saving a considerable amount in interest costs over the life of the
loan.
Question. The downpayment assistance program you are proposing
would direct $200 million from the HOME program to 40,000 families.
That works out to $5,000 per family. While this is not an insignificant
amount, given the cost of home ownership these days can this make a
difference for most families? Even assuming that these families could
get a 7 percent/30-year mortgage, $5,000 will only lower monthly
payments $33/month. How is this an improvement as compared to what we
are doing already under the HOME program?
Answer. Again, citing the 2000 research report by the Local
Initiatives Support Corporation (LISC) entitled Mind the Gap: Issues in
Overcoming the Information, Income, Wealth, and Supply Gaps facing
Potential Buyers of Affordable Homes, it was determined that 30 percent
of low-income buyers cannot afford to buy a modestly priced home
because they lack sufficient funds for the downpayment while under 3
percent could not do so because they could not afford the monthly
payment. Since the average amount of cash needed for downpayment on a
modestly priced home in 1999 was approximately $3,500 according to the
report, the American Dream Fund would be providing just the amount
necessary at just the right point in the homebuying process to
accomplish its goals.
elimination of chronic homelessness
Question. According to a study released in December by the U.S.
Conference of Mayors, 37 percent of requests from homeless people for
emergency shelter went unmet in 2001. On average, people remained
homeless for 6 months in the cities surveyed, an increase for 54
percent of the cities surveyed. These numbers are disturbing. I
understand that the Administration has made a commitment to end chronic
homelessness in the next decade. This is an admirable goal, but there
are some who work closely with the homeless who have questioned whether
the modest increases in homeless programs are sufficient to meet this
goal.
If chronic homelessness is to be eliminated in the next 10 years,
do you intend to devote significantly more funding for homeless
programs in future years budgets?
Answer. The Department is working with a variety of other Federal
agencies to end chronic homelessness in the United States. In
particular, we have undertaken several major initiatives with the
Department of Health and Human Services (HHS) to not only coordinate
activities but, most importantly, to open up the enormous resources
tied to the HHS mainstream supportive service programs for use in
meeting the critical supportive service needs of homeless persons. We
are similarly working with the Department of Veterans Affairs (VA),
which has joined the HUD/HHS Interagency Task Force, to better utilize
the resources of that agency in eliminating chronic homelessness.
Similar inter-Departmental coordination has been achieved in the
development of Policy Academies jointly being sponsored by HHS, HUD and
VA in which State governments are actively engaged in identifying and
eliminating barriers that currently prevent homeless persons from
accessing supportive service funding.
In addition, HUD's efforts to coordinate access to Federal funds to
end chronic homelessness are now being assisted by the Interagency
Council for the Homeless (ICH). The Agency, with the new leadership of
Executive Director Philip Mangano, is responsible for planning and
coordinating the Federal Government's actions and programs to assist
homeless people, and making or recommending policy changes to improve
such assistance. ICH has committed to actively working with all its
member agencies to aggressively promote the goal of ending chronic
homelessness across the Nation.
HUD believes that, with effective coordination of all relevant
Federal and State Government agencies, improved targeting of all
resources available for addressing homelessness, and the expanded
active involvement of non-profit provider agencies so critical to this
effort, the Nation can achieve the goal set out by Secretary Martinez
last July.
In addition, the HUD program that most directly works toward ending
chronic homelessness is the Shelter Plus Care Program. This program
provides rental assistance for permanent supportive housing for
disabled homeless persons. HUD has committed to request additional
funding above the current funding level to ensure that all otherwise
eligible Shelter Plus Care renewal projects can be renewed. Although it
is difficult to project exact renewal needs due to the flexible nature
of the 5-year grants, based upon already approved 1-year renewals and
projected renewals of 5-year grants, it is estimated that the renewal
demand for Shelter Plus Care will be approximately $200 million in
fiscal year 2004. The Department will carefully scrutinize the total
amount of homeless substitute funds needed in our initial request to
OMB and this request will certainly take into full consideration both
renewals and regular program costs.
HUD has moved aggressively to encourage our applicants to seek
needed funding for supportive services from the mainstream supportive
service programs of HHS, VA, the Social Security Administration, the
Department of Agriculture and other agencies. As the transition to
other sources continues, a growing percentage of HUD's funding is being
freed up for use in developing housing. As a result, large additional
increases in HUD's homeless appropriations, beyond the Shelter Plus
Care renewal costs noted above, are not anticipated.
Question. Also, are you leaving out those who might not be deemed
chronically homeless but whose needs are also going unmet?
Answer. HUD's initiative to end chronic homelessness will in no way
ignore the needs of persons who are homeless but not chronically so. A
large majority of the McKinney-Vento Act resources administered by HUD
have traditionally addressed persons who are not chronically homeless.
Under HUD's Continuum of Care process, these decisions are made by the
community itself, not HUD. However, HUD's initiative to end chronic
homelessness encourages communities to consider making additional
efforts to especially address the needs of those homeless persons that
are disabled and have been homeless for long periods of time. As a
result, it is anticipated that a greater percentage of available
resources will be used to fight chronic homelessness but the bulk of
those resources will continue to be used to address the approximately
80 per cent of homeless persons who are not considered chronic
homeless.
______
Questions Submitted by Senator Christopher S. Bond
public housing reinvestment and financial reform
Question. HUD is proposing over $400 million less in Public Housing
Capital funding for fiscal year 2003 than fiscal year 2002. In
addition, the fiscal year 2002 funding is some $150 million less than
the fiscal year 2001 level. These reductions seem excessive especially
since public housing throughout the country has a capitalization
backlog of some $22 billion. How does HUD justify this reduction from
public housing?
Answer. The proposed amount in the President's Budget is sufficient
to cover the accrual of new Capital needs for fiscal year 2003. In
addition, as of December 31, 2001, there were approximately $5.5
billion in unexpended Capital grant funds that were provided to PHAs.
Included within this amount there were approximately $3.2 billion in
Capital grant funds that remained unobligated by the PHAs. These
balances are significant. The Department will closely monitor
obligations and expenditures and make appropriate budget proposals.
Question. In addition, the VA/HUD fiscal year 2002 Appropriations
Act included requirements to ensure the timely use of these funds last
year, including a reallocation of the capital funds where a PHA does
not obligate its capital funds within a reasonable period of time. This
change in the law was the result of HUD representing that a number of
PHAs were not obligating their capital funds quickly enough and that
these funds were sitting unused. I have no problem in requiring PHAs to
address their capital needs to ensure that residents live in the best
housing possible. However, in retrospect, how big a problem are
unobligated Public Housing capital funds? Can you put a dollar number
on this problem?
Answer. HUD Initially identified 163 grants with approximately
$212,608,002 in fiscal year 1998 and 1999 Capital Fund grants in PHAs
that failed to obligate 90 percent (the Quality Housing and Work
Responsibility Act of 1998 (QHWRA) standard) or more of their grant
award by the 24-month obligation deadline in the QHWRA. We later
subtracted 49 grants from the 163 grants that were found to be
legitimate obligations, as described in the footnote \1\ As a result of
this analysis, the Office of Public Housing identified a total of 117
grants with $126,821,817 of unobligated Capital Funds for the 2 years
in question.
---------------------------------------------------------------------------
\1\ Forty-four of those 49 grants, were obligated by September 30,
2001, but for a variety of reasons the PHA did not put the correct
numbers in Line of Credit Control System (LOCCS). Four of the 49 grants
were Moving to Work grantees (MTW) that totaled approximately $46
million. One of the 49 grants originally identified was a $6 million
grant for the Virgin Islands Housing Authority (VIHA). It was later
determined that the $6 million was composed of an emergency loan/grant.
Consequently, this grant was excluded from the analysis of recaptures
because the 24-month obligation deadline in the statute applies to
regular formula grants and not grants for disasters and emergencies.
The total for the 49 grants that were excluded is $82,387,814. Finally,
four PHAs misreported the amount of unobligated funds. This required a
$3 million adjustment in the amount of unobligated funds. The
department intends to carefully review the four misreported situations
and will take corrective actions/sanctions against those PHAs if
appropriate.
---------------------------------------------------------------------------
For the 117 grants, the HUD Field Offices were asked to provide a
justification and supporting documentation for each PHA that failed to
obligate in a timely manner. The Department carefully reviewed each
case and the justification proposed for compliance with the section
9(j)(2)(A) of the 1937 Act, including cases where the Field Offices had
given the PHA an original obligation deadline beyond September 30,
2001, or the PHA had an extension granted by the field office or a
self-granted extension.
HUD identified a group of 24 grants that had unobligated balances
as of September 30, 2001, that did not have either: (a) a PHA self-
extension, or (b) a HUD Field Office approved time-extension in
accordance with the Comprehensive Grant Guidebook, 7485.3 G, issued
October 1996. PIH determined that these grants should be recaptured.
PIH has recently directed the HUD Field Offices to recapture these
funds.
HUD identified a second group composed of two parts: (a) 53 grants
that were 100 percent obligated as of March 22, 2002, and (b) 19 grants
that had time extensions or an original obligation deadline dates after
September 30, 2001, but were not known- to be 100 percent obligated by
March 22, 2002. On March 22, 2002, the Department sent a letter to PHAs
\2\ that managed 72 grants and requested that, within 5 days, they
certify the amount of grant funds unobligated as of the date of the
letter. Responses to HUD's March 22, 2002 letters, from the PHAs (Table
2) were received and then tallied. As of April 3, 2002, the total funds
unobligated from the 72 grants in Table 2 is $647,499 from 6 PHAs. (A
copy of the table is attached.) The remainder of the PHAs obligated 90
percent of their grant funds by March 22, 2002.
---------------------------------------------------------------------------
\2\ There were a total of 67 PHAs that managed the 72 grants. Five
of the PHAs had a grant from fiscal year 1998 as well as fiscal year
1999.
---------------------------------------------------------------------------
The combined total of funds unobligated as of March 22, 2002, is
approximately $6.2 million, which the Department plans to recapture.
The Department recognized that there have been differing
interpretations as to the effect of QHWRA as they relate to previous
HUD guidance given to PHAs regarding the obligation of fiscal years
1998 and 1999 funds. However, the Department must still implement the
law. In fairness to PHAs that have previously requested and received
extensions that are not now valid under QHWRA, HUD decided to only
recapture those funds that remain unobligated as of March 22, 2002,
when the PHAs were directed to immediately cease obligating fiscal
years 1998 and 1999 funds. On April 5, 2002, the Department sent
letters to the 6 PHAs in the second group that had unobligated funds as
of March 22, 2002, informing them that the funds will be recaptured. On
April 11, 2002, HUD Field Offices were directed to take the appropriate
steps to initiate the recapture of funds by amending the Annual
Contributions Contract.
Twenty-one of the 117 grants were found to have justifications for
extensions that met the requirements of Section 9(j)(2)(A) of the Act,
and have been recommended to the Deputy Secretary for time extensions.
We anticipate publishing a Notice in the Federal Register shortly,
which will identify grants by PHA where unobligated funds will be
recaptured, as well as the 21 grants that have been recommended to the
Deputy Secretary for time extensions. This action by the Deputy
Secretary is pending. (The exact date of publication of the Federal
Register Notice is not known at this time.)
PIH plans to take strong measures to implement additional
procedures to closely monitor obligations and expenditures.
Specifically, PIH plans to require a new monthly obligation and
expenditure report, which will replace the current quarterly reporting
system. Implementing a monthly reporting system will enable the
Department to implement section 9(j)(3) of the Act, Penalty for Slow
Expenditure of Capital Funds, a 1/12-month penalty for failure to
obligate Capital Funds within 24 months. We anticipate that the monthly
reporting system will be implemented in LOCCS October 1, 2002 in time
to address the fiscal year 2003 Capital Fund Formula Grant
distribution.
It is important to note that the question only related to the
deadline for unobligated Capital Funds. The law provides for two
deadlines, obligations and expenditures. Consequently, when looking at
a PHA's capacity to obligate funds, the Department must take into
account a PHA's unexpended funds that have already been obligated. The
Department must closely monitor compliance with both deadlines. For
example, as of December 30, 2001, there were approximately $5.5 billion
in unexpended Capital Funds. Large unexpended balances may directly
impact a PHA's ability to obligate current year funds.
GRANTS 90 PERCENT-100 PERCENT OBLIGATED AS OF MARCH 22, 2002 AND GRANTS WITH TIME EXTENSIONS BUT NOT OBLIGATED
BY MARCH 22, 2002
----------------------------------------------------------------------------------------------------------------
Fiscal Grant Authorized
Field office name Housing authority name year unobligated amount
----------------------------------------------------------------------------------------------------------------
ALBUQUERQUE PROGRAM CENTER............. CHAMA HOUSING AUTHORITY, 1999 $75,217.00 $75,217.00
NM.
ALBUQUERQUE PROGRAM CENTER............. SUNLAND PARK HA, NM...... 1999 90,964.00 67,264.00
ATLANTA HUB OFFICE..................... BRUNSWICK HA, GA......... 1999 924,936.00 576,780.00
ATLANTA HUB OFFICE..................... GRIFFIN, GA.............. 1998 430,342.00 251,899.00
ATLANTA HUB OFFICE..................... CORDELE HA, GA........... 1999 702,335.00 347,913.00
ATLANTA HUB OFFICE..................... QUITMAN, GA.............. 1998 1,781,022.00 1,272,957.00
ATLANTA HUB OFFICE..................... TIFTON HOUSING AUTHORITY, 1999 525,836.00 172,726.00
GA.
ATLANTA HUB OFFICE..................... LAFAYETTE HA, GA......... 1999 305,392.00 248,664.00
BALTIMORE HUB OFFICE................... ANNAPOLIS HOUSING 1999 1,838,764.00 581,973.00
AUTHORITY, MD.
BIRMINGHAM HUB OFFICE.................. BIRMINGHAM, AL........... 1998 10,932,880.00 1,270,836.00
BIRMINGHAM HUB OFFICE.................. TALLASSEE, AL............ 1998 150,000.00 45,649.00
BIRMINGHAM HUB OFFICE.................. TALLASSEE HA, AL......... 1999 190,772.00 190,772.00
BOSTON HUB OFFICE...................... PLYMOUTH HA, MA.......... 1999 149,480.00 125,210.00
BOSTON HUB OFFICE...................... WEBSTER HA, MA........... 1998 492,500.00 286,330.00
BOSTON HUB OFFICE...................... WEBSTER HA, MA........... 1999 81,413.00 71,413.00
BUFFALO HUB OFFICE..................... WATERTOWN HA, NY......... 1999 977,389.00 173,848.00
BUFFALO HUB OFFICE..................... TROY HA, NY.............. 1998 2,143,930.00 395,981.00
BUFFALO HUB OFFICE..................... TROY HA, NY.............. 1999 2,499,166.00 1,192,993.00
BUFFALO HUB OFFICE..................... WATERVLIET HA, NY........ 1999 471,295.00 70,222.00
BUFFALO HUB OFFICE..................... RENSSELAER HA, NY........ 1999 292,562.00 149,049.00
CHICAGO HUB OFFICE..................... DECATUR HOUSING 1999 1,865,509.00 520,193.00
AUTHORITY, IL.
CHICAGO HUB OFFICE..................... MENARD COUNTY HOUSING 1999 410,257.00 71,830.00
AUTHORITY, IL.
CHICAGO HUB OFFICE..................... KANKAKEE COUNTY HOUSING 1999 552,216.00 140,616.00
AUTHORITY, IL.
CHICAGO HUB OFFICE..................... ADAMS COUNTY HOUSING 1999 182,727.00 69,200.00
AUTHORITY, IL.
CHICAGO HUB OFFICE..................... LAKE COUNTY HOUSING 1999 1,415,393.00 310,677.00
AUTHORITY, IL.
CHICAGO HUB OFFICE..................... WHITE COUNTY HOUSING 1999 194,818.00 55,676.00
AUTHORITY, IL.
CHICAGO HUB OFFICE..................... OAK PARK HOUSING 1999 264,259.00 247,079.00
AUTHORITY, IL.
CINCINNATI COMMUNITY SERVICE CENTER.... CLINTON MHA, OH.......... 1998 202,280.00 117,453.00
CINCINNATI COMMUNITY SERVICE CENTER.... CLINTON MHA, OH.......... 1999 61,177.00 24,611.00
COLUMBIA PROGRAM CENTER................ GREENVILLE HA, SC........ 1999 1,302,973.00 167,258.00
COLUMBIA PROGRAM CENTER................ MYRTLE BEACH, SC......... 1999 41,404.00 4,767.00
COLUMBIA PROGRAM CENTER................ YORK, SC................. 1999 227,128.00 41,606.00
COLUMBIA PROGRAM CENTER................ CHARLESTON C0, SC........ 1999 329,004.00 90,544.00
DETROIT HUB OFFICE..................... DETROIT HC, MI........... 1999 20,258,934.00 8,567,878.00
DETROIT HUB OFFICE..................... PONTIAC HC, MI........... 1999 1,178,664.00 247,375.00
FORT WORTH HUB OFFICE.................. PARIS, TX................ 1999 378,192.00 95,000.00
FORT WORTH HUB OFFICE.................. GRAND SALINE HA, TX...... 1999 162,364.00 107,667.00
GRAND RAPIDS COMMUNITY SERVICE CENTER.. MUSKEGON HEIGHTS, MI..... 1999 891,694.00 751,030.00
GRAND RAPIDS COMMUNITY SERVICE CENTER.. MUSKEGON, MI............. 1999 261,843.00 238,337.00
GREENSBORO HUB OFFICE.................. HA LUMBERTON, NC......... 1999 1,196,802.00 705,931.00
GREENSBORO HUB OFFICE.................. BENSON, NC............... 1999 776,516.00 611,024.00
GREENSBORO HUB OFFICE.................. HA WADESBORO, NC......... 1999 329,388.00 55,193.00
GREENSBORO HUB OFFICE.................. HA MIDEAST REGIONAL, NC.. 1999 410,806.00 251,698.00
HARTFORD PROGRAM CENTER................ MERIDEN HOUSING 1999 858,546.00 333,399.00
AUTHORITY, CT.
HARTFORD PROGRAM CENTER................ GLASTONBURY HOUSING 1999 383,497.00 203,737.00
AUTHORITY, CT.
INDIANAPOLIS PROGRAM CENTER............ INDIANAPOLIS HA, IN...... 1998 3,440,145.00 780,340.00
INDIANAPOLIS PROGRAM CENTER............ INDIANAPOLIS HOUSING 1999 3,846,488.00 2,067,108.00
AGENCY, IN.
JACKSON PROGRAM CENTER................. MCCOMB, MS............... 1999 615,301.00 268,532.30
JACKSONVILLE HUB OFFICE................ ORLANDO, FL.............. 1999 3,900,597.00 792,119.00
JACKSONVILLE HUB OFFICE................ UNION COUNTY, FL......... 1999 214,967.00 214,967.00
LOUISVILLE HUB OFFICE.................. HA LEXINGTON, KY......... 1999 2,728,620.00 1,822,626.00
MILWAUKEE PROGRAM CENTER............... CITY OF BELOIT, WI....... 1999 263,692.00 171,043.00
NASHVILLE PROGRAM CENTER............... MEMPHIS, TN.............. 1998 12,314,347.00 3,066,870.00
NASHVILLE PROGRAM CENTER............... PULASKI, TN.............. 1999 439,626.00 108,127.00
NEW ORLEANS HUB OFFICE................. CROWLEY HOUSING 1999 708,324.00 687,074.00
AUTHORITY, LA.
NEW YORK CITY HUB OFFICE............... WHITE PLAINS HA, NY...... 1999 1,748,410.00 568,792.00
NEW YORK CITY HUB OFFICE............... NORTH HEMPSTEAD HA, NY... 1999 252,717.00 103,052.00
NEWARK HUB OFFICE...................... TRENTON HOUSING 1999 4,717,627.00 1,624,992.00
AUTHORITY, NJ.
NEWARK HUB OFFICE...................... BEVERLY HOUSING 1998 939,257.00 385,249.00
AUTHORITY, NJ.
NEWARK HUB OFFICE...................... BEVERLY HOUSING 1999 128,111.00 24,934.00
AUTHORITY, NJ.
PHILADELPHIA HUB OFFICE................ MONROE COUNTY HOUSING 1999 574,924.00 215,238.00
AUTHORITY, PA.
PHILADELPHIA HUB OFFICE................ LACKAWANNA COUNTY HA, PA. 1999 1,825,518.00 571,812.00
PHILADELPHIA HUB OFFICE................ WILLIAMSPORT HOUSING 1999 372,544.00 45,755.00
AUTHORITY, PA.
PITTSBURGH HUB OFFICE.................. JEFFERSON COUNTY HOUSING 1999 448,655.00 210,008.00
AUTHORITY, PA.
SAN ANTONIO HUB OFFICE................. DEL RIO HOUSING 1998 411,901.00 96,138.19
AUTHORITY, TX.
SAN ANTONIO HUB OFFICE................. DEL RIO HOUSING 1999 483,059.00 77,860.16
AUTHORITY, TX.
SAN ANTONIO HUB OFFICE................. EDCOUCH HOUSING 1998 350,000.00 110,129.00
AUTHORITY, TX.
SAN ANTONIO HUB OFFICE................. INGLESIDE HOUSING 1999 179,647.00 60,078.00
AUTHORITY, TX.
SAN ANTONIO HUB OFFICE................. STARR COUNTY HOUSING 1999 163,288.00 157,063.00
AUTHORITY, TX.
SEATTLE HUB OFFICE..................... TACOMA HOUSING AUTHORITY, 1999 4,571,296.00 1,366,829.00
WA.
SEATTLE HUB OFFICE..................... SEDRO WOOLLEY HOUSING 1999 127,909.00 32,918.00
AUTHORITY, WA.
ST. LOUIS PROGRAM CENTER............... WEST PLAINS HOUSING 1999 313,340.00 92,709.00
AUTHORITY, MO.
---------------------------------------------
TOTAL............................ ......................... 72 105,272,796.00 37,319,837.65
----------------------------------------------------------------------------------------------------------------
Question. In addition, the HUD fiscal year 2003 Budget requests
authority for HUD to permit PHAs to borrow private capital as a way to
fund needed capital improvements. These private funds would be repaid
through the provision of Section 8 project-based assistance for these
units. In turn, there is proposed authority to convert this Section 8
project-based assistance to vouchers and allow this housing to be
rented on the private market. This essentially means that the best
units in public housing would be converted to private housing and the
inventory of affordable housing in many marketplaces would shrink. How
does the Administration justify the risk of losing this affordable
housing, especially in tight marketplaces?
Answer. HUD believes that the result of this proposal will be a
substantial improvement in the current public housing stock that would
not have been possible otherwise. The proposal is not designed to
convert public housing to private housing, does not cover the best
units in particular and would not result in shrinkage in the inventory
of affordable housing.
The assistance proposed is Section 8 project-based vouchers. The
ability to convert public housing subsidy to project-based vouchers
will enable PHAs to borrow funds for capital improvements on a
development-by-development basis, just like other multifamily real
estate. This will enable PHAs to leverage private dollars to help
address the $22 billion backlog in capital needs.
The proposal is not limited to the best public housing. All public
housing is eligible. HUD only would approve transactions where
significant enough capital work is needed to justify use of this
financing tool. Where a development has higher capital needs than the
amount that could be financed within program limits, PHAs would have
the choice of supplementing the funding with Capital Fund or other
money.
The proposal does not assume private for-profit ownership in any
fashion. It is a voluntary program in which PHAs may participate. PHAs
may retain control of a participating development's ownership, through
a PHA-controlled subsidiary where this will facilitate financing. If a
PHA desires to dispose of the property to any owner that is not PHA-
controlled, the public housing disposition rules would apply (as they
would with any other public housing property).
A participating development would have a continuing contract for
project-based vouchers for all the units. The Administration proposal
does allow renting of some units to unassisted tenants, up to one third
of non-elderly or disabled units. To the extent this occurs, the PHA
can use additional vouchers elsewhere, so that affordable housing
opportunities are not lost. Even in that case, the project-based
voucher contract would remain for all of the units in the development,
so that the PHA later could again rent all the units at the development
to assisted tenants (and reduce the number of extra vouchers used in
the community accordingly). This proposal is designed to provide
additional flexibility for producing mixed-income developments, and
should not be confused with an effort to ``voucher out.''
Question. If Congress does not provide this new authority to
support the private financing of rehabilitation through Section 8
funding, does Public Housing need the additional $400 million that the
Administration is recommending be cut from the Public Housing Capital
Fund?
Answer. If that proposal is not enacted, the HUD-proposed amount is
sufficient to cover the accrual of new capital needs during fiscal year
2003. As of December 31, 2001, there were approximately $5.5 billion in
unexpended Capital grant funds that were provided to PHAs. Included
within this amount there were approximately $3.2 billion Capital grant
funds that remained unobligated by the PHAs. These balances are
significant. The Department will closely monitor obligations and
expenditures and make appropriate budget proposals.
Question. Doesn't this proposal just shift the cost of public
housing from the Public Housing Operating and Capital Funds to the
Certificate Fund?
Answer. No, the proposal does not simply shift costs to the
Certificate Fund. A different product is being funded--deteriorated
public housing with significant capital needs is being replaced with
renovated or new assisted housing. As a result, tenants will be able to
live in decent conditions in the near future.
This renovation or replacement otherwise could not be afforded for
years with the resources available under historic patterns for Public
Housing Capital Fund appropriations. At the same time, the developments
will be managed and financed on a property-by-property basis, which
should lead to more sound management practices.
project-based opt-outs
Question. I remain concerned about the Administration's continuing
emphasis on section 8 vouchers to the detriment of preserving section 8
project-based housing especially in tight rental markets. Over the last
3 years, how many projects and units have opted out of the section 8
project-based program with the tenants converting to section 8 tenant-
based assistance?
Answer. The Department is in the process of updating and revising
its systems for tracking opt-outs in its Real Estate Management System
(REMS), including a specific effort to confirm actual opt-outs from the
project-based inventory and reconciling this data with public housing
records for issuances of tenant protection vouchers for projects that
have filed an intent to opt-out. Difficulty has been experienced in
tracking these actions because project owners sometimes give formal
notice of an intent to opt-out, but are later persuaded to continue
with project-based assistance. Another issue is that opt-out data has
been combined with counts of Section 8 contracts that have been
terminated by HUD because the property fails to meet program standards.
Preliminary results, however, indicate that approximately 10,000 units
in about 230 projects were removed from the project-based inventory in
fiscal year 2001 by a decision by a property owner to opt-out of the
Section 8 project-based program.
opt-outs
Question. How many of these projects have been elderly projects or
designated for persons with disabilities?
Answer. The Department does not have data that identifies whether
projects with an elderly designation or primarily serving the disabled
are among those to have opted-out from project-based assistance,
however, it is unlikely that there are a significant number of projects
in this category. Anecdotal evidence indicates that where there are
opt-outs involving projects serving the elderly or disabled, the
availability of tenant protection vouchers generally permits residents
to remain in the project.
homeless assistance
Question. HUD continues to fund over $1 billion per year in
McKinney-Vento homeless assistance through State and local continuums
of care. These funds generally are funded through the CDBG formula
which includes no consideration of homelessness. What steps is HUD
taking to ensure accountability that these funds are being used to
assist the homeless.
Answer. The CDBG formula is only applied to $150 million of the
McKinney-Vento appropriation for allocating the Emergency Shelter Grant
program. Funds for the remaining Homeless Assistance Grants are
distributed based on competitions. HUD uses a variety of methods to
ensure that funds awarded are being used to assist homeless people. On-
site monitoring of HUD grant programs is a key responsibility of HUD's
field staff. Monitoring is conducted using established standards and
procedures, and includes interviews, examination of files, and visits
to grantee and sub-grantee sites. Written monitoring findings and
concerns are provided to the grantee, and resolution is required within
a specific time frame. Grantees are also required to submit an Annual
Progress Report for each year that funding is provided. The report
includes financial and progress information.
In the annual homeless assistance competition, all grantees,
including those applying for renewal grants, must meet application
threshold review standards that include applicant capacity, eligibility
of the homeless participants, and cost-effectiveness. Many grant awards
are conditioned, requiring the conditionally selected grantee to
clarify or provide additional information before a final award is made.
In some cases, the original award offer is reduced or withdrawn, if
program requirements are not met, or funding amounts not justified.
Question. How are these accountability requirements different from
a year ago?
Answer. Since last year, HUD has increased its efforts to further
ensure accountability. The Annual Performance Report has been
automated, and the database is currently being populated. The data will
not only enable better tracking of individual projects, but will also
generate a variety of reports which will assist HUD in developing
policies and procedures to address any specific accountability issues
demonstrated in APRs.
The application for the 2002 competition includes stronger
performance requirements for previous recipients applying for renewal
grants. In addition, all applicants must demonstrate specific actions
they have taken with regard to ensuring clients will be assisted to
obtain benefits of mainstream programs for which they are eligible. The
application also requires more budget detail to help applicants better
plan projects and request appropriate funding amounts. To address HUD's
goal of ending chronic homelessness in 10 years, applicants in the 2002
competition are asked for information that will enable us to establish
a baseline against which progress toward the goal can be measured.
emergency food and shelter program
Question. The President's Budget recommends that the Emergency Food
and Shelter program be transferred from FEMA to HUD. This has been a
very successful program at FEMA and there are significant concerns that
any transfer could reduce the effectiveness of this program. What are
the advantages to this transfer?
Answer. We agree that the Emergency Food and Shelter Program (EFSP)
has been efficiently and effectively administered and we propose to
operate it in the same fashion. Significant amounts of EFSP funds are
provided for shelter resources, often to the same entities receiving
HUD's Emergency Shelter Grants (ESG) funds and Continuum of Care
competitive funds. Many of the same activities are eligible under EFSP
and ESG. Given HUD's successful role in implementing the Continuum of
Care, it is anticipated that EFSP can be administered in a manner that
more effectively coordinates EFSP with the Continuum of Care planning
concept. However, HUD has no plan to alter the basic method of EFSP
formula allocation. Any efforts to better coordinate the programs will
be done only after careful consultation with key stakeholders in the
EFSP allocation process, local providers and program clients.
mark-to-market savings
Question. The Section 8 Mark-to-Market program was enacted to
provide a mechanism to reduce the cost of oversubsidized, expiring
section 8 contracts to market rents while preserving this housing as
affordable, low-income housing. How much section 8 funding has actually
been saved since the beginning of the program? How many projects have
been preserved with section 8 project-based contracts?
Answer. Since inception of the Mark-to-Market (M2M) program through
February 28, 2002, 1,354 properties, with a total of 105,834 units, of
affordable housing have been preserved. The M2M reviews resulted in:
--407 full debt restructurings, 32,870 units;
--270 Actions Other Than Closing (AOTC), 17,686 units. AOTC
transactions are comprised of those deals that are financially
infeasible, or where the owner refuses to complete the closing,
or where a bad owner/bad property is involved;
--572 lites (reductions in contract rents that do not require debt
restructuring), 47,932 units; and
--105 comparability reviews, 7,346 units.
Of the 1,354 properties completed as of February 28, 2002, 968
properties with 80,584 units received reduced rents. The remainder were
either still in process, have ultimately been determined to have rents
at or below market, or are not eligible for the M2M program.
In the fiscal year 2003 Budget request, approximately $135 million
in savings has been assumed in Housing Certificate Fund for fiscal year
2002.
market-to-market opt-outs
Question. How many projects have been removed from the section 8
inventory by owners who opted out of their section 8 project-based
contracts?
Answer. Since inception of the Mark-to-Market program, through
February 28, 47 owners with 2,498 total units gave notice to the Office
of Multifamily Housing Assistance Restructuring that they would opt-out
of their project-based Section 8 contracts; 34 owners, accounting for
1,382 total units, have actually done so.
preservation of assisted units
Question. For fiscal year 2001 and 2002, the VA/HUD appropriations
acts have required HUD to preserve section 8 project-based assistance
for the elderly and disabled upon foreclosure by HUD, except under
certain circumstances. How many projects have been preserved under this
requirement? How many of these projects have been disposed by HUD
without maintaining the section 8 project-based assistance?
Answer. See table below.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Preserved w/project-
Property Name of Units Location based Section 8? Date Closed Comments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bethesda Manor II............... 12 Plainview, TX...... No Property was 10/20/2000 Vacant property sold to Wayland Manor University.
vacant.
Kenilworth Park Plaza........... 77 Portland, OR....... Yes................ 11/01/2000 Sold to City of Portland.
Project Independence............ 49 Arkansas City, KS.. No Other 11/01/2000 Sold to Arkansas City. The conditions of the sale
preservation tools were agreed to by HUD before the field was aware of
used. the new statute regarding retention of project based
Section 8. However, other preservation tools were
used. All tenants were provided rental housing
vouchers, and rents were required to be maintained
as affordable for 20 years. Nearly all of the
tenants remained in residence using their vouchers.
NMARC........................... 6 Santa Fe, NM....... No Property was 01/26/2001 Vacant property. Sold to the Santa Fe Civic Housing
vacant. Authority without restrictions.
Monastery....................... 24 Way Sitka, AK...... No Other 03/30/2001 The conditions of the sale were agreed to by HUD
preservation tools before the field was aware of the new statute
used. regarding retention of project based Section 8.
However, other preservation tools were used. All
tenants were provided rental housing vouchers.
Nearly all of the tenants remained in residence
using their vouchers. Property sold to Baranof
Island Housing Authority for elderly housing.
Morningside Village............. 31 Alcester, SD....... No Other 04/30/2001 The conditions of the sale were agreed to by HUD and
preservation tools the City of Alcester before the field was aware of
used. the new statute regarding retention of project based
Section 8. However, other preservation tools were
used. All tenants were provided rental housing
vouchers, and HUD created ``voucher ready units'' by
requiring that rents cannot exceed the voucher
payment standard. Nearly all of the tenants remained
in residence using their vouchers.
Elmwood Group Home.............. 15 Ottumwa, IO........ No Property was 06/08/2001 Vacant property sold to the Area XV Multi-County
vacant. Housing Agency.
Edgewood/Eldercrest............. 147 Youngstown, OH..... No Other 07/30/2001 The conditions of the sale were agreed to by HUD and
preservation tools the City of Youngstown before the field was aware of
used. the new statute regarding retention of project based
Section 8. However, other preservation tools were
used. All tenants were provided rental housing
vouchers. Nearly all of the tenants remained in
residence using their vouchers.
J.C. Progress................... 204 Chattanooga, TN.... No Other 08/24/2001 Property was only about 50 percent occupied by
preservation tools elderly. The conditions of the sale were agreed to
used. by HUD and the City of Chattanooga before the field
was aware of the new statute regarding retention of
project based Section 8. However, other preservation
tools were used. HUD required that the property be
repaired and provided an Up Front Grant to pay for
part of the rehabilitation and conversion of the
efficiencies to one bedroom units to better meet
market demand for affordable elderly and near-
elderly housing. Occupancy is limited to the elderly
and near-elderly. All tenants were provided rental
housing vouchers, and HUD created ``voucher ready
units'' by requiring that rents cannot exceed the
voucher payment standard. Nearly all of the tenants
remained in residence using their vouchers.
Tiffin VOA...................... 20 Tiffin, OH......... No Property was 09/06/2001 Vacant property sold to Seneca County Commissioners
vacant. to be used for public purpose.
Pickwick/Royal Tower............ 233 Kansas City, MO.... No Other 09/23/2001 Majority of residents were chronically mentally ill.
preservation tools Other preservation tools were used. All tenants were
used. provided rental housing vouchers, and HUD created
``voucher ready units'' by requiring that rents
cannot exceed the voucher payment standard. Nearly
all of the tenants remained in residence using their
vouchers.
Gardner House................... 8 Gardner, MA........ Yes................ 09/27/2001 Sold to North Central Human Services, Inc.
Monadnock Workshop.............. 8 Peterborough, NH... No Property was 09/27/2001 This was a vacant 8-unit property in an old historic
vacant. property not suited for the elderly as configured.
HUD sold the property to the Contooncook Housing
Trust who plans to convert it to 3 units of
affordable housing.
Sana............................ 271 Hartford, CT....... Yes................ 02/01/2002 Sold to City of Hartford.
--------------------------------------------------------------------------------------------------------------------------------------------------------
hud assisted housing in foreclosure and in inventory
Question. For the record, I would like a list of projects by State,
including location and number of units.
Answer. See lists below.
MULTIFAMILY PROPERTIES IN FORECLOSURE AS OF 4/4/02
(Please note that most of the unsubsidized notes will be offered the next note sale)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No. of
FHA# Section of the Act Property Name Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
023-35269....................... 221D4............... EAST CANTON STREET APARTMENTS, 79 E CANTON STREET, BOSTON, MA 02118-2328............... 80
017-44076....................... 236................. ST. CHRISTOPHER APTS., 360 MAIN STREET, HARTFORD, CT 06106............................. 100
024-22007....................... 232................. SEACOAST HEALTH CENTER, 777 LAFAYETTE RD., HAMPTON, NH 03842........................... 169
024-22019....................... 232................. FAMILY LIVING ADULT CARE, 24 HALL ST., SACO, ME 04072.................................. 48
024-EH078....................... 202................. OSSIPEE HOUSE, 70 MOULTONVILLE RD., CENTER OSSIPEE, NH 03814........................... 8
016-22006....................... 232................. DESILETS NURSING HOME, 642 METACOM AVE., WARREN, RI 02885.............................. 80
016-43017....................... 232................. ROSE COTTAGE NURSING FACILITY, 151 HUNT STREET, CENTRAL FALLS, RI 02863................ 100
016-43062....................... 232................. EDMUND PLACE, 350 TAUNTON AVE., EAST PROVIDENCE, RI 02914.............................. 79
016-43071....................... 232................. COVENTRY HEALTH CENTER, BROAD STREET, COVENTRY, RI..................................... 344
012-43180....................... 232................. TAPPAN ZEE MANOR, MOUNTAINVIEW RD, NYACK, NY 10960..................................... 100
012-44159....................... 236................. PLEASANT EAST APARTMENTS, 446 E 117TH ST, NEW YORK, NY 10035-5038...................... 111
012-57114....................... 221D4............... HAROLD APTS, 437 MANHATTAN AVE., NEW YORK, NY 10026.................................... 53
012-57115....................... 221D4............... DESCHLER APARTMENTS, 1871 7TH AVE., NEW YORK, NY 10026-2800............................ 60
012-57170....................... 221D4............... PUEBLO DE MAYAGUEZ, 950 AVENUE SAINT JOHN, BRONX, NY 10455-3400........................ 76
013-35073....................... 221D4............... WASHINGTON PARK APARTMENT, 212 THIRD STREET, TROY, NY 12180............................ 34
014-00002....................... 207................. TROUT BROOK MOBILE HOME, 8 GARDNERVILLE RD., LE RAY, NY 13637.......................... 100
014-43009....................... 232................. BEECHWOOD RESTORATIVE, 900 CULVER RD., ROCHESTER, NY 14609............................. 82
014-43066....................... 232................. LORETTO-UTICA HEALTH CARE, 1445 KEMBLE STREET, UTICA, NY 13501......................... 156
014-EH182....................... 202................. ALFRED SENIOR HOUSING, 34 GLEN ST, ALFRED, NY 14802.................................... 40
035-43049....................... 232................. GREENBRIAR NURSING HOME, 191 N. EVERGREEN, WOODBURY, NJ 08096.......................... 220
052-43051....................... 232................. ANNAPOLITAN SENIOR CARE, 84 NORTH OLD MILL BOTTOM RD., ANNAPOLIS, MD 21401-9003........ 84
052-43064....................... 232................. NOBLE HOUSE NURSING HOME, 2327 NORTH CHARLES STREET, BALTIMORE, MD 21218............... 109
052-44133....................... 236................. UPLANDS A, 4625 EDMONDSON AVE, BALTIMORE, MD 21229-2554................................ 495
052-44143....................... 236................. UPLANDS B, 4625 EDMONDSON AVE, BALTIMORE, MD 21229-2554................................ 478
052-44157....................... 236................. FREEDOM APARTMENTS, 4665 FREEDOMWAY W, BALTIMORE, MD 21213-2609........................ 308
052-EH011....................... 202................. APOSTOLIC TOWERS, 201 N. WASHINGTON ST, BALTIMORE, MD 21231............................ 215
052-EH081....................... 202................. BEREA APOSTOLIC TOWERS, 1401 N. LAKEWOOD AVE, BALTIMORE, MD 21213...................... 102
034-35193....................... 221D4............... NORTH QUEEN STREET APARTMENTS, 424 N QUEEN ST, LANCASTER, PA 17603-3055................ 8
034-SH016....................... 202................. MOUNT OLIVET VILLAGE, 642 N 41ST STREET, PHILADELPHIA, PA 19104........................ 220
033-22003....................... 232................. INDEPENDENCE COURT-OAKL, 4700 FIFTH AVENUE, PITTSBURGH, PA 15213....................... 128
033-33501....................... 221D4............... CORA STREET APTS, 525 CORA ST., PITTSBURGH, PA 15208................................... 22
033-35159....................... 221D4............... RENAISSANCE APARTMENTS, 308 N TAYLOR AVE, PITTSBURGH, PA 15212-4551.................... 57
033-44015....................... 236................. BRADDEHANNA APARTMENTS, 7515 SUSQUEHANNA ST., PITTSBURGH, PA 15208..................... 45
033-44028....................... 236................. STERRETT-COLLIER APARTMENTS, 7335 HAMILTON AVE, PITTSBURGH, PA 15208-1937.............. 145
033-55008....................... 221D3............... LIBERTY PARK APARTMENTS, 6209 BROAD STREET, PITTSBURGH, PA 15206....................... 332
033-55018....................... 221D3............... WESTGATE I, 287 VILLAGE RD, PITTSBURG, PA 15206-3702................................... 206
033-55032....................... 221D3............... WESTGATE II, 287 VILLAGE RD., PITTSBURGH, PA 15205-1938................................ 230
051-22001....................... 232................. LAUREL MEADOWS NURSING HOME, RT. 1, BOX 181B, LAUREL FORK, VA 24352-9707............... 60
051-43087....................... 232................. HERITAGE HALL XIII, 400 W. STARSBURG RD., FRONT ROYAL, VA 22630........................ 60
051-43088....................... 232................. HERITAGE HALL XV, 500 W. RIO RD., CHARLOTTESVILLE, VA 22901............................ 120
051-43109....................... 232................. HERITAGE HALL XX, 633 COOK AVE., BROOKNEAL, VA 24528-3111.............................. 60
051-43110....................... 232................. HERITAGE HALL XXII, 203 HOUSTON ST., LEXINGTON, VA 24450-2415.......................... 60
051-43113....................... 232................. HERITAGE HALL XXIX, 5580 DANIEL SMITH RD., VIRGINIA BEACH, VA 23462-1104............... 90
051-43116....................... 232................. HERITAGE HALL XIV, ROUTE 5, BOX 104, GRUNDY, VA 24614-9504............................. 120
051-43135....................... 232................. VANGILDERS CARE CENTER, 1011 PENNSYLVANIA AVENUE, WINCHESTER, VA 22601................. 78
051-43154....................... 232................. DOGWOOD NORTH, 30 KINGS CREST DRIVE, STAFFORD, VA 22554................................ 48
051-44071....................... 236................. CARRINGTON GARDENS APARTMENTS, 1125 DOVE ST, RICHMOND, VA 23222-4524................... 95
000-44015....................... 236................. SAYLES PLACE HOMES, INC, 2700-07 DOUGLAS PL SE, WASHINGTON, DC 20020................... 63
000-94014....................... 207................. GOOD HOPE APARTMENTS, 1667 GOOD HOPE RD SE, WASHINGTON, DC 20020....................... 41
061-43113....................... 232................. CAMPBELL-STONE ASSISTED L, 2911 SOUTH PHARR ROAD, NW, ATLANTA, GA 30305................ 48
062-11028....................... 223F................ PINERY TOWNHOUSE APTS, 4930 PARKTOWNE WAY, MONTGOMERY, AL 36116........................ 202
062-35087....................... 221D3............... PARKSIDE APARTMENTS, 415 CUBA ST., MOBILE, AL 36603-5220............................... 48
062-44065....................... 236................. SARALAND APTS., 527 US HIGHWAY, 43 SOUTH, SARALAND, AL 36571........................... 60
062-92002....................... 207................. STONEGATE VILLAGE APTS., 1238 2ND ST., SW, DECATUR, AL 35601........................... 136
056-35137....................... 221D4............... THE PENTAGON APARTMENTS, 1919 PONCE DE LEON AVE., SANTURCE, PR 00916................... 50
054-11038....................... 207................. GREENWOOD PARK APARTMENTS, GREENWOOD PK, RT 3, TUBELLO CT, MARION, SC 29571-8040....... 32
054-35593....................... 221D4............... MAGNOLIA LANE APARTMENTS, DESTINY LANE, CONWAY, SC 29526............................... 48
054-43070....................... 232................. RIVERSIDE AT BELFAIR, 56 OAK FOREST ROAD, BLUFFTON, SC 29910........................... 101
054-43073....................... 232................. COLONY HOUSE, 1036 MAXWELL MILL, FORT MILL, SC 29715-7852.............................. 92
054-43077....................... 232................. SEVEN OAKS ASSISTED LIVING, 119 CHESTERFIELD HWY, CHERAW, SC 29520..................... 114
053-35005....................... 221D3............... THOMASVILLE CHURCH HOMES, 904 DOAK CT., THOMASVILLE, NC 27360.......................... 100
053-94014....................... 207................. FOUR SEASONS APTS, 3129 SPRING VALLEY DR., GASTONIA, NC 28052.......................... 81
063-22004....................... 232................. SOUTHLAND SUITES, RR 2 BOX 1785, MAYO, FL 32066-9201................................... 22
063-35196....................... 221D4............... WARRINGTON VILLAGE APARTMENTS, 34 PATTON DR., PENSACOLA, FL 32507-3805................. 200
066-43078....................... 232................. MUNNE CENTER AKA THE OAKS, 17250 SW 137TH AVE., MIAMI, FL 33177........................ 94
067-35331....................... 221D4............... ASHLEY CROSSINGS, 401 ROSERY ROAD EAST, LARGO, FL 33770................................ 278
067-43089....................... 232................. PALM TERRACE RESIDENT CARE, 5121 E. SERENA DRIVE, TAMPA, FL 33617...................... 73
083-35211....................... 221D4............... BEECHER HOUSE, 203 S MAIN ST., SOMERSET, KY 42501...................................... 62
083-35272....................... 221D4............... CYPRESS POINT, 1101 BURLEW BLVD., OWENSBORO, KY 42303.................................. 120
083-35345....................... 221D4............... TOWN BRANCH APARTMENTS, 221-A S HORD STREET, GRAYSON, KY 41143......................... 24
083-35367....................... 221D4............... DIXIE PARK HOMES, 219 HORD STREET, GRAYSON, KY 41143................................... 8
083-35472....................... 221D3............... KENTUCKY TOWERS, 514 S. FIFTH ST., LOUISVILLE, KY 40202................................ 275
083-35544....................... 221D4............... HAVERFORD PLACE, COLONY BLVD. & STURBRIDGE DR., GEORGETOWN, KY......................... 160
083-43087....................... 232................. SHELBY MANOR HEALTH CARE, 100 CHURCH VIEW ST., SHELBYVILLE, KY 40065................... 153
087-43046....................... 232................. VERANDA AT HAMILTON PLACE, 7429 SHALLOWFORD RD., CHATTANOOGA, TN 37421................. 60
081-15001....................... 232................. FOX ACRES, 2180 MAGNUM RD., MEMPHIS, TN 38134.......................................... 10
081-22003....................... 232................. MAPLE RIDGE MANOR, 705 LAKE ROAD, DYERSBURG, TN 38024.................................. 43
081-43021....................... 232................. FOX ACRES, 2180 MAGNUM RD., MEMPHIS, TN 38134.......................................... 10
081-55002....................... 221D3............... WATKINS MANOR APTS, 2623 N WATKINS ST, MEMPHIS, TN 38127-8500.......................... 214
071-94029....................... 223F................ CRESTVIEW VILLAGE APARTMENTS, 208 NORTH CRESTLANE DRIVE, KANKAKEE, IL 60901............ 132
072-35078....................... .................... SAINT NICHOLAS APARTMENTS, 400 E JEFFERSON STREET, SPRINGFIELD, IL 66666............... 94
046-35605....................... 221D4............... KINGS CROSSING, 4106 KINGS HIGHWAY, DAYTON, OH 45406................................... 298
046-44089....................... 236................. MORIANE APTS, 27 S LUDLOW ST, DAYTON, OH 45402-1832.................................... 110
046-44170....................... 236................. GLENCOE-AUBURN APARTMENTS, 10 VIEW CT, COLUMBUS, OH 45219-1724......................... 90
042-35195....................... 221D3............... CARTER MANOR APTS., 1012 PROSPECT, CLEVELAND, OH 44115................................. 280
042-35287....................... 221D4............... PARK LANE VILLA, 10510 PARK LANE AVE, CLEVELAND, OH 44106-0000......................... 185
042-35326....................... 221D4............... BUCYRUS ESTATES APTS., 1730 MARION RD., BUCYRUS, OH 44820.............................. 50
042-35444....................... 221D3............... THE NORTHWESTERLY, 1341 MARLOWE AVE., LAKEWOOD, OH 44107-0000.......................... 92
044-SH004....................... 202................. ROCHDALE COURT APTS, 1584 E LAFAYETTE ST, DETROIT, MI 48207-2959....................... 70
044-SH012....................... 202................. FOUR FREEDOMS HOUSE, 1600 ANTIETAM ST, DETROIT, MI 48207............................... 320
044-SH021....................... 202................. INDEPENDENCE HALL, 1935 CHENE CT., DETROIT, MI 48207................................... 216
073-11144....................... 223F................ VILLAGE PARK APTS., 2754 EAST PAULDING RD., FORT WAYNE, IN 46816....................... 484
073-44360....................... 236................. PARKSIDE TERRACE I, 2340 SUNBURST BLVD, EVANSVILLE, IN 47714-4610...................... 202
073-44457....................... 236................. PARKSIDE TERRACE II, 2340 SUNBURST BLVD, EVANSVILLE, IN 47714-4610..................... 120
075-EH251....................... 202................. MONROE MANOR, 2403 MONROE STREET, NEW HOLSTEIN, WI 53061-0000.......................... 12
092-35133....................... 221D3............... SOUTHGATE APTS. I, 3200 MAPLE AVE., SLAYTON, MN 56172-0000............................. 31
112-35015....................... 221D3............... SUNNYDALE APT., 125 SUNNYDALE ST., JACKSONVILLE, TX 75766-3388......................... 64
112-35327....................... 221D4............... PARK MANOR APTS., 2934 WEST PIONEER DRIVE, IRVING, TX 75061............................ 210
112-35380....................... 221D4............... HIGHLAND COURT APARTMENTS, 3618 WHEELER, DALLAS, TX 75209.............................. 85
112-43065....................... 232................. COUNTRY CLUB VILLAGE, 3400 NORTH COUNTRY CLUB RD., IRVING, TX 75062.................... 38
113-44065....................... 236................. SABINE TERRACE, 600 WEST SADOSA STREET, EASTLAND, TX 76448-3343........................ 70
116-35121....................... 221D4............... CUESTAS APTS., 2800 NORTH ROADRUNNER PKWY, LAS CRUCES, NM 88011........................ 104
114-35280....................... 221D4............... SATSUMA GARDENS APTS., 2008 JENKINS RD, PASADENA, TX 77506............................. 232
114-43032....................... 232................. PARK CENTRAL NURSING HOME, 425 LAKE ARTHUR DRIVE, PORT ARTHUR, TX 77642-0000........... 120
059-35229....................... 221D4............... SNAP II APTS., PO BOX 84, SHREVEPORT, LA 71161-0000.................................... 59
059-35236....................... 221D4............... GRAMBLING DEVELOPMENT, 200 EDITH ROSE LANE, GRAMBLING, LA 71254-0000................... 72
117-35127....................... 221D3............... WESTERN VILLAGE APTS., 120 N. EDWARDS STREET, HOLLIS, OK 73550......................... 48
117-35185....................... 221D4............... APACHE TRACE APARTMENTS, 1301 E HIGHWAY 3, GUYMON, OK 73942-5431....................... 144
117-43028....................... 232................. CARRIAGE INN APTS., 1300 EAST AYERS, EDMOND, OK 73034-0000............................. 94
117-EH087....................... 202................. REDBUD HOUSING, PO BOX 10, OAKS, OK 74359.............................................. 24
115-35205....................... 221D4............... LASBY PARK TERRACE APTS., 120 TERRACE DR., SAN BENITO, TX 78586-5906................... 65
115-43033....................... 232................. VILLA SERENA ALZHEIMER'S, 4455 HORIZON HILL BLVD., SAN ANTONIO, TX 78229............... 36
115-94015....................... 221D4............... CAMELOT RETIREMENT COMMUN, 2015 S. CYNTHIA AVE., MCALLEN, TX 78503-2846................ 120
074-35162....................... 221D4............... DAVENPORT MANOR APARTMENT, 7118 HILLANDALE RD, DAVENPORT, IA 52806-1049................ 100
074-44026....................... 236................. COUNTRY MANOR APTS., 1010 N. 16TH ST., CLARINDA, IA 51632-0000......................... 48
084-35252....................... 221D4............... LOVETT PLACE, 2701-03 BENTON BLVD, KANSAS CITY, KS 64128............................... 48
102-35139....................... 221D4............... MULBERRY COURT APTS., 1500 N. CEDAR ST., ABILENE, KS 67410............................. 37
102-35172....................... 221D4............... FOX RUN APTS., 206 E. MIAMI, HIAWATHA, KS 66434-0000................................... 44
102-35177....................... 221D4............... FLEMING PLACE APARTMENTS, 2914 FLEMING ST, GARDEN CITY, KS 67846-7409.................. 96
102-43036....................... 232................. MEADOWBROOK MANOR OF TOPE, 711 SW GARFIELD AVE., TOPEKA, KS 66606...................... 168
103-94006....................... 221D4............... STREHLOW TERRACE APTS., 2007 N. 18TH ST., OHAHA, NE 68110.............................. 70
085-SH006....................... 202................. COUNCIL HOUSE APTS., 300 S. GRAND BLVD., ST. LOUIS, MO 63103-2400...................... 287
091-35093....................... 221D3............... FRIENDSHIP VILLAGE, 211 S. WILSON AVE., FLANDREAU, SD 57028............................ 18
101-35167....................... 221D3............... LAMAR APARTMENTS, 708 SOUTH MULLEN, LAMAR, CO 81502.................................... 48
101-35296....................... 221D4............... ROTELLA PARK APARTMENTS, 1620 CORONADA PKWY, THORNTON, CO 80229........................ 82
105-43038....................... 232................. SERENITY RANCH ASSISTED L, 360 WEST 4200 NORTH, OAKLEY, UT 84055....................... 42
123-43042....................... 232................. PALM VALLEY REHAB. AND CA, 13575 WEST MCDOWELL RD., GOODYEAR, AZ 85338................. 155
121-44082....................... 236................. UNIVISTA APTS., 1340 TURK STREET, SAN FRANCISO, CA 94115............................... 24
121-EH065....................... 202................. HOMES NOW IN THE COMMUNITY, 1800 LINDEN STREET, OAKLAND, CA 94607...................... 10
127-35257....................... 221D4............... RIVERSIDE APTS., 1109 ARTHUR ST., ABERDEEN, WA 98520................................... 20
171-43034....................... 232................. LOGANHURST HEALTH CARE, EAST 1515 ILLINOIS AVE, SPOKANE, WA 99207...................... 45
--------
TOTAL PROJECTS............ .................... ....................................................................................... 131
TOTAL UNITS............... .................... ....................................................................................... 14,750
========
Hud-Owned Multifamily
Properties, As of 4/4/02
023-35213....................... 221D3............... FRANKLIN PARK I, 278 HUMBOLDT AVE, DORCHESTER, MA 02121-2234........................... 181
023-35214....................... 221D3............... THEROCH I, 107 ELM HILL AVE, DORCHESTER, MA 02121-2941................................. 106
023-35216....................... 221D4............... FRANKLIN PARK II, 278 HUMBOLDT AVE, DORCHESTER, MA 02121-2234.......................... 97
023-35218....................... 221D4............... THEROCH II, 129 COLUMBIA RD, DORCHESTER, MA 02121-3106................................. 109
023-35229....................... 221D4............... FIELDSTONE APTS, 887 BLUE HILL AVE, DORCHESTER, MA 02124-2902.......................... 84
023-35292....................... 221D4............... ACADEMY HOMES II, 2978 WASHINGTON ST, ROXBURY, MA 02119-1299........................... 316
023-55027....................... 221D3............... GENEVA APARTMENTS, 229 GENEVA AVE APT B, BOSTON, MA 02121-3848......................... 48
023-55110....................... 221D3............... CAMFIELD GARDENS, 115 LENOX ST, BOSTON, MA 02118-1051.................................. 102
023-55147....................... 221D3............... ROXSE HOMES, 1070 TREMONT ST, ROXBURY, MA 02120-2119................................... 389
023-99905....................... 221D3............... BLUE HILL, BLUE HILL AVE, BOSTON, MA 02121............................................. 16
023-99906....................... 221D3............... CASTLEGATE, CASTLEGATE, BOSTON, MA 02121............................................... 54
023-99907....................... 221D4............... BLUE CASTLE GATE (DEMO), BLUE CASTLEGATE STREETS, BOSTON, MA 02121..................... 40
023-99909....................... 221D3............... SONOMA, SONOMA STREET, BOSTON, MA 02121................................................ 22
023-99910....................... 221D4............... MAPLE, MAPLE STREET, BOSTON, MA 02121.................................................. 66
023-99911....................... 221D3............... SCHUYLER, SCHUYLER STREET, BOSTON, MA 02121............................................ 12
023-99913....................... 221D4............... WAUMBECK, WAUMBECK ST, BOSTON, MA 02116................................................ 32
023-99914....................... 221D3............... HUMBOLT, HUMBOLT STREET, BOSTON, MA 02121.............................................. 52
023-99915....................... 221D3............... CRAWFORD, CRAWFORD STREET, BOSTON, MA 02121............................................ 89
023-99916....................... 221D4............... REGENT, REGENT STREET, BOSTON, MA 02121................................................ 15
017-11019....................... 223F................ WILLOW STREET APTS, 26-84 WILLOW ST, 111 PUTNAM ST., NEW BRITAIN, CT 06051............. 50
016-35056....................... 221D4............... MELROSE APARTMENTS, 50 PRAIRIE AVE, PROVIDENCE, RI 02905-2437, HUD New York............ 42
012-44033....................... 236................. MEDGAR EVERS HOMES, 84 LIVINGSTON ST., BROOKLYN, NY 11201.............................. 318
012-44043....................... 236................. JOSE DE DIEGO BEEKMAN I, 324 POWERS AVE, BRONX, NY 10454-1633.......................... 103
012-44051....................... 236................. JOSE DE DIEGO BEEKMAN II, 328 BEEKMAN AVE, BRONX, NY 10454-1404........................ 142
012-44052....................... 236................. JOSE DE DIEGO BEEKMAN III, 694 E 141 ST, BRONX, NY 10454-2431.......................... 176
012-44053....................... 236................. JOSE DE DIEGO BEEKMAN IV, 597 E 138TH ST, BRONX, NY 10454-2727......................... 138
012-44054....................... 236................. JOSE DE DIEGO BEEKMAN V, 578 E 141ST ST, BRONX, NY 10454-2350.......................... 150
012-44134....................... 236................. JOSE DE DIEGO BEEKMAN VI, 570 SAINT MARYS ST, BRONX, NY 10454-1428..................... 185
012-44140....................... 236................. JOSE DE DIEGO BEEKMAN VII, 615 E 141ST ST, BRONX, NY 10454-2317........................ 165
012-44160....................... 236................. JOSE DE DIEGO BEEKMAN V III, 590 OAK TER, BRONX, NY 10454-1408......................... 172
012-55183....................... 221D3............... GATES AVENUE HOUSING, 650-700 GATES AVE, BROOKLYN, NY 11221-1701....................... 163
012-57150....................... 221D4............... EVENING STAR, 277 GATES AVENUE, BROOKLYN, NY 11238..................................... 35
012-HH002....................... 202................. BRONX INDEPENDENT LIVING, 1310 MORRIS AVE, BRONX, NY 10451............................. 21
031-94002....................... 223F................ BRICK TOWERS, 685 MARTIN LUTHER KING JR BLVD, NEWARK, NJ 07102-1006.................... 320
HUD Baltimore
052-35332....................... 221D4............... KENSETT HOUSE, 1700 EUTAW PL., BALTIMORE, MD 21217..................................... 24
052-35471....................... 221D3............... SCHOOL 181, 1645 N CALHOUN ST, BALTIMORE, MD 21217-2800................................ 100
HUD Philadelphia
034-35175....................... 221D4............... MACLAY STREET I APARTMENT, 501 MACLAY STREET, HARRISBURG, PA 17110..................... 129
034-35211....................... 223F................ MACLAY STREET II APARTMENT, 428 PEFFER STREET, HARRISBURG, PA 17102.................... 172
HUD Washington DC
000-44123....................... 236................. CAPITOL VIEW PLAZA, 5929 E CAPITOL ST SE STE 104, WASHINGTON, DC 20019-7237............ 309
HUD Jacksonville
066-R4071....................... 236................. HOLIDAY LAKES APARTMENTS, 973 N POWERLINE RD, POMPANO BEACH, FL 33069-2305............. 208
HUD Indianapolis
073-35475....................... 221D4............... ORCHARD PARK APTS, 3102 BALTIMORE AVE, INDIANAPOLIS, IN 46218-2059..................... 94
HUD New Orleans
064-35040....................... 221D4............... PECAN VILLA, 220 MARGARET ST, BREAUX BRIDGE, LA 70517-5942............................. 103
HUD St. Louis
085-58505....................... 236................. JVL HOUSING CORP PACKAGE, 2754 BACON ST, SAINT LOUIS, MO 63106-1099.................... 56
085-58508....................... 236................. JVL#14, 2754 BACON ST, SAINT LOUIS, MO 63106-1099...................................... 65
--------
TOTAL PROJECTS............ .................... ....................................................................................... 44
TOTAL UNITS............... .................... ....................................................................................... 5,270
--------------------------------------------------------------------------------------------------------------------------------------------------------
native american housing block grants fund
Question. The Native American Housing Block Grant fund has been
largely flat funded at some $650 million since its inception. How many
low-income units have been preserved with these funds?
Answer. On average, during the 5 years that funding has been
appropriated for the Native American Housing Block Grant (NAHBG)
program authorized by the Native American Housing Assistance and Self-
Determination Act of 1996, as amended (NAHASDA), Indian tribes or their
tribally designated housing entities (TDHE) have provided assistance
designed to preserve the viability of 77,838 units each fiscal year.
The unit count includes moderate or substantial rehabilitation, and
modernization and operating assistance related to units currently in
management. It does not include other eligible affordable housing
activities under the NAHBG, such as down payment and buy down
assistance, minor rehabilitation under $5,000, housing services,
housing management services, crime prevention and safety, and model
activities. The total does include Section 8 type programs operated by
a tribe or TDHE. Figures are derived from Formula Current Assisted
Stock (FCAS) data used to determine the FCAS allocation portion of the
NAHBG formula.
Question. How many new units are created each year with these
funds?
Answer. Using 4 years of Native American Indian Housing Block Grant
(NAHBG) funding (fiscal year 1998 through fiscal year 2001), on
average, 2,149 units have been created each year. Fiscal year 2002
figures are incomplete as of this date. Data are derived from Annual
Performance Reports and Indian Housing Plans, and in one instance, an
Area Office of Native American Housing Programs (ONAP) in-house data
report. In most instances, figures reflect dwelling units started and
completed. Figures are reliable to the extent those reports contain
accurate information.
Figures are affected by the transition from the way in which
housing development funds were awarded competitively under the United
States Housing Act of 1937, and the formula block grant allocation
method under the NAHBG authorized by the Native American Housing
Assistance and Self-Determination Act of 1996, as amended. Numbers do
not reflect ``phased projects,'' where it may be necessary for a tribe
or tribally designated housing entity (TDHE) to complete several pre-
construction steps, such as acquisition of land and development of
infrastructure prior to actual construction of dwelling units. Phased
pre-construction activities are necessary in most areas of Indian
Country, but somewhat more common in the East, the Midwest and the
Northwest, less common in the Plains States. Alaska's phased
construction is more the result of limited weather-related building
seasons, materials acquisition challenges and smaller project sizes.
hope vi
Question. The Public Housing HOPE VI program is scheduled to sunset
at the end of fiscal year 2002. This program has been tremendously
valuable in revitalizing both distressed public housing and distressed
communities. Is the Administration going to seek an extension of this
program?
Answer. Yes, the Department submitted a reauthorization proposal.
Question. What is the cost of this program per unit?
Answer. The cost per unit of this program is $161,755. This amount
represents the amount budgeted from all sources, such as HOPE VI funds,
leveraged funds, and funding from other sources, as well as the hard
and soft construction costs and supportive services. The sum is based
on the number of units planned for participating in the HOPE VI
program. This information is based on the HOPE VI Quarterly Report for
the quarter ending December 31, 2001.
Question. Please provide a breakdown of costs for all projects by
unit with the soft costs identified as a separate breakout?
Answer. Below is the breakdown of costs for all HOPE VI projects.
Which is based on data from the HOPE VI Quarterly Report for the
quarter ending December 31, 2001. Total costs represents the amount
budgeted from all sources. Number of units represents all units planned
(ACC and non-ACC as well as rental and homeownership).
All HOPE VI UNITS
----------------------------------------------------------------------------------------------------------------
Housing-Related
Costs Soft Costs Total
----------------------------------------------------------------------------------------------------------------
Total Costs............................................ $8,501,556,044 $3,159,331,262 $11,660,887,306
Number of Units........................................ ................. 72,090 .................
Cost per Unit.......................................... $117,930 $43,825 $161,755
----------------------------------------------------------------------------------------------------------------
Question. Please identify the reforms that should be considered
before additional funds are appropriated?
Answer. The Department has requested the reauthorization of HOPE
VI. HUD is currently finalizing proposals for program reforms and
believes that they are best discussed in the context of reauthorization
legislation. At the request of the Appropriations Committees, the
Department submitted a report on the HOPE VI programs on June 14, 2002.
The report describes the lessons that have been learned during the
first 10 years of the program's operation.
lack of affordable housing
Question. There is a lack of affordable housing in many communities
throughout the country, especially for extremely low-income families
(those at or below 30 percent of median income). Vouchers do not work
well in these communities and housing is too expensive to build to
assist many of these low-income families. How do address this
production problem, especially since tax credit production does not
reach extremely low-income families?
Answer. It is true that many Americans cannot afford the costs of
rental housing and that affordability problems are most prevalent among
extremely low-income families. The Department does not agree, however,
that ``vouchers do not work well in these communities.'' A recent HUD
study found that in 2000, roughly 7 out of 10 families who received
vouchers in metropolitan areas nationwide succeeded in using them.
Vouchers that are not used by the initial recipients are re-issued to
other families, and most of these families are successful.
With respect to the production of new rental housing, despite
overall Federal budget limitations due to the war against terror and
the weakened economy, HUD's fiscal year 2003 budget seeks to expand the
number of households that can afford the costs of rental housing.
--HUD is requesting 34,000 additional housing vouchers--most of which
will be used to assist extremely low-income families.
--HUD is proposing a $74 million increase in HOME, in addition to the
$200 million proposed for the American Dream Downpayment Fund.
--HUD continues its strong commitment to Section 202 for the elderly
and Section 811 for the disabled.
--HUD is adding $15 million to the Housing Opportunities for Persons
with AIDS program--raising it from $277 million to $292
million.
Last year, HUD raised the loan limits for FHA multifamily
insurance, a step that has led to a substantial increase in volume in
that program. HUD is also reducing the mortgage insurance premium from
80 basis points to 57 basis points, effective in October. Finally, it
is important to note that in recent years, Congress has increased the
Low-Income Housing Tax Credit by 40 percent and raised the caps on tax-
exempt bond authority.
Taken together, these changes will have a significant impact in
expanding the availability of affordable rental housing.
With respect to serving extremely low-income families, it is
important to consider that housing vouchers can be combined with
existing production programs to make units affordable to extremely low-
income families. The Department would be happy to discuss how to
improve the linkages of these various programs.
d.c. sfpd fraud and abuse
Question. There have been a number of recent news stories about a
church-sponsored group in the D.C area called the Church Association
for Community Service which was identified as defrauding a HUD program
whereby nonprofits rehabilitate and resell HUD housing. In this case,
the nonprofit used a private entity to rehabilitate the housing and
made some $100 thousand on average per house in violation of the rules.
The news stories also indicated that this group did not qualify to
participate in the program absent broad waivers by HUD under the last
Administration. How big a problem is this type of fraud and what steps
has HUD taken to ensure accountability of HUD's nonprofit partners in
these types of programs?
Answer. On April 5, 2002, the Department announced that it would be
conducting a full review of the Asset Control Area (ACA) program, and
that during the review period, existing ACA agreements would be allowed
to expire. In part, this step was taken in response to the concerns
raised above and raised by HUD's Inspector General in a report issued
in February 2002. Two key components of this program review will be to
determine if any additional fraud has taken place within the program,
and what controls the Department must implement to prevent fraudulent
activity.
hud integrated information processing service (hiips)
Question. HUD recently announced a re-competition of its HUD
Integrated Information Processing Service (HIIPS) contract. This
contract is key to HUD implementing a comprehensive IT system to track
HUD programs and funding. When will this contract be awarded and when
will HUD have a comprehensive IT system in place to track all HUD
funding and programs?
Answer. The service that will be the follow-on contract to HIIPS
has been named the HUD Information Technology Service (HITS). HITS will
be a 10-year IT infrastructure contract. The HITS contract is not a
systems development contract and is not pivotal in the development of a
system to track HUD programs and funding.
The HITS contract is scheduled for award in November 2002.
Implementation of the HITS contract is not directly related to a system
to track HUD programs and funding.
Question. What are the overall expected costs for full
implementation?
Answer. The existing HIIPS contract will transition to the next
contract, HITS. There is a transition cost associated with the
migration from HIIPS to HITS. The transition cost is considered source
selection information and since this is an active procurement, Pursuant
to the Official Federal Procurement Policies Act, 41 U.S.C. Section
423, HUD employees may not disclose contractor proposal or source
selection information.
Question. Please describe what the IT system will do when complete?
Answer. HITS includes all of the supplies and services required to
support HUD's Information Technology (IT) infrastructure. It includes:
Hardware Maintenance, Repair, Upgrade and Support
Data Storage and Retrieval
Database Management
Facilities Management
Telecommunications of Data and Video
Software Support (For Systems Software), Help Desk Operations for
all Commercial off the Shelf (COTS) and HUD Unique Software
Electronic Data Interchange (EDI)
Configuration Management
Technology Assessment
Integration & Test Integration
Test Center Resources
IT Accessibility Support
Training
Enterprise Engineering Document Library Services
Nationwide IT including Telecommunications Disaster Recovery
fha multifamily premium reduction
Question. HUD has proposed to reduce the mortgage insurance
premiums for most of its FHA Multifamily Mortgage Insurance programs.
When would these reductions go into effect and how many additional
units does HUD anticipate will be funded under this change?
Answer. The Department will soon publish a Notice in the Federal
Register implementing the decreases in mortgage insurance premiums that
will go into effect for FHA Firm Commitments issued on or after October
1, 2002. The Department has not estimated any potential unit increases
in FHA commitments attributable to the MIP decrease.
multifamily accelerated processing
Question. In addition, I have concerns that FHA's Multifamily
Accelerated Processing (MAP) does not have adequate protections against
default since the owner/lender essentially self-certifies the
underwriting. How does HUD protect against unreasonable risk of
default?
Answer. MAP does provide adequate protections against unreasonable
risk of default through the HUD staff (architecture and cost,
appraisal, mortgage credit) pre-commitment review of the lender's
underwriting package. The appraisal is the key element of multifamily
transactions and HUD appraisal staff are required to conduct a field
review of the property and the comparable rental properties which
support the proposed rental estimates. The HUD technical staff can
recommend modifications or rejection of the application if the
underwriting conclusions are not supportable. The HUD staff
recommendation must specifically address major issues like the adequacy
of the initial rent-up (operating deficit), escrow for new
construction/substantial rehabilitation transactions, the adequacy of
the reserve for replacement for existing transactions and any
environmental concerns. The FHA supervisor in the field office who
makes the decision on issuing a commitment has clear authority in the
MAP Guide to modify or reject the lender's underwriting package. MAP
has freed HUD staff from preparing much of the multifamily paperwork
and allowed staff to concentrate their review on the essential parts
and risk of the proposed transaction.
fha default rate
Question. I am concerned that FHA single family mortgage insurance
tends to take the highest risk of default despite currently exceeding
actuarial requirements. What is the current rate of default on FHA
single family mortgage insurance?
Answer. As of the quarter ending December 31, 2001, the 90-day
default rate, including loans in foreclosure, was 4.60 percent of all
FHA loans in force.
default rate for conventional home mortgages
Question. How does this compare to the private market?
Answer. Using comparable data compiled by the Mortgage Bankers
Association of America, the 90-day default rate for conventional
mortgages, including loans in foreclosure, was 1.11 percent as of the
quarter ending December 31, 2001.
mmi reserves
Question. At what point does a downturn in the economy put the
Mutual Mortgage Insurance Fund at risk of failing to meet its actuarial
floor?
Answer. As of the end of fiscal year 2001, the Actuarial Review of
Mutual Mortgage Insurance (MMI) Fund estimated the financial reserves
of the Fund at approximately $18.5 billion, yielding a capital ratio of
3.75 percent. Based on estimates of MMI activity for fiscal year 2002,
the estimate of reserves was projected to increase to $22.5 billion by
the end of the fiscal year, with a capital ratio of 4.24 percent.
Actual program volume through the first half of this fiscal year
indicates substantially increased performance over that projected in
the Actuarial Review. Alternative economic scenarios analyzed in both
the Actuarial Review and by the General Accounting Office indicate that
it is very unlikely that this substantial reserve would be depleted to
the extent of dropping below the currently mandated 2 percent capital
ratio established in the Cranston-Gonzalez National Affordable Housing
Act of 1990, however the prolonged and adverse economic circumstances
that would yield such a result cannot be eliminated as a possibility.
601 program
Question. What is the status of HUD's implementation of the single
family property disposition program--more specifically, the asset
control areas or ACAs? The 1998 property disposition legislation
directed HUD to sell these properties to local governments and
qualified nonprofits at a price that allows their adequate
rehabilitation and resale to low-income homebuyers, without the need
for additional Federal subsidies.
Answer. During the Accelerated Claims Disposition (Section 601)
program demonstration phase, the initiative will have a limited scope
and operate only in certain regions of the country. Further, in those
16 communities that have signed Asset Control Area (ACA) agreements,
properties in those revitalization areas will be excluded from the
Section 601 Demonstration, even during the ACA program review period.
In the initial demonstration phase of the Accelerated Claims
Disposition program, the Department wants to learn if the profit-
motivated Joint Venture Partner will team with high capacity nonprofit
organizations in carrying out loss mitigation and asset disposition on
notes in impacted revitalization areas to meet its recovery objectives.
The Department wants to be able to evaluate and report conclusively at
the end of the demonstration if the objectives of operationalizing the
claim processing, increasing recoveries to the FHA fund and achieving
budget savings have been addressed. The Department, upon publishing
Regulations, will consider allowing nonprofits to purchase mortgages in
the future.
single family property disposition holding costs
Question. Also, HUD is proposing to block sell many of the
foreclosed FHA single family properties and get HUD primarily out of
the business of selling individual houses. What are the current costs
for HUD to hold foreclosed FHA houses, including the per unit cost of
management and rehabilitation. This cost breakout should include the
costs associated with HUD staff and overhead as well as the per unit
cost for the use of management companies, including all associated
costs.
Answer. Daily per unit holding costs equal $36.75. This includes
$4.00 for taxes, $30.84 for property management and marketing, $.63 for
lost interest, and $1.28 for HUD staff costs. (This assumes 30,000 on-
hand properties and 125 HUD staff. Management & marketing costs include
actual management fees, maintenance expenses, and the costs for limited
repairs completed to address health and safety concerns.)
puerto rico housing authority
Question. What is the status of funding for PRPHA?
Answer. Under the operating fund the Puerto Rico Housing Authority
has received $73,822,415 and is scheduled to receive an additional
$18,948,123 for a total of $92,770,538 for its fiscal year ending June
30, 2002.
per unit amount of operating subsidy for puerto rico public housing
authority
Question. How much funding does PRPHA receive per unit?
Answer. Under the Operating Fund, the Puerto Rico Housing Authority
will receive a subsidy of $1,652 per unit for its fiscal year ending
June 30, 2002.
comparison of per unit amount of operating subsidy
Question. How does this compare to the funding received 3 years ago
per unit and how does it compare to the funding received per unit by
other PHAs such as Atlanta, New York City, Chicago and Los Angeles?
Answer. The data below shows a comparison of annual per unit
amounts for the Public Housing Authorities (PHAs) in question for
operating subsidies received over a 3-year period based on the PHAs'
fiscal years:
Fiscal Year Per Unit Cost
PRPHA:
6/30/2002.....................................................$1,652
6/30/2001..................................................... 1,433
6/30/2000..................................................... 1,987
New York:
12/31/2001.................................................... 4,687
12/31/2000.................................................... 4,265
12/31/1999.................................................... 3,724
Chicago:
12/31/2001.................................................... 5,863
12/31/2000.................................................... 5,898
12/31/1999.................................................... 5,277
Los Angeles:
12/31/2001.................................................... 3,507
12/31/2000.................................................... 3,529
12/31/1999.................................................... 3,244
Atlanta:
6/30/2002..................................................... 4,031
6/30/2001..................................................... 2,813
6/30/2000..................................................... 3,191
As reflected by the above data, the per unit amount of subsidy
received by an individual PHA can vary from year-to-year and there can
be a significant variation in funding levels between PHAs. For its
December 31, 2001 fiscal year, the Chicago Housing Authority received
about 3.5 times the average funding per unit than the Puerto Rico
Public Housing Authorities (PRPHA's) received for its June 30, 2002
fiscal year and 1.7 times the December 31, 2001 fiscal year average
funding per unit than the Los Angeles PHA. Using this gross type of
average, however, masks the impact of several important factors that
determine operating subsidy eligibility and would help explain why
Chicago receives more funding than the Los Angeles PHA or the PRPHA.
The amount of operating subsidy received by any particular PHA is
determined by a formula that takes into account factors such as routine
operating expenses, utility costs, add-ons permitted by HUD, audit
expenses, and rents charged to residents. For example, heating costs
are a major expense to Chicago, but less of an expense for the PRPHA.
Another example where costs vary by PHAs is that of routine operating
costs, which is represented by the Allowable Expense Level (AEL). The
AEL is a formula factor intended to represent the costs of operating a
well-managed PHA. For the PRPHA, routine operating costs are low, but
these costs are relatively higher for Chicago. Finally, in terms of
comparing per unit amounts of operating subsidies, Chicago has a
significant number of units approved for demolition by HUD and, as a
result, receives operating subsidy for phase down or transition funding
as well as funds to preserve and protect the units until they are
demolished. On the other hand, the Puerto Rico PHA is not undertaking
major demolition actions.
______
Questions Submitted by Senator Larry E. Craig
rural housing
Question. I remain concerned over HUD's decision to not request
funds for the rural Housing and Development Program. I am well aware
other mechanisms exist within HUD to fund development block grants and
sweat-equity programs; however, while that is encouraging, I find that
HUD's rationale in shifting responsibility for the Rural Housing and
Development Program onto the USDA, is questionable. What assurances are
there that this is not a cut or elimination of services?
Answer. The Rural Housing and Economic Development Program has a
current portfolio of grantees that include rural nonprofit
organizations, community development corporations, Indian tribes, State
Housing Finance agencies, and State economic development and/or
community development agencies. HUD has grant agreements for up to 36
months with these entities to carryout the projects until they are
completed, based on the organization's project timelines. The current
projects will be administered by HUD through fiscal year 2003. The
Administration's proposal to eliminate HUD's program reflects the much
greater assistance provided by the U.S. Department of Agriculture and
other agencies and presumes that there will not be a meaningful change
in the overall Federal assistance to rural America.
Question. What assurances can you give to me that at least the same
level of services will be delivered, and that our government's helping
hand in rural America would be made more effective by this change?
Answer. The U.S. Department of Agriculture (USDA) continues to
manage a substantial portfolio of rural housing grant programs and
economic development grant programs, the service delivery will allow
for a continuation of services provided to rural constituents. USDA's
current rural development portfolio greatly exceeds HUD's Rural Housing
and Economic Development Program in terms of programs and services from
budgets to staffing.
housing counseling program
Question. I've noted the Administration's proposal to restore
funding for the Housing Counseling Program, which helps teach first-
time home buyers with modest incomes about often-complicated things
like mortgages, inspections, and predatory lending practices. The
previous Administration cut this funding, and also succeeded in almost
eliminating participation by State housing finance agencies (HFAs).
This made no sense, because State HFAs have the expertise and resources
to offer new home buyers the broadest possible range of services.
In Idaho, for example, our Idaho HFA is launching a program to help
overcome language barriers and reach out to the Hispanic population
through its homebuyer education program.
Am I correct in assuming the Administration proposal for increased
funding reflects your plans to fully re-engage State HFAs in the
Counseling program?
Answer. Most Housing Finance Agencies (HFAs) that operate good
programs, such as the Idaho HFA, should receive substantial awards with
the funding proposed for fiscal year 2003. The overall funding for the
Housing Counseling program was increased and then cut significantly
between fiscal years 1998 and 2000. An increase from $15 million in
fiscal year 1997 to $20 million in fiscal year 1998 permitted HUD to
seek out and fund additional organizations providing counseling
services. However, a cut back to $15 million in fiscal year 2000 forced
HUD to make a decision regarding how to spread substantially less money
among the same types of groups.
Experience clearly demonstrated to HUD that many State HFAs were
not able to provide counseling services directly nor suballocate the
funds to other local groups. In fact, over the last few years, HUD has
recaptured hundreds of thousands of unspent funds from State HFAs. This
funding was reserved in the names of several HFAs for an entire year-
long grant period, before HUD could recover it; clearly, it could have
been well-used by other counseling agencies to serve many hundreds of
clients in need. For this reason, HUD plans only a minimal increase in
the amount of funding available for State HFAs for fiscal year 2003.
However, HUD's decision to increase funding for this category only
minimally should not affect high-performing HFAs such as Idaho's.
equal opportunity and access to housing
Question. In the President's basic budget document, one of HUD's
main strategic objectives was to Ensure equal opportunity and access to
housing, in other words, promote fair housing. HUD's own Budget
Summary, spent just over a page describing HUD's programs to enforce
fair housing laws.
I commend the Administration's emphasis in this year's budget of
assessing performance and effectiveness. However, I didn't see
assessments in the area of fair housing.
Using the Administration's red-light, green-light approach, how
would you assess HUD's effectiveness in its strategic objective to
ensure equal opportunity and access to housing?
I realize, of course that you have inherited programs that
previously were not subject to performance measurement and that this
Administration is still implementing its policy of conducting such
reviews. HUD's programs include both education and enforcement
components. I think we all agree that an effective fair housing agenda
includes both, adequate education and fair enforcement. How would you
assess HUD's effectiveness in each of these areas?
Answer. HUD has made significant progress in accomplishing the
Department's strategic objective to ensure equal opportunity and access
to housing, but at the moment we would still have to give ourselves a
red light in this area. While our enforcement efforts have contributed
to the reduction of discrimination in America, significant problems
persist. The effectiveness of HUD's enforcement efforts has been
historically impaired by the excessive length of time it has taken to
resolve discrimination complaints. Also, while knowledge of what
constitutes illegal discrimination under the fair housing laws is
generally high, research indicates that the public requires more
education about some prohibited practices.
HUD is completing several studies that provide quantitative
measures of the level of discrimination against different groups in our
society. The preliminary findings of the Department's nationwide
Housing Discrimination Study (HDS), to be released shortly, show that
the Nation has made progress on some measures of discrimination against
African Americans and Hispanics over the last 10 years but some serious
problems remain. Moreover, an examination of the actual instances of
discrimination reveals that many real estate professionals blatantly
disregard the law. For example, in many cases agents openly confess
their racial prejudices while steering prospective renters and
homebuyers to certain neighborhoods.
In the area of mortgage lending, HUD will release a study this
month that shows that generally Blacks and Hispanics in Chicago and Los
Angeles are treated no worse than whites when they inquire about
financing options. However, the data also indicates that Blacks and
Hispanics are more likely to be quoted worse terms and conditions on
loans than equally-qualified or less-qualified whites. For example, in
Chicago, Whites were offered higher loan amounts than similarly-
qualified Hispanics 51 percent of the time, while Hispanics were
offered higher loans 19 percent of the time. In Los Angeles, the study
showed that Blacks who were clearly qualified for conventional loans
were steered to FHA loan products 31 percent of the time while Whites
with comparable profiles were steered to FHA 8 percent of the time.
The Department's research and other activities also reveal
widespread non-compliance with the fair housing laws that require that
new multifamily buildings be accessible to persons with disabilities.
The Department will soon release a study that provides quantitative
measures of the extent of such non-compliance. In many cases, the
violations involve the failure to provide a basic level of
accessibility (no ramped access, front doorways are too narrow, lack of
access to common areas). HUD has made substantial progress in
ameliorating these problems through its enforcement efforts and 14
years of education, but substantial non-compliance remains.
HUD has taken several steps to improve the effectiveness of its
fair housing enforcement. The Bush Administration has made it a
priority that fair housing complaints be processed in a timely manner.
The Fair Housing Act requires that complaints be resolved in 100 days.
Since President Bush took office, HUD has reduced by 29 percent the
number of complaints remaining unresolved past 100 days. HUD
accomplished this reduction through the commitment of additional staff
and resources.
Second, HUD is focusing more attention on particular communities
and enforcement needs that weren't adequately addressed in the past.
HUD has identified recent immigrants and persons living in Southwest
Border ``colonias'' as populations who face significant barriers in the
housing market, and have been traditionally underserved by HUD-funded
fair housing programs. HUD's fiscal year 2002 Notice of Funding
Availability (NOFA) and its fiscal year 2003 Budget emphasize fair
housing projects that provide greater assistance to these communities.
The NOFA also recognizes the need to be responsive to circumstances
when they first arise, emphasizing projects that address national
origin and religion discrimination that is on the rise since the
September 11 terrorist attacks. HUD has also entered into an
Interagency Agreement with the Department of State in furtherance of
Executive Order 13166, ``Improving Access to Services for Persons with
Limited English Proficiency,'' to translate FHEO publications into
Arabic, Cambodian, Chinese, Korean and Vietnamese.
As the Administration has become aware of enforcement needs
requiring greater attention, HUD has committed additional resources to
address them. For example, HUD has proposed reprogramming $1.95 million
of fiscal year 2001 FHIP funds, originally planned for the third phase
of HDS, to respond to immediate enforcement needs, including addressing
the kind of discrimination HDS is uncovering. The reprogrammed funds
will also support projects to combat lending discrimination, including
predatory lending; post-terrorism discrimination; and fair housing
issues in the colonias.
HUD continues to aggressively enforce the fair housing laws on
behalf of people with disabilities, seeking voluntary compliance where
possible. As people with disabilities are disproportionately
represented among low-income persons, HUD is responding to the lack of
accessible housing units in public and assisted housing. HUD has
recently signed Voluntary Compliance Agreements with the District of
Columbia and the Boston Housing Authorities, which collectively will
create more than a thousand new units of accessible housing. HUD has
also developed a Web-based system that will assist its field offices in
their review of non-compliant FHA-insured properties and in targeting
their enforcement efforts. In addition, as the IRS-administered low-
income housing tax credit program currently produces more units of
affordable housing than any other Federal program, HUD has joined
forces with the Department of Justice and the IRS to notify tax-credit
beneficiaries that failure to comply with the law places their tax
credits in jeopardy.
Finally, HUD is moving toward more effective enforcement by making
sure more States, localities, and private organizations have the tools
and the resources they need to tackle the specific fair housing
problems in their communities. HUD now reimburses 95 States and
localities for their enforcement of substantially equivalent laws under
the Fair Housing Assistance Program (FHAP). This includes 33 States
plus the District of Columbia. Under FHIP this past year, HUD awarded a
record-number, 90 grants to a diverse range of fair housing groups
throughout the country. The Department is also providing a more
continuous funding stream for FHIP enforcement projects by eliminating
a policy that made successful applicants ineligible for new enforcement
grants the following year.
In the area of education, HUD's soon-to-be-released Fair Housing
Act Awareness study indicates that while most people understand the
most commonly discussed provisions of the Fair Housing Act, a majority
are not aware of the full scope of the Act's prohibitions. Moreover, a
significant minority of people remain ignorant even of the law's most
basic provisions.
The Department carries out much of its education activities through
FHIP, for which the 2002 NOFA provides $6 million in grants (grantees
may also use a portion of enforcement and new-organization grants for
education purposes). A few representative successes include: the
education project of the Colorado Coalition for the Homeless (CCH), who
formed a statewide Fair Housing Task Force, which consists of rank-and-
file citizens and State, local, and Federal Government representatives,
delivering fair housing services to many communities throughout the
State; Citizen Action of New Jersey's ``train-the-trainers'' sessions,
whereby grassroots and faith-based organizations replicate trainings on
predatory lending and other emerging fair housing issues to fulfill the
needs of their individual communities; and the work of the State of
Kentucky Fair Housing Commission, who have provided statewide
translators and disseminated Spanish-language materials to educate
Kentucky's growing Hispanic population of their fair housing rights.
This year's FHIP NOFA provides funding for a national Predatory
Lending Awareness campaign and greater outreach to underserved
populations, including those persons living in the colonias. The NOFA
also recognizes the historic role faith-based organizations have played
in educating people on their civil rights by providing extra points for
applicants who are either faith-based or grassroots organizations, or
partnered with such organizations. Over the years, the Department has
undertaken several education and outreach initiatives to ensure greater
access to housing for people with disabilities. This has involved
outreach to housing industry groups and to advocates. The Department
continues to build on these efforts. Not only has HUD reprogramming
proposed $1.7 million in Fair Housing Initiatives Program funds to
continue a project that provides training and technical assistance in a
manner that the housing industry advises works best for them, but HUD
also has provided nearly $1 million to the International Codes Council,
who are actively working with the National Association of Homebuilders
and others to encourage States and localities to incorporate
accessibility features into their building codes. This latter effort
will help address these matters upfront, when builders seek permits.
The Department believes that its retooled, more responsive
enforcement program, combined with enhanced education and outreach
projects, will bring the fair housing program closer to green-light
status in the future.
fair housing initiatives program
Question. In your proposed budget, how much is provided for each
fair housing component education and enforcement?
Answer. HUD's fiscal year 2002 budget includes $6,000,000 to fund
the Fair Housing Initiatives (FHIP) Program education and outreach
activities; $12,150,000 for private enforcement activities; and
$2,100,000 to support the fair housing organizations initiative. To
make additional funds available for education and outreach, HUD allows
grantees to allocate a percentage of fair housing organization grants
and private enforcement grants for these activities.
______
Questions Submitted by Senator Pete V. Domenici
community development block grants
Question. Secretary Martinez, according to the latest CBO estimate
of the President's budget the funding level for the CDBG program drops
about $300 million from its 2002 level after you take out the $2.0
billion the program received in the Emergency Response Fund.
Mr. Secretary could you please justify this cut to what many
consider to be an immensely important program?
Answer. The CDBG budget for fiscal year 2003 is a reduction from
its 2002 level because it does not request funding for several set-
aside programs. The request for the CDBG formula grants represents a 2
percent increase of $95 million over 2002.
Question. Mr. Secretary, the President's budget briefly discusses a
legislative proposal that would reduce the number of grants made to the
wealthiest 1 percent of eligible communities. The hope here, obviously,
is to allocate more funds to those who need it the most.
Could you please give this committee a bit more detail on this
legislative proposal and the Department's rationale behind this
proposal?
Answer. The Department's proposed budget for fiscal year 2003
requests $4.436 billion in budget authority for the formula CDBG
program to address locally identified community and economic
development needs. Although the CDBG program allocates funds by formula
in a way that targets most funds to our neediest communities, the
current formula distribution of these funds also provides grants to
higher-income communities. Because of the great disparity in per capita
income among our grantees, the budget proposal seeks to re-evaluate the
method of allocating the limited resources of the CDBG program.
A legislative change has been proposed for fiscal year 2003 to
reduce, by 50 percent, the amount of the grant to the wealthiest one
percent of eligible grantee communities. The wealthiest communities
would be defined as those with per capita income equal to, or greater
than, two times the national average. However, it must be noted that
this proposed legislative change is intended to further target limited
CDBG funds to the neediest communities. If this proposal is enacted,
the Department will use data on per capita income from the 2000 Census
to identify the communities whose funding would be reduced.
The funds captured by the 50 percent reduction would become
available to all the other entitlement communities with lower per
capita incomes and would not directly fund the Colonias Gateway
Initiative. However, the savings achieved by this movement of funds to
more needy communities would create room in HUD's overall budget to
provide resources for the Colonias Gateway Initiative, which is
designed to serve some of the poorest communities in the Nation.
The Department does not consider this a new formula for CDBG. The
data from the 2000 census needed to do a comprehensive analysis of the
CDBG formula should be available this fall. We expect to do a study and
present it to Congress for their consideration next spring so that
consideration could be made for the 2004 allocation of funds. Rather
than wait for the process and a full examination of the formula, we
choose to propose this adjustment to move a limited amount of funds
from very wealthy communities.
Question. Also can you give us a rough estimate of the percentage,
or even better, a dollar value of the funding that went to these
wealthier communities as you define them?
Answer. Provided is a list of those high-income entitlement
communities that exceed 200 percent of the Per Capita Income (PCI)
national average based on 1990 census data and their 2002 CDBG
allocations. This list, however, is only illustrative because the
proposal would be based on 2000 census data, which will not be
available until the spring. The list of the communities that would be
affected based on 1990 census data is:
------------------------------------------------------------------------
Per capita
Income as
a multiple Fiscal year
Community of 2002 CDBG
National funds
Average
------------------------------------------------------------------------
Greenwich, CT............................... 3.2 $1,157,000
Newport Beach, CA........................... 3.2 490,000
Lower Marion, PA............................ 2.9 1,407,000
Naples, FL.................................. 2.9 149,000
Palo Alto, CA............................... 2.3 808,000
Westchester County, NY...................... 2.1 7,004,000
Santa Monica, CA............................ 2.0 1,787,000
Brookline, MA............................... 2.0 1,872,000
Newton, MA.................................. 2.0 2,663,000
------------------------------------------------------------------------
empowerment zones and enterprise communities
Question. Mr. Secretary, for fiscal year 2003 the President's
budget does not include any funding for Round 2 Urban Empowerment Zones
and Enterprise Communities. In addition, a similar program but one that
is funded through the Agriculture Subcommittee, the Rural Empowerment
Zone, has also received no funding in the President's budget. I hasten
to add that the word ``termination'' is never used in the President's
budget in relation to these programs but in budget materials received
from OMB no new budget authority is given to these programs over the
next 10 years. I might also add that on page 176 of the President's
budget it is explained how HUD has just designated communities for a
Round 3 initiative.
Can you explain the discrepancy I have just described and could you
please explain what the future holds for these programs, or at the very
least, the future of the Urban side of the EZ and EC initiative?
Answer. The EZ initiative is not being terminated even if no grant
funds are included for fiscal year 2003. HUD's efforts will henceforth
concentrate on enabling the Empowerment Zones to develop the capacity
to use the funds they've received over the remaining few years of the
authorization. If successful, the Administration would consider
additional grants, if appropriate. HUD will also be emphasizing tax
incentives and leveraging funds in the Empowerment Zone program through
greater attention to Tax Incentive Utilization Plans.
Each of the Round III Empowerment Zone applications selected came
with over 100 commitment letters from the private sector, non-profits
and other public entities. One community remarked that it was
refreshing to have partners come to the table with commitments to offer
instead of an open hand asking for grant money. Rather than seeing the
President's fiscal year 2003 budget as a threat to the Round II, we
encourage them to see it as an opportunity to share the enthusiasm of
the Round IIIs. For example, they can take advantage of the two point
scoring bonus for HUD programs in our March 2002 SuperNOFA and bundle
other Federal, State and local grant and incentive programs for a
prosperous tomorrow. All Empowerment Zones will qualify for Federal tax
incentives until December 31, 2009.
Question. Is it your position that these programs have enough
carryover from the previous fiscal year and this is why they have
received no funding for this year?
Answer. Yes. Funds were not requested for fiscal year 2003 because
over $225 million in carryover remained. Collectively, the Empowerment
Zones have only used 20 percent of the funds already appropriated. It
would be more appropriate at this time for HUD to concentrate on
enabling the Empowerment Zones to develop the capacity to use the funds
they've received. HUD will also be emphasizing tax incentives and
leveraging funds in the Empowerment Zone program through greater
attention to Tax Incentive Utilization Plans.
SUBCOMMITTEE RECESS
Senator Mikulski. This Subcommittee stands in recess. Next
week we will take the testimony on the Environmental Protection
Agency. We look forward to working with you.
Secretary Martinez. Thank you.
[Whereupon, at 10:55 a.m., Wednesday, March 13, the hearing
was concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MARCH 20, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:36 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Leahy, Kohl, Bond, Craig, and
Domenici.
ENVIRONMENTAL PROTECTION AGENCY
STATEMENT OF CHRISTINE TODD WHITMAN, ADMINISTRATOR
ACCOMPANIED BY:
LINDA FISHER, DEPUTY ADMINISTRATOR
ROBERT BOSTOCK, CHIEF SENIOR ADVISOR TO THE ADMINISTRATOR
MORRIS X. WINN, ASSISTANT ADMINISTRATOR, OFFICE OF
ADMINISTRATION AND RESOURCES MANAGEMENT
JEFFREY HOLMSTEAD, ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND
RADIATION
SYLVIA K. LOWRANCE, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF
ENFORCEMENT AND COMPLIANCE ASSURANCE
KIMBERLY T. NELSON, ASSISTANT ADMINISTRATOR, OFFICE OF
ENVIRONMENTAL INFORMATION
LINDA M. COMBS, CHIEF FINANCIAL OFFICER
MICHAEL W.S. RYAN, DEPUTY CHIEF FINANCIAL OFFICER
ROBERT FABRICANT, GENERAL COUNSEL, OFFICE OF GENERAL COUNSEL
NIKKI TINSLEY, INSPECTOR GENERAL
JUDITH AYRES, ASSISTANT ADMINISTRATOR, OFFICE OF INTERNATIONAL
ACTIVITIES
SUSIE HAZEN, DEPUTY ASSISTANT ADMINISTRATOR, OFFICE OF
PREVENTION, PESTICIDES AND TOXIC SUBSTANCES
HENRY L. LONGEST, II, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF
RESEARCH AND DEVELOPMENT
MARIANNE HORINKO, ASSISTANT ADMINISTRATOR, OFFICE OF SOLID
WASTE AND EMERGENCY RESPONSE
DIANE REGAS, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF WATER
BENJAMIN GRUMBLES, DEPUTY ASSISTANT ADMINISTRATOR, OFFICE OF
WATER
THOMAS GIBSON, ASSOCIATE ADMINISTRATOR, OFFICE OF POLICY,
ECONOMICS AND INNOVATION
EDWARD D. KRENIK, ASSOCIATE ADMINISTRATOR, OFFICE OF
CONGRESSIONAL AND INTERGOVERNMENTAL RELATIONS
JOSEPH MARTYAK, ACTING ASSOCIATE ADMINISTRATOR, OFFICE OF
COMMUNICATIONS, EDUCATION AND MEDIA RELATIONS
JOSEPH L. DILLON, COMPTROLLER, OFFICE OF THE CHIEF FINANCIAL
OFFICER
NANCI E. GELB, DIRECTOR, ANNUAL PLANNING AND BUDGET DIVISION
OPENING STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Good morning and welcome. The Subcommittee on
VA, HUD, and Independent Agencies will come to order for the
fiscal year 2003 appropriations for EPA.
The Chair is tied up in traffic, as I gather several people
were. I just went to the wrong room. So, I did not have an
excuse.
But, Madam Administrator, we are always delighted to
welcome you to testify on the budget request.
As we discussed last year, EPA, has one of the most
difficult challenges of any Federal agencies, with the
responsibilities for the clean-up of Superfund and brownfield
sites and the funding of clean water and drinking water
infrastructure to the enforcement of environmental laws to
representing our Nation with regard to issues of climate
change.
On top of these important responsibilities, EPA, since
September 11, has embraced the unfortunate new challenges posed
by the threat of terrorism to our Nation's water supply, and
has provided leadership within the Federal Government with
regard to toxic biochemical agents and other hazards, such as
Anthrax.
This year, the Administration has requested some $7.7
billion in budget authority; a reduction of about $283 million
from the fiscal year 2002 funding level. However, assuming a
number of adjustments, including the Administration's fantasy
reduction of $488 million in Congressionally designated EPA
water and sewer grants, the EPA funding level is approximately
equivalent to the fiscal year 2002 level.
Within these funding levels, the Administration is
requesting $200 million for the brownfields grant program, an
increase of $100 million from fiscal year 2002, $21 million for
a new targeted watershed program, a repeat request for a new
State Enforcements Grant Program at $15 million, and $124
million for Homeland Security.
I continue to have one primary area of concern, both in my
role here on this committee and as a member of the committee on
Environment and Public Works. The Administration is again
recommending a reduction of the Clean Water State Revolving
Fund, from $1.35 billion, for the current year, to $1.2 for the
next year, while maintaining a level request of $850 million
for the Drinking Water State Revolving Fund.
I strongly support the continued funding of both these
State Revolving Funds at the 2002 level, especially the Clean
Water Revolving Fund at $1.35 billion. The need is especially
relevant, since the EPA gap analysis is expected to indicate
that the United States will need to spend over $350 billion
over the next two decades on new and existing water
infrastructure.
Even more troubling, outside estimates have concluded that
as much as $740 billion is needed over the next 20 years, with
some $200 billion more in financing, and as much as $980
billion for local governments to operate and maintain this
water infrastructure.
The programs must be maintained and increased, if possible.
The huge funding estimates for water infrastructure needs also
beg the question of how Congress and the EPA should prioritize
and allocate the available funding to meet our most pressing
needs.
Now, Madam Administrator, I have places in my State, in
rural Missouri, where they do not have adequate water
treatment. And I can tell you that you do not have to get very
close to them to tell they have got a problem. You can smell
it. And if you are talking about cleaning up the environment
and making sure we take care of public health, when we do not
take care of the clean water needs, we are neglecting one of
the most serious and real threats to our environment and to the
health of our population, because with polluted water, comes
significant health problems.
In addition, the EPA faces significant challenges with
regard to the new requirement for the total maximum daily load,
or TMDL pollutants, the impact on public health and the
environment by large animal feeding operations, increased
public health risks attributable to combined sewer overflow
problems, and statutory requirements for the protection of
wetlands.
I also am concerned about issues related to air quality
standards on the Clean Air Act, including the implementation of
the New Source Review provisions of the Clean Air Act, which
authorize EPA to set standards for certain facilities for the
installation of air pollution control equipment.
It is an especially important issue, as we seek to maintain
the economic viability of U.S. producers of energy all meeting
the air quality standards.
I applaud EPA's attention and commitment to homeland
security. As a follow-up to the $175.6 million Congress
appropriated for EPA's investment in 2002 emergency
supplemental, the Administration is asking for an additional
$124 million in follow-up funding to protect the Nation's water
supply, for continued security upgrades to EPA facilities, and
to continue to operate the West Coast Emergency Response Team.
There is one other issue I am compelled to raise at this
time. On March 8, the Wall Street Journal printed an editorial
regarding the awarding of EPA funds to non-profit groups that
have used the funds primarily for lobbying or litigating on EPA
issues, and that these funds may have totaled as much as $2
billion from 1993 to 2001. The editorial goes on to indicate
that EPA's top six non-profits that have received these funds
were not environmental organizations, but senior citizens'
groups. AARP received some $99 million. There are even
allegations that EPA officials have erased hard drives and
destroyed e-mail tapes.
These, Madam Administrator, are very troubling allegations
that need to be addressed, especially since the VA/HUD
Appropriations Act prohibits the use of agency funds for
lobbying or litigation, and requires the Chief Executive
Officer to certify that no funds have been used to lobby or
litigate on EPA issues. I trust you and the Inspector General
will pursue these allegations and report back to us on what you
found, and if there, in fact, has been such a problem, and the
definitive steps that you are going to undertake to make sure
it never happens again.
Finally, I am very glad that EPA is focusing on meeting its
primary program and legal obligations, rather than creating a
new series of programs and responsibilities. You have got
enough work to do with what you have. In the past, we have seen
lots of side efforts going off in different directions that
took away from the main responsibility. We are delighted that
you are going to stick with the very important primary
responsibilities you have.
With that, I am going to turn to a distinguished member of
the committee, Chairman of the Budget Committee, in whose good
graces we all seek to be. And he can speak as long as he wants.
At least until the Chair arrives.
STATEMENT OF SENATOR PETE V. DOMENICI
Senator Domenici. I will not be long. I thank you very
much, Senator Bond. And let me open the discussion with you by
telling you that I understand that the nomination of Mr. Paul
Gilman, who has been selected by the President to work with you
to be your Science Director, was being held up. I did want to
tell you that there was a hold on his nomination but last
night, it was released. At least, the Senator that suggested
the hold, when I went to talk with him, said he would release
it sometime yesterday. So, perhaps it is ready to go through.
Senator Bond. Thank you.
Senator Domenici. We look forward to his being confirmed,
and I compliment you on getting a very talented science
advisor, who also understands a lot about the way things are
done up here. I might say that he used to work for me. He was
my Administrative Assistant or Chief of Staff, but he is a
great scientist. I look forward to his being at EPA, so we can
work science issues with him. He will be a very big asset.
Now, I am going to talk about just one subject, and I will
do it as quickly as I can. I think if I said to you, write down
the subject that Domenici is going to talk about, you could
write it down, because it is arsenic and the new arsenic
standard in communities and cities in my State, the State of
Nevada, the State of Arizona, and many others.
As an example, the City of Albuquerque has briefed us,
Madam Administrator, and told us that their estimate now is
$150 million to fix their system so it is in compliance. With
that, we think we have an estimate for the State of New Mexico,
from the largest, which is Albuquerque, down to some very small
ones that if they have to put in an arsenic treatment system,
they will have to go back to individual wells, because they
will not be able to afford the water. Between $400 million and
$700 million will be the cost in New Mexico. We are told that
Arizona is very similar. So, they are between $400 million and
$700 million. When we were discussing this issue on the floor,
that last time, several Senators, including Senator Mikulski,
who chairs this committee, Senator Boxer, Senator Clinton,
Reed, Bingaman, Hagel, Hutchison, happened to be on the floor,
and each, in turn, stood up and said they would like to be
helpful in the passage of a bill that would grant assistance to
these cities that have to make these changes that you know,
they never would have made on their own. Many of them would
have fought to convince anyone that their water was not
dangerous. We now have a standard that for many out in the
Southwest is a ludicrous standard. I think you know how we feel
about it, but it is the standard.
I have two questions. One, if we were to pursue some kind
of assistance, by way of grants or the like to communities so
that they might be able to afford the equipment and changes
that are required, would you be supportive of that?
Ms. Whitman. Would you like me to answer that now, Senator?
Senator Domenici. Yes, please.
Ms. Whitman. We would certainly look very closely.
Senator Domenici. I am going to be leaving, so I cannot
stay long.
Ms. Whitman. Okay. I would be happy to answer that. We have
identified $20 million in our budget to begin this process. One
of the things we are looking at very closely is how we can aid
these communities with new technologies that will help bring
down the cost. We would look very closely at any legislation
you propose, because we are very sensitive to this being an
enormous issue for those States where you have a lot of
naturally occurring arsenic.
Senator Domenici. And the second issue has to do with one
that you touched on, that has to do with research and
development of technology. I gather, from looking at your
budget, you have up to $20 million for research and development
in this area.
I am going to give you a hypothetical question. If, in
fact, we had a technology, and it was close, not quite there,
but close, and if in fact some kind of a certification could be
obtained that will be ready, but not exactly on time, will you
have an open mind to considering, with these communities, some
way of alleviating the enormous cost, as long as they are ready
to go, thereafter, with new technology?
Ms. Whitman. We are certainly going to do everything we can
to make sure that they have time to comply with the new arsenic
in drinking water standard, so it does not put them into
bankruptcy and does not force people to drill their own wells,
because that is one of the issues that was of concern at the
very beginning. Then we have the ability to protect them
against actually getting water that has much higher levels of
arsenic----
Senator Domenici. Right.
Ms. Whitman [continuing]. Than is acceptable. So, we would
certainly look forward to working with you and the communities
to see what we can do to make this a feasible standard, an
achievable standard. We already have, in the rule, exemptions
for which communities can apply.
Senator Domenici. I thank you so much. I will not be able
to stay. We are starting the budget mark-up, but I thank you
for your consideration. And we will be working with you and
those in your department who are experts in this field, because
we have to solve this. So, I will be dedicating time to this is
my number one--let us solve the problem issue.
I think my friend would vouch that if I do that, we are
probably going to find a solution.
Senator Bond. Senator Domenici, you have made a very
compelling case.
And I work with you, not always successfully, to try to
find a modus vivendi, but certainly, Madam Administrator, with
research dollars, with assistance, and where appropriate, if
there are specific actions you need to take or need legislative
provisions, we would like to work with you, because my great
fear is that in seeking the perfect, we will be the enemy of
the good, and force many small communities to go back to
untreated wells. And by trying to do something that is beyond
our grasp, we could actually put people in greater harm.
Senator Domenici. Thank you.
Senator Bond. So, with that, Madam Administrator, I know
the Chair--I am sure the Chair is avidly reading your opening
statement as she comes in. She has asked that if you would go
ahead and present your comments, and then we will continue
until she is able to get here until traffic lets up, so she can
be here.
So, Madam Administrator.
Ms. Whitman. Thank you very much, Senator. It is a pleasure
to appear before you, once again. It is always a pleasure to be
able to see you and to present the President's budget for the
Environmental Protection Agency for fiscal year 2003.
This budget request provides the funds that EPA needs to
complete its mission efficiently and effectively. As you know,
the President's total request for fiscal year 2003 is $7.7
billion, which is more than a $200 million increase over last
year's request.
Overall, our proposed budget reflects the goal that
President Bush and I have of leaving America's air cleaner,
it's water purer, and it's land better protected.
I should also point out that EPA's proposed budget is part
of the Administration's record overall request of $44.1 billion
for the environment and natural resources; the highest ever
such request, representing a $1.1 billion increase over the
enacted levels of the current fiscal year.
If I may, I would like to discuss some of the highlights of
our proposal.
Madam Chair, good morning.
Senator Mikulski. Good morning.
Ms. Whitman. And submit a somewhat more detailed statement
for the record, if that is all right.
Senator Bond. We would be happy to have it. Thank you.
Ms. Whitman. I would defer to the Chair, if she wants to
make some comments, now.
Senator Mikulski. I apologize to the Administrator. It has
taken me 2 hours to get here this morning from Baltimore. Why
do you not go ahead with your testimony? And then, when I get
ready to ask you questions, I will do it that way. Let us keep
our momentum going. We both have to be at a hearing. And thank
you for----
Ms. Whitman. Thank you.
Senator Mikulski [continuing]. Starting, please.
Ms. Whitman. All right. First, as you know, almost half our
budget is in grants to State, local and tribal governments.
This is reflective of our experience that many innovative,
creative and effective environmental achievements are being
made at the State, local and county levels.
As I have traveled around the country during the past year,
I have seen some very exciting work in action. The Chair and I
actually spent some time with the Alliance for Chesapeake Bay
last summer, and saw just how much strong partnerships can
accomplish. Good work like this is taking place in countless
communities across the country, and the results speak for
themselves.
In this budget, we are going to build on those results to
achieve even greater environmental progress, recognizing that
not all wisdom resides in Washington.
Next, this budget more than doubles the funds available for
brownfields reclamation, as you pointed out, Senator, providing
$200 million. This money will lead to thousands of acres of
better protected land in the years ahead.
The success that so many communities have had already in
cleaning our less challenging brownfields will be replicated at
thousands more difficult sites across the country.
We have also continued to ask for steady funding for the
Superfund Program at $1.3 billion. At a time of national
crisis, this commitment to the continuity of Superfund
reaffirms its significance to this Administration.
Third, this budget provides important funding for a new
watershed initiative. As you mentioned, we are requesting $21
million for a program that will allow us to build an effective
public-private partnership to help restore and protect 20 of
the Nation's most precious watersheds.
This initiative is another opportunity to show the real
results that partnerships can achieve and how such partnerships
can bring together existing programs in a unified approach,
including the Nonpoint Source Grant program, which we propose
funding at $238.5 million. As a result, this budget will help
improve water quality for drinking, boating, swimming and
fishing, in those watersheds that we target.
There are numerous other important initiatives in our
proposed budget. They include funding to increase the
development of new technologies for environmental progress,
funding for research that could lead to the significant
reduction or curtailing of animal testing by building on the
discoveries of the human genome project, and funding to
increase our knowledge base about our air quality challenges,
so that we can save lives and prevent illnesses, such as
asthma, among America's children.
In addition, the funding we propose for the Drinking Water
and the Clean Water State Revolving Funds is the largest such
combined request. Of course, our budget request also includes
significant new money to help EPA meet its homeland security
responsibilities. The $124 million in new funding we are
requesting, will support such important efforts as protecting
the Nation's water infrastructure by funding vulnerability
assessments at the Nation's drinking water utilities, and
wastewater facilities securing additional personnel and
equipment to expand our ability to respond to biological
attacks, and investing in research designed to enable the
Nation to better detect and respond to chemical or biological
attacks.
PREPARED STATEMENT
I am pleased to say, Madam Chair, that taken together, the
President's proposed EPA budget for fiscal year 2003 fully
supports the work of this Agency. It will enable us to
transform the Agency's 30-year mission to meet the challenges
of the twenty-first century, and it brings us that much closer
to realizing that goal of cleaner air, purer water, and better
protected land.
I look forward to answering any questions that you might
have.
[The statement follows:]
Prepared Statement of Christine Todd Whitman
Madam Chair and Members of the Committee, I am pleased to be here
to discuss President Bush's budget request for the Environmental
Protection Agency (EPA). The President's budget provides the necessary
funds for the Agency to carry out our mission efficiently and
effectively to protect human health and safeguard the environment. The
fiscal year 2003 request is $7.7 billion, which includes more than a
100 percent increase in funding for Brownfields, and significant
increases for watershed protection.
I would like to begin, Madam Chair, by emphasizing that the
President's budget request for EPA reflects the Agency's strong
commitment to leaving America's air cleaner, its water purer, and its
land better protected than it was when we took office. It promotes that
goal in a manner consistent with our commitment to fiscal
responsibility; by further strengthening our partnerships with State,
local and tribal governments; by funding innovative new programs, and
by strengthening existing programs that work.
I'd like to touch on a few of the highlights: nearly half of EPA's
budget request provides funding for State and tribal programs,
including almost $3.5 billion in assistance to States, tribes and other
partners. The President and I both believe that much of the innovative,
creative, and effective environmental progress being made comes from
State, county and local governments and our budget request supports
that.
As I have traveled around the country during the past year, I've
seen some really exciting programs in action. From the people of
Kentucky PRIDE to the members of the Paiute Tribe in Nevada, and in
countless other communities across America, the EPA is building strong
partnerships for environmental progress and the results speak for
themselves. In this budget, we will build on those results to achieve
even greater environmental progress.
Homeland Security
I would like to thank the appropriators for recognizing the
important role EPA plays in homeland security by providing $176 million
in the fiscal year 2002 supplemental. Since September 11, we have seen
the traditional mission of our Agency safeguarding the environment and
protecting the public health take on new meaning. We now play a
critical role in preparing for and responding to terrorist incidents
because of our unique expertise and experience in emergency
preparedness and response to hazardous material releases. Our new role
of supervising the decontamination of anthrax infected buildings has
shown us that better information and new technologies are needed. To
continue to do our part to ensure that the nation is prepared to
respond to terrorist incidents, we are investing an additional $124
million for homeland security.
Included in this figure is $75 million for research in technologies
for decontaminating buildings affected by bioterrorists attacks. We
will provide guidance, technical expertise and support to Federal,
State and local governments in building contamination prevention,
treatment and cleanup capabilities. Combined with resources provided in
the Emergency Supplemental Appropriation Act of 2002, this represents a
two-year total of $300 million in new resources. Also included in this
figure is $20 million to address threats to the nation's drinking water
supply. We, at EPA, play a significant role in working with State
Governments and local utilities to protect drinking water supplies. We
have already begun working with states and local utilities to assess
this vulnerability. The additional $20 million being requested in
fiscal year 2003 will augment $88 million appropriated as part of the
Emergency Supplemental Appropriation Act of 2002. Together, these funds
will ensure that utilities have developed a comprehensive assessment of
these vulnerabilities and emergency operations plans using the most
current methods and technologies.
Brownfields
Our fiscal year 2003 budget more than doubles the funds available
for brownfields reclamation by providing $200 million. This money will
allow states, tribes, and local governments to build on the work
they've already done in turning thousands of neighborhood eyesores into
community assets. Despite that progress, thousands of brownfields still
mar America's landscape. That is going to change. Thanks to President
Bush's commitment to brownfields, this money will help us get at some
of the most difficult brownfields challenges that remain. Those
reclaimed brownfields will provide their communities with new jobs, new
places to play, and a new sense of optimism for the future.
Watershed Projects
By providing $21 million for a new watershed initiative, our budget
will target up to 20 watersheds around the country for improvement
funding that will lead to millions of gallons of purer water in the
years ahead. This initiative will allow us to build on existing public-
private partnerships to restore and protect up to 20 of America's most
threatened watersheds. When I visited Boston last year and saw first-
hand the excellent work done by the Charles River Initiative, I knew we
could use that effort as a model for other communities. I've heard a
watershed defined as ``communities connected by water.'' Well, with
this initiative, we are connecting EPA with local watershed protection
through the flow of Federal dollars. As a result, we will help improve
water quality for drinking, boating, swimming, and fishing.
National Environmental Technology Competition
Of course, underlying everything we do is our commitment to
partnership. One of the most exciting new partnerships this budget
seeks to build upon is our proposed National Environmental Technology
Competition. Over the past 30 years, advances in technology have helped
us address some of our most pressing environmental challenges. I
believe technology can play an even greater role as we seek to achieve
the next generation of environmental progress. That is why we are
proposing $10 million for our National Environmental Technology
Competition. This program will use competition to foster technological
innovation through public-private partnerships. It will promote the
development of new, cost-effective environmental technologies that will
help clean the air, water, and land. For example, in fiscal year 2003
EPA will solicit proposals related to arsenic removal in drinking
water. This work will help further EPA's commitment to help fund,
through research and development, cost effective methods of arsenic
removal for small systems.
Cleaner Air
Under the Clean Air Act, we continue work to make the air cleaner
and healthier to breathe by setting standards for ambient air quality,
toxic air pollutant emissions, new pollution sources, and mobile
sources. In fiscal year 2003, we will assist states, tribes and local
governments in devising additional stationary and mobile source
strategies to reduce ozone and particulate matter, and other
pollutants. A key component to achieving the Clean Air Goal for all
citizens is the request for over $232 million for air grants to states
and tribes. In addition, EPA will continue to build upon its voluntary
government/industry partnership efforts to achieve pollution reductions
and energy savings. For example, as we continue our Energy Star
Labeling and Building Program efforts, our goal is to reduce the
emissions of greenhouse gases by more than 40 million metric tons
annually, by 2010, while saving consumers and businesses an estimated
$14 billion in net energy bill savings when using energy-efficient
products.
Purer Water
Over the past three decades, our nation has made significant
progress in water pollution prevention and cleanup. While we have
substantially cleaned up many of our most polluted waterways, and
provided safer drinking water for millions of U.S. residents,
significant challenges remain. This budget request addresses the
challenge to provide clean and safe water in every American community.
Protection from Drinking Water Contaminants.--The fiscal year 2003
request supports our coordinated efforts with the states and tribes to
implement new health-based standards to control for microbial
contaminants, disinfectants and their byproducts, and other
contaminants.
Drinking Water State Revolving Fund.--The Drinking Water State
Revolving Fund (DWSRF) request of $850 million will provide substantial
funding to states and tribes to upgrade and modernize their drinking
water systems. At this funding level, EPA will eventually meet its goal
of providing an average of $500 million annually in assistance.
BEACHES Grants.--This budget includes $10 million to support our
implementation of the ``Beaches Environmental Assessment and Coastal
Health Act of 2000.'' The money will be provided in the form of grants
to states to develop local monitoring and notification programs for
coastal recreation waters.
New Watershed Investments.--Our $21 million Targeted Watershed
Program is designed to support the need for additional funding for
priority watershed restoration efforts. This request supports a range
of water quality restoration tools to assist local communities in
restoring their waterways. This Program would provide direct grants to
watershed stakeholders to implement comprehensive restoration actions.
Helping States Address Run-off and Restore Polluted Waters.--The
President's fiscal year 2003 Budget provides significant resources to
states to build on successes we have achieved in protecting the
nation's waters, by providing states and tribes with grants to address
polluted run-off, protect valuable wetlands, and restore polluted
waterways.
Clean Water State Revolving Fund.--Our budget request includes
$1.212 billion for states and tribes for the Clean Water State
Revolving Fund (CWSRF). States receive capitalization grants, which
enable them to provide low interest loans to communities to construct
wastewater treatment infrastructure and fund other projects to enhance
water quality. This investment allows our Agency to meet the goal for
the CWSRF to provide $2 billion average in annual financial assistance
over the long-term.
Protecting Human Health along the U.S.-Mexico Border.--This budget
includes $75 million for water and wastewater projects along the U.S.-
Mexico Border. These resources help our Agency to address the serious
environmental and human health problems associated with untreated and
industrial and municipal sewage on the U.S.-Mexico border.
Strong Science
The fiscal year 2003 budget supports our efforts to further
strengthen the role of science in decision-making by using scientific
information and analysis to help direct policy and establish
priorities. EPA will achieve maximum environmental and health
protections through our request of $627 million for the Office of
Research and Development to address both current and future
environmental challenges. This Administration is committed to the
incorporation of science into regulatory decisions by having scientists
participate early and often in the regulatory development process. The
budget request supports a balanced research and development program
that addresses Administration and Agency priorities, as well as meets
the challenges of the Clean Air Act (CAA), the Safe Drinking Water Act
(SDWA), the Federal Insecticide, Fungicide, and Rodenticide Act
(FIFRA), the Food Quality Protection Act (FQPA), and other
environmental statutes.
Environmental Information
In fiscal year 2003, we will further our commitment to providing
assistance to states and tribes to develop and implement the National
Environmental Information Exchange Network. The goal of this program is
to advance collaborative efforts to integrate environmental data
between and among EPA, states and the Agency's other partners. The
ability to easily exchange up-to-date, accurate information is critical
to meet today's increasingly complex environmental challenges. The
grant program has several components, each of which is aimed at
building on the growing success of states and tribes in finding smarter
alternatives to the current approaches for exchanging environmental
data. The grants being offered include grants to enable states and
tribes to re-engineer their environmental reporting; grants to
demonstrate progress in developing a joint EPA/state National
Environmental Information Exchange Network, and grants that challenge
State or multi-state or tribal efforts to integrate environmental
information.
As EPA works with states and tribes to develop the National
Environmental Information Exchange Network, we will also continue to
build and institutionalize a Central Data Exchange (CDX) which will be
EPA's focal point for securely receiving, translating, and forwarding
data to EPA's data systems. In fiscal year 2003, the CDX will service
45 States and an assemblage of 25,000 facilities, companies, and
laboratories. By widely implementing an electronic reporting
infrastructure, this infrastructure will reduce reliance on less
efficient paper-based processes, thereby improving data quality,
reducing reporting burden, and simplifying the reporting process.
enforcement grant programs
Most of our nation's environmental laws envision a strong role for
State Governments in implementing and managing environmental programs.
The fiscal year 2003 request includes $15 million in a new grant
program to continue to support State agencies implementing authorized,
delegated, or approved environmental enforcement programs. These funds
will continue to afford states a greater role in the enforcement of
environmental laws and regulations.
This budget request will allow our Agency to continue to support
the regulated community's compliance with environmental requirements
through voluntary compliance incentives and assistance programs. We
will provide information and technical assistance to the regulated
community through the compliance assistance program to increase its
understanding of all statutory or regulatory environmental
requirements. The program will also continue to develop strategies and
compliance assistance tools that will support initiatives targeted
toward improving compliance in specific industrial and commercial
sectors or with certain regulatory requirements.
Safe Food
The fiscal year 2003 request includes $142.3 million to help meet
the multiple challenges of the implementation of the Food Quality
Protection Act (FQPA) of 1996 so that all Americans will continue to
enjoy one of the safest, most abundant, and most affordable food
supplies in the world. FQPA provides for the expedited registration of
reduced risk pesticides to introduce alternatives to the older versions
on the market. EPA implements its various authorities in a manner to
ensure that farmers are able to transition with a minimal disruption in
production to safer substitutes and alternative farming practices.
Expanded support for tolerance reassessments will reduce the potential
risks to public health from older pesticides. Reassessing existing
tolerances promotes food safety, especially for infants and children,
while ensuring that pesticides meet the most current health and safety
standards. This budget request also supports FQPA-related science
through scientific assessments of cumulative risk, including funds for
validation of testing components of the Endocrine Disruptor Screening
Program.
Summary
Taken together, the President's proposed EPA budget for fiscal year
2003 fully supports the work of our Agency. It will enable us to
transform the Agency's 30-year mission to meet the challenges of the
21st century. It brings us that much closer to realizing our goals of
cleaner air for all Americans to breathe, purer water for all Americans
to drink, swim and fish in, as well as safeguarding public health.
This concludes my prepared statement. I would be pleased to answer
any questions that you may have.
STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. Well, thank you very much, Administrator
Whitman. And sorry I was late. It was just rolling accidents
this morning. But we want to welcome you to your third hearing
before this subcommittee. You came last year for the EPA's
regular appropriations hearing, and then you testified in
November about EPA's role in helping with the Anthrax
decontamination, particularly in the Hart Building. And we have
worked together on many issues.
Before I go into my comments about the President's request
and questions that I will be following, I really want to thank
you, personally, and your entire team, for their dedication in
helping us come to grips with the Anthrax situation in the Hart
Building, at Brentwood, in our postal facilities, and also in
the Nation. I know that they were tireless. I know that they
were dedicated.
And I just want to on behalf of our colleagues here and
also postal employees, again, thank you for that. It was a very
tough time for our country. I have a saying that when we face
tough times, the tough have to get going. We want to talk more
about the threats to the Nation and the role of EPA and
homeland security, but let me go on to some of the other
basics, and then get to my questions.
I want to note that as we get ready to look at next year's
appropriation, we are at somewhat of a disadvantage, because we
have not received EPA's operating plan. I am not finger-
pointing you about this, Madam Administrator. I know that you
sent the operating plan to OMB some time ago. But it is the
only agency for which we have not received an operating plan.
And we would like you to really use your good office, as we
believe you have developed an operating plan. We know you have.
We would like to see it. We would just like to see it, so we
can start operating on the plan. So, we really do need that.
I am going to ask unanimous consent that my full statement
go into the record.
EPA serves this very important issue of protecting human
health and the environment. And I am so pleased where the
appropriations request is strong in several key areas. I really
acknowledge the fact that doubling the brownfields program to
$200 million will create new jobs and increase the tax base in
the communities. And we want to work with you on, not only
adequate funding, but really robust implementation.
As a former governor of New Jersey, a former governor of
Missouri, we know that brownfields are a cornucopia of
opportunity to clean up the environment, but turn them into
greenfields of economic opportunity.
We also know that you have a request in here for the cost
of dealing with the Anthrax both here and at Brentwood--and we
will be talking more about that.
I want to talk about the enforcement of the environmental
laws. I am concerned that this year's budget proposes to cut
100 ``environmental cops on the beat,'' and move more of our
efforts into State enforcement programs. I know that there has
to be a partnership with the State, but in doing so, I do not
believe we should weaken Federal enforcement capabilities. And
in our question and answer, I would like to probe that in more
detail.
I know that, right now, there are 130 unfilled positions at
EPA. And these have been jobs that have been vacant since 2001.
So, let us have a conversation about that.
Enforcement will be a big issue. Water infrastructure is
another very big issue. I am very pleased that the
appropriations request fully funds the Drinking Water State
Revolving Loan Fund. This is absolutely crucial to our
communities. But I am puzzled by the $140 million cut in the
Clean Water State Revolving Fund. Communities in Maryland and
across the Nation are really challenged by the enormous cost of
upgrading old and failing sewer systems.
In Maryland, these projects, of course, are critical to the
Bay. Now, water and sewer are just not sexy issues. We do not
have a ``Save the Sewer'' group, like we have a ``Save the
Whale'' group, but it is a whale of a job trying to save the
sewers.
Everywhere I go in my State and I think Senator Bond can
speak to this as well--when I go in my State to every county,
they ask me for two things for the--to help them cope with
twenty-first century demands. They want a fiberoptic system for
schools, business, and economic development. And they either
want a new sewer grant or a new waste water treatment facility.
And just the cost of modernizing, replacing, or even building,
is just really overwhelming.
We cannot be skimpy on this priority. EPA is currently
negotiating with Mayor O'Malley on this issue. I am not going
to get into the negotiations. It is not appropriate at the
hearing. But it could cost us $1 billion to comply with what we
ought to comply with, but where is the $1 billion? It is not
that kind of stalemate.
The State of Maryland has recently done a survey through a
task force process. We have got $3.5 billion that we could
spend in Maryland.
I know that OMB is critical of what we call our
``earmarks.'' We call them ``Congressionally-designated
projects,'' probably, the biggest demand that we get are from
our colleagues, really, on waste water and sewer replacement.
And I feel that if we could give every one of the states $1
billion, that they would spend it wisely, going on your own
excellent criteria for State plans.
So, this is an area where I think we are really in a
national crisis, here. And vigorous enforcement to communities
who do not have the power to pay to comply, when they want to
comply--this is not stonewalling you and pushing you aside and,
you know, the way we sometimes run into. They want to comply
with you. And when I say, ``with you,'' comply with the law and
the regs. But it is really just a tremendous economic issue.
So, we--I think we need a new national plan for this, and a
national plan that would really modernize our sewers and waste
water treatment. And at the same time, this would really be
creating jobs in the private sector and laying the groundwork.
Now, another area that is very troublesome is the air
quality power plant issue. I am concerned about the impact of
the recent decision to revisit the section of the Clean Air Act
called the New Source Review, and replace it with something
called the Clear Skies Initiatives. I understand that there is
a desire to find ways to increase domestic utility and refinery
capacity, but at the same time, taking what is a mandated
proposal and turning it into a voluntary proposal. We need to
hear more about that.
Also, I believe Senator Bond and I want to work very
closely with you and our colleagues in the House. We really do
not want riders this year, as we have resisted every year. But
I am concerned that in the power plant issue, we could end up
with the committee being caught in the middle, between those
who want to stay the current course and those who want to
follow the new course. And we become the authorizers by proxy.
The other is the issue of homeland security. And I know you
have a request in here on the role you want EPA to play in
Anthrax research. We would like to know how you want to do this
and how this coordinates with CDC and the other Federal--even
DOD, in working on this, because one agency cannot do this by
itself. And we saw that here and at Brentwood.
PREPARED STATEMENT
And then the other is, particularly, when protecting
America's water supply. And I know that mayors and governors
have spoken to Senator Bond and I about this. They are very
concerned. And yet, local government cannot do this on its--on
its own. So, we look forward to hearing your comments on that.
So, that is my opening statement.
[The statement follows:]
Prepared Statement of Senator Barbara A. Mikulski
I welcome Administrator Whitman to her third hearing before the
Subcommittee. She appeared before us last year for EPA's regular budget
hearing, and also testified in November about EPA's role in anthrax
decontamination. We have worked with her through arsenic and anthrax,
and I thank her for the very productive relationship we have with her
and her team.
Where is the Operating Plan?
Unfortunately, the Subcommittee is at a disadvantage right now
because we still have not received EPA's 2002 Operating Plan. The
Operating Plan is required within 30 days after our bill is finalized.
So I am puzzled why, over 3 months after the VA-HUD bill was signed
into law, we still have not gotten the plan. In fact, EPA is the only
Agency within our jurisdiction that we haven't heard from yet.
It's not a question of fault. I know that EPA sent the Operating
Plan to OMB some time ago. But it is really unacceptable that we are
beginning the 2003 budget cycle without knowing how the funding we
provided last year is being prioritized. I know Administrator Whitman's
staff has been willing to provide some details. But in order for the
Subcommittee to give EPA the resources it needs, we really need to see
the entire big picture.
Overall Budget
The 2003 budget request for EPA totals $7.7 billion, a $,175
million decrease from the 2002 level. But the request includes over
$100 million for retirement funding that the budget shifts government
wide. When we exclude this shift of mandatory funding to the
discretionary side, the 2003 EPA budget is $7.6 billion, or about $300
million below the 2002 level.
Every Administration responds to cuts in EPA by saying that the
budget eliminates earmarks. Each year, the Administration tells us that
many of the Committee's priorities are not important enough to be
carried in the budget. This is troubling because it implies that our
decisions are inferior or not an appropriate use of limited resources.
But we know that what it really means is cuts in programs to protect
water quality, infrastructure, clean air, and scientific analysis.
EPA serves the very important mission of protecting human health
and the environment, so I am pleased that the budget is strong in
several key areas. The budget proposes to double the Brownfields
program to $200 million. This will create new jobs and increase the tax
base in our communities, and I thank Administrator Whitman for her
support of this important program. The budget also proposes to spend
$75 million researching ways to cleanup contaminated buildings. This
will help ensure that places like the Brentwood postal facility are
cleaned up and safe for employees. The budget also increases funding
for State air programs to help manage and reduce pollution from
factories and traffic congestion.
But I am also puzzled about many areas of this budget proposal. I
know that EPA didn't get everything it wanted from OMB, but I really
question some of the priorities here.
For example, once again, the budget seeks to reduce Federal
enforcement capacity. It also cuts critical water infrastructure
funding at a time when many communities--large and small, urban and
rural--are facing enormous challenges in getting their facilities to
comply with the law.
Enforcement of Environmental Laws
Once again, the budget proposes to shift enforcement resources from
the Federal government to the states. The Committee had serious
concerns about a similar proposal last year, and we rejected it. We
were troubled that cuts in Federal enforcers would result in more
polluters ignoring the law. So I am perturbed that this year's budget
proposes to cut another 100 ``environmental cops on the beat.''
Instead, most of the resources freed by these cuts would go to the
states in the form of a new enforcement grant program. I know that we
need to do more to help enhance State enforcement programs, but in
doing so we should not weaken our Federal enforcement capabilities. We
need both a strong Federal and strong State enforcement presence to
achieve compliance with our environmental laws not one or the other.
The Committee was clear on this last year, and we will be clear again.
So I am very interested in hearing more about this proposal and how it
differs from the proposal we rejected last year.
I also want to know how priorities are being set within the
enforcement funding this Committee provided in 2002. Last year, we told
EPA to fund Federal enforcement at no less than the 2001 level--about
$465 million. I understand that EPA met that goal by eliminating about
130 unfilled positions. These were jobs that had been vacant even prior
to 2001. Administrations--current and past--failed to fill them. Nobody
lost their job, and I know that even under this year's proposal there
wouldn't be any layoffs.
I also know that OMB sets artificial personnel ``ceilings'' that
Agencies never meet. But at the same time, there are currently over 100
unfilled enforcement jobs at EPA. So it's not just a question of
funding--this Subcommittee has really emphasized Federal enforcement.
This is really a question of management, and the Administration's
priority in recruiting and retaining the experts it needs to enforce
environmental laws. We're not talking about building bureaucracies or
empires, just about giving the Agency the resources and staff it needs.
We have ``cut all the fat'' that we can, and this year we don't
want to hear that there are vacancies that should be eliminated. These
are real jobs that provide real expertise to get polluters to comply
with the law. The Subcommittee doesn't want to take the position of
micromanaging staff positions. But if we have to this year, we are
prepared to do so. So I want to know why EPA isn't doing more to fill
these slots and how can the Subcommittee be helpful in this area.
Water Infrastructure
Water and sewer are not sexy issues. We don't have ``Save the
Sewer'' groups like we have ``Save the Trees'' or ``Save the Whales.''
But water funding means just as much to the environment. Water
infrastructure funding gives us ``double value'' for the taxpayer
dollar. It helps keep our waterways clean and safe. And for every $1
billion spent, about 19,000 jobs are created.
But Baltimore City can't hold a cocktail party to raise money to
fix its crumbling sewer system. And Albuquerque can't have bingo night
to raise dough to get arsenic out of its drinking water. We just cannot
skimp on this priority. We can't expect communities to comply with
numerous regulations--arsenic, radon, discharges, just to name a few--
without giving them the money to do so.
So while I am pleased that the budget fully funds the Drinking
Water State Revolving Loan Fund (SRF) at $850 million, I am puzzled by
the $140 million cut to the Clean Water SRF. Communities in Maryland
and all across the nation are challenged by the enormous costs of
upgrading old and failing sewer systems. In Maryland, these projects
are critical to protecting the Chesapeake Bay.
In fact, Maryland recently identified over $3.5 billion in
immediate needs. Nationwide, it is estimated that we will need to
invest over $20 billion each year for the next 20 years in wastewater
infrastructure.
This budget does not acknowledge these needs. It cuts the Clean
Water SRF from $1.35 billion to $1.2 billion. And those who have not
read the finer print in the budget will be startled to know that it
ZEROES out the Clean Water SRF program in 2006 and beyond. I have to
believe that this is just a budgeting gimmick by OMB to make the
numbers add up. But the Committee is really paying attention to the
commitments made in this area, and we're not pleased.
I know that our authorizing committee is working to reauthorize
these critical programs at much higher levels in the future. While I
have serious concerns about the new formula they are proposing, I
applaud Senator Jeffords' leadership in seeking additional resources
for critical water infrastructure improvements. This is even more
important now that water utilities must take steps to safeguard their
facilities, and the chemicals they use, from possible threats.
Anthrax Decontamination
Again, I am pleased that the budget proposes $75 million to
research ways to decontaminate buildings from chemical and biological
agents. We need better science in this area. I have several hundred of
constituents who worked out of the Brentwood postal facility, which
remains closed. So I am interested in hearing how EPA plans to move
forward with this research, and how the Agency will be involved at
Brentwood.
I really want to thank EPA for its outstanding work at the Capitol
complex, including the Hart building. I know many employees worked
around the clock to get us back up and running safely.
The Subcommittee provided some $21 million in last year's
Supplemental Appropriations bill for decontamination, including $12.5
million in Superfund funding to ensure that EPA didn't have to divert
regular cleanup resources to pay for the Hart building. This was based
on EPA's best estimates at the time, and we know now that the cleanup
actually cost much more. So we'd like to know how much in anticipation
of another Supplemental. We want to be sure that EPA, and the Superfund
program, are made whole for their efforts. I also look forward to
hearing what progress EPA has made since our hearing last fall.
Environmental Education
For many years, EPA has run an environmental education program
called the STAR fellowship program. The budget proposes to shift this
modestly funded program--just $10 million per year--to the National
Science Foundation. I have heard from many graduate students who are
concerned that this means their funding will be canceled. So I would
like to know why this shift has been suggested, and what this proposal
will mean for students who are specializing in the environmental
sciences and engineering.
Regulations and Riders
I am concerned about the impact of the recent decision to revisit
the section of the Clean Air Act called ``New Source Review,'' and to
replace it with the proposed ``Clear Skies Initiative.''
I understand the desire to find ways to increase domestic utility
and refinery capacity. But we must have certainty and reliability in
the program for industry and the environment. I want to be sure that
we're not changing the rules midstream. We can't have an open-ended
dodge ball situation on this.
We need to protect children and the elderly, who are most
vulnerable to the health effects of air pollution. We have record-high
levels of childhood asthma, and a recent study has confirmed that air
pollution contributes to lung cancer. Many water quality problems in
the Chesapeake Bay and other waterways are due to air pollution. So we
want to be sure that we continue the public health and environmental
gains made under the Clean Air Act.
Finally, Senator Bond and I have always taken the position that the
VA-HUD bill should not be a vehicle for environmental riders--good or
bad ones. And I hope that as we move a bill through the Committee this
year, we can continue this policy.
Ouster Study Thank You
In closing, I want to personally thank Administrator Whitman for
working quickly to help fund a study by the National Academies of
Sciences on the possibility of introducing a new oyster species into
the Bay. I understand that EPA was able to dedicate $90,000 of existing
resources for this study--more than any other Federal agency that is
involved. The environmental groups and watermen who are working so hard
to bring oysters back to the Bay really appreciate your efforts, and so
do I.
Senator Mikulski. Do you want to kick off the questioning
part by going right to this whole issue of enforcement? And we
understand that the budget cuts $10 million from enforcement,
100 ``environmental cops on the beat.'' And I wonder, what are
the consequences of this policy shift? What will be the
consequences to the environment? And then, you want to do a
State program, and do we need authorizing? So, why do I not
just offer some broad questions and--but let us go for it.
And, again, thank you.
Ms. Whitman. Certainly, Senator. First, let me say that the
budget that we have proposed for enforcement, represents the
highest funding level in that part.
Okay. In that part of the Agency, it is the largest
commitment to vigorous enforcement. We expect to hire up
another 100 in the coming months. We are looking forward to it.
We have just come off one of the most successful years ever
in enforcement. We had outstanding results. Last year, alone,
it was nearly record-setting. It was not quite record-setting,
but nearly record-setting expenditure for violators of
pollution controls and environmental clean-up.
As you know, states typically do about 90 percent of the
enforcement and compliance work. And what we are seeking to do
with this budget is to enhance that. Again, that is the $15
million program that we have in this budget. But we are very
comfortable that the levels proposed for enforcement in this
budget proposal will enable us to continue the very successful
track record that we established last year. And we do not see
any reduction in enforcement focus. There is going to be no
reduction in the kind of dedication that we commit to
enforcement.
What we are doing and what you are seeing reflected in
numbers, is a reduction of the overhead. But as you pointed
out, we have about 130 vacant positions. And that has been
somewhat traditional for the Agency. I think we have lapsed
about 120 each year. It is a question of getting people in and
keep training them, keeping them in, and people leaving. The
normal attrition.
So, we do not feel that this reduction in the overhead is
actually going to be detrimental to the enforcement efforts of
the Agency, particularly if we are able to help the States some
more.
Senator Mikulski. So, I just want to be clear. The request
is to cut $10 million from enforcement. You have 100-and-some
vacancies. Then you are saying you are going to hire 100
people. Is that correct?
Ms. Whitman. Right. We anticipate hiring 100.
Senator Mikulski. Now, is that 100 to fill the vacancies?
Ms. Whitman. That will--yes. It is part of the normal----
Senator Mikulski. Or is that in addition to, and therefore,
you would have 200 people----
Ms. Whitman. No. It will be----
Senator Mikulski [continuing]. To fill the vacancies, plus
the 100?
Ms. Whitman. They--it will be to fill the vacancies.
Senator Mikulski. Fill the vacancies. And then you are
saying the $10 million cut would have no consequence on
enforcement.
Ms. Whitman. It is not coming out of those people who are
doing the actual enforcement and inspections. It is coming from
other parts within the Agency. The actual personnel of the
enforcement division represents about a fifth of the overall
personnel of the Agency. And that will continue to be true.
Senator Mikulski. Well, I think we want to see how that
really works, in terms of this, and ask your staff to be able
to follow-up.
Ms. Whitman. I would be happy to give you a more detailed
breakdown for the record, if you would like it.
ENFORCEMENT: STATE GRANT PROGRAM
Senator Mikulski. Now, you are requesting a $15 million for
a new State Enforcement Program. I would like you to describe
that. And, also, do you need authorizing legislation to be able
to create this, or do you want us to create it by a line item?
So--but tell us, now, what this $15 million would buy to
protect the environment, if it protects it at all?
Ms. Whitman. Well, as I indicated to you before, the States
now do 90 percent of the compliance and 90 percent of the
inspections. What we want to do is leverage that, to make it as
effective as it can possibly be.
They are the ones on the ground. They know where the
problems are. They know who they have to go after. Some States
are more sophisticated in their enforcement than others. What
we are proposing, it would be a competitive program that States
would submit to us what they would do with those dollars;
whether they would use it to enhance--some States, for
instance, may be very good on water enforcement; they may have
all the technology and trained personnel, but not as good in
air. And with a little bit more money, particularly, now, when
they are facing budget squeezes, they could use that to enhance
their ability to do the air monitoring. Others might see it as
an ability to make a commitment that they have not made before
to enforcement.
And so, it would be a competitive program, but it is
reflective of the fact that they already do a great deal of the
work. And it makes sense that they do a great deal of the
compliance and enforcement work, because they are there full-
time.
Senator Mikulski. Do you need an authorization to do this?
Ms. Whitman. No, we do not.
Senator Mikulski. But it does create a new enforcement
program. You think you can do it through an executive
direction.
Ms. Whitman. It is a current--I mean, we----
Senator Mikulski. That is not a confrontational question.
Ms. Whitman. Yes. We have current grant authority in this
area. This is an enhancement. It is a change, in that we have
current grant authority but are proposing to expand the current
grant authority.
Senator Mikulski. I see. Senator Bond? Thank you. We will
come back----
CLEAN WATER FUNDING
Senator Bond. Thank you very much, Madam Chair.
Pursuing the line that you and I both mentioned in our
opening statements, I am very disappointed that the EPA did--or
the OMB, for EPA, requested a $138 million reduction from the
O2 level for clean water fund. As I mentioned in my statement,
the--there are tremendous needs. And we see it in each State.
I would like your views on what a reasonable level of
funding should be. How do we prioritize it? We have got aging
and obsolete water infrastructure of concern to many cities in
the East and Midwest, and yet, we just heard Senator Domenici
talk about the huge new capital costs that the arsenic standard
is going to pay require is going to require in the West, and
yet, we see, with the needs going up, the money coming down.
How do we balance it?
Ms. Whitman. Well, Senator, first of all, I would repeat
what I said in my opening statement; that, in fact, the
combined monies for the two programs, $1.2 billion for the
Clean Water State Revolving Loan Fund, and $850 million for the
State Revolving Loan Fund for the Drinking Water, is the
highest request that has been made before.
But the issue that you are talking about is one where had a
little bit of this discussion last year. And it is becoming
even more important. I honestly, believe that water is going to
be the major environmental challenge of the twenty-first
century; both in quantity and quality.
Obviously, our responsibility, here, is not quantity. But
the numbers that we are talking about are going to require that
we engage very closely with Congress; that we reach out and
work with States, and with local water authorities. Whether you
take our projections or you take the gap analysis or you take
the utilities' projections, we are talking about literally
billions and billions,--upwards of a trillion dollars in
infrastructure needs. This is far beyond the ability of any one
branch of government to satisfy.
We are putting money into a great deal of research, to see
if there are new technologies out there, to look at new
technologies that can help address the needs. We are working
closely with the water utility organizations to see what we can
do to support the kind of work they are doing; to see how, in
fact, we can help lower the cost for this enormous challenge
that we have in both drinking water and sewer, as well as
septic systems.
But this is something that is going to be far beyond any
one budget cycle. And we really do need to work closely with
you.
HOMELAND SECURITY: TECHNOLOGIES AND METHODOLOGIES
Senator Bond. We very much appreciate your attention to it,
because I really think that the problems are big and they are
getting bigger. And I would just note, parenthetically, I have
had discussions with high Administration officials, who do not
think that members of Congress should be able to provide
funding for high-priority needs in their States.
I assure you that we see those needs. We are going to
continue to do it. I know the Executive Branch does not like
it. You have lots of authority, but we also are living with and
listening to our people. We are going to continue to provide a
very small portion where the needs are greatest. And just--my
only suggestion is just relax and enjoy it, because we are
going to help where we think the needs are most pressing in our
State.
Let me turn to the matter that Senator Mikulski was
discussing, and that is--well, first, let me turn to some
problems in counter-terrorism. There are many, many challenges
that you have faced. And we congratulate you and the agencies
who worked with them, but you had to coordinate with FEMA at
the World Trade Center site, and with the Department of
Justice. You have a special role to play in researching
technologies and methodologies. How are you coordinating with
other Federal agencies?
Ms. Whitman. We are coordinating very well. Most of it is
done through the Office of Homeland Security, as a
clearinghouse, but we also do it directly.
For instance, in the situation of the World Trade Center
and up in lower Manhattan, I have put together a task force of
the other Federal agencies, as well as the State and the city,
to look at the issue of indoor air. If there is a gap in
response, that is where we have it. I believe determining who
is responsible for the indoor air and the clean-up is required
after something as catastrophic as what we saw September 11.
We are working directly with drinking water systems to
ensure the safety of drinking water supplies. We have been
working since September 11 with the various water companies.
There are 165,000 independent, individual, municipal, and State
water systems nationwide. We have worked with them. We work
closely with Sandia Labs and the Department of Defense in
enhancing our knowledge of what kind of chemical or biological
attack could be expected; best ways to detect contaminants; and
what is the most current technology available to deal with
that.
We also, obviously, are working with the chemical industry
to ensure that they have done vulnerability assessments, as
well. We have done the same thing with the water systems, to
make sure that they know what their vulnerabilities are. We
have worked with the FBI and conducted outreach to every single
local law enforcement agency right after September 11 to help
expand their knowledge of what to look for around reservoirs
and what kind of vulnerabilities water systems have, so that
they could, in fact, help us. They need to help the systems.
We have been working very closely, as an agency, with the
individual groups for which we have a responsibility, and then
reaching out to our Federal counterparts. We work closely with
ATSDR, the CDC, the Department of Defense, on a regular basis.
SMALL AND RURAL WATER SYSTEMS VULNERABILITIES
Senator Bond. Madam Chair, if I may just finish up on that,
without asking a question.
I would ask that you submit it for the record, Madam
Administrator, but we have a number of small businesses in our
State, working on decontamination processes, remediation
processes. One of them was working with the Department of
Defense on a electrostatic decontamination. I want to make sure
that those technologies are reviewed by the appropriate
scientists in EPA to see what works, because we have got a new
challenge. And our small businesses are very mobile. They may
be coming up with something. We would like to be able to work
that.
The other thing, for the record, I would like to know how
you are planning to help small and rural water systems prepare
for and reduce their vulnerabilities. I have been very
impressed. The large water systems are very sophisticated.
And just for the record, if you would let us know what you
can do to help the small systems, because a water system attack
in a small community could be very deadly, because they do not
have the protections built in that the large systems have.
And thank you, Madam Chairman.
Ms. Whitman. I can give you a little bit of that answer
right now, Senator, if you would like. We are doing a great
deal of work with the small and mid-sized water systems. We are
conducting training for them in the use of vulnerability
assessments and in the development of emergency operations
plans. As I indicated before, we worked with Sandia Labs, and
enabled them to move ahead in much more rapid fashion with a
vulnerability study and training manuals and a disk that we are
adapting that methodology to supply the small water systems.
To support them, there is $3 million that we are putting
toward working with the small and medium water systems to train
them on the use of vulnerability assessments and the
development of emergency response plans. So that they know what
they need to look for and how they need to better protect
themselves.
We are very sensitive to that. Our focus is on making the
most, the safest, fastest. That is how we have been guiding--
how we have gone forward with the overall process of protecting
the Nation's drinking water supply. As far as research is
concerned, we are constantly getting applications for approval
as new technologies to deal with contaminants, such as Anthrax
and other types of biological and chemical weapons. We are
reviewing those as quickly as we can. We have an expedited
process that we are undergoing, but, obviously, we have to make
sure they do what they claim.
Senator Mikulski. Thank you very much. I am going to do a--
kind of a next-come/next-serve, if you would proceed--Senator
Craig and then Senator Kohl.
COEUR D'ALENE BASIN SUPERFUND SITE
Senator Craig. Well, Madam Chairman, thank you. I will be
very brief.
And I apologize for running late, Director Whitman, and
missing your opening comments. I will read your testimony. The
EPA is very important to all of us and the work you do and the
work you are doing is critical. And I thank you for it.
I have got a brief statement that will probably only
require a brief comment from you, that is of great concern to
the Idaho delegation and our governor. And I am quite sure
that, by now, you are aware of it. We have a Superfund site in
north Idaho, in the Coeur d'Alene Basin area. Most know it is
an old lead and silver mining area that has been in operation
for nearly 100 years. And we are in what I hope are the final
days of that effort. A great deal of work has been done. A
great deal of time and money has been spent, but the
communities involved are still in limbo as the site continues
to work its will.
You are probably also aware that the citizens of north
Idaho are profoundly concerned, as are we, about EPA's proposal
for a 30-year, $1.3 billion clean-up in the basin. That is
currently a proposal that is out there. I must tell you, in as
blunt a term as I can, it does not make any damn sense.
Now, having said that, and that is probably as blunt as I
will get, EPA's proposal plan is so aggressive and so far-
reaching, that I do not believe that it can be effectively
implemented. It will allow EPA staff a generational opportunity
to live in one of the most beautiful areas in the world, which
is a prime vacation site for most of the inland empire.
No, Madam Chairman, we are talking about a Superfund site.
No, we are talking about one of the prime vacation sites in the
United States. That is why, Director Whitman, I think it is so
important that you come to the ground and see this.
Anything that is going to ask of you to find $1.3 billion
and dedicate your Agency for 30 years in a place that has one
of the premier golf courses of the world, one of the top
destinational resorts of the world, and some of the most
beautiful glacierly gouged lakes in the northern tier of our
country, deserves your attention.
Now, having said that, our frustration is multiple. We know
that EPA has spent a good deal of time and a lot of money. It
is a 21-square-mile site. There are recommendations that it be
expanded to over 1,200 square miles. Now, if you think you have
got management problems, now, try to manage a 1,200-square-mile
Superfund site. That is bigger than some of the eastern States.
Senator Mikulski. How big is that?
COEUR D'ALENE BASIN: NATIONAL ACADEMY OF SCIENCE STUDY OF CHILDREN'S
HEALTH
Senator Craig. 1,200 square miles is what some EPA people
are proposing be a new Superfund site. It is watershed upon
watershed, mountain range upon mountain range. It is time we
all get real. The bureaucracy has run amok.
And here is what I am proposing we do: While the State of
Idaho would like to manage this, because they think they can do
it with so much more efficiency, less bureaucracy, and get a
good deal more done in a shorter period of time--what I am
proposing is that we ask the National Academy of Science to
come in and look at the science.
While there is physical work to be done here and there, and
hot spots left, what is driving all of this are blood-level
measurements of the children of the area. There is, in my
opinion, ample evidence to demonstrate that those blood levels
have plummeted dramatically over the course of the last two
decades. We have taken all of the top soil away and replaced
it. We have torn down all of the old buildings and buried them.
We are reconstituting the area, totally. The streams now run
clear. They are swimmable and fishable. And yet, somehow, the
old science lingers on and drives the bureaucracy forward, in
my opinion.
Even the website of EPA on this issue has the old science.
It is one of the fastest growing economic areas in Idaho,
outside the edge. And yet, we had a company with 300 new jobs,
less than 6 months ago, look at the website and look at the old
science in a final decision-making process whether to come and
locate in that area, and they left. And it was devastating to
the opportunity of the economy of that area.
It really, I believe, demands our attention. Now, what I am
proposing, Madam Chairman, is that we get the National Academy
of Science in to look at the science, to peer review it, to
give it an objective second- or third-party view. It has had
none of that. It has been in-house science. And I believe it is
obsolete science today. And to do that, I am going to be asking
this committee to help me find some money to direct them. I
would like your support, Director Whitman. But most
importantly, we need your attention to resolve this issue.
I hold a golf tournament in the middle of a proposed
Superfund site each year, along the shores of this beautiful
lake that is full of boats and vacation homes and all of that,
and people say, ``Larry, they are talking about this being a
Superfund site?'' And I say, ``Uh-huh.''
It just does not stand the test. Therefore, it does, I
believe, require your attention, and ours, to resolve this
issue, to bring some closure to it and some permanency and some
direction. It should not allow 30 years and $1.3 billion,
because this committee and this Congress and America's
taxpayers do not have that kind of money to waste, when, I
believe, for a less than a third of that, you can clean up the
remaining hot spots and let Mother Nature help to finish the
rest.
That is all I have to say, but I hope I have gained your
attention and that we can work together to resolve this. I know
that you are aware of it, and we chatted about it. It is time,
now, for us to lead on this issue and bring some finality to
it.
Thank you, Madam Chairman.
Senator Mikulski. Thank you, Senator Craig.
And the Idaho situation has--I think, first of all, its
enormity and significance is most compelling for, really, your
personal attention, I believe, Madam Administrator.
And I know Senator Murray also wanted to be at the hearing,
because of its impact also on Washington State, and would ask
that whatever dialog occurs and problem-solving, that Senator
Murray be included. But there is no doubt that this is a big
issue and it is a big buck issue, and its consequences are
significant to Idaho, Washington State.
SPOKANE RIVER HOT SPOTS
Senator Craig. Thank you, Madam Chairman. That is well put,
because these drainages do flow into the State of Washington.
And we have done work in that area to know that there are hot
spots along the Spokane River that deserve our attention--the
Coeur d'Alene River.
Senator Mikulski. Senator Craig, I think Senator Murray
wanted to talk, but I--I think, right now, let us really make
this a really top priority with EPA, and perhaps could make it
really an--a real model for cleaning up this. But when you are
talking about cleaning up mountain ranges and so on, this is--
this is something.
So, let us turn, then, to Senator Kohl. I hope you have
some easier problems.
Senator Craig. Madam Chairman.
Senator Mikulski. Yes, sir. I just----
Senator Craig. Could we give the Director an opportunity to
make a comment on that?
Senator Mikulski. Oh, I am sorry. I am sorry. Go ahead.
Ms. Whitman. No. That's all right. I just wanted----
Senator Mikulski. Please. I apologize, Senator Craig.
Ms. Whitman. I wanted to assure the Senator that his
eloquent plea has not gone unheard. I have had the opportunity
to talk to Governor Kempthorne on a number of occasions. We
have sent the Regional Administrator for Region 10 there to sit
down and see if we cannot bring a resolution to this issue.
The National Academy of Science remains a very real
potential possibility. I know there are some proposals that
would clean up at least the residential area, within 5 years,
at a much lower cost than had originally been proposed by the
Agency. We are looking at all of those things.
I also believe that they are trying to set up a trip for me
to be able to go out there and see it and take advantage of the
beautiful park.
Senator Craig. Well, we would like to have you. We will--we
will show you a good time. And what is most important about
that is to look, Madam Chairman, in its whole perspective. A
lot of work has been done. A lot of good work has been done. An
awful lot of money has been spent, and a phenomenal amount of
time.
It is not a showcase of efficiency, but it has solved a lot
of problems. And I am not condemning the work of the past. What
I am condemning is the perspective of the past lurking in
future proposals.
Thank you.
Ms. Whitman. I look forward to working with you on this,
Senator.
Senator Craig. Thank you very much. Thank you, Madam
Chairman.
Senator Mikulski. Senator Kohl.
STATEMENT OF SENATOR HERB KOHL
Senator Kohl. Thank you, Senator Mikulski. Governor
Whitman.
Ms. Whitman. Senator.
Senator Kohl. Lord Alfred Tennyson wrote, and I quote, ``In
the spring, a livelier iris changes on the burnished dove. And
in the spring, a young man's fancy lightly turns to thoughts of
love.''
Senator Kohl. However, Governor Whitman, in Wisconsin----
Ms. Whitman. I do not think that is what is happening.
REFORMULATED GAS PRICE INCREASE
Senator Kohl [continuing]. We worry about whether gasoline
prices are going to go through the roof, again. I can assure
you, as my constituents start to defrost this year, we--you and
I are going to be grilled, and rightly so, over what we are
doing to make sure that regional gas prices do not go through
the roof again, like they did last year.
We do appreciate, very much, the new regulations that EPA
has put forth, allowing refiners some flexibility in making the
shift from winter to summer fuel. And we are hopeful that will
be enough to solve the problem; however, if it is not, and if
we see another gas price spike unique to our region, will the
EPA be prepared with some additional policy or response? Can we
get your commitment that if gas prices skyrocket again, solely,
in the Chicago-Milwaukee area, EPA will engage immediately and
actively to fix the problem?
Ms. Whitman. We will certainly work with you to determine,
first of all, what is causing that problem and if we need to
take some action to help alleviate it, as we did last year.
As you point out, we have made some regulatory changes that
should ease the burden. And we do not believe that with the
flexibility we have given to the refineries on the blended
stock and the flexibility we have given on the 2 percent, that
there is no reason to assume, unless there is a major
catastrophe at one of the refineries, that there should be any
price spike due to the reformulated gas. But we certainly will
watch that very carefully and work with you on that.
FOX RIVER CLEANUP PROJECT
Senator Kohl. I thank you. Governor Whitman, EPA has issued
a new guidance for river clean-up or sediment management. You
recommend a so-called iterative process, that is being used on
the Hudson River clean-up. As I understand, it means that the
EPA will clean up large river sites in phases, starting
upstream and moving downstream, so that you can learn from the
work and modify the remedy as the work is done.
For us, in Wisconsin, what could this mean for the Fox
River Clean-Up Project?
Ms. Whitman. Well, Senator, we are moving forward,
obviously, with Fox River. We are very focused on it. Fox River
is larger and there are more contaminants to be taken out of
the river there. At this point, it appears to be a much less
expensive program, but that is because of the way that the
sediments will be handled once they are taken out of the river.
There is not a transportation issue, because of some of the
willingness of the responsible parties and agreements that have
been reached that settle--the sediment will be taken care of
closer to the site. And that vastly reduces the cost.
I believe, as we go forward on any of these major
undertakings, that we should constantly be looking at the
science, looking at the results, to determine whether or not
what we project is going to happen is happening, and be
willing, as we look at these, to change, if we see we are
having an adverse impact; if something--if we are resuspending
more than we thought we were resuspending, and it becomes a
bigger threat to the health and the environment of the river,
then we ought to stop and take another look and go back at it
in the right way.
These are large undertakings. The Hudson River and the Fox
River Project are both enormous. They are very important. They
need to get done, but they need to get done right. We believe
we have the science. We believe we have the appropriate
approach, but I do not think there is anything wrong with
checking yourself as you go along.
There have been some allegations that have said that if you
do that, you are really just looking for a way out. I do not
see it that way at all. I see it as a way of doing it better,
making sure we are getting it right, making sure we are doing
exactly what we said we would do for the river and for people
who live in those areas.
FOX RIVER CLEANUP PROJECT: COST AND PUBLIC ACCEPTANCE
Senator Kohl. Okay. In the case of the Fox River, there is
a great deal of uncertainty about the cost of the clean-up,
because people are concerned that the disposal site identified
in the plan is not practical. Local disposal sites for dredge
sediments are an important part of any clean-up effort, as we
know. The disposal site influences costs and public acceptance
of the clean-up plan, as we know.
Should EPA try to identify and tell the public about
potential disposal sites before the clean-up plan is proposed
for public comment?
Ms. Whitman. Well, we are in the process of reviewing the
comments. As far as the actual work on the river goes, as you
may know, we did a demonstration project that we did with the
State of Wisconsin, and were able to meet all the goals.
Once we have proposed the solution, we go through the
comment period and the proposed plan, and that will obviously
include the concerns raised by citizens as for ultimate
disposal. And that will be part of our response to the citizens
and to the concerns that they raise.
Senator Kohl. As I understand it, the disposal site permit
has not been granted, and there is some considerable question
as to whether or not it is going to be granted.
Ms. Whitman. I am not as up-to-date with that.
Senator Kohl. I will, perhaps, work with your office on
that in greater detail.
Ms. Whitman. Certainly.
ENVIRONMENTAL EDUCATION: TRANSFER TO NATIONAL SCIENCE FOUNDATION
Senator Kohl. One other question, Governor Whitman. I have
been told that the Office of Management and Budget has proposed
a transfer of the EPA's Office of Environmental Education to
the National Science Foundation. OMB claims that the transfer
was made because the Environmental Education Program was
ineffective; however, supporters of the program think this is
only an attempt to de-fund Environmental Education. And I have
heard nothing but good things about the work that the EPA is
doing.
Was EPA unhappy with the way Environmental Education was
working? As an Administrator of EPA, did you recommend that the
Environmental Education Program be transferred to the National
Science Foundation? Does the EPA agree with OMB's evaluation of
the Office of Environmental Education, or was this an attempt
to cut the budget for Environmental Education?
Ms. Whitman. Senator, I do not believe this was an attempt
to cut the budget for the Environmental Education. When I
talked to those who were concerned about it and making the
recommendation, it was more an effort to consolidate
Environmental Education at the National Science Foundation.
There was a finding that, in fact, their work had not been
recognized enough in previous budgets and they need to and
deserved to continue to broaden the scope of their work, and
that they, in fact, have the ability to administer this very
well.
We did keep, as you know, a part of our research fellowship
program, our work with minority universities. I think we were
doing a pretty good job on the Environmental Education program,
but I can understand the desire to consolidate Environmental
Education in one place, if that allows you to maximize your
dollars and make sure you are having the most effect that you
possibly can.
Senator Kohl. It was my understanding that this was a $9
million program, and when it was transferred to the National
Science Foundation, the funding did not go along. So, the
inference was at least given that the program was going to be
de-funded, which, to most people, means it is going to be,
basically, eliminated.
I do not know whether or not you are aware of those
details, but----
Ms. Whitman. No.
Senator Kohl [continuing]. But that is the information that
I got. And it is in that connection that I bring the question
to you today.
Ms. Whitman. I can appreciate that. I am not aware of the
National Science Foundation's budget, as it reflects
environmental education.
Senator Kohl. I thank you very much. And I thank you, Madam
Chairman.
Senator Mikulski. Senator, you have raised some very
important questions. And the questions that you raised
regarding environmental education, really, very much paralleled
my own. And I want you to know, as we look at NSF, which is
funded at this committee, that I would encourage you and your
very able staff to also look at it.
I am concerned about the transfer. Everyone who seems to
work with the small but obviously very effective program, and
the EPA is quite satisfied. The Chesapeake Bay Foundation,
which is a premier environmental advocacy and education agency
just speaks so highly of it, and their networks with their
counterparts around the country speak about this. And this is
really where we teach the stewardship of the environment, where
the young people get hands-on experience and so on.
So, I think we need to look at it. Senator Bond and I need
to talk about it. And we welcome your input. Just rearrange--
the question is: What is the objective we seek? If it is really
to have a really outstanding environmental education program,
it is where is the best place to put it, and where should we be
putting our money?
So, we thank you for that.
CHESAPEAKE BAY RESEARCH PROGRAM: RECRUITMENT
Administrator Whitman, I am going to come back to the--
speaking of the Bay, before I go on to clean water. How are we
on getting a permanent head of the Chesapeake Bay Foundation
Research--I mean, the Chesapeake Bay Research Program?
Ms. Whitman. We have a number of outstanding candidates. We
have winnowed the list down from seventy. We had seventy
applications. We have gotten that down now to a number where we
are going to start to do the interviewing and hope to be able
to appoint somebody very quickly.
CLEAN WATER REVOLVING LOAN PROGRAM
Senator Mikulski. Yes. Because we have been without one
since Mr. Murkowski retired. And so, we really think it needs
the--needs a permanent appointment. So, we look forward to
hearing about this.
Let us go on, back to the Clean Water State Revolving Loan
Program. In the budget, it really does cut it from $1.35
billion to $1.2, and also, when we read the fine print, it
startled us, because the fine print indicated to myself and my
staff that it will zero out the Clean Water State Revolving
Loan Program when we get to 2006, just at the same time when--I
think if the committee had its way, we would make this a $3
billion or even $5 billion program.
Have we read this wrong, or is this OMB? We do not want to
put you in a difficult situation with OMB, but we--and I know
they are trying to cope with how to achieve the budget,
homeland security, and Nonpoint source. I mean, this is not the
committee that is going to debate that. But we will debate that
this program cannot be phased out and we cannot use budget
gimmickery with it.
Ms. Whitman. Senator, I think the important thing here is
that the fund has enough money and will continue to have enough
money to revolve at more than $2 billion a year. It has been at
least for the last few years. It is revolving at almost $4
billion now, because it is a fund that gets repaid and
replenished by those who are using it.
It is really at a very healthy stage. Now, this gets back
to the broader question that both you and Senator Bond have
been talking about this morning, which is that the needs are
far, far greater than that. And that is why we need to have
vigorous support of Congress in the discussion of how we
address these issues. But as far as the actual dollars going
in, the fund will be able to continue to revolve. Congress
initially had supported a $2 billion revolving loan fund. It
will certainly be at that, even if no more money is provided.
Right now, it is revolving at closer to $4 billion.
Senator Mikulski. Well, I am troubled about this. I am
troubled by the whole Clean Water SRF and its lack of funds. I
know our colleague, Senator Jeffords, is leading an effort to
re-authorize this program. I am concerned about the formulas.
And we do not want to get into an East Coast-Midwest-Western
struggle. Under the current proposal, I lose out. What I do
think, when they are--I just heard, ``Me, too.''
So, you can understand. The appropriators are not going to
lose out to the authorizers.
Ms. Whitman. You never do.
Senator Mikulski. No. We just will not but I think that
this is the time where, really, you and your team have to
really get in it with the efforts that are being made by the
Environmental Public Works Committee. They are the authorizers.
We respect them. We value them, but not necessarily their
formula changes.
But really, this is a great opportunity for us to create a
21st century Clean Water State Revolving Loan Fund and to be
serious about what we need to do and the amount that it is
going to take, and then the best way to do it.
We really would encourage your very strong hands-on
involvement with the committee. You know it as a governor, you
know it now as an Administrator; you--you were very active, of
course, with the National Governors Association. I mean, you
have kind of been there, too. And you know what it is like
passing water weights along to those--like those older
communities in New Jersey. And we could go to--we could go to
Wisconsin, we could--you heard Senator Craig talk about
arsenic. Anyway----
Ms. Whitman. Senator, there is no question that there is a
gap developing between the existing level of water and waste
water infrastructure investment and the growing need. There is
just no question about that. Just to reassure you that, while
the planning assumptions of the President's budget do recognize
a ramp-down, that is nothing new. It does not reflect any
policy decisions.
This is the way the formula was set up in the beginning,
and it will not affect any of the decisions that we are making,
but we do need to address what is a very serious growing gap.
When I say I think water, both its quality and its quantity is
the environmental challenge for the Twenty-first Century, I
mean it. And this discussion is part of it. We do need an
investment in water infrastructure, but we are going to have to
work together. We need to work very closely with you to try to
identify the best way.
Senator Mikulski. Well, are you actively involved with the
efforts of the Environmental Public Works Authorizing Committee
on this topic, and their legislative initiatives?
Ms. Whitman. Yes. Yes.
U.S. GEOLOGICAL SURVEY: CONTAMINENTS IN WATER
Senator Mikulski. And so, we--we do need to be talking
about it. My time has expired, and I want to go to Senator
Bond, but one other question about water. I was very troubled
to read about the U.S. Geological Survey recently identifying
that there is a number of contaminants showing up in water,
from birth-control pills to steroids to pesticides to--et
cetera. As a result of the recent study, FDA said it was going
to take a look at its effects on the environment.
Where do you come in, with this startling report of the
U.S. Geological Survey? Again, validating your belief and mine,
that water is the big issue.
Ms. Whitman. We're working very closely with all of the
other Federal agencies that are addressing this issue, to get
an understanding of what this means. This is reflective of
something that we have seen coming and, I think, all of us have
seen coming for some time. As science gets more sophisticated,
it is able to identify more substances. It is not, at the same
time, able to tell us exactly what the impact of those
substances are on the human body or on the environment, in
general. That is where we need to turn our attention, now that
we are beginning to identify that, in fact, these things are
appearing in water.
We need to get a better understanding of what levels do
they affect humans or at what levels do they affect the
environment? We need a lot of scientific research here. We are
putting our scientific focus on this. And we are working very
closely with all those who are involved in it in the Federal
Government.
Senator Mikulski. Are you working with FDA----
Ms. Whitman. Yes.
Senator Mikulski [continuing]. And the Geological Survey?
Ms. Whitman. Yes.
Senator Mikulski. Well, again, I would like to come back to
that, probably, even, maybe, at another hearing, because it
is--the question is: Where--how did this get into the water?
And now that it is in, what--what is the effect, but also, what
is the synergistic effect? But that is a little bit more than
for this appropriations hearing. But I really welcome your
staff paying very close attention to this. And your own
commitment to science, I think, will help us be able to get
in--get into this and solve it.
Senator Bond?
NEW SOURCE REVIEW
Senator Bond. Thank you very much, Madam Chair. I am going
to have to ask you a couple of quick questions, because we have
got a long way to go and a short time to get there. And the
Chair and I both have other hearings we are supposed to be in.
Number one, I commend you on your emphasis on water. We
look forward to working with you. I commend you for having the
largest request in history for the SRFs. It is not enough. This
committee criticized previous Administrations, because they
provided even less. So, we look forward to working with you on
that.
New Source Review--this is going to be a real challenge to
balance the environmental goals, the energy policy, without
driving up costs. Give a quick thought on how you balance those
two compelling needs.
Ms. Whitman. Well, New Source Review is a part of the Clean
Air Act that has been subject to a lot of attention and the
subject of a lot of concerns particularly from the utility
industry. Some of the concerns are the lack of clarity in some
of the definitions, what was routine maintenance, repair and
replacement; what triggered New Source Review. There is some
compelling evidence that, in fact, initiatives that might have
cleaned up some emissions from power plants were not
undertaken, because of concern of triggering New Source Review,
but it is always hard to prove the negatives. So, it is
something that has been very contentious.
The New Source Review reform was first undertaken by the
previous Administration, back in 1996. We are looking very
closely at what was proposed there. It was also a plea from the
National Governors Association that we look at how we can
reform New Source Review, in order to ensure that we protect
the environment. We need to make it more efficient and more
effective. And, we are looking at doing that.
INSPECTOR GENERAL DRAFT REPORT: POLLUTION ENFORCEMENT
Senator Bond. I will be looking forward to working with you
in the EPW Committee, there, as well.
In addition, EPA IG issued a draft report out, criticizing
the EPA for failing to monitor and enforce pollution levels.
Only 64 percent of the major sources apparently have obtained
permits. The New England region and the States near and dear to
us are at the bottom of the list.
How does the EPA plan to address the problem?
Ms. Whitman. We are continuing to focus on that. We have
done a great deal, even since the draft report was issued, to
address the failings that they found and the concerns that they
raised, to ensure that we continue to enforce the laws. And we
are enforcing the laws. As I said, last year, we had almost the
best year ever as far as enforcement actions that were
undertaken against those who had violated permits. We have
required them to spend a great deal of money because we believe
in polluter-pays to rectify the situation. And we will continue
to enhance the enforcement efforts of the Agency.
WALL STREET JOURNAL ARTICLE: NON-PROFIT GRANTS
Senator Bond. I mentioned, in my opening statement, the
allegations in the Wall Street Journal editorial about EPA
funds being used by not-for-profits.
What steps has the EPA taken to ensure that--that this has
not occurred? Have--have you done any preliminary
investigations? What steps can you take to make sure these
allegations do not, in fact, occur in the future?
Ms. Whitman. The first and most important thing is we are
going to move to a competitive basis for non-profit grants.
That, I think, is a very important commitment. And that is the
way we are going to move those non-profits grants to a
competitive funding source.
We are also going to ensure that we are focusing on the
kind of compliance that is required of the grantees; those that
get these awards. We are going to ensure that we are doing
everything possible to have them submit to us, in a timely
fashion, the kind of data that would ensure that what was
alleged has not gone on or does not go on in the future. And we
will look at what has been done.
Senator Bond. We would like you to advise us when you find
out what has happened or has not happened--
Ms. Whitman. Certainly.
Senator Bond [continuing]. We would like to know, because
the--the allegations are very serious. If they are untrue, we
need to put them to rest.
Ms. Whitman. Yes.
HOMESTAKE MINES IN SOUTH DAKOTA: INDEMNIFICATION
Senator Bond. If they are true, then we also need to know
about it.
The final issue I am going to have time to ask about today,
I would like just your quick response, Homestake Mine in South
Dakota. We are very much concerned about that. This is a
potential multi-billion dollar project. We are going to have to
ask the NSF about it. There are environmental reviews required,
but I have a specific question about indemnification.
A January 29th Associated Press article said the Mining
Committee was unhappy, because the legislation did not protect
the company from litigation regarding environmental hazards.
The article mentioned that some kind of side letter would be,
essentially, developed as a memorandum of understanding to
outline that the Department of Justice and EPA would implement
indemnification measures.
This is a very major project, with some very serious
implications for funding, as well as remediation.
Is there any truth to the report, or where does that
process stand?
Ms. Whitman. Right now, Region 8 is working very closely
with South Dakota Department of Environment to address this
issue. We intend to continue to work together and to try to
work with the company to see if we cannot get resolution as
quickly as possible. We are in the process of consultation and
due diligence, and public participation to meet the
requirements of the time tables and the legislation.
Senator Bond. Well, if you would keep us involved, because
this committee is in the middle of this thing. And this could
be an extremely expensive effort. We need to know what your
take is on it.
Thank you, Madam Chair.
Madam Administrator, always a pleasure.
Senator Mikulski. Thank you, Senator Bond, for those
insights and also calling to the attention the excellent work
of the IG. In fact, perhaps, while you are here, would you,
would Ms. Tinsley come up, please, for a minute?
Ms. Tinsley. Yes, ma'am.
WALL STREET JOURNAL ARTICLE: INSPECTOR GENERAL DRAFT REPORT
Senator Mikulski. First of all, this committee really
appreciates the role of the Inspector General. And though
they--we sometimes do not extend our hearings, et cetera, and
we are not going to ask the IG to testify, but we want to
express the--really, the outstanding work that IGs perform in
all of the agencies and bring them to our attention.
And we are going to ask Ms. Tinsley to brief both of our
staffs on, kind of, what you consider some of the flashing
yellow lights in the Agency.
But Senator Bond raised something, and then I am going to
come back, in my round of questioning, to--to the issues over
the Clear Skies Initiative. The--The Journal, on March 12th--
and I ask unanimous consent that it go into the record--says
that you concluded that efforts to monitor and enforce
pollution levels have fallen behind, and asserts that EPA has
not realized the benefits from Congress--that Congress intended
in the 1990 Clean Air Act, and that it should give us pause,
because of the tremendous backlogs, bureaucratic confusion, and
so on.
[The information follows:]
[From The Wall Street Journal, March 12, 2002]
Report Says Many Major Polluters Operate Without Required Permits
A third of the nation's major polluters operate without permits and
monitoring systems that Congress had required by 1997 because of a
chronic lack of resources and bureaucratic confusion in State agencies,
according to a draft report by regulators.
The report from the Environmental Protection Agency's inspector
general's office concludes that efforts to monitor and enforce
pollution levels have fallen behind, and asserts that the EPA has ``not
realized'' benefits that Congress intended in 1990, when it made the
last major changes to the Clean Air Act.
The latest report is likely to give Congress pause as it considers
deeper cuts in pollution levels being pressed by both Democrats and the
Bush administration.
In 1990, Congress required each major industrial polluter to obtain
one permit that holds their emissions on regulated pollutants to
specific levels and requires monitoring. The permit was to be issued by
state agencies paid through fees charged to polluters based on
emissions.
The report states that by last July, only 63 percent of the 19,025
major sources of industrial pollution in the U.S. had obtained permits,
although the law imposed a deadline of 1997. The most delinquent
region, according to the report, is New England, where on average only
37 percent of the permits had been issued. Among states, the most
delinquent region is New Jersey, where only 30 percent have been
issued.
Kyla Bennett, director of the Boston office of Public Employees for
Environmental Responsibility, which had obtained a copy of the internal
report, said the ``poor track record'' of industrial states ``should be
setting off alarm bells.'' The largest polluters, such as power plants,
are generally the ones lacking permits, according to PEER, which
represents employees in some of the 112 State and local agencies that
implement the program.
EPA spokesman Joe Martyak acknowledged the program has had problems
and blamed some of the delays on lawsuits by industries. ``We've given
the message to our offices in various regions to focus on things that
really matter and to get these permits in place and correctly in
place.'' The final version of the report is expected to be released in
April.
Bradley Campbell, named last week as commissioner of New Jersey's
Department of Environmental Protection, said, ``I share the concerns
that are raised in the report.'' He has launched an investigation on
the permit backlog and how to deal with it.
The report noted that several states in the EPA sample lacked
sufficient resources to run the program and that many states had
difficulties getting EPA guidance on how the agency's regulations
should be applied to a specific polluter.
One big problem is a so-called new source review section of the
Clean Air Act that applies to power plants and other complex
facilities. John D. Walke, a lawyer who formerly oversaw the program
for the EPA, said that industries often pressured State legislatures to
``low ball'' the fees charged to operate the program. Legislatures in
states that had collected adequate fees sometimes shifted the money to
other purposes. ``These were two of the dirty secrets we had to deal
with,'' Mr. Walke said.
Senator Mikulski. Again, this is not meant to be a debate
or a confrontation. It is meant to--how do we get a cleaner
environment?
Could you share with us--essentially, is what was reported
in The Journal your position? And could you then share with the
committee your concerns, as the Inspector General, about the
pollution control efforts that are hit by bureaucratic concerns
and the lack of funds?
And I think Senator Bond would like to hear this. And we
work together on these kinds of issues. So----
Ms. Tinsley. The comments in the Wall Street Journal were
actually premature. The Wall Street Journal got a copy of a
report that was a draft document. We have not issued that
report, in final, yet. We hope to have it out by the end of
March. We have a revised draft that the Office of Air and
Radiation is looking at now.
And so, I would really rather wait until we have a final
report to give you to talk about that in detail, because the
comment process is very important to us on draft documents.
Senator Mikulski. No. I am not asking you to comment here.
Ms. Tinsley. Right. And so----
Senator Mikulski. No. We believe that you are supposed to
find things, and then the agencies are supposed to tell you if
they think you really did find them.
Senator Mikulski. I mean, is that not right?
Ms. Tinsley. Well, yes. I probably would not say it exactly
that way, but, yes, we value the agencies' comments, because we
want to make sure that what we do report is as accurate as
possible.
Senator Mikulski. Well, Ms. Tinsley, this is what The
Journal reported prematurely still is of concern. We recognize
the appropriateness that we discuss this after the final report
is issued, which is in a matter of weeks--a matter of a week.
And we really invite you, then, to come and brief our staffs
and, perhaps, if appropriate, then--or necessary, to come back
and discuss this with Senator Bond and myself.
But before I turn back to Ms. Whitman, are there any other
flashing yellow lights that you want to tell us about at EPA?
And then--or did I catch you by surprise, here?
Ms. Tinsley. Yes. Well, you caught me by surprise, but I am
trying to be responsive. We have a lot of issues around the
management challenges. And, in fact, the President's Management
Score Card, that we are working closely with the Agency on. And
these are important to help this Administration better manage
Agency activities and make better decisions about how to spend
the limited resources that it does have.
Senator Mikulski. Well, why do we not take a look at the
report? And I know--first of all, Administrator Whitman,
everything I know about her and everything I believe about her
is she really--really sound management and good management is
really kind of one of her--in--in terms of being the way--one
of her signature issues.
So, we did not mean to catch you by surprise or--or
whatever, but you never know what we are going to do here.
Ms. Tinsley. No. No. That is fine. I am happy to speak to
you about that.
CLEAR SKIES INITIATIVE AND NEW SOURCE REVIEW
Senator Mikulski. Well, let us get that report, and then
let us look at this report, because whether it is--whether it
is the Clear Skies Initiatives or the New Source Review, again,
if it is not working at the State level and so on, all we are
doing is top-down rearrangement.
[The information follows:]
[Clerk's Note.--The Office of Inspector General Evaluation
Report on Air EPA and State Progress In Issuing Title V
Permits, can be found at the following website www.epa.gov/
oigearth.]
Senator Mikulski. So, let me say thank you. And I am going
to turn, now, to Administrator Whitman.
Senator Bond raised issues about the Clear Skies
Initiative. And as you know, Administrator Whitman, they have
become enormously controversial. There are ads about you by
TomPayne.com and a variety of things.
My questions goes, I think, to the core. How will replacing
this mandatory review with a voluntary program, be better to
protect the environment and public health, when the mandatory
program, in and of itself, had so many problems? And why would
volunteer be good? And is this not just a loophole for
community--for polluters to squeeze-out, fade-out, loophole-
out?
Ms. Whitman. Well, Senator, I am glad you asked that
question, because there is nothing voluntary about the Clear
Skies proposal. It is mandatory. It proposes mandatory caps. It
is based on what I think was a very prescient piece of
legislation enacted by the Congress when they did their reforms
to the Clean Air Act, which was the Acid Rain Trading Program,
which has been enormously successful.
The proposal, here, is to establish mandatory caps on three
of the most onerous emissions from power plants:
SO2, NOX, and mercury. Under the
proposal, what we would do is set those standards up front, so
that the utilities understand exactly what those standards are.
Under the current Clean Air Act, we have at least five
different regulatory proceedings that are either in place or
about to be in place, but they come at different time frames,
and they are subject to litigation.
They are subject to a lot of back and forth. They do not
result in the environmental benefits that we necessarily seek
in the time frame that we want to seek it.
What we are proposing is, to have Congress set out, now,
standards for SO2 emissions, for emissions of
NOX for emissions of mercury. The utilities will
know what they are. We establish a cap and trade program. And
as with the Acid Rain Program, we feel, and all our models
show, this will be faster; we will get deeper cuts, deeper
reductions.
In fact, from our modeling, at the numbers that the
President has proposed in the Clear Skies Program, we should
get 25 million tons better reductions in sulfur dioxides over
the next 10 years, than under the Clean Air Act; 10 million
tons better reduction in nitrogen oxides over the next 10
years, than under the current Clean Air Act; and 20 tons better
reduction in mercury over the next 6 years, than under the
current Clean Air Act.
That is because you make it simpler. We are not proposing
to roll back the Clean Air Act. We are not proposing to do away
with New Source Review, until we know what those numbers are.
But if the numbers are what the President proposed, we are
actually getting, as I indicated, better reductions than under
the current regulatory process, which is very complicated and
convoluted, takes a long time, and costs a lot of money. Then
New Source Review as it applies to utilities, would become
redundant, and there would not be a need for it. But that is
not something that we could do. That is something that Congress
would have to consider, as they consider the legislation.
The reform of New Source Review was first seriously
undertaken by the previous Administration. And with the support
of governors and State environmental commissioners, we are
looking at again, subject to a lot of misinformation, shall we
say--looking at finalizing, over the next few months some parts
of those original proposals that were put out in 1996 and have
been subject to the full comment period. Then moving it on to
the White House.
Along with that, we would make other recommendations for
anything else that we thought would improve the program.
Anything else would have to be subject to the regular rule-
making process, which is at least a 3-year process.
Clear Skies is totally separate from New Source Review;
however, in our minds, as we look at the numbers, if the Clear
Skies mandatory cap on these emissions is set in accordance
with what the President recommended, then New Source Review
becomes redundant and, in fact, could be a deterrent to moving
forward and reaching these goals.
CARBON DIOXIDE EMISSIONS: VOLUNTARY VS. MANDATORY REGULATION
Senator Mikulski. Well, I want to just take a minute to
talk about carbon dioxide. As you talked about the voluntary--
that it is not a voluntary program; that it is a mandatory
program.
Ms. Whitman. Right. For those three emissions.
Senator Mikulski. My--what staff has shared with me, as we
looked at this, is that, yes, the carbon dioxide, though--the
carbon dioxide pollutant is--would be a voluntary one, and the
other three would stay--would be a mandatory effort. And my----
Ms. Whitman. Clear skies it does not deal with carbon
dioxide.
Senator Mikulski. Tell me about carbon dioxide.
Ms. Whitman. It does not deal with carbon dioxide. It talks
about sulfur dioxide, nitrogen oxides, and mercury. Carbon
dioxide is an issue that I know will be subject to a very broad
and thorough and in-depth discussion. But these three emissions
are the ones that have the most immediate impact on public
health, on asthma, bronchitis, heart disease. They are the ones
that contribute to smog. They are the ones that impact on our
visibility at national parks. And we feel it is important to
move forward with these three, but carbon dioxide is not part
of the President's proposal.
Senator Mikulski. Well, during President Bush's campaign,
he said that carbon dioxide emissions should be regulated as a
pollutant, and that--because the CO2 is a greenhouse
gas, a great contributor to global warming, and spoke from
there.
You even spoke in support of the Kyoto Protocol, which
would talk about the CO2. Now--and I am not trying
to re-hash things. I know it was a very awkward time as the--
last year, when the Administration--but what is the
Administration's position on carbon dioxide? Does it want it
regulated? And how does it want it regulated? And when does it
want it regulated?
Ms. Whitman. Well, Senator, first of all, let me just say
that even as a governor, I was opposed to the Kyoto Protocol.
The issue of carbon dioxide is something else, again. And as
you know, last year, the President indicated, given the overall
concerns he had about energy demands and energy self-
sufficiency for this country, he did not feel it was
appropriate, along with the additional science that he had
received, to mandate a cap on carbon dioxide.
He did propose, at the same time that he proposed Clear
Skies, a separate program to address global climate change.
What he has done for the first time is to set a target for the
United States of an 18-percent reduction in intensity of
greenhouse emissions over the next 10 years. It is with a
proviso that if the science justifies, at the end of that time,
to not just reduce the intensity, but to stop the production of
greenhouse gases entirely, and then to reverse the trend. But
that is if science justifies it.
The proposal also calls for a program of technology
transfer to bring in some of the developing countries by
provide a structure, such that they could continue to grow
their economies, but not committing the same kind of mistakes
that we did when we went through the Industrial Revolution and
all the harm that we caused to the environment. China is the
second largest emitter of greenhouse gases and India in the top
five.
We have come too far in environmental technology not to be
able to provide them with alternatives to some of the
development that we see occurring now. The argument has been
that you cannot involve the developing Nations, until their
economies reach the same plateau or are equal with the
developed Nations. The President--and I concur, believes that
this just does not make any sense, because for the overall
environment, that is very harmful.
In this program, he has provided a baseline protection for
any company that wants to take early action to start reducing
their greenhouse gas emissions. He has called for the
Environmental Protection Agency to work with the Department of
Energy to enhance their reporting model, so that companies can
come in and report their greenhouse gas emissions. We will have
the appropriate base and know where we are coming from; and
companies have some kind of protection, should there be a
regulatory change in the future that would put a cap on carbon
dioxide.
The program also has a great deal of money focused on
technology and science, because there is an understanding that
while we recognize that global climate change is occurring, the
science is not nearly as precise as to all that goes into that
as you would like it to be.
What is the role of black soot? If we are going to make
these enormous investments in addressing global climate change,
then let us make sure we are absolutely certain of where to
make them. But the President said, at the same time, he does
not believe that that means we should sit back and do nothing,
which is why he set that carbon intensity target, which links
our greenhouse gas emission to the economy and allows for
economic growth at the same time that we are decoupling the
same rate of greenhouse gas emissions.
Senator Mikulski. Well, I think that as we move on,
eventually, to our mark-up, this is--the--the Clear Skies
issue, the carbon dioxide issue, will be a controversial issue.
And, again, we, as appropriators, do not want to become the
Conflict Resolution Committee, though----
Ms. Whitman. That is a good role.
Senator Mikulski [continuing]. You know, we are prepared to
do it. It is a very good role and--and so on, but, first of
all, you--you explained the Administration's position quite
well. I think we do need further conversation on it, but my
time is complete.
And I would like to turn to Senator Leahy.
NEW SOURCE REVIEW: AGENCY RELAXATION OF ENFORCEMENT
Senator Leahy. Thank you, Madam Chair.
Administrator Whitman, everybody is talking about
terrorism. And sometimes we forget that you actually have one
of the most difficult jobs in Washington, because it is so
important to each and every American.
The EPA's mission to safeguard our Nation's land and air,
water, to protect the health of our children, our citizens--
especially, our children--from environmental pollutants. And
you have got to balance all of the major health and
environmental issues we face today, and do it with increasingly
limited resources.
Now, I have appreciated the work the EPA--in my home State
of Vermont, EPA has been instrumental in helping Vermont's
citizens restore the health of Lake Champlain and the
Connecticut River watersheds. You have worked with local
communities. You made a commitment to cleaning up two Superfund
sites, and including the Elizabeth Mine. Vermonters, over the
years, thought of the EPA as one of our greatest protectors and
best friends.
So, with that as a backdrop, I have got to tell you, I do
not know when I have been so disappointed in you or your
Agency. I think of how vigorously the Administration has worked
to undermine enforcement of the Clean Air Act, which was
enacted with strong bipartisan support. My predecessor, Senator
Bob Stafford, was actively involved in that.
So, you have--careful balancing is required to protect
public health, but now that balance has been unbalanced,
because special interests have been permitted to put their
thumb on the scales. And I am talking about the New Source
Review regulations that the EPA is on the verge of announcing.
And I know Senator Mikulski and others may have talked about
this, but I look at months of meetings with the energy industry
lobbyists, and the Administration came up with a wish list of
items for power companies that we can--New Source Review, that
is right at the top.
From a cold financial perspective, I can see why power
companies want a special interest provision that gives them
immunity from a Federal law. They just simply look at dollars
and cents. Of course they want that.
The New Source Review requires the oldest and dirtiest
power plants comply with clean air requirements, when they make
upgrades of these facilities. It is a core provision that is
supposed to gradually eliminate--but everybody knew there was a
loophole in the Clean Air Act, but a loophole that was allowed,
because it was going to be eliminated over time. A loophole
that lets power plants emit thousands of tons of pollutants
into our Nation's air and into our children's lungs and
everybody else's.
A lot of years, power companies ignored the requirement.
Their oldest plants add controls. Your immediate predecessor,
Administrator Browner, made it a priority to enforce, not
undermine, the New Source Review regulations. She followed up
on Agency investigations and found energy companies illegally
exploiting a loophole in the Clean Air Act. She found those
irresponsible power producers that chose to put the money back
into the profits, rather than cleaning our air, and she said,
``Enough is enough.'' And she went to the Department of Justice
in November of 1999. She filed lawsuits against the facilities
with these egregious violations.
And guess what happened? When the violators actually
believed somebody was going to call them on it and actually
bring them to court on it, they started lining up, and said,
``Okay. How do we settle all of this?''
And the settlements, of course, meant cleaning the air of
millions of tons of pollutants. It also meant billions of
dollars in fines that would go into our--the coffers for--to
help the taxpayers of this country.
One settlement, alone, resulted in, I think, about $1
billion in fines and reduced about 200,000 tons of pollutants.
Another recent settlement had around $350 billion in fines and
over 50,000 tons of pollutants.
So, it is fulfilling EPA's mission to enforce the Clean Air
Act, and it also said we are serious about it.
Then the new Administration came to town. First major
energy proposal by the Bush Administration was that the New
Source Review enforcement should be undermined by
administrative debt. And guess what? Two major companies who
had previously announced agreements in principle to settle
said, ``Oh, boy, new sheriff in town. We do not have to do it.
We can back off.''
Even though their settlements would have reduced pollution
by over 750,000 tons and would have given $3 billion back to
our Nation's taxpayers. They said, ``Heck. If we are not going
to be enforced, you know, if it is going to be,' go ahead and
pollute, we do not give a hoot,' that is a great symbol, and
let us go for it.''
And so, the pollution still goes on. The polluters do not
pay for the crime.
As a matter of public record, the energy companies wanted
this relaxation of New Source Review. Many were already under
the gun and knew that they were going to have to pay up and
actually obey the law. But your Administration, suggest EPA,
chose to listen to these people, actually act upon their
request, and roll back the Clean Air Act, It just baffles me,
because we had already proven--all you have to do is enforce
it, and they will show up.
A lot of us in the Northeast asked you about it. In
January, the Department of Justice found that all current New
Source Review cases were legally justified and the violators
were right to be prosecuted. I mean, this is during Attorney
General Ashcroft's Justice Department. But you continue to
follow the requests of the energy industry.
Two weeks ago, one of your experts of the Clean Air law
resigned in dismay at the handling of the matter at your
Agency. Monday, the Washington Post reports you are continuing
to follow their requests.
I have heard you say that the Administration's legislation
to cut emissions from power plants, your Clear Skies Initiative
is a replacement for the New Source Review. Well, that is not
true at all. The New Source Review is specific to individual
facilities. It is also mandatory.
The Clear Skies Initiative is about voluntary lowering of
emissions. It does nothing for the communities stuck next to a
1950s coal-fired power plant.
I will tell you, right now, anybody in the Justice
Department--I see you shaking your head, but I disagree. The
relaxation in New Source Review regulation would cover far more
than 1,100 coal-fired power plants that are under your Clear
Skies Initiative. New Source Review applies to more than 15,000
industrial facilities or refineries--pulp, paper mills.
Also, New Source Review is in the--in the law right now.
Why not enact it right now? When I was a prosecutor, I believe
if you had a law on the books, you enforce it. If the
legislature or, in this case, the Congress wants to change the
law, let them do it. But this idea of saying, ``We do not like
that a lot. We do not want to protect the environment. We do
not want to stop pollutants coming down into the waters and the
streams of Vermont or anywhere else in the Northeast.''
Heck, when you were governor of the great Garden State, you
strongly supported the strongest clean air regulations,
including enforcement under the New Source Review.
I--the Administration is--if you tell people we are not
going to enforce the law, none of these companies--I mean, they
have already shown that when the law is being enforced, then
they start--they pay the fines, they start cleaning up. You
tell them the law is not going to be enforced, they say,
``Okay. Good-bye. See you.''
It is like having a speed limit somewhere. You have got one
where you have got the radar----
Senator Mikulski. Excuse me, Senator. I have to get to
another mark-up. Do you want to continue for an extended line
of questioning and----
Senator Leahy. If I could.
Senator Mikulski. I would ask you, then, to close out the
hearing.
Senator Leahy. Certainly.
Senator Mikulski. It is a mark-up on the pension bill. So,
I did not mean to interrupt your train----
Senator Leahy. I appreciate that.
Senator Mikulski. I am going to, then, yield the gavel to
Senator Leahy.
Senator Leahy. I am only going to be a few more minutes,
anyway, but thank you.
Senator Mikulski. And--and then, Senator--and then,
Administrator Whitman, we look forward to working with you.
Senator Leahy. I would have been here earlier, but we had a
closed meeting with the intelligence agencies on another mark-
up. So, I had to be at that. Thank you.
Senator Mikulski. Yes. And I have got to get to the
pension----
Senator Leahy. Thank you.
Senator Mikulski. So, please, continue. And--and then I
will ask you to, then, conclude the hearing.
Senator Leahy. Yes. And--okay. I have--and that is also
fair. Then I will give you time to respond. But, I tell you, in
Vermont, we look at this--well, we take a bipartisan attitude
toward the environment. And I hear it from just as many
Republicans as I do Democrats, saying, ``What in heaven's name
is going on at the EPA?''
Ms. Whitman. Well, Senator, if all I did was read the
papers, I would probably ask the same question. As a person in
public life, and as I certainly found as a governor of the
State of New Jersey, I learned to have a little bit of
skepticism about everything I read in the paper. I, too,
believe that our NSR cases are strong. We continue to urge
companies to come to the table. In fact, one of the two
settlements that you talked about was with, a New Jersey
company, PSE&G, and was concluded just recently. It was part of
the work that we have done. We have gone forward.
We continue to enforce New Source Review. In fact, in the
last year, we made approximately 87 information requests to
power plants, refineries, and other facilities. We issued about
22 notices of violation. We have concluded at least seven
cases. We are still vigorous in our pursuit of New Source
Review.
Senator Leahy. Are you--are you going to prosecute
violations of it? Are you going to----
Ms. Whitman. We are going to continue to prosecute
violations.
Senator Leahy [continuing]. Prosecute as aggressively as
the last Administration did?
Ms. Whitman. Absolutely. We are going to continue to
prosecute.
What we are talking about in reform of New Source Review is
what was proposed by the previous Administration back in 1996.
We will make some proposals to the White House within the next
couple of months that would be based on what was proposed by
the Clinton Administration in 1996, subject to full public
review.
Any additional comments that we make, as far as how to
streamline and make New Source Review more efficient and more
effective, would be subject to the full public process, which
is about a 3-year process.
Senator Leahy. Do you have any companies that announced
agreements in principle, who have now changed their mind?
Ms. Whitman. We are in negotiations with a number of
companies. And some are more active than others. We continue to
have settlement agreements every week. But as you well know, as
a former prosecutor, not all cases have a very smooth road to
completion and that people go forward and they move back and
they go forward and they move back. But we are continuing. We
have negotiations going on for settlement every week.
Senator Leahy. Well, did we talk about what is in the--did
the energy companies want--did any energy companies want
relaxation of New Source Review?
Ms. Whitman. Oh, I am sure there are a number of them that
would love it.
Senator Leahy. Are there any that came to you or met with
you and asked you to do that? You or your Agency?
Ms. Whitman. There have been discussions of what is going
on, but no, I have not been individually lobbied.
Senator Leahy. No energy companies have come to the EPA and
asked for relaxation of New Source Review?
Ms. Whitman. No. They have asked us to look at changes and
how we could make it more efficient. But they have not asked me
to relax it. They have not asked me--I have not been personally
lobbied by anyone asking me to change New Source Review.
Senator Leahy. Are you aware--are you aware of----
Ms. Whitman. They have certainly indicated their
displeasure with it.
Senator Leahy. Are you aware of anybody in the
Administration who has been lobbied for--by any energy
companies for relaxation of New Source Review?
Ms. Whitman. I am not, personally. I would not be
surprised, because, certainly, this has been something that has
gone on for a long time. It is why the National Governors
Association unanimously asked that the Agency look at
streamlining New Source Review.
Senator Leahy. But you are not aware of any energy
companies--you are not aware.
Ms. Whitman. Not personally. No, sir.
Senator Leahy. Well, what do you mean, ``not personally''?
I mean, you are either aware of it or you are not aware of it.
Ms. Whitman. I do not know whether there have been
meetings. I am not aware of them.
Senator Leahy. I am not asking you about--you are not aware
of it. Okay.
Ms. Whitman. No.
Senator Leahy. Would you be amazed to hear that some have
come to the Administration to ask for that?
Ms. Whitman. Would I be amazed if what? I am sorry.
Senator Leahy. To hear that some have come to the
Administration--some energy companies--asking for relaxation of
New Source Review?
Ms. Whitman. No. Not at all. And any meetings, by the way,
Senator, that we have, will be part of the record.
Senator Leahy. And no one in the Administration has asked
you to.
Ms. Whitman. I am sorry, Senator.
Senator Leahy. No one in the Administration has asked you
to relax New Source Review.
Ms. Whitman. I have been asked, as you know, under the
auspices of the energy policy, to conduct a review of New
Source Review. I have had numerous meetings with energy
companies, with environmentalists, with the States' Attorneys
General, on the issue of New Source Review and on the issue of
enforcement, but I have not been specifically requested by
anyone to make any particular changes to New Source Review.
Senator Leahy. No one has asked you to relax the issue of--
on enforcement.
Ms. Whitman. No. They may complain, but they do not ask.
ENFORCEMENT PROGRAM
Senator Leahy. Years ago, we had a predecessor--yours--who
took the enforcement department, and about every 6 weeks she
would reorganize it, so nobody could ever get started on
enforcement. I mention that only because some worry that--and
just administratively, you can have a law on the books, but
make sure it is not being enforced.
It is something that we--I imagine many will--many will
watch, because, frankly, I do not see this--well, let me ask
you this: Is EPA's enforcement budget--your proposal, is it the
same this year as last year? More or less? What?
Ms. Whitman. The overall request for enforcement is higher
than last year. And, Senator, if I might, if you look at last
year's record, when ``this new boy in town,'' as you said, or
the new gang in town was there, our----
Senator Leahy. I did not say ``this new boy in town.''
Ms. Whitman. Well, I am sorry. Whatever. The new--the new
sheriff.
Senator Leahy. I would not be that disrespectful. I would
not be----
Ms. Whitman. I think you said ``new sheriff in town.''
Senator Leahy. I would not be--I would not call any
President----
Ms. Whitman. I--I apologize.
Senator Leahy [continuing]. A boy.
Ms. Whitman. New sheriff in town. But our enforcement
program achieved outstanding results. It was almost a record-
setting amount of penalties.
Senator Leahy. And these are all----
Ms. Whitman. Almost----
Senator Leahy. These are all actions that your
Administration began. None of them were left over from the
past----
Ms. Whitman. Oh, no. Some of them were left over, but we
had to----
Senator Leahy. Ah.
Ms. Whitman. We had to finish enforcing them. If we were
not interested in enforcing them, it is just as easy to walk
away from an ongoing negotiation.
Senator Leahy. No. It is not, actually. Actually, it is
not, because if you had some----
Ms. Whitman. Well----
Senator Leahy [continuing]. Enforcement that was
successfully going forward, the political cost would have been
enormous to walk away from them.
Ms. Whitman. Well, Senator, I would be very happy to give
you a complete breakdown of all the cases that we have brought
in this year; that we have brought----
Senator Leahy. I would appreciate that.
Ms. Whitman [continuing]. And all the actions that we
concluded. And suffice it to say that maybe we would not have
walked away from ongoing cases, but the fact that the penalties
we got were almost record level and the time served by people
we were able to convict, were almost record level, I believe,
indicates a commitment to enforcement that belies some of what
you have been reading in the press about a hidden agenda to
walk away from what is important to this country.
ENFORCEMENT PROGRAM: FTE REDUCTION
Senator Leahy. Well, and please supply that for the record,
because I--I do not want to----
Ms. Whitman. I would be happy to.
[The information follows:]
Clean Air Act/New Source Review Enforcement Activity
EPA's enforcement activities under the Clean Air Act to address New
Source Review (NSR) violations continue to be vigorous. Beginning with
investigations, of which we have over 100 under way, and concluding
with a filed case or settlement, EPA aims to reduce harmful air
pollution caused by refineries, power plants and other industrial
processes, such as paper mills.\1\
---------------------------------------------------------------------------
\1\ These activities reflect EPA's approach to enforcement
generally, which includes the following steps:
Investigate possible violations by gathering information, e.g.,
through information. requests, citizen complaints, inspections or other
reports;
Review collected information to determine compliance
Issue ``Notices of Violation'' or other formal notification to the
violator to alert them to the violations detected and give them an
opportunity to correct those violations
Enter into negotiations with the violator in an attempt to reach an
agreed upon settlement to resolve the violations
Proceed with formal enforcement by filing a case for litigation if
no resolution of the violations could be achieved.
---------------------------------------------------------------------------
Our current data shows that--between January 2001 and March 2002--
EPA made 115 information requests; issued 23 Notices of Violation;
filed and settled 15 cases, concluding 7 of them (i.e., they were
entered by the appropriate court); and engaged in numerous other
enforcement activities such as depositions, motion practice and on-
going settlement discussions--all to enforce the Clean Air Act's NSR
requirements.
Since the start of NSR initiative in 1997, EPA has, through settled
cases alone, reduced nitrogen oxides (NOX) and sulfur
dioxide (SO2) emissions by approximately 329,000 tons per
year; ordered nearly $3 billion in injunctive relief aimed to rectify
the violations; required that nearly $43 million be spent on
environmental mitigation projects; and ordered over $57 million in
civil penalties to be paid.
Further pollutant reductions and reparations are expected from
cases in which we have a settlement agreement in principle: a reduction
in nitrogen oxides (NOX) and sulfur dioxide (SO2)
emissions by approximately 591,000 tons per year; $3 billion in
injunctive relief; over $35 million in environmental mitigation
projects; and almost $14 million in civil penalties.\2\
---------------------------------------------------------------------------
\2\ Current data as of April 19, 2002.
---------------------------------------------------------------------------
SO2 and NOX are significant contributors to
acid rain and fine particulates. NOX also contributes to the
formation of ground level ozone, which is a component of smog. Fine
particulate matter
Senator Leahy. I do not want you to, in any way, feel that
you were not given a chance to answer these questions. And I
will make sure they are part of the record. And--because, you
know, I have a great deal of respect for you, personally. And I
want to make sure that you have a full opportunity to answer.
I am concerned that, as I read the EPA enforcement budget,
I see it as a cut. The--when I have asked questions about this,
I have been told that it was simply allocating more power to
the States. But I find most States, especially small States, do
not want that. They want you to do it, because they do not have
the ability to. Is there a dichotomy that I am missing here?
Ms. Whitman. There are two different things, here, Senator.
Senator Leahy. Oh.
Ms. Whitman. The fiscal year 2003 request for enforcement
and compliance is, in fact, higher than last year's. It totals
$482 million, which is the highest ever for the program. That
is over $16 million higher than fiscal year 2001 and $7 million
higher than last year's request.
But what we are also showing as part of the overall effort
as--one of the things that Congress requested of us a couple of
years ago or last year was to continue to tighten our overhead.
And so, what we are showing is a reduction of full-time
equivalents of 100 or 113.
We are also in a position where we have unfilled positions.
We lapse about 120 positions a year. We anticipate hiring 100
new people into the enforcement program in the coming year, to
fill those that have left.
Our program, essentially, will be pretty close to what it
is--what it is now, in terms of bodies. About one-fifth of the
overall personnel of the Agency resides in that office.
And we believe, because of the success we had last year,
that we are not going to see any kind of backing away from
that. The $15 million program for the States is first of all,
in recognition, that the States do 90 percent of the compliance
and enforcement work. And we want to be able to enhance that;
particularly at a time when States are facing tighter budgets.
There are some States that have very sophisticated
enforcement programs. But they may not be consistently
sophisticated. They may--for instance, be very good at air
monitoring and not water, and with some extra money, they would
be able to bring it all up. They are on the ground. They know
where the bad actors are. They know where to target the
resources.
And we believe that combined with the strong emphasis on
enforcement at the Federal level, leveraging the States'
abilities can only enhance enforcement, overall.
ENFORCEMENT: COMPETITIVE GRANT PROGRAM
Senator Leahy. But this is not a case of putting unwanted
enforcement on the--on the States. In other words, every State
that will ask EPA for help in enforcing will still get the same
help today that they would have a couple of years ago.
Ms. Whitman. This would be a largely competitive program.
Any State that would be interested in putting in a proposal to
access these dollars, it would be done on a competitive basis.
Senator Leahy. Enjoying the job?
Ms. Whitman. It is a challenge.
Senator Leahy. Do you miss being governor?
Ms. Whitman. Oh, yes.
Senator Leahy. The--well, you have an interesting job. I am
curious. With all your knowledge of the politics in New Jersey,
did Mr. Ray talk to you about running for the Senate prior to
leaving his office?
Ms. Whitman. He did not talk to me about running--his
personal running. He talked about whether or not the Senate
race--well, no. Actually, I take it back. What he did was say
he might have an interest in it, but he did not ask for my
support or get into any particulars as to how you would run a
Senate race.
ADDITIONAL COMMITTEE QUESTIONS
Senator Leahy. Well, that is not a matter for this thing
anyway. I was just curious.
Thank you very much.
Ms. Whitman. Thank you, Senator.
Senator Leahy. And we will leave the record open for
further questions.
Ms. Whitman. Certainly.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Barbara A. Mikulski
enforcement of environmental laws: budget proposal
Question. Once again, EPA's budget proposes a fundamental shift in
policy. It shifts enforcement resources from the Federal to State
governments. How does the budget proposal differ from last year's
request?
Answer. Last year when the President's fiscal year 2002 Budget
proposed a $25 million enforcement grant program, EPA worked
extensively with States and Tribes to solicit and consider their
comments and suggestions. The design for the proposed $15 million
program in the President's fiscal year 2003 Budget will build on the
comments and suggestions received previously to create a program that
is effective and responsive to State priorities.
In terms of a shift in resources, it should be noted that the
President's request for the enforcement office at EPA represents the
highest funding level in that office's history. The proposed State
grant program will help ensure that states have the resources they need
to be effective partners with EPA in enforcing our environmental laws.
enforcement of environmental laws: budget cuts affect on enforcing
environmental laws
Question. The budget cuts $10 million from enforcement, and 100
environmental ``cops on the beat.'' How will this affect EPA's ability
to carry out its responsibilities to enforce environmental laws?
Answer. As noted, the President's request for EPA's enforcement
office represents the highest funding level in that office's history.
The fiscal year 2003 budget provides EPA's enforcement and compliance
assurance program sufficient resources to carry out the appropriate
Federal role, focusing on Federal cases involving multi-state or multi-
facility corporations, environmental programs which cannot be delegated
to states due to statutory prohibition, or issues for which EPA can
provide specialized expertise. The shift of some resources to the
states tracks what has happened on a national level. ECOS has
documented a substantial increase in programs delegated to the states
over the last decade.''
enforcement of environmental laws: consequences of budget reduction on
catching prosecuting polluters
Question. What are the consequences of this reduction? How many
fewer polluters will be caught and prosecuted?
Answer. We expect performance results in the national Enforcement
and Compliance Assurance program to remain the same, with states
picking up an additional increment of that work. EPA and the states
have different, but complementary roles when it comes to enforcement of
our Nation's environmental laws. States have primary responsibility for
implementing and enforcing most environmental programs through
delegated authority from the EPA. In addition to ensuring a presence in
the regulated universe, and identifying violations that need to be
corrected, the EPA's Federal role is to implement and enforce programs
that cannot be delegated to states, to handle more complex cases
involving multiple states or corporations with multiple facilities, to
deal with issues that require expertise or resources that only EPA can
provide, and to enforce when states are unable or unwilling to. Given
the interplay between the State and Federal programs, we believe the
State and tribal enforcement grant program will enhance both State and
EPA efforts to increase compliance with environmental laws.
enforcement of environmental laws: new state grant enforcement program
Question. The budget requests $15 million for a new State
enforcement grant program. How does EPA plan to award the new State
grants?
Answer. Though details of the proposed enforcement grant program
have not been finalized we anticipate that funds will be awarded
through a combination of one or more of the following mechanisms:
competitive grants available to states and tribes, base-share grants
available to states, and a competitive set-aside available only to
tribes. Options for allocating grant funds identified during the
outreach process are outlined below.
Options for Allocating Funds to States and Tribes (One or a
combination of options may be used)
--Competitive Awards: funds will be awarded based on the merits of
the proposal; not all states and tribes would receive funds.
--Base Share Grants: each State receives a minimum amount, plus
additional funds are available through the competitive award
process.
--Tribal Set-Aside: Recognizing that Tribal environmental programs
may not compete well with states, it may be necessary to set
aside a portion of the funds for Tribal grants.
enforcement of environmental laws: special or new authority legislation
Question. Does EPA need special authority or new authorizing
legislation to create a new State enforcement grant program?
Answer. While we believe we have existing authority, we are
proposing an expansion of that authority to accommodate the multimedia
context in which the grants will be administered. Accordingly,
authorizing language in the appropriations bill that funds the program
would facilitate the administration of the grants.
enforcement of environmental laws: gao report on state enforcement
weaknesses
Question. GAO has reported weaknesses in State enforcement
programs. Will states with good enforcement records be given
preference? Or will the grants go to states with poor records?
Answer. Based on comments received, and draft guidance prepared for
the grant program proposed in the President's 2002 budget, we
anticipate that the grant program will have base-share and competitive
components. Competitive grants will be awarded to those states whose
proposals address significant environmental problems, and have the
greatest potential for achieving measurable environmental results.
Base-share grants will be available to all states that submit an
acceptable proposal that implements a problem-based strategy or program
improvement.
enforcement of environmental laws: work with states with poor records
Question. How will EPA work with states that have poor records?
Answer. With respect to the proposed grant program, we expect that
most of the base-share grants would be used by states to bolster
existing programs, or address specific state program deficiencies.
Implementation of competitive grant proposals will also help to improve
State program performance.
In general, EPA helps to improve the capacity of states, local, and
tribal government compliance and enforcement programs through the
delivery of training and other capacity building activities. In fiscal
year 2001 EPA delivered 128 training courses, reaching over 4,700
students; and conducted approximately 900 EPA assisted inspections to
help build capacity of State, local, and tribal governments. EPA
provides environmental management, planning, funding, and regulatory
information to local governments through the Local Government
Environmental Assistance Network (LGEAN). Additionally, when requested,
EPA assists states with specific enforcement and compliance
initiatives.
enforcement of environmental laws: monitoring states' use of funds
Question. How will EPA monitor states' use of these funds?
Answer. States will be approved for grant funding only if their
grant proposal includes specific plans to measure and report on their
performance in achieving results. For example, states will need to
define performance measures for determining whether they are having an
impact on the environmental risk or noncompliance pattern they are
addressing with the grant funds. EPA will establish required reporting
intervals for states to provide performance information that can be
reviewed by EPA on a regular basis.
enforcement of environmental laws: states' use of funds for enforcement
activities vs other activities
Question. Will EPA require that these funds be used solely for
enforcement activities, or will states be able to use the grants for
other activities?
Answer. States and tribes will be required to use grant funds for
enforcement and compliance assurance activities. We anticipate states
will use the funds for general enforcement capacity building or to
implement problem-based strategies to address a specific risk or non-
compliance pattern.
water infrastructure: infrastructure funding
Question. The budget cuts $138 million from the Clean Water SRF and
$340 million in targeted water projects. What are the consequences of
this cut? How many water projects won't be funded as a result of these
cuts? How many jobs won't be created?
Answer. For fiscal year 2003 the President has requested
$1,212,000,000 for the Clean Water State Revolving Fund (CWSRF), the
largest request since fiscal year 1997. At the $1,212,000,000 funding
level, and without further capitalization, the CWSRF would revolve at
an average of $2.22 billion annually between 2010 and 2035. The CWSRF
long-term revolving level, which includes loan repayments, is the
projected average annual amount of funds available to states for clean
water infrastructure. Because the CWSRF has been well-capitalized over
the years, changes in the appropriated level do not significantly
affect the revolving level.
water infrastructure: watery security improvement
Question. Water utilities are facing enormous burdens in meeting
water regulations and upgrading aging infrastructure. Now, they're also
facing needs to improve security. What is EPA doing to help wastewater
and drinking water utilities improve security
--of their physical infrastructure?
--of the chemicals they use?
Answer. EPA is working with other Federal agencies, states, tribes
and utilities to improve water security with the goal of ``making the
most systems safest soonest.'' To achieve this goal, the Agency and its
partners are working to: (1) accelerate the development and testing of
counter terrorism tools, such as vulnerability assessment methods; (2)
train utilities in the development of vulnerability assessments and
emergency operations plans; (3) provide needed technical and financial
assistance to utilities conducting vulnerability assessments and other
security-related work; (4) identify research needs and conduct research
on topics such as detection technologies, potential contaminants, and
treatment effectiveness for water collection and treatment systems; and
(5) test new technologies and disseminate information on their
application.
EPA currently is reviewing grant applications to conduct
vulnerability assessments at the approximately 400 largest drinking
water systems nationwide, and plans to award $53 million for these
assessments by the end of July 2002. EPA also is working with its
partners to support assessments at the Nation's small and medium-sized
drinking water systems. Vulnerability assessments are designed not only
to identify weaknesses in the physical infrastructure of water systems,
but also in the protocols for safeguarding the chemicals used in water
treatment processes. In subsequent years, EPA will revise the training
and tools it provides to utilities based on (1) the new monitoring and
detection technologies under development, and (2) new approaches to
continuously improve water security as a result of utilities'
experience conducting vulnerability assessments.
water infrastructure: methods for detecting security violations
Question. What is EPA doing to help water systems develop methods
for detecting security violations like contaminants in the drinking
water?
Answer. Through $2 million of the fiscal year 2002 Supplemental
Appropriation, and $500,000 in fiscal year 2002 earmarked funds, the
Agency currently is supporting the development of water security-
related detection, monitoring and treatment tools. There are several
initiatives underway or in the planning phase for fiscal year 2002.
Specifically, EPA is:
Supporting research by the University of North Carolina at
Greensboro to research real-time detection methods for pathogens.
Co-sponsoring a detection technologies conference at Rutgers
University in June. This was a forum where water utilities, regulatory
agencies and scientific researchers could discuss needs and solutions
to issues in water safety and security related to real-time monitoring
and modeling.
Developing a water security technology verification and outreach
program to verify the performance of innovative technical solutions to
intentional contamination that threatens human health or the
environment. This program is designed to accelerate the entrance of new
environmental technologies into the domestic and international
marketplace.
homeland security: status of funding for homeland security and
activities undertaken
Question. Congress provided $176 million in the 2002 Supplemental
for EPA Homeland Security efforts. What is the status of this funding?
What specific activities has EPA undertaken?
Answer. Of the $176 million EPA received the Emergency
Supplemental, $12.5 million was for partial reimbursement for the
Capitol Hill anthrax cleanup. An additional $5.5 million was allocated
to establish a western branch of the Environmental Response Team in Las
Vegas, NV improving our ability to provide timely technical expertise
to emergency situations nationwide. $23 million has been primarily
allocated to our ten regional emergency response centers, to provide
response staff, equipment and contract support, with the goal of
developing sustained response capability throughout the country. EPA
also received $1.5 million and 2 FTE as part of the fiscal year 2002
Emergency Supplemental for Homeland Security research. EPA has used
these resources to: (1) evaluate the performance of drinking water
treatment systems for their ability to cost-effectively remove inactive
biological and chemical agents; (2) work with State and Federal
agencies to coordinate research efforts and (3) prepare for the
implementation of the proposed Homeland Security research in 2003.
EPA's Office of Administration and Resources Management (OARM) is
responsible for leading and managing physical security efforts at EPA's
facilities nationwide. Under the President's Supplemental Counter
Terrorism Budget, OARM is being appropriated $30 million for physical
security improvements, including vulnerability risk assessments, guard
services, equipment, communications systems, and window enhancements.
OARM has obligated 6 percent of the $30 million as of May 20, 2002.
These funds were used for conducting vulnerability risk assessments at
EPA facilities nationwide, procuring additional security guard services
nationwide, purchasing and installing a smart card system at EPA's
Region 2 Office in New York City, and purchasing and installing an
integrated emergency communications system at EPA's Federal Triangle
Complex in Washington, DC.
The Acute Exposure Guideline Levels (AEGL) Program was established
to develop short-term exposure limits applicable to the general
population for a wide range of extremely hazardous substances for
purposes of chemical emergency response, planning, and prevention
related to chemical terrorism and chemical accidents. EPA would use
Supplemental Homeland Security funding to accelerate the development of
guidelines in 2002 and beyond.
EPA's Office of Pollution Prevention and Toxics (OPPT) is
participating in national and international efforts to develop one
standardized set of scientifically sound short-term exposure values.
EPA also planning to use Supplemental Homeland Security funding to
initiate work in concert with the International Chemical Weapons
Convention (CWC) to identify and fill analytical gaps in the assessment
of potential risks of chemicals potentially used in the manufacture of
chemical weapons. EPA would offer Structure Activity Relationship
expertise to assist in expanding the information available on CWC-
listed chemicals to include chronic toxicity and ecotoxity aspects,
would expand its work in the Green Chemistry program to include CWC-
listed chemicals in tools (e.g., expert systems), and broaden the Green
Chemistry Challenge program to identify alternatives to CWC-listed
chemicals.
$89 million in supplemental appropriations was provided for water
infrastructure protection. It has been allocated as follows.
$53 million for water security planning grants for the largest
drinking water utilities that regularly serve populations over 100,000.
Collectively, these large systems provide drinking water to nearly half
of Americans served by public water systems. Over 380 applications from
publicly owned drinking water utilities were received. EPA plans to
approve all eligible grants by the end of July.
$23 million to address the needs of small and medium-size
utilities. EPA is working with the industry, environmental groups, and
the states to define the best approach for providing these utility
systems with awareness training, technical assistance, vulnerability
assessment tools, and capacity building.
$5 million in grants to support State, tribal, and territorial
counter-terrorism coordination (from State/Territorial Assistance
Grants). EPA Regions are now working with states to award these funds.
$2 million for investigation of security-related detection,
monitoring and treatment tools.
$3 million for wastewater tool development, training on
vulnerability assessments and emergency operations, technical
assistance, and investigation of treatment and detection tools.
Nearly $2 million for additional needs, including training of
public health officials, local government, law enforcement, and support
for the information sharing and analysis center.
homeland security: progress for improving homeland security
Question. What progress has been made in improving homeland
security with this spending?
Answer. The Environmental Response Team (ERT) is EPA's premier
technical support group for emergency response operations;
historically, the team has been based in Edison, NJ, with a small annex
in Cincinnati. We are nearing the completion of establishing a western
ERT branch in Las Vegas, NV, which will improve EPA's coverage of the
western half of the country, as well as build staff capacity in
specific technical areas, such as bio-hazard assessment and
remediation.
One of the lessons we learned from the 9/11 events and the anthrax
incidents was that our response capacity was dangerously low; we were
forced to draw on resources from all ten of our regional emergency
response programs and curtail other time-critical response work. The
fiscal year 2002 supplemental budget provides each region with an
additional five response personnel and approximately $1.6 million in
funds for equipment and contract support, increasing our overall
response capacity by 20 percent.
The resources received in fiscal year 2002 for Homeland Security
research also helped EPA to prepare for the efficient use of the $75
million requested in fiscal year 2003 for Homeland Security research.
This preparation will allow for quicker and more effective development
and certification of new methods as well as techniques for detecting,
treating, disposing, and understanding how best to manage buildings
contaminated with biological or chemical agents.
Office of Administration and Resources Management (OARM) is in the
process of conducting vulnerability risk assessments at EPA's 146
facilities nationwide. These assessments will provide EPA with the
current physical security conditions at its facilities, including
identifying and documenting vulnerabilities and risks, assessing human
threat, and determining the overall qualitative risks as it relates to
perimeter security, entrance and exit security, interior security, and
security planning. Based on the findings from the assessments, OARM
will develop recommendations and cost estimates to mitigate the risks,
and implement mitigation and countermeasure efforts, where appropriate.
OARM is using a phased approach in conducting these assessments,
where our more critical facilities are assessed first and the less
critical facilities are assessed last. To date, we have completed site
visits at 50 facilities and laboratories nationwide, and completed 25
reports of findings. We are currently in the process of ranking and
prioritizing the risks associated with our most critical facilities,
and expect to make funding decisions in June 2002. This funding will be
used to purchase additional guard services, equipment, and
communications systems. OARM plans to continue this process until we
complete the assessments and mitigate the vulnerabilities at all our
facilities nationwide.
EPA's Water Protection Task Force and Regional Offices, working
with many partnering organizations, are taking actions to improve the
security of the nation's drinking water and wastewater infrastructure.
The actions underway:
To date, the Task Force has:
--Supported development of vulnerability assessment tools (developed
by Sandia/AWWA, and AMSA) and released emergency operations
planning guidance;
--Trained thousands of water utility personnel on security planning
and vulnerability assessment methodologies;
--Completed an assessment of the State of knowledge on technologies
to detect contaminants, monitoring protocols and techniques,
and treatment effectiveness.
On-going actions include:
--Providing technical assistance, training, and capacity building
tailored to the needs of small and medium drinking water, and
wastewater utilities;
--Supporting information sharing between government organizations and
industry by funding start-up of a secure Information Sharing
and Analysis Center;
--Supporting research to improve treatment and detection methods.
homeland security: development of outcome-based measures and specific
spending plans
Question. Has EPA developed outcome-based measures and specific
plans to assure that this spending will improve the security of our
homeland?
Answer. Prior to the events of last fall, EPA had undertaken a
comprehensive review of the agency's Emergency Response Program,
developing standards and measures to ensure a high degree of
consistency and responsiveness in regional response operations.
Subsequent to the terrorist responses, we took the lessons learned from
those actions and integrated them into the overall response program
framework. This effort will be reflected in the Agency's GPRA measures
for the fiscal year 2003 enacted budget, as well as the fiscal year
2004 President's Budget.
EPA has also developed goals and measures to support all aspects of
the draft Agency Homeland Security Strategy to help ensure efficient
and effective spending.
EPA's goal for water infrastructure security is to get the most
systems as secure as possible as soon as possible. EPA works closely
with utility organizations, the states, and security experts to
identify the most effective approaches and tools needed to improve the
security of the nation's critical water infrastructure.
EPA has developed a new Annual Performance Goal in its fiscal year
2003 President's Budget request to track development of Acute Exposure
Guideline levels (AEGL) for additional chemicals. The measures are
quantitative, so they will clearly identify the additional numbers of
chemicals and guidelines developed each year. Additionally, EPA is
continuing to review the program activities and has identified areas
for improvement, including development of health and safety plans for
select agent, developing occupational and medical monitoring plans,
addressing containment issues, securing laboratory space and
identifying and tracking samples.
homeland security
Question. How does EPA plan to spend the additional $124 million
requested in fiscal year 2003?
Answer. EPA Superfund plans to continue to improve the emergency
response program by insuring that the additional capacity and technical
capability that were first funded in fiscal year 2002 will be
maintained in fiscal year 2003 and beyond(including both the ERT-West
operation and regional and HQ response program improvements).
EPA requested $75 million for Homeland Security research. Work will
focus on five main areas: detection of contaminants, containment of
contaminants, decontamination of indoor materials, disposal of
contaminated clean-up equipment and supplies, and risk communication
including the transfer of improved methods to users. Before initiating
efforts in any of these areas EPA will survey the private sector and
other agencies and organizations to assess existing capabilities and
where possible work to bring that technology, information or process to
those who need it. Where others have already established a lead in a
given area, EPA can defer to that organization. In other cases, a
collaborative working relationship may be best suited. A leadership
role may also be appropriate for EPA.
EPA has requested $22 million in fiscal year 2003 for critical
water infrastructure protection. $17 million of the request will
support continued work to: develop tools and training for small and
medium drinking water utilities to complete vulnerability assessments;
develop and enhance emergency response plans, and; develop and
disseminate detection, monitoring and treatment technologies. $5
million of the request will be directed to states to support state-
level coordination of homeland security activities with EPA and
drinking water utilities.
homeland security: anthrax decontamination spending
Question. How much did EPA spend on this effort? Did this funding
come from the Superfund program?
Answer. EPA has expended over $28 million for Capitol Hill response
out of its Superfund removal program.
In general, the USPS, other government agencies and privately owned
facilities, such as the America Media, Inc. site in Florida, are
funding their own cleanups. EPA is providing technical assistance from
our On-Scene Coordinators, our Environmental Response Team, and other
personnel. EPA estimates that it has spent approximately $2 million for
anthrax cleanup and technical assistance at sites other than the
Capitol Hill Complex.
Estimated costs for OPPT in fiscal year 2002 are approximately
$900,000. These funds were not provided from the Superfund program,
they are being paid by the pesticides program.
homeland security: anthrax decontamination full reimbursement
Question. How much more does EPA need in order to be fully
reimbursed?
Answer. EPA has expended over $28 million for Capitol Hill response
out of its Superfund removal program. The fiscal year 2002 Supplemental
Appropriations bill reimbursed EPA for $12.5 million of that. The
Administration has requested an additional $12.5 million in
reimbursement.
homeland security: lessons learned from the anthrax decontamination at
the hart building
Question. What ``lessons learned'' can EPA provide about the
anthrax decontamination at the Hart building?
Answer. We verified that our basic response infrastructure and
authorities are sound, and that our regional response programs are up
to the task of mitigating new and unique threats to public health. We
also learned that we need to enhance and develop our short term
assessment and mitigation methods.
homeland security: progress made assuring clarity of roles and safety
Question. What progress has EPA made in assuring clarity in: Who is
in charge?
Answer. We believe the basic roles and responsibilities defined by
the Federal Response Plan, the National Contingency Plan and PDDs 39
and 62 are clear and do not need further amendment. However, the
execution of these authorities may be compromised by inconsistent
application in different situations; we have discussed this with the
Office of Homeland Security and are hopeful that clarifying guidance
will be forthcoming.
The National Response Team has established an ad hoc committee,
which includes EPA, CDC, OSHA, USCG and other agencies, to consolidate
and coordinate civilian and military expertise on detecting and
cleaning up anthrax contamination. This committee is close to
completing an interim final technical assistance document that begins
to address this issue for anthrax. Lessons learned by this group will
be applied to broader efforts to address risk-based decision making in
other scenarios involving chemical or biological terrorism. We believe
the continuing dialogs and related improvements in cross-agency
coordination in this area will improve our ability to make definitive
cleanup decisions in the future.
Question. How clean is safe?
Answer. The risk-based response protocols established by the
Superfund program provide a solid foundation for making site-specific
cleanup decisions, but these decisions must be informed by improved
government-wide understanding of the nature of biological risks. We
believe the continuing dialogs involving EPA, CDC and other agencies
will improve our ability to make definitive cleanup decisions in the
future.
pharmaceutical pollution of waterways
Question. A recent study by the USGS found trace pharmaceuticals in
80 percent of streams analyzed. What is EPA's role in looking at the
possible effects of drug wastes on the environment? Is EPA looking at
how these contaminants affect drinking water?
Answer. EPA has statutory responsibilities under the Clean Water
Act and the Safe Drinking Water Act to evaluate the environmental and
human health risks of pollutants, including pharmaceuticals and
personal care products (PPCPs) , and to determine whether ambient water
quality criteria or drinking water standards are needed. In response to
this mandate, EPA is focusing on collecting and evaluating occurrence
data in water sources to assess potential ecological and human health
risks. Based upon the risk assessments, EPA will develop intra- and
inter-agency research strategies for future research. EPA has been
exploring the effect of chlorination (which is commonly used to treat
both waste water and drinking water) on selected pharmaceuticals to
determine if the process is effective at removing the compounds from
the water, as well as what by-products are formed. This data was
presented at the Society of Environmental Toxicology and Chemistry
(SETAC) annual meeting in November 2000, and is currently being
summarized for publication in fiscal year 2002. In addition, EPA has
previously funded several PPCP-related research projects, including
aquatic effects studies through the Sceince to Acheive Results (STAR)
program. Information on these projects is available at: http://
www.epa.gov/nerlesd1/chemistry/pharma/star.htm The EPA also hosts the
world's only web site devoted to environmental issues associated with
PPCPs (http://www.epa.gov/nerlesd1/chemistry/pharma/index.htm.
Question. As a result of the recent study, FDA said it would take a
closer look at the effects on the environment. Is EPA working with FDA
on this issue?
Answer. EPA and FDA staff interactions have resulted from joint
participation in organizing a scientific session devoted to PPCPs (the
2000 American College of Toxicology Annual Meeting) and from FDA review
of EPA PPCP-related presentation materials. EPA plans to engage FDA in
the development of an inter-agency research strategy to establish risk-
based research priorities and opportunities for inter-agency
collaborations.
Question. The U.S. Geological Survey is also looking at how these
contaminants might affect drinking water. Is EPA working with USGS?
Answer. EPA has collaborated and co-authored published papers with
USGS on a Neuse River Basin, North Carolina, field study to develop
better measurement methods and to collect occurrence data for
antibiotic and endocrine disrupting compounds near animal feeding
operations. EPA is currently collaborating with USGS on a project using
pharmaceuticals, as well as other chemicals found in human waste
streams (e.g, detergents, surfactants), as tracers of human fecal
contamination. As part of this work, samples will be taken upstream, at
the point of discharge, and at two points downstream of waste water
discharges. This data should provide information about the lifetime of
pharmaceuticals in the environment (i.e, are they found one mile
downstream from the discharge point, or are they removed/reduced due to
effects such as photo- or bio-degradation, sedimentation, and
dilution), which will be useful for exposure assessment. The EPA and
USGS staff have also been collaborating by exchanging information,
reviewing each other's documents, and collaborating on research. EPA-
USGS collaborated on the research project: ``Analytical Chemistry for
Mapping Trends of Pharmaceutical and Personal Care Product Pollution
from Personal Use: Some Current Research and Future Needs.''
Question. Is EPA developing technologies for ways to remove these
contaminants from drinking water?
Answer. EPA is evaluating the removal of steroid hormone compounds
by various drinking water treatment processes. In the future, a group
of nonylphenolic compounds and additional pharmaceuticals will also be
added. Analytical methods to identify and quantify the steroid hormones
will be developed, and a reporter gene assay, the MVLN assay, will
evaluate the removal of estrogenic activity from the water samples.
Once the analytical and MVLN assays are in place, bench, pilot, and
field-scale evaluations of various drinking water treatment processes
will be conducted. Of special interest are technologies amenable to
small systems. To reduce the need for treatment, EPA also is
considering ways to minimize the occurrence of PPCPs in drinking water
sources, such as encouraging safer disposal of discarded
pharmaceuticals.
Question. Is there any funding in the budget related to these
efforts?
Answer. In the fiscal year 2003 President's Budget, EPA requested
approximately $1.2 million and 11 FTE for PPCP research. This includes
work focusing on collecting and evaluating occurrence data in water
sources to assess potential ecological and human health risks,
developing intra- and inter-agency research strategies to determine
risk-based priorities for future research, the effects of chlorination
on selected pharmaceuticals to determine if the process is effective at
removing the compounds from the water as well as evaluating the removal
of steroid hormone compounds by various drinking water treatment
processes.
environmental education: rationale for elimination of approximately
$10m from k-12 environmental education
Question. The budget proposes to eliminate approximately $10
million for K-12 environmental education. What is the rationale for
this cut?
Answer. The President's fiscal year 2003 budget transfers the
Agency's Environmental Education Grant program to the National Science
Foundation's (NSF) math and science program. The functions of the EPA's
grant program will continue at NSF.
Consolidation of the EPA's Environmental Education program with
those of NSF will combine similar programs, improve the services
delivered to environmental institutions, and reduce costs. The function
of Environmental Education is better served by one agency and NSF is
fully capable of administering the requirements of S. 876.
star fellowship: rationale for shift from epa to nsf
Question. The budget proposes to shift the STAR fellowship program
from EPA to NSF. What is the rationale for this shift?
Answer. The President's Budget proposes to strengthen math and
science education in the United States by improving the quality of math
and science education in grades K-12 and by attracting the most
promising U. S. students into graduate level science and engineering by
providing more competitive stipends. The President's K-12 math and
science initiative and the higher graduate stipends are being funded
through the National Science Foundation's (NSF) budget. NSF is noted
for its expertise and success in funding competitive programs in math
and science. Funding for EPA's STAR Fellowship Program was shifted to
NSF in fiscal year 2003 as part of the Federal initiative to strengthen
math and science programs.
EPA will continue funding its Minority Academic Institutions (MAI)
Fellowships program at $1.5 million in 2003. The Minority Academic
Institution (MAI) fellowship program offers undergraduate and graduate
fellowships in academic disciplines relating to environmental research,
and are intended to help defray costs associated with environmentally-
oriented study leading to the bachelor's, master's or doctoral degree.
Undergraduate fellows agree to participate for up to 12 weeks at an EPA
laboratory/center as a summer intern. Eligible students in both the
undergraduate and graduate programs must attend a 4-year U.S. Minority
Academic Institution, defined as Historically Black Colleges or
Universities (HBCUs), Hispanic Serving Institutions (HSIs), and Tribal
Colleges (TCs).
star fellowship: graduate students completing fellowships?
Question. How would this affect graduate students who are
completing their fellowships? Will their funding be canceled?
Answer. No, the STAR fellows funding will not be canceled. EPA
presently supports about 200 STAR fellows. The terms of those
agreements provide funding for the next 1 or 2 years. EPA plans to
fully fund the present fellows for the intended duration of their
fellowships. EPA will use fiscal year 2002 resources to fund students
presently in the STAR fellowship program through the completion of
their fellowships.
star fellowship: the star program?
Question. How does EPA propose to spend 2002 funding provided for
the STAR fellowship program?
Answer. EPA will use fiscal year 2002 resources to fund students
presently in the STAR fellowship program for the duration of their
fellowships.
star fellowship: citation
Question. Please provide the citation within the NSF budget where
this program is proposed to be funded in 2003.
Answer. Resources for the STAR Fellowship Program, previously
funded by EPA, were redirected to the National Science Foundation
(NSF), though the program itself was not transferred. No funding exists
within the NSF Budget for the STAR Fellowship program. Funding to
graduate students pursuing studies in some of the environmental
sciences supported by EPA is available through existing well-
established graduate research fellowship and traineeship programs in
NSF. These programs are discussed on pages 285-286 of NSF's fiscal year
2003 Budget Justification to Congress.
star fellowship
Question. If NSF takes over this program, would it remain as a
separate program focusing on the environmental sciences, or would it be
folded into NSF's other science education programs?
Answer. As mentioned above, EPA's STAR Fellowship Program was not
transferred to NSF. However, NSF does provide financial assistance to
graduate students across the nation studying scientific disciplines
through existing well-established graduate research fellowship and
traineeship programs. Graduate students pursuing degrees in a subset of
the environmental sciences who previously sought EPA's financial
assistance may apply to these NSF programs.
brownfields: questions raised concerning effective use of funding
Question. Recent reports by the House Energy and Commerce Committee
(Nov. 2000) as well as GAO (Dec. 2000) and the EPA Inspector General
(Sept. 2000) all raised serious questions about whether past funding
for the program had been effectively used. Specifically, few cleanup
loans had been made, and EPA could not demonstrate what tangible
results had been achieved with the funding that had been provided. Have
these past problems been corrected? If so, how?
Answer. EPA has responded to the recommendations in numerous ways.
EPA has clarified certain critical requirements and streamlined them.
Currently 143 Brownfields Cleanup Revolving Loan Funds Pilots (BCRLF)
have been selected. In addition, EPA has deobligated eleven BCRLF where
progress has not been made by the recipient in making loans. Recent
improvements to the BCRLF program include the development of model
documents and a marketing guide.
In the past year, the number of loans being made by BCRLF pilots
has more than doubled to 17 loans with an additional three expected
within the next quarter and more under discussion with EPA regions. We
attribute the lag in community participation in this program to a
number of factors, including lack of familiarity with the program
requirements and the limited competitiveness of Federal funds that
require recipients to comply with all Superfund requirements. Improved
outreach on the part of the EPA Brownfields program, increased
understanding of this program, and the increasing competitiveness of
these funds has increased the rate of loans being made in the last
year. We anticipate that communities will continue to find the BCRLF
funds attractive when combined with other public and private resources.
Most importantly however, the new legislation signed by President
Bush on January 11, 2002, the Small Business Liability and Brownfields
Revitalization Act, provided significant relief to the program from its
current regulatory burdens. The new Act provides that the EPA may
determine which specific provisions of the Superfund National
Contingency Plan are applicable to the brownfields program and thus use
only provisions which are needed in implementing the program. EPA's
Legislative Implementation work group is developing a transition
guidance to outline the requirements of the new law. This will assist
grant recipients in determining whether to choose to take advantage of
the new statutory provisions. We anticipate that many grant recipients
will take advantage of the new statutory provisions and a substantial
increase in loans and/or cleanup subgrants will result from the
transition.
brownfields: increase in funding for fiscal year 2003
Question. How will the large increase in funding for fiscal year
2003 be used effectively?
Answer. Increased funding will be focused upon several significant
areas. These areas include increasing the number of grants, and
supplemental funding for existing grantees for assessment and
brownfields cleanup revolving loan funds. New grant categories are also
created by the legislation including direct and indirect grants for
cleanup and funding for assessment and cleanup of petroleum-
contaminated properties. In addition, funding to the fully authorized
ceiling has been requested for State and tribal response programs.
roles and responsibilities of epa's regional offices: workforce
analysis and projections
Question. Different regions do their jobs in different ways, in
terms of the levels of effort they apply to enforcement actions,
technical compliance assistance, community outreach efforts, and so
forth. OMB has asked all agencies, including EPA, to provide workforce
statistics now and as they would see their workforces changing over the
next 5 years. What is the status of EPA's workforce analysis for OMB,
and what do the workforce projections show?
Answer. The Agency submitted the Workforce Analysis to OMB on June
29, 2001 in response to OMB Bulletin 01-07. Projections included in
that report show a changing workforce in age and other demographics. By
2005, 25.6 percent of the workforce will be eligible for voluntary,
FERS 10-year, or Law Enforcement Officer retirement.
roles and responsibilities of epa's regional offices: analysis
performed to determine size of regional offices
Question. Has EPA performed an analysis to determine the
appropriate size of the regional offices? If not, will such an analysis
be done?
Answer. The Agency has not completed an analysis to determine the
appropriate size of regional offices, and does not plan such a specific
study. However, EPA is undertaking an Agency study to determine the
competencies necessary to meet mission needs in the future which may in
turn have organizational impacts. The resultant workforce planning
system from this study is to be available for EPA line manager's use
second quarter of fiscal year 2004.
roles and responsibilities of epa's regional offices:
Question. Has or will the issue of different regional approaches to
carrying out EPA's responsibilities be addressed?
Answer. The Agency has not completed an analysis of various
regional approaches. The Agency will, however, continue to examine how
to best perform EPA's responsibilities.
______
Questions Submitted by Senator Christopher S. Bond
compliance assistance: list of rules for developing compliance
assistance tools
Question. List the rules currently considered economically
significant for the purposes of developing compliance assistance tools?
Provide the rule finalization date and the status of any tools
development for rules finalized or to be finalized by December 2002.
Answer. EPA develops compliance assistance tools for rules that
have an economic impact of $100 million or more on companies and/or
government facilities or other rules, as appropriate. EPA also develops
compliance tools for rules that have a significant economic impact on a
substantial number of small entities as defined under the Small
Business Regulatory Enforcement Fairness Act.
The potential universe of regulations for which compliance guides
may be developed is continually changing based on changes to specific
provisions of a regulation and subsequent economic analysis. Also,
changes in rule finalization dates alter the compliance tool schedule.
Extensions in developing compliance tools are allowed because of
factors such as resource constraints, providing for greater stakeholder
involvement, or demands of other work.
For the purposes of this response, Attachment A contains
information, as of May 22, 2002, on the three economically significant
rules finalized or expected to be finalized by December 2002.
COMPLIANCE ASSISTANCE--LIST OF RULES FOR DEVELOPING COMPLIANCE ASSISTANCE TOOLS
----------------------------------------------------------------------------------------------------------------
Projected/Actual
Regulation Projected/Actual Final Compliance Tool Estimated Compliance
Publication Date Completion Date Tool Cost
----------------------------------------------------------------------------------------------------------------
Office of Air and Radiation:
Emissions from Nonroad Spark- September 2002......... December 2002.......... Uncertain \1\
Ignition Engines and Standards
for Recreational Spark Engines
(Contact: A. Stout, 734-214-
4805).
Office of Prevention, Pesticides and
Toxic Substances:
Groundwater and Pesticides September 2002 \2\..... December 2002.......... Not Applicable. See
Management and Plan Rule Note 2
(Contact: A. Williams, 703-305-
5239).
Office of Water:
National Primary Drinking Water January 2001........... June 2002.............. $52,000
Regulations: Arsenic and
Clarifications to Compliance and
New Source Containment
Monitoring (Contact: A.
Bielanski, 202-564-3824).
----------------------------------------------------------------------------------------------------------------
\1\ EPA will work with the regulated community to develop the appropriate compliance assistance tool. EPA
expects to use in-house resources to complete the tool.
\2\ The Projected Final Publication date is delayed until the end of fiscal year 2002. The delay is allowing EPA
to explore potential modifications to the proposed final regulation to address issues raised by the regulated
community and co-regulators.
compliance assistance: estimate of cost to develop compliance
assistance tools
Question. Provide an estimate of the cost of developing compliance
assistance tools for each economically significant rule finalized or to
be finalized in 2002?
Answer. The costs associated with developing compliance assistance
tools for economically significant rules vary significantly. Cost
variations are based on the type of technical issues associated with
the substantive requirements of a rule, the degree of experience that
the regulated community has in dealing with environmental rules, and
the diversity of the regulated community (e.g., need for bilingual
assistance materials). In addition, cost variations arise because of
the multiple ways in which information exchanges occur with the
regulated community, including face-to-face training and delivery of
information via computer-based technology. Cost variations are also
associated with whether EPA develops a compliance guide within the
agency or uses contractor assistance to develop the guide. Attachment A
contains information on the cost associated with each completed
compliance guide for economically significant rules or estimated costs
for upcoming compliance guides.
COMPLIANCE ASSISTANCE--ESTIMATE OF COST TO DEVELOP COMPLIANCE ASSISTANCE TOOLS
----------------------------------------------------------------------------------------------------------------
Projected/Actual
Regulation Projected/Actual Final Compliance Tool Estimated Compliance
Publication Date Completion Date Tool Cost
----------------------------------------------------------------------------------------------------------------
Office of Air and Radiation:
Emissions from Nonroad Spark- September 2002......... December 2002.......... Uncertain \1\
Ignition Engines and Standards
for Recreational Spark Engines
(Contact: A. Stout, 734-214-
4805).
Office of Prevention, Pesticides and
Toxic Substances:
Groundwater and Pesticides September 2002......... December 2002.......... Not Applicable. See
Management and Plan Rule Note 2
(Contact: A. Williams, 703-305-
5239).
Office of Water:
National Primary Drinking Water January 2001........... June 2002.............. $52,000
Regulations: Arsenic and
Clarifications to Compliance and
New Source Containment
Monitoring (Contact: A.
Bielanski, 202-564-3824).
----------------------------------------------------------------------------------------------------------------
\1\ EPA will work with the regulated community to develop the appropriate compliance assistance tool. EPA
expects to use in-house resources to complete the tool.
\2\ The Projected Final Publication date is delayed until the end of fiscal year 2002. The delay is allowing EPA
to explore potential modifications to the proposed final regulation to address issues raised by the regulated
community and co-regulators.
compliance assistance: ranking of top ten compliance assistance needs
Question. Provide a ranking of the top 10 compliance assistance
needs and identify the criteria used for the ranking such as risk of
environmental damage or susceptibility of the problem to compliance
assistance techniques.
Answer. EPA integrates compliance assistance as appropriate when
addressing national enforcement and compliance assurance priorities,
newly promulgated regulations, and special needs of specific industry
sectors. OECA has also developed guidelines for staff to use in
reviewing the regulatory agenda to determine whether new or upcoming
rules would be good candidates for compliance assistance. Attachment A
contains these guidelines for determining rules which are good
candidates for compliance assistance.
National priorities are environmental risks or noncompliance
patterns that can often be addressed using compliance assistance in
combination with compliance incentives, inspections and investigations,
and enforcement actions. Decisions about whether to use assistance to
address specific national priorities are based on the nature and
complexity of the regulatory requirement, the compliance history of the
industry sector(s) to which the requirement applies, the capacity of
the sector to receive and utilize assistance, and whether assistance
can be effective (by itself or in combination with other tools) in
increasing compliance or reducing risks associated with a specific
priority.
Compliance assistance needs are also identified through
consultation with industry sectors about the compliance challenges
confronting these sectors. This consultation can result in development
of tailored compliance guides and creation of sector-based online
compliance assistance centers.
guidelines for screening new rules for compliance assistance
Screening Guidance
As you are reviewing the list of Tier I, Tier II and Tier III
proposed rules, consider the following factors in determining whether
the proposed regulations are good candidates for compliance assistance.
Compliance Assistance Required
Is the rule an ``economically significant rule?'' (impact of 100M
or more on regulated community. See RFA (Regulatory Flexibility Act)/
SBREFA tracking report in RAPIDS (Rule and policy Information
Development System) or the Rule Tiering Forms.)
--Compliance guide, fact sheet or expert system required by Aiming
for Excellence Report
Is the rule a ``SBREFA rule?'' (rule has a significant impact on
substantial number of small entities. See RFA/SBREFA tracking report in
RAPIDS or Rule Tiering Forms)
--Compliance guide required under Small Business Regulatory
Enforcement Fairness Act (SBREFA))
Possible Candidate for Compliance Assistance
Does the rule impact a sector with a large number of small
businesses who may lack the resources/ability to obtain compliance
assistance on their own? (See RAPIDS for list of rules that impact
small businesses but don't meet SBREFA threshold or check SBA guidance
on definition of small business)
--May be candidate for compliance assistance
Does the proposed rule impact a larger number of entities with
varying degrees of prior regulatory experience and access to compliance
assistance resources?
--May be candidate for compliance assistance
Does the proposed rule embody new or novel concepts to which
existing compliance assistance concepts or activities are inappropriate
or ineffective?
--May be candidate for compliance assistance
Is the regulated community willing and able to assist EPA in
developing compliance assistance tools?
--May be candidate for compliance assistance
Is the sector(s) impacted by the proposed rule on the ``emerging
sector'' list?
--May be a candidate for compliance assistance
Does the rule address an Agency initiative, priority in the
Strategic Plan or OECA or program office MOA priority?
--May be a candidate for compliance assistance
Less Likely Candidate for Compliance Assistance
Is the proposed rule concise and easily understood by the regulated
community? Does it mirror existing, familiar regulatory approaches that
apply to the same regulated community?
--Compliance assistance may not be needed
Does the proposed rule impact a small number of regulated entities
that are reasonably expected to be familiar with the regulatory
environment and/or have access to existing compliance assistance
resources?
--Compliance assistance may not be needed
Does a large proportion of the industry sector(s) affected by the
rule belong to a trade association?
--Compliance assistance may not be needed
compliance assistance: activity plan
Question. Describe how does the Compliance Assistance Activity Plan
direct EPA actions and resources to meet these priority needs?
Answer. The Compliance Assistance Activity Plan is helpful in
guiding EPA toward the best opportunities for using compliance
assistance. The Plan reflects EPA's continuing efforts to better
identify the priority needs for compliance assistance, improve the
process for obtaining stakeholder input, engage in dialogue on how best
to meet the identified needs, and provide guidance on how to direct
resources to the highest priority needs.
compliance assistance: analysis of new regulatory requirements and
compliance assistance tools in fiscal year 2003
Question. In fiscal year 2003, how will EPA comprehensively analyze
its upcoming new regulatory requirements and determine the compliance
assistance tools most likely to help bring about compliance with those
requirements?
Answer. EPA will continue to utilize the mechanisms developed in
prior years for determining needed compliance assistance tools to
address upcoming regulatory requirements. One mechanism EPA uses for
continuing the compliance assistance needs discussions with its
partners is the National Compliance Assistance Forum. Discussions and
information provided at the Forum have been used to identify compliance
assistance needs and provide input on EPA's National Compliance
Assistance Activity Clearinghouse (Clearinghouse) and the Annual
Compliance Assistance Activity Plan. Another vehicle for assessing
compliance assistance needs comes from EPA's work with the Compliance
Assistance Advisory Committee (CAAC) which is a component of the
National Advisory Council for Environmental Policy and Technology
(NACEPT). These efforts not only support the development of compliance
assistance tools, but they also provide a forum to assess the
effectiveness of EPA's compliance assistance efforts. Through all of
these activities EPA is comprehensively analyzing forthcoming
regulatory requirements to identify which are best suited to compliance
assistance.
Based on discussions with stakeholders, EPA has also decided to
identify, through the rule development process, rules that have an
``economically significant'' impact on the regulated community, defined
as $100 million or more, and EPA may develop compliance guides for
those rules as appropriate. Similarly, as mandated by the Small
Business Regulatory Enforcement Fairness Act (SBREFA), based on the
regulatory flexibility analysis conducted early in the rule development
process, EPA develops plain English compliance assistance guides for
all SBREFA rules. OECA has also developed guidelines for staff to use
in reviewing the Regulatory Agenda to assess whether regulations would
be good candidates for compliance assistance. Attachment A contains
these guidelines for identifying compliance assistance candidates.
guidelines for screening new rules for compliance assistance
Screening Guidance
As you are reviewing the list of Tier I, Tier II and Tier III
proposed rules, consider the following factors in determining whether
the proposed regulations are good candidates for compliance assistance.
Compliance Assistance Required
Is the rule an ``economically significant rule?'' (impact of 100M
or more on regulated community. See RFA (Regulatory Flexibility Act)/
SBREFA tracking report in RAPIDS (Rule and policy Information
Development System) or the Rule Tiering Forms.)
--Compliance guide, fact sheet or expert system required by Aiming
for Excellence Report
Is the rule a ``SBREFA rule?'' (rule has a significant impact on
substantial number of small entities. See RFA/SBREFA tracking report in
RAPIDS or Rule Tiering Forms)
--Compliance guide required under Small Business Regulatory
Enforcement Fairness Act (SBREFA))
Possible Candidate for Compliance Assistance
Does the rule impact a sector with a large number of small
businesses who may lack the resources/ability to obtain compliance
assistance on their own? (See RAPIDS for list of rules that impact
small businesses but don't meet SBREFA threshold or check SBA guidance
on definition of small business)
--May be candidate for compliance assistance
Does the proposed rule impact a larger number of entities with
varying degrees of prior regulatory experience and access to compliance
assistance resources?
--May be candidate for compliance assistance
Does the proposed rule embody new or novel concepts to which
existing compliance assistance concepts or activities are inappropriate
or ineffective?
--May be candidate for compliance assistance
Is the regulated community willing and able to assist EPA in
developing compliance assistance tools?
--May be candidate for compliance assistance
Is the sector(s) impacted by the proposed rule on the ``emerging
sector'' list?
--May be a candidate for compliance assistance
Does the rule address an Agency initiative, priority in the
Strategic Plan or OECA or program office MOA priority?
--May be a candidate for compliance assistance
Less Likely Candidate for Compliance Assistance
Is the proposed rule concise and easily understood by the regulated
community? Does it mirror existing, familiar regulatory approaches that
apply to the same regulated community?
--Compliance assistance may not be needed
Does the proposed rule impact a small number of regulated entities
that are reasonably expected to be familiar with the regulatory
environment and/or have access to existing compliance assistance
resources?
--Compliance assistance may not be needed
Does a large proportion of the industry sector(s) affected by the
rule belong to a trade association?
--Compliance assistance may not be needed
compliance assistance: analysis of prospective enforcement activities
in fiscal year 2003
Question. In fiscal year 2003, how will EPA analyze its prospective
enforcement activities to determine where compliance assistance might
fill the gaps where the enforcement program does not currently reach?
Answer. EPA will continue to use a problem-solving approach that
applies integrated strategies tailored to address specific
environmental risks and noncompliance patterns. For some of these
problems a period of assistance designed to increase compliance is the
best approach. For other problems, assistance combined with incentives
for self-policing works best. In other instances, bringing enforcement
actions can be used as a tool with compliance assistance. Assistance
will be used with inspections, incentive policies, and enforcement
actions in combinations appropriate to the problem.
compliance assistance: documenting and measuring environmental
improvements
Question. How is EPA documenting and measuring environmental
improvements from compliance assistance activities? Provide the results
of these efforts.
Answer. EPA is advancing management of environmental improvements
from its compliance assistance activities through tracking of outcomes
from specific compliance assistance initiatives, surveys of compliance
assistance recipients, and by providing grants to states for
measurement of assistance outcomes. Beginning in fiscal year 2003, all
regional offices are being required to report on the outcomes of
compliance assistance projects. These results will be compiled in a
national database and analyzed to learn more about the results of
assistance. The database will capture outcome measures in three broad
areas: (1) understanding of regulatory requirements; (2) changes within
the regulatory community to improve environmental performance; and, (3)
direct reduction of emissions/discharges.
In 2001, the Compliance Assistance Centers conducted a survey of
their users. Ninety percent of the regulated survey respondents
reported the Centers helped them understand applicable environmental
requirements. Survey respondents indicate that Center information is
well used. In fact, 73 percent of the regulated entity respondents took
one or more actions as a result of Center use. Actions ranged from
contacting a regulatory agency, changing a process or practice, to
conducting a self audit. Additionally, 69 percent of the survey
respondents indicated a cost savings from actions taken as a result of
using a Center. Furthermore, 85 percent of respondents indicated an
environmental improvement from actions taken as a result of using a
Center. In addition to the survey results, annual usage of the Centers
by the target audience has increased three fold since 1998.
To encourage State programs to measure compliance assistance
outcomes EPA has awarded approximately $2.3 million in grants to states
in the last 2 years. A limited amount of funds are available in fiscal
year 2002 for this purpose.
compliance assistance: status of total resources devoted to compliance
assistance
Question. What is the status of EPA's efforts to determine total
resources devoted across the agency to compliance assistance
activities?
Answer. EPA has completed its efforts to determine total resources
devoted across the agency to compliance assistance programs. A
Compliance Assistance key program was created to track planned
resources and FTE for this activity across the Agency.
compliance assistance: compliance assistance analysis in analytic
blueprint for new regulations in fiscal year 2003
Question. In fiscal year 2003, how will EPA ensure that the
analytic blueprint for each new regulation includes a compliance
assistance analysis?
Answer. Pursuant to the Small Business Regulatory Enforcement
Fairness Act (SBREFA), EPA has committed to develop compliance guides
for Federal regulations that have a ``significant economic impact on a
substantial number of small entities.'' The Agency also develops either
a compliance guide or a self-audit checklist for Federal regulations
with an ``economically significant'' impact of $100 million or more on
companies and/or government facilities. As of April 5, 2002, there are
seven rules for which EPA expects to develop a guide or checklist in
calendar year 2002.
Further, Agency guidance requires program offices responsible for
``Tier 1 and Tier 2'' regulatory actions (i.e., those that require
participation of the Administrator's office and those that need cross-
media or Assistant Administrator-level involvement) to develop an
``analytic blueprint'' as an initial step in the regulatory development
process. An analytic blueprint is a plan for development of the rule.
It identifies the significant issues in the rule and discusses the
methodologies that will be used to resolve them. This includes the
economic, scientific, technical and intergovernmental information that
will be developed; the analyses that are required by law and Executive
Order; and, the significant policy issues, including implementation
issues, that need to be addressed.
An Agency-wide Task Force on the EPA Regulatory Development Process
has reaffirmed the importance of preparing an analytic blueprint. EPA
is updating its internal guidance on the preparation of an analytic
blueprint, a process which is scheduled to be completed this year. The
revised guidance will address implementation issues such as whether the
proposed rule will likely require the preparation of a compliance guide
or whether other types of compliance assistance tools should be
developed.
The analytic blueprint is prepared by the lead Program Office for
the rule. As a result of the Task Force recommendations, EPA's Office
of Enforcement and Compliance Assurance (OECA) now has the opportunity
to review blueprints for, among other things, the analysis of
compliance assistance opportunities.
compliance assistance: resources for implementation and performance and
assessments
Question. In fiscal year 2003, how will EPA ensure that each
rulemaking working group performs an assessment of the compliance
assistance needs associated with the various regulatory options,
including an assessment of the resources needed for implementation?
Answer. EPA examines the need for compliance assistance through
several different mechanisms throughout the rule development process.
The Small Business Regulatory Enforcement Fairness Act (SBREFA)
requires EPA to develop compliance guides for Federal regulations that
have a ``significant economic impact on a substantial number of small
entities.'' The Agency also has decided to prepare either a compliance
guide or a self-audit checklist for Federal regulations with an
``economically significant'' impact of $100M or more on companies and/
or government facilities. The Agency's ``1999 Revised Interim Guidance
for EPA Rulewriters: Regulatory Flexibility Act as Amended by the Small
Business Regulatory Enforcement Fairness Act,'' directs regulatory
workgroups to begin developing compliance assistance guides as early in
the process as there is enough information to do so, with a goal to
publish the guides within 2 months of promulgation of the rules. This
helps ensure timely consideration of resources necessary to implement
the guide. The guidance further states that ``[i]t remains EPA policy
that program offices should assess the direct impact of every rule on
small entities and minimize any adverse impact to the extent feasible,
regardless of the magnitude of the impact or number of small entities
affected.''
In addition, the recent Agency-wide Task Force report on the EPA
Regulatory Development Process mandates that EPA improve consideration
of implementation issues, including the provision of compliance guides,
throughout the regulatory development process. This report reaffirms
the importance of preparing an analytic blueprint for ``Tier 1 and Tier
2'' regulatory actions (i.e., those that require participation of the
Administrator's office and those that need cross-media or Assistant
Administrator-level involvement). An analytic blueprint is a plan for
development of the rule. It identifies the significant issues in the
rule and discusses the methodologies that will be used to resolve them.
This includes the economic, scientific, technical and intergovernmental
information that will be developed; the analyses that are required by
law and Executive Order; and, the significant policy issues, including
implementation issues, that need to be addressed. Revised Agency
guidance on the analytic blueprint is scheduled for completion this
year. The revised guidance will address implementation issues such as
whether the proposed rule will likely require the preparation of a
compliance guide or whether other types of compliance assistance tools
should be developed and the resources necessary to provide that
assistance.
compliance assistance: targeting compliance assistance to
constituencies in fiscal year 2003
Question. In fiscal year 2003, how will EPA better target
compliance assistance to constituencies which have not traditionally
participated in compliance assistance activities?
Answer. EPA is taking numerous steps to draw more diverse
constituents into compliance assistance activities. In particular, EPA
is soliciting more input from our stakeholders. The Office of
Enforcement and Compliance Assurance (OECA) sponsors the Compliance
Assistance Advisory Committee (CAAC), a multi-stakeholder working group
of the National Advisory Council for Environmental Policy and
Technology to provide input and guidance into the national compliance
assistance program. OECA also broadly solicits input into its
compliance assurance priorities by holding stakeholder meetings and
issuing a Federal Register Notice prior to its selection of priorities.
EPA also seeks out new constituents through the annual Compliance
Assistance Providers Forum which brings together an array of compliance
and environmental assistance providers and industry to collaborate and
identify compliance assistance priorities.
compliance assistance: dollars and fte for compliance assistance
activities within and outside of oeca
Question. Provide the dollars and FTE for compliance assistance
activities, within and outside OECA. In meeting this request, provide
resource levels from the fiscal year 2002 enacted, fiscal year 2002
actuals, and fiscal year 2003 request. Organize the information by
Appropriation, Office or Region, and Activity.
Answer. Provided below are resource and FTE for Agency-wide
compliance assistance activities from the enacted fiscal year 2002
operating plan and the fiscal year 2003 President's request by
Appropriation and Office. The Agency does not track key programs,
including Compliance Assistance, by Activity or by actual obligations.
----------------------------------------------------------------------------------------------------------------
Fiscal year
Appropriation/Office -------------------------------------------------
2002 Enacted Op Plan 2003 President's Budget
----------------------------------------------------------------------------------------------------------------
EPM........................................................... $60,376.3/465.9 FTE $60,579.2/455.1 FTE
Office of Air and Radiation............................... 1,003.4/5.2 FTE 1,005.6/5.2 FTE
Office of Water........................................... 23,940.7/161.2 FTE 24,684.8/162.3 FTE
Office and Pesticides & Toxic Sub......................... 1,257.2/0.0 FTE 1,257.0/0.0 FTE
Office of Solid Waste/Emerg. Resp......................... 7,168.3/75.0 FTE 7,168.3/75.0 FTE
Office of Enforcement & Compliance Assistance............. 25,706.7/206.1 FTE 25,103.5/194.2 FTE
Office of the Administrator............................... 1,300.0/18.4 FTE 1,300.0/18.4 FTE
S & T......................................................... $5,340.6/54.0 FTE $6,315.0/54.0 FTE
Office of Air and Radiation............................... 5,340.6/54.0 FTE 6,315.0/54.0 FTE
STAG.......................................................... $2,459.3/0.0 FTE $2,459.3/0.0 FTE
Office and Pesticides & Toxic Sub......................... 250.0/0.0 FTE 250.0/0.0 FTE
Office of Enforcement and Compliance Assurance............ 2,209.3/0.0 FTE 2,209.3/0.0 FTE
LUST.......................................................... $670.0/5.5 FTE $689.8/5.5 FTE
Office of Enforcement and Compliance Assurance............ 670.0/5.5 FTE 689.8/5.5 FTE
OIL........................................................... $264.8/1.8 FTE $271.4/1.8 FTE
Office of Enforcement and Compliance Assurance............ 264.8/1.8 FTE 271.4/1.8 FTE
-------------------------------------------------
TOTAL................................................... 69,111.0/527.2 FTE 70,314.7/516.4 FTE
----------------------------------------------------------------------------------------------------------------
compliance assistance: cuts proposed by fiscal year 2003--president's
budget for compliance assistance and centers key program
Question. Provide a detailed explanation of the cuts proposed in
the fiscal year 2003 President's Budget for the Compliance Assistance
and Centers key program.
Answer. In fiscal year 2003, EPA is requesting a total of
$26,067,900 and 201.5 workyears for the Compliance Assistance and
Centers key program. This represents a total reduction of 11.9
workyears and $602,300 from fiscal year 2002. This reduction is part of
the Agency's efforts to redirect resources from Federal to State
enforcement and compliance programs. The Office of Enforcement and
Compliance Assurance (OECA) will reduce development of guidance and
policies, and assistance tools by about 3 FTE. The remaining 9 FTE
reduces general assistance provided to the regulated community. We
expect that the states will use their increased funding to increase the
assistance provided to the regulated community on the environmental
programs delegated to their states.
enforcement: fte ceiling and on-board levels as of october 1, january
1, march 1, and july 1 for oeca
Question. Provide the FTE ceiling and on-board levels as of October
1, January 1, March 1, and July 1 in each of the last 3 years for OECA,
the Office of Regulatory Enforcement, the Office of Compliance, and the
Office of Criminal Enforcement, Forensics, and Training.
Answer. The following tables provide the FTE and on-board levels
for the Office of Enforcement and Compliance Assurance (OECA), Office
of Regulatory Enforcement, Office of Compliance, and the Office of
Criminal Enforcement, Forensics, and Training. The workyear ceiling is
allocated at the beginning of the fiscal year and did not change during
the year. The on-board levels reflect the total number of full and part
time employees at the beginning of the pay period close to the dates
listed below. It is important to note that the Office of Regulatory
Enforcement, Office of Compliance, and the Office of Criminal
Enforcement, Forensics, and Training include headquarters FTE only.
Regional and headquarters FTE are included in the OECA chart.
OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE (OECA)
----------------------------------------------------------------------------------------------------------------
On-Board Employees
Fiscal year FTE ---------------------------------------------------------------
Oct 1 Jan 1 March 1 July 1
----------------------------------------------------------------------------------------------------------------
1999............................ 3,645.6 3,060 3,380 3,368 3,463
2000............................ 3,565.0 3,505 3,449 3,459 3,463
2001............................ 3,536.8 3,404 3,411 3,401 3,420
2002............................ \1\ 3,456.8 3,383 3,304 3,303 3,335
(May 17)
2003............................ 3,311.3
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2002 includes 50.0 FTE from the emergency supplemental for Homeland Security.
OFFICE OF REGULATORY ENFORCEMENT (ORE)
----------------------------------------------------------------------------------------------------------------
On-Board Employees
Fiscal year FTE ---------------------------------------------------------------
Oct 1 Jan 1 March 1 July 1
----------------------------------------------------------------------------------------------------------------
1999............................ 148.1 150 151 151 148
2000............................ 138.9 147 146 145 142
2001............................ 143.5 141 140 143 145
2002............................ 136.8 144 144 144 145
(May 17)
2003............................ 127.8
----------------------------------------------------------------------------------------------------------------
OFFICE OF COMPLIANCE (OC)
----------------------------------------------------------------------------------------------------------------
On-Board Employees
Fiscal year FTE ---------------------------------------------------------------
Oct 1 Jan 1 March 1 July 1
----------------------------------------------------------------------------------------------------------------
1999............................ 168.0 169 167 170 173
2000............................ 158.7 171 170 166 158
2001............................ 155.9 158 151 148 144
2002............................ 145.5 145 145 146 148
(May 17)
2003............................ 135.5
----------------------------------------------------------------------------------------------------------------
OFFICE OF CRIMINAL ENFORCEMENT, FORENSICS, AND TRAINING (OCEFT)
----------------------------------------------------------------------------------------------------------------
On-Board Employees
Fiscal year FTE ---------------------------------------------------------------
Oct 1 Jan 1 March 1 July 1
----------------------------------------------------------------------------------------------------------------
1999............................ 394.4 404 401 399 399
2000............................ 386.1 390 384 379 370
2001............................ 385.8 364 360 361 360
2002............................ \1\ 454.3 361 363 367 397
(May 17)
2003............................ 399.8
----------------------------------------------------------------------------------------------------------------
\1\ Includes 50.0 FTE from emergency supplemental for Homeland Security.
enforcement: federal inspections to areas that pose greatest risk to
human health or the environment in fiscal year 2003
Question. In fiscal year 2003, how will EPA target Federal
inspections to the areas that pose the greatest risk to human health or
the environment? Discuss the technical tools as well as management
attention necessary to ensure inspections focus on the greatest risks
to human health or the environment.
Answer. EPA targets Federal inspections for three elements of the
national enforcement and compliance assurance program: national
priorities, core program areas, and special initiatives.
National priorities are selected as a result of reviewing Agency
compliance data systems, feedback from field inspectors, discussions
with EPA program offices and State environmental agencies, and comments
from external stakeholders. Through this process EPA selects the most
important environmental risks and noncompliance patterns. In developing
strategies for each of these priorities EPA determines the need for
inspections and investigations that will help reduce risks and improve
compliance. The priorities for fiscal year 2003 are:
--Clean Water Act--Wet Weather
--Safe Drinking Water ActMicrobial Rules
--Clean Air Act--New Source Review/Prevention of Significant
--Deterioration
--Clean Air Act--Air Toxics
--Resource Conservation and Recovery Act (RCRA)--Permit Evaders
--Petroleum Refining
Core program areas under the 14 Federal laws for which EPA has
enforcement authority also receive inspection coverage as part of EPA's
national enforcement and compliance assurance program. For example, EPA
conducts inspections under the Clean Air Act and Clean Water Act to
ensure an appropriate level of compliance monitoring for basic
provisions of these laws.
Inspections are also conducted as part of special initiatives that
EPA develops to address specific risks or noncompliance patterns
associated with economic sectors, geographic areas, pollutants, or
particular regulatory requirements. These initiatives are sometimes
developed using tools such as the On-line Targeting System (OTIS), a
multi-media database that contains information on approximately one
million facilities nationwide. This internal database contains
information such as basic facility and permit data, Federal and State
enforcement and compliance data (inspections, enforcement actions,
significant violations), environmental justice data, and pollutant
release information. The data base can be accessed by EPA and State
employees, and it helps inspectors identify facilities that
consistently pose a threat to human health and the environment by
allowing them to review patterns of noncompliance and pollutant
emissions by industry sector and geographic location.
enforcement: civil enforcement activities to areas that pose the
greatest risk to human health or the environment in fiscal year 2003
Question. In fiscal year 2003, how will EPA target its civil
enforcement activities to areas that pose the greatest risk to human
health or the environment? Discuss specifically the role of OECA
management in ensuring that OECA civil enforcement efforts remain
focused on the greatest risks to human health or the environment.
Answer. For fiscal year 2002/2003, OECA management collaborated
with the Headquarters' Program Offices, Regional offices, and State and
Tribal agencies in developing national priorities, as delineated in the
Office of Enforcement and Compliance Assurance's Memorandum of
Agreement (MOA) 2002/2003 guidance. National priorities are selected
for a two year cycle. In selecting the national priorities for fiscal
year 2002/2003, stakeholders were asked to consider three criteria in
their decision making. These three criteria were: (1) risk reduction--
program areas or sectors where significant reductions in risks to human
health or the environment may be made through concerted Federal
attention; (2) noncompliance--consistent patterns of noncompliance in
particular programs or sectors where concentrated Federal effort will
result in improvement; and, (3) EPA responsibility--identified problem
areas or programs that can better be addressed by EPA nationally due to
a lack of delegation or State capacity/performance issues.
The six priorities that the Agency selected for the fiscal year
2002/2003 MOA cycle are:
--Clean Water Act--Wet Weather
--Safe Drinking Water Act--Microbial Rules
--Clean Air Act--New Source Review/Prevention of Significant
--Deterioration
--Clean Air Act--Air Toxics
--Resource Conservation and Recovery Act (RCRA)--Permit Evaders
--Petroleum Refining
In addition, much of the Agency's core enforcement and compliance
program focuses resources, through long standing enforcement response
policies and program guidance, on those violations that present the
greatest risk to the environment and human health. As directed by the
OECA MOA guidance, each Region develops and submits their MOA work plan
each Fall to OECA. OECA management and staff review the activities in
each of the Regional work plans to ensure that Regional work supports
the national priorities, thereby ensuring that the work of the Regions
is focused on the greatest risks to human health or the environment.
Division Directors in OECA must concur on each Region's final MOA
workplan.
enforcement: epa's inherent conflict between desire to meet inspection
and case output performance goals and strategies
Question. Given that in certain circumstances or sectors regulatory
or non-enforcement initiatives or incentives may produce greater
benefits to the environment or reductions in pollution than traditional
enforcement actions, how will OECA avoid the inherent conflict between
its desire to meet inspection and case output performance goals and
strategies which may prove more beneficial to the environment?
Answer. EPA takes a problem-solving approach to identifying
environmental problems and devising the best strategies to deal with
them, focusing on the most effective and efficient ways to use our
resources to achieve the best possible environmental results. EPA uses
an integrated approach to strategically mix our available tools
incentives, compliance assistance, inspections, investigations,
settlements in a manner targeted and tailored to particular problems
and situations, to produce the most benefit to the public and the
environment.
One example of a recent successful integrated approach is the
Federal Lead Paint Program, in which EPA identified the significant
environmental and public health problem of childhood lead poisoning (48
million homes contain lead-based paint and nearly 890,000 children have
elevated lead levels) and partnered with states and HUD to implement a
solution in cities across the nation. The strategy uses a mix of tools
including dedicated compliance assistance, audit incentives, and
focused enforcement to combat the problem.
Specifically, EPA has partnered with State and local agencies to
deliver compliance assistance by providing members of the real estate
community with compliance assistance packages, sample disclosure forms
and information on how to achieve compliance. We have conducted
seminars for local State and real estate associations and provided
mailings and TV/radio public service announcements. EPA and HUD have
taken advantage of the existing framework of EPA's Audit Policy, which
allows the disclosure and correction of violations at a substantially
reduced penalty, to reach out to landlords in 11 cities across the
nation and return them to compliance. EPA, HUD and the Department of
Justice have focused their enforcement actions in four major cities Los
Angeles, Chicago, New York, and the District of Columbia on large
management companies responsible for buildings which were covered by
the disclosure rule and had multiple incidents of children with
elevated blood levels.
EPA sets annual performance goals for inspections, but not for
cases. By setting an annual goal for inspections EPA ensures a presence
in the regulated universe, and identifies violations that need to be
corrected. There are no performance goals set for cases, as this would
establish a quota that might lead to less serious cases taken for the
sake of meeting an annual target.
enforcement: process used to choose and employ the most effective
regulatory tool
Question. In fiscal year 2003, what process will EPA management use
to choose and employ the most effective regulatory tool in a given
sector or circumstance--albeit traditional enforcement by OECA, or
other approach by OECA or another EPA office including regulatory
flexibility, compliance assistance or incentive--to produce the
greatest benefit to health of the environment?
Answer. The Office of Enforcement and Compliance Assurance (OECA)
uses a problem-solving approach to identify and address environmental
risks and noncompliance patterns, and to devise the best ways to deal
with them. OECA strategically combines our available tools compliance
assistance, inspections and investigations, enforcement and innovative
settlements using Supplemental Environmental Projects, and incentives
provided by the Agency's self disclosure policies to achieve the
desired environmental results. OECA works with other EPA Program and
Regional offices, states, the regulated community and public interest
groups, as appropriate, to identify and analyze the cause of compliance
problems and develop strategies integrating use of all appropriate
compliance and enforcement tools to address problems.
OECA currently has four efforts underway to improve and refine
identification of environmental problems and development of strategies
to address them. First, a pilot project is underway that has
established a problem identification and analysis team to review data
bases and other information sources for noncompliance patterns. Second,
an analysis of industry sectors is being conducted to determine whether
there are particular sectors with new or emerging compliance problems.
Third, a mechanism for gathering feedback more systematically from
field inspectors is being developed to ensure that their experience
informs the selection of national priorities and initiatives. Fourth, a
work group of senior managers is currently reviewing ways to improve
the development and implementation of strategies that integrate
assistance, inspections, incentives, and enforcement.
enforcement: appropriate balance, roles, and responsibilities between
state and federal enforcement agencies
Question. What is the appropriate balance, roles and
responsibilities between State and Federal enforcement agencies?
Answer. Enforcement of environmental programs is done in
cooperation with states and Indian tribes. States have the primary
authority for implementing and enforcing most environmental programs
through authorization or delegated authority from the EPA. The EPA's
Federal role is to implement and enforce programs that cannot be
delegated to States and Indian tribes, to handle more complex cases
involving multiple states or corporations with multiple facilities, to
deal with issues that require expertise or resources which only EPA can
provide, and to enforce when states are unable or unwilling to do so.
enforcement: impact of reduction of enforcement ftes and additional
state enforcement resources on enforcement output
Question. How will the proposed reduction of enforcement FTE and
additional State enforcement resources impact enforcement outputs--
Federal, State and total?
Answer. We expect performance results in the national Enforcement
and Compliance Assurance program to remain the same, with states
picking up an additional increment of that work. EPA and the states
have different, but complementary roles when it comes to enforcement of
our Nation's environmental laws. States have primary responsibility for
implementing and enforcing most environmental programs through
delegated authority from the EPA. The EPA's Federal role is to
implement and enforce programs that cannot be delegated to states, to
handle more complex cases involving multiple states or corporations
with multiple facilities, to deal with issues that require expertise or
resources that only EPA can provide, and to enforce when states are
unable or unwilling to. Given the interplay between the State and
Federal programs, we believe the State and tribal enforcement grant
program will enhance both State and EPA efforts to increase compliance
with environmental laws.
States will be approved for grant funding only if their grant
proposal includes specific plans to measure and report on their
performance in achieving results. For example, for environmental risks
or noncompliance patterns they are addressing with the grant funds,
states will need to define performance measures for determining whether
they are having an impact (e.g., pollution reductions, improved
environmental practices at facilities or within an industry, increased
compliance rates). EPA will establish required reporting intervals for
states to provide performance information which can be reviewed on a
regular basis by EPA.
enforcement: impact of reduction of enforcement ftes and additional
state enforcement resources on national environmental indicators
Question. How will the proposed reduction of Federal enforcement
FTE and additional State enforcement resources impact national
environmental indicators, such as clean air and clean water?
Answer. National environmental indicators such as clean air and
clean water are affected by a number of factors such as land usage,
stress from population, economic and financial considerations,
compliance rates, and the severity of violations. We expect that the
proposed resource shift will result in a national level of enforcement
activity that is equal to or greater than baseline levels.
enforcement: geographic areas subject to decrease in federal
enforcement fte realize increase in state enforcement resources
Question. How will EPA ensure that geographic areas subject to a
decrease in Federal enforcement FTE personnel realize an increase in
State enforcement resources?
Answer. The President's fiscal year 2003 budget proposes a
reduction of 100 workyears from EPA's enforcement and compliance
assurance program to help fund the proposed State and tribal
enforcement grant program. states will use the grant funds to address
important environmental risks and noncompliance patterns. In addition,
the fiscal year 2003 budget provides EPA's enforcement and compliance
assurance program sufficient resources to carry out the appropriate
Federal role, focusing on more complex cases involving multi-state or
multi-facility corporations, dealing with issues that require expertise
or resources that only EPA can provide, ensuring compliance with
environmental programs that cannot be delegated to states due to
statutory prohibition, and to enforce when states are unable or
unwilling to do so.
enforcement: acceptance of multiple proposals from states for new
enforcement grants
Question. Will EPA accept multiple proposals from states for the
$15 million in new enforcement grants and thereby reward states which
have the resources to submit numerous high quality proposals?
Answer. Based on feedback from states and tribes EPA will likely
require a lead agency within a State or tribe to submit a single,
consolidated proposal. Agencies other than the lead agency will remain
eligible to receive grants funds if they are included in the proposal.
enforcement: new enforcement grant program grants award to states and/
or used by epa
Question. Will states receive the entire $15 million from the new
enforcement grant program or will EPA use some of that money?
Answer. EPA will distribute the entire $15 million to states,
tribes, and other eligible entities.
enforcement: information obtained from states measuring outputs or
outcomes from usage of new enforcement grants
Question. How will EPA obtain information from states measuring
their outputs and outcomes from usage of the new $15 million?
Answer. States will be approved for grant funding only if their
grant proposal includes specific plans to measure and report on their
performance in achieving results. For example, states will need to
define performance measures for determining whether they are having an
impact on the environmental risk or noncompliance pattern they are
addressing with the grant funds. EPA will establish required reporting
intervals for states to provide performance information that can be
reviewed by EPA on a regular basis.
enforcement: determining impact on environment by enforcement fte cuts
from information from states
Question. Will the information EPA obtains from states on their use
of the $15 million be sufficient for EPA to determine whether the
environment was hurt by the enforcement FTE cuts?
Answer. Information gathered from states and tribes on their use of
grant funds will allow the Agency determine the impact they are having
on the environmental problems they chose to address. In addition, EPA
will continue oversight of State enforcement programs, reviewing not
just what is being achieved with grant funds, but the overall
performance of the enforcement program of each State.
EPA will continue to collect and analyze performance information
about its own programmatic outputs and outcomes to ensure we are
focusing on important problems, and achieving the right results and
outcomes. By monitoring the use of the grant funds, providing oversight
of State programs, and analyzing the performance of the Federal
enforcement effort, EPA believes it can provide a credible deterrent to
pollution while maximizing compliance.
enforcement: verification and validation of actual accomplishments from
enforcement activities
Question. In fiscal year 2003, how will EPA verify and validate
that actual accomplishments resulted from EPA activities?
Answer. EPA's attorneys and technical staff analyze completed
enforcement actions and report an estimated, predicted outcome in terms
of reduced emissions, preventive management of potential pollutants,
treatment of contaminated materials, and industrial modifications.
These estimates are produced using technical guidance EPA revised and
issued in fiscal year 2001. The guidance was developed in consultation
with engineers, environmental management practitioners, and experienced
environmental attorneys and administrators. EPA is currently completing
detailed training on this guidance in all of its regional offices and
in headquarters, for hundreds of EPA staff. As a result of the guidance
and training, EPA expects that there will be an improvement in the
quality of the estimates, and an increase in the number of concluded
enforcement actions that report such estimates.
The Agency can and does, in conjunction with the Department of
Justice and under the supervision of the Courts, confirm that the terms
of court imposed settlement agreements are adhered to by Defendants.
Additionally, in a memorandum dated February 8, 2001, EPA's Office of
Regulatory Enforcement and Office of Site Remediation and Enforcement,
in response to recommendations from the EPA's Inspector General,
reemphasized to regional offices that progress towards meeting the
terms of compliance in Federal judicial settlements must be monitored,
documented and tracked in a data system from which reports can be
issued quarterly. This will help ensure that EPA will monitor, and take
further action if necessary, to ensure required steps are taken to
achieve the environmental progress required for compliance in orders
and settlements.
grants: number of non-profit recipients of non-construction grant
awards in last three years
Question. How many different non-profit recipients received non-
construction grant awards in each of the last 3 years?
Answer. EPA awarded grants to 846 different non-profit recipients
in fiscal year 1999, 759 in fiscal year 2000, and 772 in fiscal year
2001.
grants: dollars of non-profit recipients of non-construction grant
awards in last three years
Question. How many dollars did the Agency award to non-profit
recipients in non-construction grants in each of the last 3 years?
Answer. EPA awarded $249,983,517 to non-profit recipients in fiscal
year 1999, $264,898,545 in fiscal year 2000, and $349,978,246 in fiscal
year 2001.
grants: top twenty non-profit grant recipients by number of awards in
fiscal year 2002
Question. List the top twenty non-profit EPA grant recipients by
number of awards in fiscal year 2002. Provide also the number of awards
and total dollar amount awarded.
Answer.
FISCAL YEAR 2001--TOP 20 NON-PROFIT GRANTEES BY NUMBER OF AWARDS
------------------------------------------------------------------------
Number of
awards Amount
------------------------------------------------------------------------
NATIONAL OLDER WORKER CAREER CENTER, 75 $20,805,037
WASHINGTON, DC.........................
NATIONAL CAUCUS & CENTER ON BLACK AGED, 74 10,285,948
WASHINGTON, DC.........................
NATIONAL SENIOR CITIZENS ED & RSCH CTR, 61 11,544,270
SILVER SPRING, MD......................
NATL ASIAN PACIFIC CENTER FOR AGING, 48 6,330,332
SEATTLE, WA............................
NATIONAL ACADEMY OF SCIENCE, WASHINGTON, 36 6,816,253
DC.....................................
THE ENVIRONMENTAL CAREERS ORGANIZATION, 30 5,833,801
BOSTON, MA.............................
NATIONAL COUNCIL ON AGING, WASHINGTON, 28 4,415,772
DC.....................................
NATIONAL ASSOCIATION FOR HISPANIC ELDE, 24 5,700,429
PASADENA, CA...........................
INTERNATIONAL CITY/COUNTY MGMT. ASSOC., 16 2,716,184
WASHINGTON, DC.........................
NORTHEAST STATES FOR COORDINATED AIR U, 10 3,313,275
BOSTON, MA.............................
NATL CONFERENCE OF STATE LEGISLATURES, 9 749,532
DENVER, CO.............................
ENVIRONMENTAL LAW INSTITUTE, WASHINGTON, 8 689,272
DC.....................................
CENTER FOR CLEAN AIR POLICY, WASHINGTON, 8 1,055,224
DC.....................................
NATIONAL ASSOCIATION OF COUNTIES, 8 870,300
WASHINGTON, DC.........................
INTER TRIBAL COUNCIL OF ARIZONA INC., 8 1,352,277
PHOENIX, AZ............................
ENVIRONMENTAL COUNCIL OF THE STATES, 7 805,488
WASHINGTON, DC.........................
NATIONAL CENTER FOR MANUFACTURING SCIE, 7 1,319,615
ANN ARBOR, MI..........................
WV UNIVERSITY RESEARCH CORPORATION, 7 5,515,808
MORGANTOWN, WV.........................
RESEARCH TRIANGLE INSTITUTE RESEARCH, 7 2,354,288
TRIANGLE, NC...........................
WESTERN GOVERNORS' ASSOCIATION, DENVER, 7 3,200,806
CO.....................................
------------------------------------------------------------------------
This data is for fiscal year 2001. Fiscal year 2002 data can be provided
at end of fiscal year.
grants: top twenty non-profit grant recipients by total amount of funds
awarded in fiscal year 2002
Question. List the top twenty non-profit EPA grant recipients by
total amount of funds awarded in fiscal year 2002. Provide also the
number of awards and total dollar amount awarded.
Answer:
FISCAL YEAR 2001--TOP 20 NON-PROFIT GRANTEES BY DOLLARS AWARDED
------------------------------------------------------------------------
Number of
awards Amount
------------------------------------------------------------------------
NORTH AMERICAN DEVELOPMENT BANK, SAN 1 $84,000,000
ANTONIO, TX............................
NATIONAL OLDER WORKER CAREER CENTER, 75 20,805,037
WASHINGTON, DC.........................
NATIONAL SENIOR CITIZENS ED & RSCH CTR, 61 11,544,270
SILVER SPRING, MD......................
NATIONAL RURAL WATER ASSOCIATION, 5 10,631,100
DUNCAN, OK.............................
NATIONAL CAUCUS & CENTER ON BLACK AGED, 74 10,285,948
WASHINGTON, DC.........................
BORDER ENVIRONMENTAL COOPERATION COMM., 5 8,192,000
EL PASO, TX............................
HEALTH EFFECTS INSTITUTE, CAMBRIDGE, MA. 2 7,500,000
NATIONAL ACADEMY OF SCIENCE, WASHINGTON, 36 6,816,253
DC.....................................
NATL ASIAN PACIFIC CENTER FOR AGING, 48 6,330,332
SEATTLE, WA............................
THE ENVIRONMENTAL CAREERS ORGANIZATION, 30 5,833,801
BOSTON, MA.............................
NATIONAL ASSOCIATION FOR HISPANIC ELDE, 24 5,700,429
PASADENA, CA...........................
WV UNIVERSITY RESEARCH CORPORATION, 7 5,515,808
MORGANTOWN, WV.........................
AMERICA'S CLEAN WATER FOUNDATION, 3 5,080,000
WASHINGTON, DC.........................
GAS TECHNOLOGY INSTITUTE, DES PLAINES, 1 4,989,000
IL.....................................
THREE RIVERS WET WEATHER INC., 1 4,845,000
PITTSBURGH, PA.........................
NATIONAL COUNCIL ON AGING, WASHINGTON, 28 4,415,772
DC.....................................
CANAAN VALLEY INSTITUTE, DAVIS, WV...... 4 4,194,800
WATER ENVIRONMENT RESEARCH FOUNDATION, 2 3,966,400
ALEXANDRIA, VA.........................
NORTHEAST STATES FOR COORDINATED AIR U, 10 3,313,275
BOSTON, MA.............................
WESTERN GOVERNORS' ASSOCIATION, DENVER, 7 3,200,806
CO.....................................
------------------------------------------------------------------------
This data is for fiscal year 2001. Fiscal year 2002 data can be provided
at end of fiscal year.
grants: number of bench reviews conducted of non-profit non-
construction grantees from fiscal year 2000 to fiscal year 2002--by
region
Question. How many bench reviews did EPA conduct of non-profit non-
construction grantees in fiscal year 2000, fiscal year 2001 and fiscal
year 2002? List by Region.
Answer.
----------------------------------------------------------------------------------------------------------------
Bench Reviews Fiscal Year
--------------------------------------------------------
Regional Grants Management Office 2002 as of 5/25/
2000 2001 2002
----------------------------------------------------------------------------------------------------------------
I...................................................... 0 0 0
II..................................................... 0 2 1
III.................................................... 3 0 0
IV..................................................... 0 22 18
V...................................................... 0 0 0
VI..................................................... 2 4 4
VII.................................................... 0 0 1
VIII................................................... 0 2 10
IX..................................................... 0 0 0
X...................................................... 0 0 1
HQ..................................................... 15 21 10
--------------------------------------------------------
Total............................................ 20 51 45
----------------------------------------------------------------------------------------------------------------
grants: number of on-site reviews conducted of non-profit non-
construction grantees in fiscal year 2000 to fiscal year 2002 by region
Question. How many on-site reviews did EPA conduct of non-profit
non-construction grantees in fiscal year 2000, fiscal year 2001 and
fiscal year 2002? List by Region.
Answer.
----------------------------------------------------------------------------------------------------------------
On Site Reviewz Fiscal Year
--------------------------------------------------------
Regional Grants Management Offices 2002 as of 5/25/
2000 2001 2002 (to date)
----------------------------------------------------------------------------------------------------------------
I...................................................... 2 1 0
II..................................................... 3 3 4
III.................................................... 1 2 2
IV..................................................... 0 0 0
V...................................................... 2 2 1
VI..................................................... 0 0 0
VII.................................................... 0 1 1
VIII................................................... 0 2 0
IX..................................................... 5 3 1
X...................................................... 0 0 2
HQ..................................................... 13 22 23
--------------------------------------------------------
Total............................................ 26 36 34
----------------------------------------------------------------------------------------------------------------
grants: number of ftes and on-board personnel conducting on-site
reviews of grantees in fiscal year 2002 and fiscal year 2003
Question. How many FTEs and on-board personnel are and will be
devoted to conducting on-site reviews of grantees in fiscal year 2002
and fiscal year 2003?
Answer. To date, Headquarters and Regional Grants Management
Offices devoted approximately 4 FTEs to conducting on-site reviews in
fiscal year 2002. In addition, EPA awarded three contracts to perform
eleven evaluative on-site reviews of non-profit grantees.
In fiscal year 2003, EPA plans to devote a minimum of 4 FTEs to
conducting on-site reviews and continue to procure additional
contractor support to perform reviews of non-profit grantees.
grants: number of hours of paperwork burden imposed on businesses
Question. How many hours of paperwork burden did EPA impose on
businesses in the last reporting year and each of the previous 3 years?
Answer. Total EPA burden hours (including both business and State
burden) at the end of each of the last four fiscal years are listed
below:
[In millions]
Fiscal year Burden hours
2001.............................................................. 131
2000.............................................................. 129
1999.............................................................. 119
1998.............................................................. 115
grants: number of hours of paperwork burden imposed on businesses
Question. In fiscal year 2003, how will EPA reduce the paperwork
burden it imposes on businesses?
Answer. Many EPA programs are taking the initiative to reduce
reporting and record-keeping burden. Although EPA does not have
quantified burden reductions estimates for these initiatives, these
efforts include:
Resource Conservation and Recovery Act (RCRA) Burden Reduction
Initiative (Office of Solid Waste and Emergency Response), a broad-
based initiative aimed at streamlining paperwork and regulations
associated with RCRA .
Reg-in-a-Box Expert Advisors (Office of Prevention, Pesticides, and
Toxic Substances), an expert software system which can aid the public
in understanding if and how regulations affect them.
Toxic Release Inventory (TRI) Made Easy (Office of Environmental
Information), an expert software system that assists facilities in
reporting their TRI data.
Central Data Exchange (CDX) (Office of Environmental Information),
a single Agency portal enabling the submission of data via the Internet
and aimed at improving the collection, management, and sharing of
environmental information among the states, Tribes, and EPA.
Performance Track (Office of Policy, Economics, and Innovation), an
initiative designed to motivate and reward top environmental performers
that take a systematic approach to managing environmental
responsibilities and are leading the way to environmental excellence
while saving money and improving productivity.
grants: oei work with program offices to tailor new rules to impose
less paperwork burden
Question. In fiscal year 2003, how is the Office of Environmental
Information working with program offices to tailor new rules to impose
less paperwork burden?
Answer. The Office of Environmental Information (OEI) is working on
the following initiatives which are aimed at helping program offices
decrease the amount of paperwork burden imposed on the public.
Guidelines on Minimizing Burden and Ensuring Sound Burden Estimates
OEI is working on several guidelines to assist program offices in
developing information collections which minimize the burden imposed on
regulated entities. These guidelines highlight examples of successful
streamlining efforts in program offices and offers numerous suggestions
for areas where burden may potentially be decreased. The guidelines
currently under development are:
--Guidelines on Streamlining Existing Collections
--Guidelines on Streamlining New Collections
--Guidelines for Estimating the Burden Impacts of Electronic
Reporting
--Guidelines for Preparing Sound Burden Estimates
Effort to Increase Electronic Reporting and the Integration of
Information
The National Environmental Information Exchange Network (Network)
is a partnership program with the states and Tribes aimed at developing
an integrated, electronic environmental data exchange. It includes
efforts to: build a single point of exchange for electronic reporting
through EPA's CDX portal; propose alegal framework for electronic
reporting; and apply specific data standards across information
systems. CDX currently offers electronic reporting options in four
program areas, and is testing two new programs for implementation by
the end of fiscal year 2002. As EPA's point of exchange or ``Node'' on
the Network, CDX completed the first Node test with six states in early
fiscal year 2002 and plans to expand Node testing this year.
standardizing data elements
EPA has a very active environmental data standards program and has
finalized seven standards in cooperation with states and tribes. Three
additional standards are near completion and are anticipated to be
adopted within fiscal year 2002. Three others are being considered;
most of these more fully define program specific information that
complements existing standards. One of the benefits of expanding
environmental data standards is that programs are better able to
compare the content of various information systems, thereby reducing
duplicative applications. This, in turn, results in the elimination of
some sub-applications and an increase in savings to the states, Tribes,
and EPA. Yet another benefit of promoting environmental data standards
is the identification of similar data shared by multiple programs. This
provides an opportunity to develop registries that contain commonly
used data that programs can rely on as an authoritative source, which
can result in the removal of duplicative requests for information
collection. One example of this is the reliance on facility
identification information from the Facility Registry System by OSWER,
rather than requesting the collection of this information continually
from the facilities.
grants: program offices review of current paperwork requirements to
reduce burden on businesses in fiscal year 2002
Question. In fiscal year 2003, how will the program offices, either
with or without the help of OEI, review current paperwork requirements
to reduce their burden on businesses?
Answer. EPA will reduce burden on businesses in the following ways:
Program Initiated Efforts.--Several programs have taken the
initiative to reduce burden by throughly analyzing their collections to
identify requirements which can be streamlined. For example, in fiscal
year 2003, the Office of Solid Waste (OSW) will publish a final rule
that incorporates many burden reduction components into RCRA
requirements. OSW initiated a two-phase burden reduction initiative
that first examines reporting requirements and then proposed a rule
that will streamline the collection. To reduce reporting burdens to
facilities, OSW first evaluated all of EPA's current RCRA reporting
requirements. As a result, OSW drafted a proposed rule that was
published in February 2002 in the Federal Register. OSW estimates that
this proposed rule will eliminate nearly 1 million burden hours from
the total RCRA paperwork burden (which is currently nearly 8 million
hours). This is a 12 percent reduction from current burden hours. The
proposed rule is also estimated to have annual cost savings of $120
million, mostly from the Land Disposal Restrictions changes. In fiscal
year 2003, OSW will continue work on a second phase of the Burden
Reduction Initiative (BRI), which focuses on the RCRA Biennial Report.
Currently, all large quantity generators of hazardous waste and all
treatment, storage, and disposal facilities have to complete a Biennial
Report. The second phase of the BRI will propose alternatives such as
conducting a survey of facilities rather than requiring the completion
of a report by every facility. OSW will publish their findings in a
Notice of Data Availability in fiscal year 2003.
Supporting Environmental Performance.--The Office of Policy,
Economics, and Innovation continues to develop and expand the
Performance Track program to motivate and reward facilities that
achieve better environmental performance than is required under
existing regulations. This program enhances the current regulatory
system by offering recognition and other incentives to facilities that
have shown a commitment to going beyond basic compliance with
environmental regulations. EPA is developing a rule to propose specific
regulatory changes as incentives for participation in Performance
Track. These incentives would offer a reduction in the reporting and
other operating costs of the current regulatory system and would be
implemented nationally.
Encouraging Non-Traditional Burden Reduction Efforts.--EPA
continues to encourage a number of innovative activities which are not
typically counted in burden reduction estimates. These include web-
based Compliance Assistance Centers, the promotion of internal facility
audit policies to detect violations, and options for regulatory
compliance such as emissions trading. EPA continues to implement easier
to understand regulatory language and continues providing reporting and
compliance assistance to small businesses through the Office of the
Small Business Ombudsman.
Supporting Streamlining Collections.--Preparers of new regulations,
as well as those involved in the development of Information Collection
Requests are required to verify that no other similar collections exist
as part of the development process entailed in these activities. OEI
will also be working to make the newly developed streamlining
guidelines available to the rest of the Agency, which provide step-by-
step guidance on how to reduce burden in both new and existing
collections, in addition to estimating burden reductions associated
with the use of electronic reporting. Finally, OEI held a ``Burden
Reduction Workshop'' in the Fall of 2001, highlighting seven major
efforts to decrease burden through streamlining existing collections,
consolidating collections, and using innovative technologies. OEI is
committed to continuing to recognize and promote these types of program
efforts which are aimed at decreasing burden, in both traditional and
non-traditional ways.
npdes permitting: status of efforts to reduce federal and state npdes
permits backlog
Question. What is the status of EPA's efforts to reduce the backlog
of Federal and State NPDES permits? Provide a breakdown by region and
state.
Answer. Although EPA did not meet the 2001 target of 10 percent
backlog for major permits, EPA has made substantial progress in
reducing the NPDES permit backlog. Currently, EPA's backlog of major
permits is 16 percent, down from about 48 percent in January 2000. EPA
is continuing its effort to reduce this backlog of major permits, while
also focusing on the 2004 goal of 10 percent backlog for all permits.
EPA currently has a significant backlog of minor permits (67 percent
expired) and is addressing it through a streamlining effort and the
release of several permitting tools.
The authorized states, as a whole, have shown improvement in
reducing their backlog. Currently, the major permits backlog for
authorized states is 19 percent, down from about 26 percent in January
2000. Authorized states are making strides through both permit issuance
and data clean-up and are on target to meet the 2004 backlog reduction
goal of 10 percent backlog for all permits.
The attached charts provide data on state and Regional progress
toward meeting backlog reduction goals.
BACKLOG STATUS REPORT FOR MINORS (INDIVIDUALS PERMITS ONLY)--APRIL 2002
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
August 2000 Actual for April 2002
------------------------------------------------ Goal for April ------------------------------------------------ On target to meet Permit Deficit
Total Backlog 2002 Total Backlog December 2004 Goal \2\ \3\
facilities Expired \1\ (percent) facilities Expired \1\ (percent)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 1:
CT................................ 129 98 76.0 50.6 97 43 44.3 YES..................... 0
GB \4\............................ 14 14 100.0 65.4 ( \5\ ) ( \5\ ) ( \5\ ) ( \5\ )................. ( \5\ )
MA \4\............................ 521 423 81.2 53.8 439 357 81.3 Unlikely................ 120.78
ME................................ 261 182 69.7 46.8 258 140 54.3 Possible................ 19.36
NH \4\............................ 186 161 86.6 57.1 121 100 82.6 Unlikely................ 30.89
RI................................ 109 87 79.8 53.0 103 87 84.5 Unlikely................ 32.45
VT................................ 108 20 18.5 15.2 115 12 10.4 YES..................... 0
=========================================================================================================================================================
EPA Issued............................ 982 780 79.4 52.7 560 457 81.6 Unlikely................ 161.73
State Issued.......................... 346 205 59.2 40.3 573 282 49.2 Possible................ 51.04
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 1,328 985 74.2 49.5 1,133 739 65.2 Unlikely................ 178.28
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 2:
AT \4\............................ 6 6 100.0 65.4 7 7 100.0 Possible................ 2.42
NJ................................ 2,664 263 9.9 9.9 2,755 353 12.8 Possible................ 81.02
NY................................ 1,761 305 17.3 14.5 1,449 61 4.2 YES..................... 0
PR \4\............................ 197 100 50.8 35.1 200 109 54.5 Unlikely................ 38.83
VI................................ 77 44 57.1 39.0 80 46 57.5 Unlikely................ 14.79
=========================================================================================================================================================
EPA Issued............................ 203 106 52.2 36.0 207 116 56.0 Unlikely................ 41.52
State Issued.......................... 4,502 612 13.6 12.2 4,284 460 10.7 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 4,705 718 15.3 13.2 4,491 576 12.8 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 3:
DC \4\............................ 12 3 25.0 19.2 12 3 25.0 Possible................ 0.69
DE................................ 41 2 4.9 4.9 39 3 7.7 YES \6\................. 0
MD................................ 564 229 40.6 28.8 499 215 43.1 Unlikely................ 71.13
PA................................ 3,952 508 12.9 11.8 4,008 595 14.8 Possible................ 123.80
VA................................ 2,835 1,943 68.5 46.0 1,119 61 5.5 YES..................... 0
WV................................ 1,459 647 44.3 31.1 1,189 455 38.3 Possible................ 84.80
=========================================================================================================================================================
EPA Issued............................ 12 3 25.0 19.2 12 3 25.0 Possible................ .69
State Issued.......................... 8,851 3,329 37.6 27.0 6,854 1,329 19.4 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 8,863 3,332 37.6 27.0 6,866 1,332 19.4 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 4:
AL................................ 1,385 140 10.1 10.1 1,388 61 4.4 YES..................... 0
FL................................ 348 69 19.8 16.0 300 25 8.3 YES..................... 0
GA................................ 784 0 0.0 0.0 658 0 0.0 YES..................... 0
KY................................ 1,860 84 4.5 4.5 1,788 78 4.4 YES..................... 0
MS................................ 1,841 326 17.7 14.7 1,788 404 22.6 Possible................ 140.39
NC................................ 1,344 192 14.3 12.6 1,237 166 13.4 Possible................ 9.68
SC................................ 495 73 14.7 12.9 450 71 15.8 Possible................ 12.85
TN................................ 1,321 224 17.0 14.3 1,295 45 3.5 YES..................... 0
=========================================================================================================================================================
EPA Issued............................ NA NA NA NA NA NA NA NA...................... NA
State Issued.......................... 9,378 1,108 11.8 11.1 8,904 850 9.5 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 9,378 1,108 11.8 11.1 8,904 850 9.5 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 5:
IL................................ 1,787 373 20.9 16.7 1,774 460 25.9 Possible................ 163.90
IN................................ 1,174 150 12.8 11.7 1,140 78 6.8 YES..................... 0
MI................................ 532 57 10.7 10.4 500 53 10.6 YES..................... 0
MN................................ 1,019 509 50.0 34.6 1,010 419 41.5 Possible................ 69.69
OH.................................... 2,571 680 26.4 20.1 2,716 417 15.4 YES..................... 0
WI................................ 859 165 19.2 15.7 798 77 9.6 YES..................... 0
=========================================================================================================================================================
EPA Issued............................ NA NA NA NA NA NA NA NA...................... NA
State Issued.......................... 7,942 1,934 24.4 18.8 7,938 1,504 18.9 Possible................ 9.14
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 7,942 1,934 24.4 18.8 7,938 1,504 18.9 Possible................ 9.14
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 6:
AR................................ 729 56 7.7 7.7 721 31 4.3 YES..................... 0
LA................................ 3,640 2,910 79.9 53.0 3,476 2,507 72.1 Unlikely................ 663.22
NM \4\............................ 221 203 91.9 60.4 111 44 39.6 YES..................... 0
OK................................ 560 176 31.4 23.2 476 96 20.2 YES..................... 0
TX................................ 2,666 719 27.0 20.4 2,567 400 15.6 YES..................... 0
=========================================================================================================================================================
EPA Issued............................ 221 203 91.9 60.4 111 44 39.6 YES..................... 0
State Issued.......................... 7,595 3,861 50.8 35.1 7,240 3,034 41.9 Possible................ 490.60
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 7,816 4,064 52.0 35.8 7,351 3,078 41.9 Possible................ 443.13
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 7:
IA................................ 1,660 568 34.2 24.9 1,342 199 14.8 YES..................... 0
KS................................ 1,161 753 64.9 43.8 1,171 129 11.0 YES..................... 0
MO................................ 3,015 972 32.2 23.7 3,139 826 26.3 Possible................ 82.51
NE................................ 1,184 806 68.1 45.7 835 422 50.5 Possible................ 40.09
=========================================================================================================================================================
EPA Issued............................ NA NA NA NA NA NA NA NA...................... NA
State Issued.......................... 7,020 3,099 44.1 31.0 6,487 1,576 24.3 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 7,020 3,099 44.1 31.0 6,487 1,576 24.3 YES..................... 0
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 8:
CO................................ 418 212 50.7 35.1 378 180 47.6 Unlikely................ 47.48
MT................................ 147 45 30.6 22.7 149 62 41.6 Unlikely................ 28.20
ND................................ 127 16 12.6 11.6 116 1 .9 YES..................... 0
SD................................ 380 82 21.6 17.1 377 99 26.3 Possible................ 34.44
UT................................ 84 4 4.8 4.8 84 3 3.6 YES..................... 0
WY................................ 1,149 87 7.6 7.6 1,325 51 3.8 YES..................... 0
=========================================================================================================================================================
EPA Issued............................ NA NA NA NA NA NA NA NA...................... NA
State Issued.......................... 2,305 446 19.3 15.8 2,429 396 16.3 Possible................ 13.35
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 2,305 446 19.3 15.8 2,429 396 16.3 Possible................ 13.35
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 9:
AS \4\............................ 3 0 0.0 0.0 3 0 0.0 YES..................... 0
AZ \4\............................ 144 49 34.0 24.8 143 29 20.3 YES..................... 0
CA................................ 686 245 35.7 25.8 652 245 37.6 Unlikely................ 76.63
GU \4\............................ 11 5 45.5 31.8 14 1 7.1 YES..................... 0
HI................................ 40 7 17.5 14.6 42 2 4.8 YES..................... 0
JA \4\............................ 1 0 0.0 0.0 1 0 0.0 YES..................... 0
MW \4\............................ 1 1 100.0 65.4 ( \5\ ) ( \5\ ) ( \5\ ) ( \5\ )................. ( \5\ )
NI \4\............................ 3 3 100.0 65.4 ( \5\ ) ( \5\ ) ( \5\ ) ( \5\ )................. ( \5\ )
NV................................ 70 18 25.7 19.7 70 25 35.7 Unlikely................ 11.23
=========================================================================================================================================================
EPA Issued............................ 163 58 35.6 25.7 161 30 18.6 YES..................... 0
State Issued.......................... 796 270 33.9 24.7 764 272 35.6 Unlikely................ 83.14
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 959 328 34.2 24.9 925 302 32.6 Possible................ 71.73
---------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 10:
AK \4\............................ 282 262 92.9 61.0 159 143 89.9 Unlikely................ 45.98
ID \4\............................ 277 262 94.6 62.1 174 138 79.3 Unlikely................ 30.03
OR................................ 283 180 63.6 43.0 301 219 72.8 Unlikely................ 89.61
WA................................ 654 519 79.4 52.7 618 476 77.0 Unlikely................ 150.43
EPA Issued............................ 559 524 93.7 61.5 333 281 84.4 Unlikely................ 76.10
=========================================================================================================================================================
State Issued.......................... 937 699 74.6 49.8 919 695 75.6 Unlikely................ 237.76
---------------------------------------------------------------------------------------------------------------------------------------------------------
Region Total.................... 1,496 1,223 81.8 54.2 1,252 976 78.0 Unlikely................ 297.98
---------------------------------------------------------------------------------------------------------------------------------------------------------
All Minors............................ 51,812 17,237 33.3 24.3 47,776 11,329 23.7 YES..................... 0
EPA Issued............................ 2,140 1,674 78.2 52.0 1,384 931 67.3 Unlikely................ 211.54
State Issued.......................... 49,672 15,563 31.3 23.1 46,392 10,398 22.4 YES..................... 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes no date facilities.
\2\ Possible indicates that permit deficit is within 10of the monthly target to meet the 2004 goal or is of 5 permits or less.
\3\ The number of permits that needed to be issued through the reporting period to remain on target to meet the December 2004 goal.
\4\ Indicates EPA is the permitting authority.
\5\ Based on 9/30/2000 download, there are no individually permitted facilities in the Midway Islands. Based on 1/31/2001 download, there are no individually permitted minor facilities in the
Northern Mariannas. Based on 3/31/2001 download, there are no individually permitted minor facilities in the Georges Banks.
\6\ Although the State is below the 10 percent goal, the State's backlog is beginning to trend upwards.
BACKLOG STATUS REPORT FOR MAJORS--APRIL 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual For April 2002
-------------------------------- Backlog At 10 percent Goal? 3-Month Trend Permit Deficit
Backlog Percent Total Percent \2\ \3\ \4\
Facilities Expired \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPA Region 1:
CT.......................... 10.0 113 14 12.4 NO \6\............. + 1.68
MA \5\...................... 10.0 138 33 23.9 NO................. + 17.96
ME.......................... 10.0 87 23 26.4 NO................. + 13.52
NH \5\...................... 10.0 60 8 13.3 NO \6\............. - 1.46
RI.......................... 10.0 25 2 8.0 YES................ 0 0.00
VT.......................... 10.0 33 0 0.0 YES................ - 0.00
=======================================================================================================================
EPA Issued...................... 10.0 198 41 20.7 NO................. - 19.42
State Issued.................... 10.0 258 39 15.1 NO................. + 10.88
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 456 80 17.5 NO................. + 30.30
-----------------------------------------------------------------------------------------------------------------------
EPA Region 2:
NJ.......................... 10.0 160 48 30.0 NO................. - 30.56
NY.......................... 10.0 355 11 3.1 YES................ 0 0.00
PR \5\...................... 10.0 84 27 32.1 NO................. - 17.84
VI.......................... 10.0 6 4 66.7 NO................. + 3.35
=======================================================================================================================
EPA Issued...................... 10.0 84 27 32.1 NO................. - 17.84
State Issued.................... 10.0 521 63 12.1 NO \6\............. - 6.21
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 605 90 14.9 NO \6\............. - 24.06
-----------------------------------------------------------------------------------------------------------------------
EPA Region 3:
DC \5\...................... 10.0 4 2 50.0 NO................. 0 1.56
DE.......................... 10.0 23 6 26.1 NO................. 0 3.49
MD.......................... 10.0 97 12 12.4 NO \6\............. - 1.43
PA.......................... 10.0 382 76 19.9 NO................. + 34.36
VA.......................... 10.0 140 19 13.6 NO \6\............. - 3.74
WV.......................... 10.0 93 28 30.1 NO................. - 17.86
=======================================================================================================================
EPA Issued...................... 10.0 4 2 50.0 NO................. 0 1.56
State Issued.................... 10.0 735 141 19.2 NO................. + 60.89
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 739 143 19.4 NO................. + 62.45
-----------------------------------------------------------------------------------------------------------------------
EPA Region 4:
AL.......................... 10.0 194 6 3.1 YES................ - 0.00
FL.......................... 10.0 255 28 11.0 YES................ + 0.21
GA.......................... 10.0 171 1 0.6 YES................ - 0.00
KY.......................... 10.0 132 2 1.5 YES................ + 0.00
MS.......................... 10.0 98 10 10.2 YES................ + 0.00
NC.......................... 10.0 231 68 29.4 NO................. + 42.82
SC.......................... 10.0 185 45 24.3 NO................. + 24.84
TN.......................... 10.0 156 9 5.8 YES................ - 0.00
=======================================================================================================================
EPA Issued...................... ................. NA NA NA NA................. NA NA
State Issued.................... 10.0 1,422 169 11.9 NO \6\............. + 14.00
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 1,422 169 11.9 NO \6\............. + 14.00
-----------------------------------------------------------------------------------------------------------------------
EPA Region 5:
IL.......................... 10.0 278 36 12.9 NO \6\............. 0 5.70
IN.......................... 10.0 185 78 42.2 NO................. + 57.84
MI.......................... 10.0 184 25 13.6 NO \6\............. + 4.94
MN.......................... 10.0 86 40 46.5 NO................. + 30.63
OH.......................... 10.0 294 73 24.8 NO................. + 40.95
WI.......................... 10.0 134 10 7.5 YES................ - 0.00
=======================================================================================================================
EPA Issued...................... ................. NA NA NA NA................. NA NA
State Issued.................... 10.0 1,161 262 22.6 NO................. + 135.45
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 1,161 262 22.6 NO................. + 135.45
-----------------------------------------------------------------------------------------------------------------------
EPA Region 6:
AR.......................... 10.0 109 13 11.9 NO \6\............. - 1.12
LA.......................... 10.0 250 119 47.6 NO................. - 91.75
NM \2\...................... 10.0 35 3 8.6 YES................ 0 0.00
OK.......................... 10.0 95 5 5.3 YES................ 0 0.00
TX.......................... 10.0 565 96 17.0 NO................. - 34.42
=======================================================================================================================
EPA Issued...................... 10.0 35 3 8.6 YES................ 0 0.00
State Issued.................... 10.0 1,019 233 22.9 NO................. - 121.93
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 1,054 236 22.4 NO................. - 121.11
-----------------------------------------------------------------------------------------------------------------------
EPA Region 7:
IA.......................... 10.0 129 18 14.0 NO \6\............. + 3.94
KS.......................... 10.0 58 0 0.0 YES................ - 0.00
MO.......................... 10.0 148 40 27.0 NO................. + 23.87
NE.......................... 10.0 55 30 54.5 NO................. + 24.01
=======================================================================================================================
EPA Issued...................... ................. NA NA NA NA................. NA NA
State Issued.................... 10.0 390 88 22.6 NO................. + 45.49
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 390 88 22.6 NO................. + 45.49
-----------------------------------------------------------------------------------------------------------------------
EPA Region 8:
CO.......................... 10.0 112 33 29.5 NO................. + 20.79
MT.......................... 10.0 43 16 37.2 NO................. + 11.31
ND.......................... 10.0 26 0 0.0 YES................ 0 0.00
SD.......................... 10.0 29 4 13.8 YES................ + 0.84
UT.......................... 10.0 33 0 0.0 YES................ 0 0.00
WY.......................... 10.0 26 0 0.0 YES................ - 0.00
=======================================================================================================================
EPA Issued...................... ................. NA NA NA NA................. NA NA
State Issued.................... 10.0 269 53 19.7 NO................. + 23.68
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 269 53 19.7 NO................. + 23.68
-----------------------------------------------------------------------------------------------------------------------
EPA Region 9:
AS \5\...................... 10.0 4 0 0.0 YES................ 0 0.00
AZ \5\...................... 10.0 50 0 0.0 YES................ 0 0.00
CA.......................... 10.0 239 48 20.1 NO................. + 21.95
GU \5\...................... 10.0 6 2 33.3 NO................. 0 1.35
HI.......................... 10.0 22 2 9.1 YES................ - 0.00
NI \5\...................... 10.0 20 0.0 YES 0.................. 0.00
NV.......................... 10.0 10 2 20.0 YES................ - 0.91
=======================================================================================================================
EPA Issued...................... 10.0 62 2 3.2 YES................ 0 0.00
State Issued.................... 10.0 271 52 19.2 NO................. - 22.46
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 333 54 16.2 NO................. - 17.70
-----------------------------------------------------------------------------------------------------------------------
EPA Region 10:
AK \5\...................... 10.0 75 4 5.3 YES................ - 0.00
ID \5\...................... 10.0 57 5 8.8 YES................ 0 0.00
OR.......................... 10.0 78 51 65.4 NO................. 0 42.50
WA.......................... 10.0 86 33 38.4 NO................. - 23.63
=======================================================================================================================
EPA Issued...................... 10.0 132 9 6.8 YES................ - 0.00
State Issued.................... 10.0 164 84 51.2 NO................. - 66.12
-----------------------------------------------------------------------------------------------------------------------
Region Total.............. 10.0 296 93 31.4 NO................. - 60.74
All Majors...................... 10.0 6,725 1,268 18.9 NO................. + 534.98
EPA Issued...................... 10.0 515 84 16.3 NO................. - 27.87
State Issued.................... 10.0 6,210 1,184 19.1 NO................. + 507.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes no data facilities.
\2\ YES indicates that the State is meeting or has met the December 31, 2001 backlog reduction goal of 10 OR is within 1 permit.
\3\ - indicates that the backlog percent has gone down over the last 3 months (since January 31, 2002) + It has gone up; 0 Stayed the same.
\4\ The number of permits that needed to be issued (in addition to ones that will be expiring) to achieve a 10 percent backlog reduction.
\5\ Indicates EPA is the permitting authority.
\6\ A NO indicates that the State is within 5 percent of the backlog reduction goal.
npdes permitting: level of resources devoted to reduce npdes backlog
from fiscal year 2002 and fiscal year 2003 request
Question. Provide the level of resources EPA is devoting to reduce
the NPDES backlog from fiscal year 2002 and in the fiscal year 2003
request.
Answer. Both EPA and state permitting agencies have developed
strategies that affirm permit issuance as a high priority task and in
many cases, have reorganized staff to reduce permit backlog.
NPDES permit issuance is a substantial undertaking in EPA Regional
Water Divisions and in state water pollution control agencies. To help
reverse the trend in rising backlogged permits, EPA is devoting about
$300,000 for permit issuance in fiscal year 2002, and we anticipate
making the same level of assistance available in fiscal year 2003.
Additionally, in fiscal year 2002, EPA is spending approximately
$340,000 to help reduce the backlog by tracking the NPDES permit
backlog and developing tools, such as an electronic permit application
and an electronic water quality based permit writing tool. A similar
level of spending is anticipated for fiscal year 2003.
In fiscal year 2002, EPA established Blanket Purchase Agreements
(BPAs) under GSA contracts. These agreements will support the
permitting efforts of EPA as well as the states, if they so request,
through in-kind assistance, as part of their Section 106 grant. A user
guidance web page is being developed also. This will assist states with
permit issuance, data clean up, and other water program work that will
lead to appropriate permits being issued. States have begun to use this
support, and EPA anticipates continuing this process in fiscal year
2003.
reinvention: status of review of reinvention programs
Question. What is the status of EPA's review of its reinvention
programs?
Answer. On April 10, 2001, Administrator Whitman issued a
memorandum charging EPA's Innovation Action Council (IAC) to formulate
recommendations for updating EPA's innovation strategy. In considering
strategic application of innovation, the IAC looked at both the
challenges (environmental, regulatory or programmatic) facing the
Agency, and the innovative approaches and tools needed to meet those
challenges. The IAC consulted with state environmental commissioners
and key stakeholders (e.g., states, industry, and the NGO's) as it
developed its recommendations.
On April 24, 2002, Administrator Whitman released EPA's new
innovation strategy, Innovating for Better Environmental Results: A
Strategy to Guide the Next Generation of Innovation at EPA at the 2002
ECOS meeting. The strategy provides a framework for using innovation to
move the Agency toward a system of environmental protection in which
we:
--focus on environmental performance and results;
--emphasize comprehensive environmental responsibility, not just
pollution control;
--integrate environmental management across facilities, problems and
media;
--use market-based incentives and the full range of available tools
to achieve ambitious environmental goals; and
--foster partnerships with others who can contribute to environmental
solutions.
The strategy presents four ways we plan to move toward results-
based environmental protection through innovation: (1) strengthen our
innovation partnerships with states and Tribes; (2) focus our
innovation efforts on priority environmental problems B reducing
greenhouse gases and smog, improving water quality, and reducing the
cost of water and wastewater infrastructure; (3) make fuller use of a
diverse range of tools such as information and environmental
technology, market-based incentives, environmental management systems,
and measurable performance goals; and (4) make EPA's culture and
management systems more Ainnovation friendly.
We are currently moving into the implementation phase of the
strategy, promoting innovation in all parts of EPA. We have drafted an
implementation plan that represents an initial set of activities that
will support our innovations work through both ongoing projects and
some Presidential 2003 budget initiatives. Along with the four
mentioned above, these key actions also include:
--expanding Brownfields economic redevelopment,
--forging stronger partnerships with the agriculture community,
--promoting better environmental information,
--promoting innovative technology, using incentives,
--expanding use of environmental management systems,
--testing, evaluating and deploying innovative approaches,
--ensuring support for innovation through planning and budgeting, and
--fostering a more innovation friendly culture within EPA.
A synopsis of these activities are located on our website, http://
www.epa.gov/opei/strategy.
reinvention: spreading the culture of reinvention by limiting its
application
Question. While EPA states a desire to spread the culture of
reinvention efforts to all program areas, the agency is currently
limiting reinvention activities to a few specific activities. Please
explain how EPA will spread the culture of reinvention by limiting its
application?
Answer. EPA's new innovation strategy draws on our experience and
the experience of our business, state and NGO partners and numerous
policy and academic cementers who have been working together for over a
decade to foster innovation in environmental protection. A critical
lesson communicated across the spectrum is that one of the keys to
unleashing innovation on a broad scale is to set clear and ambitious
goals for solving important problems. That is what EPA's new innovation
strategy does. By focusing innovation on key problems, we will make the
most progress toward the most important goals.
While EPA is focusing its Agency-wide innovation efforts, it is not
limiting innovation in other areas. In fact, the Office of Solid Waste
and Emergency Response is supporting an intensive focus on innovation
in several areas not mentioned in the strategy, but which are important
to improving waste management and disposal systems.
While a key to the strategy's effectiveness is its clear focus, EPA
will draw on and foster the broadest possible participation in
innovating to solve these problems. Within EPA, every program and
region will be undertaking significant actions toward these goals. EPA
has also made it a top priority to strengthen the burgeoning innovation
partnerships with states and tribes by aligning goals and actions
through partnership agreements.
EPA's innovation strategy also commits to fostering innovation at
the very core of EPA's culture through actions that address both
cultural and administrative barriers to innovation.
reinvention: examples of directing program offices and oeca to reduce
barriers, transaction costs and approval time for reinvention projects
Question. Provide examples of how EPA is directing the program
offices and OECA to reduce barriers, transaction costs and approval
time for reinvention projects?
Answer. In the development of regulatory flexibility agreements and
supporting legal documents, EPA program offices and OECA provide
valuable expertise that ensures the viability of the agreement if
challenged. However, EPA is continuing to explore ways to reduce
transaction costs and approval time and, in particular, EPA will
continue to streamline internal review and decision-making where
appropriate.
For its programs that rely on voluntary participation in exchange
for flexibility or recognition, EPA has continually worked to reduce
the transaction costs. For example, in a mid-course re-engineering, the
XL program cut approval and negotiation times significantly. We were
able to do so by clarifying program elements, helping sponsors develop
better projects and proposals, improving stakeholder involvement
processes, and streamlining internal review and decision-making. EPA
will continue to place a high priority on reducing transaction costs
for participants, co-regulators, stakeholders and itself. Because the
innovations agenda may affect some of these programs, specific actions
cannot be initiated until the innovations agenda is established.
The program offices and OECA are significantly involved in
expanding the application of successful innovations tested under
reinvention projects. For example, the Environmental Results Program
(ERP) was designed by the Massachusetts Department of Environmental
Protection. ERP is a self-certification program that replaces
individual facility permits for small sources with a set of multi-media
industry-wide performance standards and a facility-derived annual
certification of compliance. Using a combination of compliance
assurance tools, ERP has improved performance for small business
sectors and resulted in savings for these businesses, thereby allowing
regulators to focus resources on more pressing environmental problems.
EPA, in partnership with the State of Massachusetts, is working to
disseminate the successful elements of ERP to other states facing
environmental issues in small business sectors. EPA program offices and
OECA are providing technical and financial assistance to identify areas
and problems that ERP could solve to the District of Columbia, Florida
and Maryland.
reinvention: environmental benefits of regulatory flexibility vs.
status quo regulatory schemes
Question. Describe the ways EPA can further articulate the
environmental benefits of regulatory flexibility v. status quo
regulatory schemes.
Answer. EPA is at an important juncture in the cycle of testing and
broadening the application of innovative approaches. EPA has recently
issued its first Innovation Strategy, which explicitly charges the
Agency to establish a system to move innovative approaches from testing
to broader application. Critical to this system is the evaluation of
new approaches to establish their effectiveness relative to the status
quo regulatory system. EPA recognizes this and has been collecting the
data necessary for those analyses as it implements its innovations
programs.
EPA routinely measures and makes public the environmental benefits
of the regulatory flexibility granted in its innovations programs. In
developing the flexibility in a pilot project, EPA establishes the
expected environmental performance baseline of the status quo and also
characterizes the expected environmental benefits of the new approach.
Second, EPA tracks and measures the environmental results of the pilot
and reports results against the baseline annually.
The goal of these assessments is to identify new ideas and
approaches that work and then put them to use on a broader scale so
that the environment, industry, and communities can benefit. As these
projects have had time to demonstrate whether the approaches are
effective or not, EPA will evaluate their appropriateness for further
application. For example, significant data were collected from early
tests of the Environmental Results Program, a program developed by the
State of Massachusetts and tested by EPA, that clearly demonstrate the
environmental benefits of the self-certification approach for small
businesses. Based on that information, EPA is working with
Massachusetts to demonstrate the value of the approach to other states.
This approach has been very successful with several states in the
process of adopting the approach.
As part of managing the full cycle of the innovations process, EPA
will regularly review innovations being tested for their potential for
broader application. Those that are will be evaluated for their
environmental benefits relative to the status quo regulatory system.
small business: examples of program offices tailoring analysis and
regulatory proposals to realities of given industrial sectors
Question. Provide examples of how incorporation of small business
concerns are enabling program offices to more closely tailor their
analysis and regulatory proposals to the realties of given industrial
sectors?
Answer. The impact of the Small Business Regulatory Enforcement
Fairness Act on EPA's regulatory analysis and proposals has been far-
reaching, and consideration of small-business concerns is now prominent
in many sectoral actions. For example, when regulating engine
emissions, the Office of Transportation and Air Quality typically
considers modified requirements or even exclusions for certain engine
families or a set quantity of units in order to reduce burden on small-
quantity manufacturers. When issuing Maximum Attainable Control
Technology standards for a given industry under the Clean Air Act, the
Office of Air Quality Planning and Standards typically excludes area
sources or low-capacity sources defined otherwise to reduce the number
of small businesses likely to be subject to technology requirements.
Likewise, the Office of Science and Technology in the Office of Water
typically writes Effluent Limitation Guidelines by excluding low-flow
systems in order to avoid regulatory costs for small businesses that
typically operate under low-flow conditions. By its nature, the Safe
Drinking Water Act governs the water-supply sector, and EPA typically
accommodates small systems by granting delayed implementation
schedules, reduced monitoring requirements, and alternative
technologies. We are also investing in alternatives to regulations,
such as Environmental Management Systems and the Environmental Results
Program. Mechanisms such as these hold high promise of relieving small
businesses of costly requirements.
small business: increase knowledge of impact of regulatory requirements
in fiscal year 2003
Question. In fiscal year 2003, how will EPA further increase its
knowledge of the impacts of its regulatory requirements on small
business?
Answer. It continues the Agency's policy that program offices
should assess the direct impact of every rule on small entities and
minimize any impact to the extent feasible, regardless of the magnitude
of the impact or number of small entities affected. This ``any-any''
policy, which goes beyond the requirements of the Regulatory
Flexibility Act, has been the Agency's policy since before the
inception of the Small Business Regulatory Enforcement Fairness Act and
will continue to be so in the future. To build upon this important
policy, the Agency will increase its knowledge of its regulatory
requirements on small business by:
Greater Utilization of the Small Business Division (SBD).--EPA's
SBD assists the program offices by helping identify and characterize
small businesses affected by Agency actions, sharing insights on
regulatory impacts, and encouraging innovative approaches to regulatory
development. In fiscal year 2003, the SBD will enhance its outreach
efforts with the program offices by recommending small businesses for
consultation activities, participating on workgroups to provide early
guidance on rules, and developing training materials to promote better
understanding of small business issues during the rulemaking process.
Training.--The Agency's Regulatory Steering Committee (RSC) is
currently developing a training curriculum to implement the Agency's
2001 EPA Task Force on Regulatory Development recommendations. The
initial training will be for Assistant Administrators; however, the
goal is to eventually provide training for all decision-makers and rule
writers. The initial training for Assistant Administrators will include
an overview of the importance and necessity of small business outreach
to understand and mitigate adverse impacts. The training will include
guidance on how to address this important responsibility.
Guidance.--The RSC is also revising its ``Analytical Blueprint''
(Blueprint) guidance. The Blueprint is a planning document that is
developed early in the process to guide the analytic support developed
for priority regulations. The guidance will include small business
considerations so that potential impacts may be analyzed, as
appropriate.
Outreach.--Program offices are encouraged to attend briefings,
interact with stakeholders, and participate in conferences and other
events to help increase knowledge of the impacts of its regulatory
requirements on small businesses. One such example is the annual Small
Business Ombudsman (SBO)/Small Business Assistance Program (SBAP)
National Conference. This year's conference is hosted by the Illinois
Department of Commerce and Community Affairs and will be held in
Chicago on June 29-July 3. These conferences provide an opportunity for
the state small business programs and EPA to share information about
small business needs across the country. The conference provides
training and interactive opportunities for all that attend. Each year,
representatives from EPA program offices and regions participate and
learn about small business characteristics, impacts, and needs. In
addition, the Agency will continue to facilitate meetings between the
Deputy Administrator and small business groups to ensure that small
businesses have an opportunity to share their issues and concerns with
the Agency's senior management. Finally, the Agency's Small Business
Advocacy Chair will continue to work with the Small Business
Administration, the Office of Management and Budget, and small business
stakeholders, as appropriate.
Improved Access.--The Agency is providing better ways for small
businesses to share their views on proposed regulations and policies.
The Agency has created EDOCKET, an electronic public docket and on-line
comment system designed to expand access to documents in EPA's major
dockets. EDOCKET will enable small businesses to participate in the
rule-making process and access electronic docket materials more easily
and more efficiently by using the Internet. This system was developed
to process and manage public information, including rule making
documents, supporting documentation, and Federal Register notices. It
will also help small businesses view, retrieve, and submit comments
online. Such improved access will help the Agency increase its
knowledge of the impacts of its regulatory requirements on small
businesses.
Innovative Approaches.--In April, the Agency released its
Innovation Strategy. This strategy reflects EPA's commitment to explore
new and creative ways of achieving cleaner air, purer water, and better
protected land. The strategy provides the Agency with a practical
framework for encouraging innovative solutions to environmental
challenges. Key actions in this framework include strengthening
environmental partnerships, targeting priorities, expanding the current
collection of tools, and creating a more innovative culture to
effectively address challenging problems. Small businesses will be an
integral component of the Agency's innovative approach.
small business: increase knowledge of impact of rulemaking in fiscal
year 2003
Question. In fiscal year 2003, how will EPA increase its knowledge
of the impacts on small business of rulemakings under consideration?
Answer. Understanding the impacts on small business is a critical
component of the Agency's rulemaking process. In fiscal year 2003, the
Agency will continue to implement recommendations from the Task Force
on Regulatory Development to strengthen the analysis of policy issues,
including the impact on small businesses. Small business considerations
will be specifically addressed in the Analytic Blueprints for priority
actions. In addition, the Agency will continue to solicit the input of
small businesses during public comment periods for proposed rules, as
well as outreach to small business stakeholders under the Agency's
``any/any'' policy. Finally, the Agency's Small Business Advocacy Chair
will continue to work with the Small Business Administration, the
Office of Management and Budget, and small business stakeholders, as
appropriate.
In fiscal year 2003, the Agency's Small Business Division will
continue to work with the program offices to ensure that rulemakings
that are under consideration adequately address small business issues.
Such activities include participating on current workgroups, as well as
helping program offices identify and consult with affected small
business sectors. The Agency will increase its knowledge of impacts on
small business by:
Greater Utilization of the Small Business Division (SBD).--EPA's
SBD assists the program offices by helping identify and characterize
small businesses affected by Agency actions, sharing insights on
regulatory impacts, and encouraging innovative approaches to regulatory
development. In fiscal year 2003, the SBD will enhance its outreach
efforts with the program offices by recommending small businesses for
consultation activities, participating on workgroups to provide early
guidance on rules, and developing training materials to promote better
understanding of small business issues during the rulemaking process.
Training.--The Agency's Regulatory Steering Committee (RSC) is
currently developing a training curriculum to implement the Agency's
2001 EPA Task Force on Regulatory Development recommendations. The
initial training will be for Assistant Administrators; however, the
goal is to eventually provide training for all decision-makers and rule
writers. The initial training for Assistant Administrators will include
an overview of the importance and necessity of small business outreach
to understand and mitigate adverse impacts. The training will include
guidance on how to address this important responsibility.
Guidance.--The RSC is also revising its ``Analytical Blueprint''
(Blueprint) guidance. The Blueprint is a planning document that is
developed early in the process to guide the analytic support developed
for priority regulations. The guidance will include small business
considerations so that potential impacts may be analyzed, as
appropriate.
Outreach.--Program offices are encouraged to attend briefings,
interact with stakeholders, and participate in conferences and other
events to help increase knowledge of the impacts of its regulatory
requirements on small businesses. One such example is the annual Small
Business Ombudsman (SBO)/Small Business Assistance Program (SBAP)
National Conference. This year's conference is hosted by the Illinois
Department of Commerce and Community Affairs and will be held in
Chicago on June 29-July 3. These conferences provide an opportunity for
the state small business programs and EPA to share information about
small business needs across the country. The conference provides
training and interactive opportunities for all that attend. Each year,
representatives from EPA program offices and regions participate and
learn about small business characteristics, impacts, and needs. In
addition, the Agency will continue to facilitate meetings between the
Deputy Administrator and small business groups to ensure that small
businesses have an opportunity to share their issues and concerns with
the Agency's senior management. Finally, the Agency's Small Business
Advocacy Chair will continue to work with the Small Business
Administration, the Office of Management and Budget, and small business
stakeholders, as appropriate.
Improved Access.--The Agency is providing better ways for small
businesses to share their views on proposed regulations and policies.
The Agency has created EDOCKET, an electronic public docket and on-line
comment system designed to expand access to documents in EPA's major
dockets. EDOCKET will enable small businesses to participate in the
rule-making process and access electronic docket materials more easily
and more efficiently by using the Internet. This system was developed
to process and manage public information, including rule making
documents, supporting documentation, and Federal Register notices. It
will also help small businesses view, retrieve, and submit comments
online. Such improved access will help the Agency increase its
knowledge of the impacts of its regulatory requirements on small
businesses.
Innovative Approaches.--In April, the Agency released its
Innovation Strategy. This strategy reflects EPA's commitment to explore
new and creative ways of achieving cleaner air, purer water, and better
protected land. The strategy provides the Agency with a practical
framework for encouraging innovative solutions to environmental
challenges. Key actions in this framework include strengthening
environmental partnerships, targeting priorities, expanding the current
collection of tools, and creating a more innovative culture to
effectively address challenging problems. Small businesses will be an
integral component of the Agency's innovative approach.
small business: increase knowledge of delivery of information about
regulatory requirements in fiscal year 2003
Question. In fiscal year 2003, how will EPA increase delivery of
information about its regulatory requirements to small businesses?
Answer. The Agency is committed to working with small businesses to
ensure that they are aware of, and understand, their environmental
regulatory responsibilities. While the Agency has made great strides to
reach out to small businesses, it continues to look for new
opportunities to address this key component of the regulatory system.
In fiscal year 2003, the Agency will build upon its progress by:
Greater Utilization of the Small Business Division (SBD).--The SBD
hosts a toll-free hotline to answer small businesses' questions about
environmental regulations. The hotline receives over 1,000 calls a
month. The hotline will continue to be promoted as it provides one-
stop' assistance to help America's small businesses find answers to
their environmental questions. In addition, program offices will
continue to use the SBD's vast network of small business contacts to
distribute notices, announcements and other relevant compliance
information to small business groups. The SBD will continue to publish
a newsletter twice a year that reports on important Agency activities.
In addition, the new Small Business Environmental Assistance Providers
Directory will be distributed to small business groups. The directory
is an easy-to-use quick reference of the key Federal, State and private
programs that can address small business environmental compliance,
pollution prevention and other related questions and concerns. It
provides all of the relevant environmental contacts a small business
needs in one convenient location. The SBD will continue to keep the
small business community updated on Agency regulatory activities by
distributing EPA's weekly press releases and the Small Business
Quarterly Alert to its comprehensive e-mail network.
Outreach.--The Agency will continue to support access to regulatory
assistance via comprehensive websites. These resources include the EPA
websites targeting small businesses (www.epa.gov/smallbusiness;
www.epa/sbrefa; the small business regulatory library (http://
yosemite1.epa.gov/OPEI/smallbus/nsf)) and EPA-supported sites such as
one dedicated to small business issues (www.smallbiz-enviroweb.org). In
addition, the Agency has initiated over 100 activities designed to help
small businesses fulfill their environmental responsibilities.
In fiscal year 2003, the Agency will continue to build upon these
activities, including promoting the successful compliance assistance
centers (http://www.epa.gov/compliance/assistance/centers/index.html)
and sector resources, developing expert systems to help specific
industries address compliance questions, holding workshops in the
regions to educate small businesses on new rules, and developing fact
sheets to help simplify small business obligations. Lastly, the Agency
will continue to work with small business stakeholders throughout the
rulemaking process to identify effective approaches to deliver
information to small businesses. Specific examples include Small
Business Advisory Chair outreach, early consultation with small
business representatives, Small Business Regulatory Enforcement
Fairness Act (SBREFA) panels, and SBREFA Compliance Guides, as
appropriate.
Partnerships.--The Agency will continue to work with the regions,
states, and compliance assistance providers such as the State Small
Business Assistance Program to deliver information to small businesses.
Partnering with these stakeholders will help amplify EPA's message and
ensure that information is reaching the small business community.
small business: program offices considering rulemakings determining
impact on potential small business in fiscal year 2003
Question. In fiscal year 2003, how will EPA further ensure that
program offices considering rulemakings determine potential small
business impacts in areas which they may not already be aware?
Answer. For Agency rules to be effective, the rule writers must
understand the industry being regulated. EPA's current regulatory
process requires rule writers to identify rules that will affect small
businesses and investigate options that could minimize adverse burden.
EPA will continue to support this important step in the regulatory
process. In fiscal year 2003, the program offices will continue to work
with the Small Business Advocacy Chair, the Small Business Regulatory
Enforcement Fairness Act (SBREFA) Team, and the Small Business Division
to identify and consult with affected small business entities. With
additional emphasis on Analytic Blueprints and on early planning,
consideration of small business issues should improve. To further
support these efforts, EPA is improving the guidance and training
associated with its Action Development Process, as well as maintaining
information on its SBREFA website (www.epa.gov/sbrefa).
Furthermore, the Agency will complete the revision to its Small
Business Strategy in fiscal year 2003. Significant research has been
conducted to investigate what is working at the Agency and what
activities need to amended to effectively address small business
issues. The intent of the strategy will be to better integrate Agency
activities that support small businesses, including technical
assistance and outreach, regulations that minimize burden, and
participation in EPA's voluntary programs. A primary goal of the
strategy will be to ensure that program offices have the tools and
information needed to understand the small business sector and, thus,
appropriately regulate the selected industry. The Agency will determine
potential small business impacts by:
Greater Utilization of the Small Business Division (SBD).--EPA's
SBD assists the program offices by helping identify and characterize
small businesses affected by Agency actions, sharing insights on
regulatory impacts, and encouraging innovative approaches to regulatory
development. In fiscal year 2003, the SBD will enhance its outreach
efforts with the program offices by recommending small businesses for
consultation activities, participating on workgroups to provide early
guidance on rules, and developing training materials to promote better
understanding of small business issues during the rulemaking process.
Training.--The Agency's Regulatory Steering Committee (RSC) is
currently developing a training curriculum to implement the Agency's
2001 EPA Task Force on Regulatory Development recommendations. The
initial training will be for Assistant Administrators; however, the
goal is to eventually provide training for all decision-makers and rule
writers. The initial training for Assistant Administrators will include
an overview of the importance and necessity of small business outreach
to understand and mitigate adverse impacts. The training will include
guidance on how to address this important responsibility.
Guidance.--The RSC is also revising its ``Analytical Blueprint''
(Blueprint) guidance. The Blueprint is a planning document that is
developed early in the process to guide the analytic support developed
for priority regulations. The guidance will include small business
considerations so that potential impacts may be analyzed, as
appropriate.
Outreach.--Program offices are encouraged to attend briefings,
interact with stakeholders, and participate in conferences and other
events to help increase knowledge of the impacts of its regulatory
requirements on small businesses. One such example is the annual Small
Business Ombudsman (SBO)/Small Business Assistance Program (SBAP)
National Conference. This year's conference is hosted by the Illinois
Department of Commerce and Community Affairs and will be held in
Chicago on June 29-July 3 These conferences provide an opportunity for
the state small business programs and EPA to share information about
small business needs across the country. The conference provides
training and interactive opportunities for all that attend. Each year,
representatives from EPA program offices and regions participate and
learn about small business characteristics, impacts, and needs. In
addition, the Agency will continue to facilitate meetings between the
Deputy Administrator and small business groups to ensure that small
businesses have an opportunity to share their issues and concerns with
the Agency's senior management. Finally, the Agency's Small Business
Advocacy Chair will continue to work with the Small Business
Administration, the Office of Management and Budget, and small business
stakeholders, as appropriate.
Improved Access.--The Agency is providing better ways for small
businesses to share their views on proposed regulations and policies.
The Agency has created EDOCKET, an electronic public docket and on-line
comment system designed to expand access to documents in EPA's major
dockets. EDOCKET will enable small businesses to participate in the
rule-making process and access electronic docket materials more easily
and more efficiently by using the Internet. This system was developed
to process and manage public information, including rule making
documents, supporting documentation, and Federal Register notices. It
will also help small businesses view, retrieve, and submit comments
online. Such improved access will help the Agency increase its
knowledge of the impacts of its regulatory requirements on small
businesses.
Innovative Approaches.--In April, the Agency released its
Innovation Strategy. This strategy reflects EPA's commitment to explore
new and creative ways of achieving cleaner air, purer water, and better
protected land. The strategy provides the Agency with a practical
framework for encouraging innovative solutions to environmental
challenges. Key actions in this framework include strengthening
environmental partnerships, targeting priorities, expanding the current
collection of tools, and creating a more innovative culture to
effectively address challenging problems. Small businesses will be an
integral component of the Agency's innovative approach.
small business: ensure program offices' economic analysis of small
business impacts do not omit small business or industry sectors in
fiscal year 2003
Question. In fiscal year 2003, how will EPA further ensure that
program office economic analysis of small business impacts do not omit
small businesses or industry sectors it believes may be impacted by the
rulemaking but on which the agency does not currently possess impact
information?
Answer. The Agency will continue to stress the importance of
outreach to small business sectors to ensure that its rules accurately
represent the industry that is being regulated. Mechanisms for ensuring
consideration of small business issues include: attention during the
analytic blueprint development stage; continued implementation of the
Agency's ``any/any'' policy; RFA/SBREFA guidance, including assistance
to rule writers on completing Initial Regulatory Flexibility Analysis
(IRFA) and Final Regulatory Flexibility Analysis (FRFA); and
implementation of the Agency's Guidelines for Preparing Economic
Analyses, which includes a section on addressing small businesses.
In fiscal year 2003, the Agency will also continue to improve
communications with small business groups and trade associations by
preparing newsletters for small business stakeholders and holding
meetings with trade association representatives. Such activity will
help educate the small business community about upcoming regulations
and provide opportunities for small businesses to participate in the
process.
Furthermore, EPA will continue to publish and distribute, via
mechanisms including the Small Business Division (SBD), the semi-annual
Regulatory Agenda to small business contacts, which serves as an
effective alert on upcoming regulatory actions. The SBD will continue
to be the lead conduit to receive information from small business
groups on upcoming rules, and is charged with alerting the program
offices accordingly.
new source review
Question. There are roughly 20,000 sources in this country subject
to the Clean Air Act, and EPA may take the position that any repair or
replacement work at these sources (other than minor maintenance that
occurs frequently at an individual facility) triggers an analysis under
the new sources review (NSR) modification rule. How many NSR
applicability determinations do you estimate will be required annually
for those 20,000 sources? Has this question been part of your review of
NSR?
Answer. The impact of EPA's ``routine maintenance'' policies is a
question that we examined during the NSR review. Many commenters
expressed concern about the potential impact of EPA's policy.
Commenters did not provide sufficient data to estimate the number of
NSR applicability determinations undertaken annually. EPA does not
consider routine maintenance, repair or replacement work to trigger NSR
rules.
Question. A nationwide census of coal-fired boilers indicates that
each existing coal-fired boiler, on average, repairs or replaces the
types of equipment that EPA has identified in its NSR enforcement
actions at least once per year. Assuming that this is correct, how many
additional NSR permits would such repair and replacement activity
entail each year?
Answer. EPA's enforcement records do not support the assumption
presented by this question. If a utility undertakes non-routine types
of changes on an annual basis, which would be uncommon, only those
changes that result in significant net emissions increases would
trigger NSR. Simply performing a non-routine repair or replacement does
not necessarily lead to NSR.
As to the number of NSR permits needed, EPA's records indicate that
utility companies have about 1,100 coal-fired boilers currently in use,
but we would need more specific information about the types of changes
and their effect on emissions increases before determining which ones
may require permits.
Question. An EPA NSR expert has testified that, if a motor in a
factory broke down and had to be replaced, the factory could not reopen
for up to 2 years while the company processed paperwork and obtained an
NSR permit. Even then, the facility could not resume operations until
it retrofit new sources control technologies. Is this correct? Have you
performed an analysis of what this means for the nation's energy
supply?
Answer. We are unable to ascertain whether this is a correct
interpretation of testimony provided by an EPA expert. It is important
to note that only non-routine changes that significantly increase
emissions are required to undergo major NSR permitting. The
determination of whether a change is routine, and if not, its effect on
emissions, are based on case-specific facts, and the question does not
provide enough information to draw a conclusion for the case described.
In cases where unexpected equipment failure has occurred in the past,
the Agency has consistently worked with industry and state and local
permitting authorities to allow the facility to get the unit back in
operation quickly. Moreover, it is unlikely that the replacement of a
minor factory component would require major NSR permitting.
EPA reviewed the impacts of NSR on investment in new utility and
refinery generation capacity, energy efficiency, and environmental
protection, as recommended in the National Energy Policy. The report
examined among other things, the impact of delays associated with NSR.
We reported to the President on our findings on June 13, 2002.
Question. Over the last 30 years, EPA's regulations and practices
have excluded from NSR all ``routine maintenance, repair and
replacement'' and that EPA's regulations specifically exclude any
increases in emissions associated with operating a facility more hours,
unless such an increase is prohibited by a federally enforceable permit
condition. So if all of this is correct, then how can it be explained
that emissions are down under the CAA?
Answer. Under the Clean Air Act, NSR is only one tool to manage and
reduce emissions. In addition, there are several other significant
Clean Air Act programs working to provide substantial emissions
reductions. For example, the Title IV Acid Rain Program has reduced
SO2 emissions from the electric utility industry by more
than 7 million tons per year. The Tier 2 motor vehicle emissions
standards and gasoline sulfur control requirements will ultimately
achieve NOX reductions of 2.8 million tons per year.
Standards for highway heavy-duty vehicles and engines will reduce
NOX emissions by 2.6 million tons per year. Standards for
non-road diesel engines are anticipated to reduce NOX
emissions by about 1.5 million tons per year. The NOX ``SIP
Call'' will reduce NOX emissions by over 1 million tons per
year. These reductions, together with NSR's minimization of increases
from new sources and modifications that increase emissions, have worked
together to ensure that emissions have continued to decrease as the
economy has grown.
Question. Owners of electric generating units may be able to avoid
NSR by surrendering voluntarily available capacity through ``minor
source'' permit proceedings. Under these procedures capacity, whose
construction states have authorized and which ratepayers have paid for,
could not be used. What are the potential impacts on the national and
state economies of this potential loss of generation capacity?
Answer. The NSR program does not require a utility making a change
that results in an emissions increase potentially subject to NSR to
surrender generation capacity in order to avoid major NSR permitting.
In the limited cases where NSR potentially applies, the source has
options for how to assure that its emissions do not increase as a
result of the change. While some options may involve limiting operation
to historic levels, others include reducing the emissions rate at the
unit or at other units at the plant. Nevertheless, the EPA examined the
extent to which generation capacity may be affected by NSR as part of
its review and reported to the President on June 13, 2002.
Question. As the summer electric peak season draws near, the
operators of our nation's electric generating fleet are still waiting
for published guidelines on how your agency will view maintenance and
repair under the NSR program. These guidelines have been promised for
months. Without these EPA guidelines for plant operators to follow,
this reliability and the ability to meet the summer peak demands could
be threatened. When will these guidelines be published?
Answer. As noted previously, the EPA has been looking closely at
this question as part of its review of NSR and is proceeding as
expeditiously as possible to determine how best to respond to concerns
raised by operators of electric generators and other stakeholders. We
reported to the President on June 13, 2002 on our review of the NSR
program. In that report, EPA proposed to initiate a rulemaking and
public comment process on routine maintenance, repair and replacement.
As has been done in the past, EPA will continue to work closely with
generators and regulators alike to ensure that electric generation
needs are met in harmony with the nation's clean air goals.
toxics release inventory (tri) program and the tri lead rule
Question. The newly enacted Information Quality Act requires
agencies to ensure and maximize the quality, objectivity, utility, and
integrity of data disseminated by the agencies. How does EPA plan to
meet these goals with regard to the reporting data generated under the
TRI lead rule?
Answer. Section 313 of the Emergency Planning and Community Right-
to-Know Act (EPCRA) of 1986 and section 6607 of the Pollution
Prevention Act (PPA) of 1990 requires EPA to annually collect releases
and other waste management quantities of listed toxic chemicals from
covered facilities. EPCRA section 313 also requires EPA to make this
information available to the Federal, State, and local governments,
researchers, and the public. EPCRA section 313 is very clear that EPA
should not require facilities to conduct any additional monitoring or
testing to comply, but that facilities should use readily available
information, such as monitoring data collected pursuant to other laws,
or make a reasonable estimate of their release information. Therefore,
the quality of the TRI data is dependent upon the information submitted
by each facility.
To assist facilities in developing their release and other waste
management estimates, the TRI Program provides extensive compliance
assistance, such as:
--industry-specific or chemical-specific guidance documents;
--annual industry training workshops;
--user-friendly software such as the TRI Made Easy (TRI-ME). TRI-ME
is an interactive, intelligent software tool that guides
facilities through the TRI reporting experience;
--annual updates of the Reporting Forms and Instructions;
--TRI User Support: a mechanism by which individuals with questions
or need assistance can contact EPA's TRI Program directly to
the EPA headquarters TRI staff;
--EPCRA Call Center is a toll free number industry may call to obtain
answers and guidance to questions about completing the TRI
(EPCRA section 313) forms. The EPCRA Call Center number is
(800) 424-9346. For callers in the Washington, DC area the
number is (703) 412-9810. The TDD is (800) 553-7672; and
--facilities are also encouraged to write to the TRI Program
directly, asking site specific questions relating to TRI
reporting requirements. The TRI program will respond directly
to the facility in writing.
In addition to the above compliance assistance activities, the TRI
Program has a number of procedures in place to ensure the quality of
the data. Below are some examples of the types of procedures
implemented by the program:
EPA's Data Entry Process is virtually (99.9 percent) error free. A
key component of this process is double key entry.
Once a facility's data is entered into the EPA database, EPA prints
out the entered data in a ``facility data profile'' (FDP) that is sent
back to the facility to check. The FDP automatically checks for data
errors and notes those on the FDP that is sent back to the facility.
Facilities can then make revisions to their data if needed.
Independent of the ``FDP process,'' EPA has a process for
facilities to revise or withdraw their chemical reports if they
discover they have made an error in reporting. For the 2000 reporting
year, EPA evaluated approximately 350 such requests from facilities to
withdraw reported data from the TRI database and about 10,000 requests
for revisions to data.
EPA sends each state a list of all the facilities that submitted a
TRI report to EPA and all the chemicals that they reported so that the
states can check this against the TRI reports they directly receive.
EPA sends each state a list of the 100 facilities with the largest
releases in that state. EPA asks the state to make sure that there are
no facilities included or excluded that should not be. EPA follows up
with telephone calls to the states.
Once all the data has been entered into the TRI database, EPA calls
facilities that may have an error in reporting, e.g., those facilities
that reported very large increases or decreases in their releases from
1 year to the next and facilities with very large quantities of
releases and total production-related waste. EPA called more than 200
facilities this year that met that criteria. Approximately 27 of the
facilities called had significant errors that needed to be corrected.
This year, for the newly-reported persistent bioaccumulative and
toxic (PBT) data, EPA identified 560 facilities to be called regarding
their PBT chemical reports. As a result of these calls, approximately
130 facilities revised their reported release and other waste
management data for PBT chemicals. For example, facilities revised
their total release quantity of dioxin and dioxin-like compounds to
95,910 grams from the 750,226 grams originally reported.
Lastly, with regard to the Information Quality Guidelines, EPA is
developing Information Quality Guidelines to be issued by October 1,
2002, as specified in the guidelines published by the Office of
Management and Budget (OMB). EPA's guidelines will build upon ongoing
efforts to improve the quality of the information used to support
Agency policy and regulatory decisions. Given existing Agency-wide
systems and procedures and the TRI Program methods, EPA is confident
that the TRI Program will be consistent with OMB's Information Quality
Guidelines.
agency's response to incorrect data in tri database
Question. How does EPA plan to identify information contained in
the database that does not meet the data quality standards, to correct
or remove it, and educate citizens that the TRI database contains such
information?
Answer. EPA currently provides information to the public on its
website that explains the benefits and limitations of the TRI data. In
a document called ``The Toxics Release Inventory (TRI) and Factors to
Consider When Using the TRI Data'' EPA explains that facilities may
report estimated data to the TRI Program and that the program does not
require them to conduct additional monitoring. This document also
explains that various estimation techniques may be used by facilities
when monitoring data are not available. EPA intends to continue to make
this type of information available to TRI data users and provide
context about the TRI data.
EPA is currently in the process of drafting its Information Quality
Guidelines. As part of this effort, EPA is reviewing its existing
procedures for correcting information the Agency disseminates to the
public. EPA's guidelines, which are due to be issued October 1, 2002,
will address the identification and correction of information that does
not comply with the guidelines.
tri lead rule data quality
Question. What measures has EPA instituted to ensure that data
collected under the rule requiring TRI reporting for lead and lead
compounds are of high quality?
Answer. EPA does not require facilities to conduct any monitoring
or testing solely for the purpose of TRI reporting. The TRI data
reported by facilities represent facility estimates based on monitoring
data required by other provisions of law, or if not available, on the
best available information. Therefore, the quality of the TRI data is
dependent upon each facility.
The Agency has been very active in publicizing the new EPCRA
section 313 reporting requirements for lead and lead compounds, and in
providing compliance assistance. A primary purpose of EPA's compliance
assistance is to help those facilities that may need to comply with the
new TRI reporting requirements make more accurate threshold
determinations and more accurate estimates of releases and other waste
management quantities of lead and lead compounds.
small business concerns with data tri data quality
Question. In view of concerns raised by small business associations
in their February 21, 2002, letter to EPA Administrator Whitman about
implementation problems with this rule, how confident is the Agency in
the quality of the data that it will receive in the first reporting
cycle under the lowered thresholds for lead and lead compounds?
Answer. The Agency has been very active in publicizing the new
EPCRA section 313 reporting requirements for lead and lead compounds,
and in providing compliance assistance. A primary purpose of EPA's
compliance assistance is to help those facilities that may need to
comply with the new TRI reporting requirements make more accurate
threshold determinations and more accurate estimates of releases and
other waste management quantities of lead and lead compounds. The TRI
Program has a number of procedures in place to improve the quality of
the data. The TRI Program believes that, collectively, these practices
plus the compliance assistance activities help to ensure the quality of
the TRI data. The Agency recognizes that the first year data is
inevitably for many a trial year and, therefore, not as reliable as
subsequent years. However, it believes that the data will not be any
worse than would normally be expected in a first reporting year.
identification of business required to report under tri lead rule
Question. How will EPA identify the businesses required to report
under the TRI lead rule, especially the numerous small businesses that
are newly subject to TRI reporting requirements under the rule? What
outreach efforts has EPA made to ensure that each of them is aware of
the new reporting requirements?
Answer. EPA has been very active with outreach efforts during the
entire development of the lead rule. This includes three public
meetings that EPA conducted with special emphasis on potential small
business impacts of the lead rule in Los Angeles, Chicago, and
Washington, DC. The notices announcing the meeting were reviewed by the
Small Business Association (SBA). The meeting was also announced in a
targeted mailing. EPA has been very active in announcing the final TRI
lead rule, and informing those who may have to comply with the new
reporting requirements for lead and lead compounds. In addition to the
Federal Register notice (April 17, 2002) and subsequent press releases,
and extensive media coverage announcing the final lead rule, EPA's TRI
Program has conducted extensive outreach efforts to inform those who
may need to comply with the TRI lead rule of the new reporting
requirements, and to provide compliance assistance, especially to those
who are not familiar with TRI reporting. These outreach efforts are
described briefly below.
Fact Sheet.--In August of 2001, the TRI Program developed a ``Fact
Sheet'' that announces: 1) the new TRI lead rule; 2) the development of
a guidance document to provide technical assistance for complying with
the lead rule; and 3) compliance assistance workshops. This Fact Sheet
was distributed electronically by EPA's Small Business Office to many
individuals and organizations (i.e., businesses, including small
businesses and trade associations) that may be affected by the new
rule.
Guidance Document.--The TRI Program developed a technical guidance
document through a public notice and comment process. A draft version
was released on September 10, 2001, within 5 months after the lead rule
became effective. A public (stakeholder) meeting was held on September
24, 2001, to discuss the draft version. A final version was released at
the beginning of January 2002.
Lead Rule Training Workshops.--The TRI Program conducted nine lead
rule workshops that were held throughout the various regions of the
country in the fall of 2001. Approximately 730 people registered for
the fall 2001 workshops. In general, the feedback received by the TRI
Program from the participants was positive.
EPA's Small Business Ombudsman Office sent out e-mail announcements
to trade organizations and interested parties, including the SBA,
announcing the lead rule workshops.
EPA published a Federal Register notice announcing the lead rule
workshops and sent flyers directly to interested parties via e-mail.
EPA spoke at conferences, attended meetings, and assisted in the
development of outreach materials for trade associations upon the
request.
EPA posted announcements of all of these efforts on the TRI
Program's internet homepage, and EPA Regional offices sent out mass
mailing announcements to regulated entities and states.
In addition to the above-mentioned special assistance for the lead
rule, the TRI Program has established an extensive compliance
assistance program to all those who need to comply with TRI reporting
requirements (including the lead rule), including those in small
businesses. The TRI Program provides this assistance through the:
--TRI hotline;
--TRI Industry Workshops.--TRI Program sponsors compliance assistance
workshops which are offered every spring in each EPA Region
(approximately 3,000 attendees for the spring 2001 workshops).
Currently, the TRI Program is conducting forty-two workshops
across the country. These workshops cover the new reporting
requirements for lead and lead compounds (the training
materials for the 2002 spring workshops are available from the
TRI Program's internet homepage);
--TRI User Support.--A mechanism by which individuals with questions
who need assistance can contact EPA's TRI Program; and
--TRI-ME: TRI-ME is an interactive, intelligent, user-friendly
software tool that guides facilities through the TRI reporting
requirements.
EPA believes that its outreach efforts to reach small businesses
have been effective; this is supported by the fact that every year TRI-
training workshops are well attended, and that the Agency has received
many compliance-related questions from individuals from different types
of facilities, sizes, and industry sectors. Also, during the public
comment period of the proposed lead rule (published August 3, 1999),
the Agency received many comments from small and large businesses and
trade associations that represent diverse industry sectors. In
addition, since promulgation of the final rule, the Agency has received
many inquiries from: trade associations that represent small businesses
and large businesses; the SBA; and individuals (e.g., presidents, CEOs)
from businesses.
small business unaware of reporting requirements
Question. Are there still small businesses that are unaware of
their reporting requirements, and if so, how will EPA educate them and
require them to submit reports?
Answer. EPA does not have a listing of the number of small
businesses that are unaware of and not in compliance with the new
reporting requirements. EPA will continue with its compliance
assistance and outreach efforts and work with trade associations to
assist businesses in complying with the TRI lead rule.
general awareness of reporting requirements among those required to
report
Question. How confident is EPA that the entire population of those
required to report under the new TRI lead rule are aware that they must
report? What steps is EPA taking to ensure that all those who must
report have received reporting forms, including those who will be
reporting for the first time?
Answer. EPA is confident that those facilities who may have to
comply with the new TRI lead should be aware of it by now. This
confidence is based on: (1) the attention that this rule has drawn from
businesses and other entities during the public comment period of the
proposed rule, and after the rule became final; (2) the mass
announcements of the rule and new reporting requirements, training
workshops, and a technical guidance document made by EPA via Federal
Register notices, electronic mailings, flyers, and postings on the TRI
Program's internet site; (3) notifications sent to the trade
associations of activities related to the workshops and guidance
documents; (4) attendance at the fall and spring training workshops;
and (5) the many inquiries received by EPA from small and large
businesses; trade associations; the SBA; and others regarding the new
rule.
EPA announces the availability and how to obtain the TRI reporting
forms and instructions through a variety of mechanisms. These include:
the TRI internet home page, the technical guidance manual for lead and
lead compounds; the training workshops and the materials distributed at
the workshops; TRI User Support (a mechanism by which individuals with
questions or need assistance can contact EPA's TRI Program; and the TRI
Hotline. Businesses may also obtain details regarding TRI Reporting
forms from their trade associations.
president's directive for technical assistance to small business
regarding tri lead rule
Question. In his press release dated April 17, 2001, the President
asked Administrator Whitman to provide technical assistance to affected
small businesses to help them prepare their first reports under the TRI
lead rule. What has been done to meet the President's directive? Have
these efforts been adequate to ensure that these small businesses can
provide high quality data?
Answer. Subsequent to the decision to move forward with the final
lead rule, the President specifically directed the EPA to provide
compliance assistance to affected businesses, especially small
businesses, to help them prepare their first release reports which are
due by July 1, 2002.
EPA has worked hard to provide this assistance. The Agency issued a
technical guidance document on how to comply with the new lead rule and
held nine workshops throughout the country last fall on the new rule.
More than 700 individuals attended the workshops. These workshops and
the availability of the draft and final versions of the guidance
document were extensively publicized. This information was made
available through announcements and notices published in the Federal
Register, the Agency's TRI web page, and e-mail announcements sent out
by EPA's Small Business Ombudsman Office to trade organizations and
interested parties, including the SBA. In addition, TRI user support
and access to TRI experts have been available through the TRI web page
and interactive software link, as well as through the Agency's TRI
telephone hotline.
The Agency continues to work hard to provide compliance assistance.
More than forty EPA workshops on compliance with the TRI reporting
requirements are being held this spring in various areas of the
country, and these workshops will be especially helpful to those who
will be responsible for reporting lead and lead compounds for the first
time. Also, the training materials used at these workshops are
available on the Internet through the TRI web page.
EPA's outreach to the small business community and compliance
assistance efforts to help small businesses comply with the new lead
reporting requirements have been unusually extensive and robust. The
Agency will continue to be diligent in its contacts with affected
businesses to give them the assistance necessary to comply with the new
regulation.
While EPA has been diligent in providing assistance to small
businesses, the quality of the data is dependent on facilities because
they have the best knowledge of their processes and the quantities of
the chemicals that they use or manufacture.
assistance to small business with compliance to tri lead rule
Question. In my March 7, 2002 letter to Administrator Whitman, I
raised concerns over EPA's failure to assist small businesses with
compliance on the TRI lead rule. Does EPA plan to enforce the reporting
requirements of the TRI lead rule during this first year when small
businesses still have not received adequate guidance to assist in their
compliance?
Answer. As with any new TRI rule, EPA emphasizes compliance
assistance during the first year of implementation rather than
enforcement. In fact, the compliance assistance provided by the TRI
Program regarding the new reporting requirements for lead and lead
compounds has been unusually extensive and robust, and we believe
sufficient to achieve compliance for the 2001 reporting year. EPA
intends to continue promoting compliance by providing assistance with
lead and lead compound reporting to TRI. Should a small business
discover a violation after taking advantage of compliance assistance,
either that provided by EPA or by another compliance assistance
provider, it may be eligible for the Agency's Small Business Compliance
Policy. This policy provides for the elimination or significant
reduction of penalties for small businesses (those with 100 or fewer
employees) if the company discovers, discloses, and promptly corrects
the violations. Those businesses with greater than 100 employees may be
eligible for similar penalty elimination or reduction through the
Agency's Incentives for Self-Policing: Discovery, Disclosure,
Correction and Prevention of Violations.
small business tri reporting
Question. What materials are EPA making available to educate small
businesses on how to report accurately under the TRI lead rule?
Answer. The Agency's outreach to the small business community and
compliance assistance efforts to help small businesses comply with the
new lead reporting requirements have been unusually extensive and
robust. A primary purpose of EPA's compliance assistance is to help
those facilities that may need to comply with the new TRI reporting
requirements make more accurate threshold determinations and estimates
of releases and other waste management quantities for lead and lead
compounds. One example of a product the Agency has made available to
educate small businesses on how to report accurately is the lead
guidance document, which is a technical document that offers assistance
in complying with the new rule. In addition, TRI user support (a
mechanism by which individuals with questions or need assistance can
contact EPA's TRI Program and access to TRI experts are available
through the TRI web page and interactive software link, as well as
through the Agency's TRI telephone hotline). The training materials
used at the spring 2002 training workshops are available on the
Internet through the TRI web page. The TRI Program has recently
developed TRI-ME: TRI-ME is an interactive, intelligent, user-friendly
software tool that guides facilities through the TRI reporting
requirements.
small business tri reporting without computers
Question. How does EPA intend to educate small businesses required
to report under the rule that do not have access to a computer or the
Internet?
Answer. There are many means (other than the internet) by which
anyone can obtain information on how to comply with any TRI-related
regulation, including the lead rule. One example includes the TRI
Program's annual training workshops. These workshops are publicized in
several different ways, such as through mailing announcements and
Federal Register Notices. EPA has also established various other
mechanisms for facilities to receive information or assistance. For
example, facilities can contact the TRI Program directly by submitting
written questions about site specific questions, and the TRI Program
will respond in writing. Also, questions about the implementation of
the TRI reporting requirements may be directed to the TRI User Support
telephone line at 202-566-0250. Calls received will be forwarded
directly to TRI Program staff. Upon request, the TRI Program will send
out hard copies of the lead rule guidance document. The TRI Program has
also established a hotline, the EPCRA Call Center, which is a toll-free
number facilities may call to obtain answers and guidance to questions
about completing the TRI Form R reporting form. The EPCRA Call Center
number is (800) 424-9346. Callers in the Washington, DC area should
call (703) 412-9810. The TDD is (800) 553-7672. This contact
information is available through a variety of EPA publications. In
addition, many trade associations have this information. EPA plans to
continue these and other outreach and assistance efforts.
tri: how has the guidance document received by the small business
community
Question. How has the guidance document for the rule, which is over
200 pages and was not finalized until after the first reporting period
was complete, been received by the small business community? To the
extent concerns have been raised, how does EPA plan to address them?
Answer. The TRI Program developed the guidance document through a
public notice and comment process. A draft version was released on
September 10, 2001 (which is within 5 months after the lead rule became
effective). A public (stakeholder) meeting was held on September 24,
2001. This meeting provided the TRI Program with the opportunity to
discuss the draft version with stakeholders, and listen to comments
offered by stakeholders. The final version of the document was
developed from consideration of the comments submitted to EPA in
writing during the public comment period, and comments raised at the
public meeting. The final version was released at the beginning of
January 2002: nearly 7 months before the deadline for submitting the
first year release reports.
The actual body of the lead rule guidance document is only 65 pages
long. The remaining sections are appendices. The appendices contain
extensive and valuable information such as emission factors, thereby
minimizing the time for facilities to search for this information
elsewhere (e.g., saves facilities time from having to search for the
factors on the Internet or elsewhere). The guidance document is well
organized and easy to use: it contains a table of contents, a list of
figures, a list of tables, and an index. The guidance document contains
many real-world examples of scenarios likely to be encountered at
facilities. Detailed explanations are provided on how facilities should
deal with these scenarios with regard to the new reporting requirements
for lead and lead compounds. In addition, Appendix B of the document
``Selected Questions and Answers,'' provides EPA's answers to commonly
asked questions regarding the new reporting requirements for lead and
lead compounds.
The TRI Program has a policy for revising its guidance documents.
Guidance documents will be revised as appropriate, based on changes in
information, rules, or TRI Program policies and practices. The TRI
Program always welcomes comments and additional information for all of
its guidance documents, from all stakeholders. The Agency may choose to
revise the lead guidance document at a future date if the Agency
believes that such revision is needed based on constructive comments
received.
tri: unusual aspects of the tri lead rule
Question. Because the TRI lead rule has aspects that are unique or
unusual, such as the retroactive reporting obligation and the
elimination of the de minimis reporting exemption, what specific
guidance has the Agency developed to address these issues?
Answer. The TRI lead rule does not impose a retroactive reporting
obligation because it does not alter the past legal consequences of
past actions. This rule does not affect a facility's liability for past
conduct.
In addition, no reporting obligation was placed on affected
facilities prior to the rule's effective date. Reports are not required
to be filed until July 1, 2002. Nor does the rule require facilities to
have developed or kept records for any period predating the effective
date of the rule; facilities are not required to conduct any testing or
monitoring in order to report. EPCRA section 313(g)(2) only requires
facilities to use ``readily available data'' or to make reasonable
estimates based on whatever information they have, to develop their
report.
EPA's 1999 persistent, PBT chemicals rule eliminated the de minimis
exemption for TRI reporting of PBT chemicals. In the TRI lead rule, EPA
determined that lead and lead compounds are PBT chemicals. EPA has
provided facilities with guidance in the lead guidance document, as
well as in the training workshops, to aid facilities in meeting their
reporting obligations in the absence of the de minimis exemption.
tri: assistance to small companies
Question. Will EPA assist small companies in dealing with the
retroactive effect of the rule by allowing them to estimate their lead
usage during the months of January through April by extrapolating from
data concerning their lead usage after the rule was made effective?
Answer. EPCRA only requires facilities to use ``readily available
data (including monitoring data) collected pursuant to other provisions
of law, or, where such data are not readily available, reasonable
estimates of the amounts involved.'' The lead rule does not alter this
requirement. Thus, if facilities only have information concerning their
lead use and/or ``releases'' after April 17, 2001 (the date the rule
became effective) they may extrapolate from that to make reasonable
estimates of the amount of lead ``released'' during the reporting year.
However, to the extent that facilities have records of their use and
releases of lead and lead compounds for other reasons, such as to
demonstrate compliance with air or water permits, or for tax purposes,
they would be required to consider that information in developing their
threshold and release calculations.
tri: small business and the 100-pound threshold
Question. With regard to the deletion of the de minimis exemption,
how are small businesses to determine if they meet the 100-pound
threshold for reporting under the rule?
Answer. EPCRA section 313 is very clear that EPA should not require
facilities to conduct any additional monitoring or testing to comply,
but that facilities should use readily available information, such as
monitoring data collected pursuant to other laws, or make a reasonable
estimate of their release information. Guidance for determining whether
a facility exceeds the 100-pound threshold for manufacturing,
processing, or otherwise using lead or lead compounds is presented: in
the lead guidance document; at the training workshops; in materials
distributed at the workshops and currently available from the TRI
Program's internet home page (http://www.epa.gov/tri/report/training/
index.htm); and directly from the TRI Program.
tri: small business reporting responsibility in the case of ``no
knowledge''
Question. What responsibility does a small business have for
reporting under the TRI lead rule if it has no knowledge that it
manufactures, processes, or otherwise uses lead above 100 pounds per
year?
Answer. If a small business has no actual or constructive knowledge
that it manufacturers, processes, or otherwise uses lead above the
threshold (100 pounds per year), then it has no reporting
responsibility for lead under the TRI lead rule.
tri: knowledge in the context of tri reporting
Question. What constitutes knowledge in the context of TRI
reporting?
Answer. In this context, knowledge concerns both knowledge of the
facts at a facility and knowledge of the law. It has been EPA's
experience that facilities have knowledge, at a minimum, of the
following: the facility's processes, EPA reporting instructions, EPA
guidance documents, supplier notifications, trade association
documents, the facility's air and water permits, and hazardous waste
manifests. Regarding the issue of what constitutes a business'
knowledge of the law, courts have long held that everyone possesses
constructive knowledge of the laws passed by Congress and implementing
rules and regulations published in the Federal Register.\1\
---------------------------------------------------------------------------
\1\ See, e.g., U.S.C. 41507; Federal Crop Ins. Corp. v.
Merrill, 332 U.S. 380 (1947).
---------------------------------------------------------------------------
However, EPA has engaged in outreach efforts to promote awareness
among those required to report, including a robust compliance
assistance program. These efforts include: a technical guidance
document devoted specifically to assisting businesses to comply with
the lead rule (developed through public notice and comment), and nine
lead rule workshops that were held throughout the various regions of
the country in the fall of 2001. EPA estimates that more than 700
individuals participated in the fall 2001 workshops. The Agency
announced these workshops through several channels, including: e-mail
announcements to trade organizations and interested parties, including
the SBA; a Federal Register notice; flyers sent directly to interested
parties via e-mail; announcements posted on the TRI Program's internet
homepage; and mass mailings conducted to states and regulated entities.
In addition to this special assistance for the lead rule, EPA has
an extensive compliance assistance program for all those subject to
basic TRI reporting requirements. The TRI Program provides ongoing
assistance through: a toll-free hotline staffed with individuals
trained to answer TRI-related questions; workshops which are offered
every spring in each EPA Region (approximately 3000 attendees for the
spring 2001 workshops); TRI User Support, which is a mechanism by which
individuals can directly contact EPA headquarters TRI staff; and TRI-
ME, an interactive, intelligent, user-friendly software tool that
guides facilities through the TRI reporting requirements.
distinction between ``having no knowledge'' and ``not reporting'' under
tri lead rule
Question. What is the difference between ``having no knowledge''
and ``not reporting'' under the TRI Lead rule?
Answer. Knowledge raises the issue of whether an entity has an
obligation to report. ``Reporting'' or ``not reporting'' is a solely an
issue of whether an entity subject to the requirements has submitted
reports or not. An entity ``having no knowledge'' would not report, but
``not reporting'' does not imply that a TRI reporting threshold has not
been exceeded.
tri: knowledge in an enforcement context
Question. What is the difference in an enforcement context?
Answer. The extent of an entity's knowledge about a regulatory
obligation is one factor in determining the level and type of
enforcement response.
tri: burden of proof in an enforcement context
Question. Who has the burden of proof in an enforcement context?
Answer. In enforcement proceedings, the EPA has the burden of proof
that the violation occurred as set forth in a complaint. Following
EPA's presentation of a prima facie case, a respondent has the burden
of proof as to any defenses.
iris/residual risk rulemaking
Question. In fiscal year 2002, the Committee provided an additional
$5,000,000 above the budgeted request to accelerate the development of
new and update current Integrated Risk Information System (IRIS)
values. The Committee continues to be concerned that EPA is not meeting
its goals and, more importantly, is not making the systemic
improvements in its IRIS program to achieve the primary goals of A)
updating existing risk values to reflect the current best available
science and B) generating new values to meet growing demands by state,
Federal, and even international users of IRIS. What plan is ORD
following in spending the $5M?
Answer. The new funds are available for extramural support to EPA's
program offices through the Environmental Program Management (EPM)
account. This support will be directed towards the scientific
development and peer review of IRIS assessments. The Administrator has
stated that developing options for the updating and improvement of IRIS
is a key function of ORD's Assistant Administrator in his new capacity
as EPA Science Advisor. ORD has convened an intra-Agency group and is
coordinating development of a plan among the program offices for
spending the $5M designated by Congress in fiscal year 2002 for
updating and adding assessments to IRIS.
Question. What systemic improvements will ORD achieve through its
expenditures that will (A) lead to a steady, sustainable update of
existing IRIS values, and (B) lead to a quicker rate of throughput for
new IRIS risk values?
Answer. EPA has a system in place for the generation and review of
IRIS assessments across the Agency. ORD is coordinating a plan by which
EPA program offices will expend the fiscal year 2002 additional funds.
The new extramural funds will help in the scientific development and
peer review of IRIS assessments during fiscal year 2002-2003, thereby
increasing both the number of existing IRIS values that are up-to-date
and the number of new assessments added to the database.
Question. How is ORD working with external experts toward achieving
the primary IRIS improvement goals for which the Committee provided
additional funding?
Answer. ORD recognizes that significant expertise exists outside of
EPA that can assist in developing and peer reviewing IRIS assessments.
This expertise can contribute to the primary improvement goals of
updating IRIS and adding new assessments. ORD is coordinating a plan by
which EPA program offices will expend the fiscal year 2002 additional
funds by engaging external experts in IRIS improvement through
contractual mechanisms. The funds will be used to access EPA
contractors to help with the scientific development and peer review of
IRIS assessments.
Question. The Agency is now facing a series of deadlines to
promulgate residual risk standards under Section 112(f) of the Clean
Air Act. An important element of this process is the selection of
health benchmark values that represent for each major air toxic the
best available, updated information on potential health effects.
Unfortunately, IRIS includes many values for which new, more accurate
data is available. How many IRIS updates does the Agency expect to
complete in fiscal year 2002? How many do you plan to complete in
fiscal year 2003?
Answer. EPA is aware of the requirements to promulgate residual
risk standards under the Clean Air Act. The Agency has identified 53
air toxics that are important to early residual risk assessments.
Twenty-seven of these air toxics were determined to be highest priority
for assessment or reassessment and are in progress in the IRIS program.
Four assessments of the high priority air toxic chemicals will be
completed in fiscal year 2002 and seventeen are scheduled for
completion in fiscal year 2003.
Question. What criteria did the Agency use to determine the values
that would be updated in fiscal year 2002 and fiscal year 2003?
Answer. For fiscal year 2002, EPA's approach to developing the
annual IRIS agenda was to compile nominations for priority chemicals
for new assessments and reassessments, and to apply a general set of
criteria to determine which to undertake. The criteria were, (1) Agency
statutory, regulatory, or program implementation need; (2) the
availability of new scientific information or methodology that might
significantly change current IRIS information; (3) interest to other
levels of government or the public; (4) completion of most of the
scientific assessment work while meeting other Agency requirements such
that only a modest additional effort is needed to complete the review
and documentation for IRIS. The priorities that emerged from the
application of these criteria were then considered in light of
available Agency staff to manage assessments and available extramural
resources. Application of these criteria are standard practice for the
IRIS program. Similar or identical criteria will be applied to develop
the agenda for fiscal year 2003.
Question. What is the process for incorporating the 2002 and 2003
updates into the 112(f) rules, which are due beginning in 2003, or
alternatively, what process will be employed to incorporate these
values into the residual risk rule if IRIS updates are not completed?
Answer. OAR has identified those substances which it believes will
play a significant role in the early 112(f) assessments and thus
require updated assessments via the IRIS process. These are under
development for completion in 2002 and 2003. As these IRIS assessments
are available, they will be relied upon in risk assessments completed
under 112(f). As information is available regarding pending changes to
IRIS assessments, it will be used to supplement 112(f) risk assessments
and to inform 112(f) rule development as feasible and where
scientifically appropriate. Our general policy is that any dose-
response (or health) assessment that would significantly affect a
regulatory decision should be peer reviewed prior to finalization of
that decision.
Question. In response to questions submitted last year on your
fiscal year 2002 budget proposal, EPA stated that the primary
determinant of how many new assessments can be undertaken in fiscal
year 2002 is the ``availability of scientific staff to lead or oversee
the work.'' Please provide the number of scientific staff EPA dedicated
to IRIS updates over the past four fiscal years and the Agency's plans
for fiscal year 2003.
Answer. Availability of scientific staff to lead or oversee
assessment development and review is key to the IRIS process of
generating Agency consensus documents. Over the past 4 years, an
average of 40 ``IRIS chemical managers'' have been involved across the
Agency. In addition, 16 ``consensus reviewers'' and many other internal
peer reviewers have contributed to the scientific process. Most have
multiple responsibilities in addition to participating in the IRIS
program. A central IRIS staff also contributes to scientific quality
assurance. In fiscal year 2003, EPA staffing is likely to continue at
approximately the same level.
Question. One way to accelerate IRIS updates is to make greater use
of external entities in helping to conduct risk assessments, subject to
EPA review and approval. In response to questions on your fiscal year
2002 budget submittal, your Agency stated that it has 6 pilot
assessments underway which involve collaborative efforts to develop
assessments with other Agencies and the private sector, and ``that the
Agency will have sufficient experience with these efforts to evaluate
them in terms of quality and timeliness of products in fiscal year
2002.'' What were the results of this review and what are the Agency's
plans to expand the use of outside entities?
Answer. EPA has been interested in the possibilities for
accelerating IRIS updates by making greater use of health assessments
generated by external entities. The Agency undertook six pilot
assessments in fiscal year 2000 whereby EPA could engage in a dialogue
with and provide feedback to external parties developing health
assessments which could then be used as supporting documents for EPA's
IRIS assessments. Other IRIS assessments in progress also engage
external entities in various aspects of data or model development and
review, but the aforementioned pilots test whether a full health
assessment generated externally can be useful for EPA. Two of these
pilots have since been discontinued, and the remaining four are still
in progress. The need for sustained engagement of EPA chemical managers
to interact with external entities is one important aspect of ensuring
usable, timely products. Expansion of this effort to engage external
entities in the development of assessments useful to EPA for IRIS will
depend in part on availability of staff and evaluation of the four
remaining pilot assessments when they are completed.
Question. As noted in previous correspondence to the Agency, EPA
committed in an August 26, 1994, Air Office Guidance on the Use of
integrated Risk Information System to incorporate new toxicological
information during rulemakings. This commitment was repeated by
Administrator Whitman on September 7, 2001 (66 FR 46929) when she
stated that ``IRIS values are not legally binding and are not entitled
to conclusive weight in any rulemaking.'' To make this commitment a
reality during the development of residual risk standards, how many
FTEs with scientific background does the air program office have to
evaluate new toxicological data?
Answer. Different program offices within EPA participate in the
IRIS process in different ways. Some program offices have an in depth
expertise in toxicology and thus update and/or develop most of their
IRIS assessments. OAR has limited expertise in this area and thus has
relied to a large extent on the Agency's Office of Research and
Development (ORD)/National Center for Environmental Assessment (NCEA)
offices to update reference concentrations (RfCs) for priority
chemicals. This support is critical to our regulatory program. ORD
assists OAR in the air toxics residual risk program by reviewing
toxicological data and in the consultative review of other residual
risk assessments. ORD devotes approximately 9 FTE per year to assist
OAR with IRIS. In addition, OAR has 2 FTEs with the requisite
scientific knowledge to evaluate new toxicological data. The air
program currently has 0.2 FTE of these FTEs available in OAR to do this
kind of work. Discussions are currently in progress to determine how
OAR can begin to develop IRIS files for chemicals that are not high
priorities for other program offices and to help the Agency speed up
the process of evaluating new toxicological data.
Question. If EPA expects ORD to conduct any review, please describe
the process by which this data will be reviewed to ensure a timely
evaluation, especially in instances where there is inadequate time for
a full fledged IRIS value review and update? How many FTEs in ORD will
be devoted to reviewing toxicological data submitted during or in
anticipation of rulemakings?
Answer. ORD will continue to assist the Office of Air and Radiation
(OAR) in the air toxics residual risk program. ORD reviews
toxicological data in the standard process for developing air toxics
assessments for IRIS. Where there is inadequate time or priority for
developing an IRIS assessment, ORD recommends other sources for dose-
response values. ORD also assists in the consultative review of other
residual risk assessments for OAR. ORD devotes approximately 8 FTE per
year to the development of assessments for chemicals of priority to the
residual risk program, and less than 1 FTE per year for consultative
review.
mact standard setting
Question. How many MACT standards have yet to be promulgated?
Please provide an updated list of the remaining MACT source categories
and the Agency's current schedule for when the Agency will promulgate
standards for these source categories.
Answer. There are 36 10-year Maximum Achievable Control Technology
(MACT) standards that are yet to be promulgated; three of the
promulgations represent a combination of 2 standards from the original
list of categories subject to MACT. These were efficiently combined
because they addressed the same industry. The updated list of remaining
MACT standards and the draft schedule for completion are:
Signature by June 30, 2002
Large Appliances
Polyvinyl Chloride & Co-polymer Production
Signature by November 30, 2002
Municipal Solid Waste Landfills
Friction
Paper & Other Web Coating
Signature by February 28, 2003
Flexible Polyurethane Foam Fabrication Operations
Coke Ovens; pushing, quenching & battery stacks
Reinforced Plastics
Semiconductors
Miscellaneous Metal Parts & Products (Surface Coating) (&Asphalt/
Coal Tar Application on Metal Pipes)
Refractories Manufacturing
Brick, Structural Clay Products & Clay Ceramics Manufacturing \1\
---------------------------------------------------------------------------
\1\ These promulgations represent a combination of 2 standards from
the original list of categories subject to MACT. These were combined
because they addressed the same industry.
---------------------------------------------------------------------------
Asphalt Roofing/Asphalt Processing
Integrated Iron & Steel
Hydrochloric Acid Production Industry/Fumed Silica \1\
Engine Test Cells/Stands
Metal Furniture
Fabric Printing, Coating & Dyeing
Signature by August 30, 2003
Combustion Turbines
Wood Building Products
Lime Manufacturing
Site Remediation
Iron Foundries
Taconite
Miscellaneous Organic Chemical Products & Processes (MON)
Organic Liquids Distribution
Primary Magnesium
Metal Can
Plastic Parts (Surface Coating)
Bin 5 Signature by February 28, 2004
Industrial, Commercial & Institutional Boilers & Process Heaters
\1\
Plywood & Composite Wood Products
Reciprocating Internal Combustion Engines (RICE)
Auto & Light Duty Truck Manufacturing (Surface Coating)
mact standard setting
Question. Under the Section 112(j) of the Clean Air Act, if the
Administration fails to promulgate a MACT standard within 18 months of
the statutory deadline--May 15, 2001--owners and operators must file a
permit application with their state and local permitting authorities
that includes a source-specific MACT determination--a very burdensome
requirement on sources. Part I of this application is due on May 15,
2001. How many individual sources does EPA estimate will have to submit
Part I applications? When will the Part II applications be required?
Answer. As of May 15, 2002, the Part I permit application deadline,
we had not promulgated 36 MACT standards covering 62 source categories.
We roughly estimate that there are over 84,000 emitting facilities
located at major sources subject to the Part 1 submittal requirements.
The actual number of Part 1 applications will be significantly less
because many major sources contain multiple emitting facilities
contained in the source categories. However, each application will
cover as many of the emitting facilities as are located at that source.
In the recent rule amendments which created the two-part
application process, we made it clear that the Part 2 application must
include certain source-specific information needed to make a MACT
determination, but the application itself need not include a ``source-
specific MACT determination.'' Although the current regulation
specifies that sources have 24 months to submit the Part 2 application
after submitting the Part 1 application, a national environmental group
has filed a petition for judicial review to challenge this provision.
We are currently engaged in settlement discussions in that case, and
these discussions will most likely lead to a proposed change in this
timetable. If we fail to reach a settlement an adverse judicial
determination in that case could also change the timetable.
Question. If EPA has yet to promulgate standards by this date, what
additional information will have to be included in the Part II permit
application?
Answer. Part 2 of the permit application requires:
--The anticipated date of startup of operation of any new affected
source.
--The hazardous air pollutants emitted by each affected source in the
relevant source category and an estimated total uncontrolled
and controlled emission rate for hazardous air pollutants from
the affected source.
--Any existing Federal, State, or local limitations or requirements
applicable to the affected source.
--For each affected emission point or group of affected emission
points, an identification of control technology in place.
--Information relevant to establishing the MACT floor.
--Any other information reasonably needed by the permitting authority
including at the discretion of the permitting authority,
information required pursuant to Subpart A [the general
provisions] of this part.
Question. How many individual sources does EPA anticipate under
best and worst case scenarios will have to submit a Part II
application?
Answer. We estimate that anywhere from 0 to over 84,000 emitting
facilities at major sources could be subject to the Part 2 application
requirements. We are currently engaged in settlement discussions with
an environmental group to establish a fairly tight schedule to
promulgate the remaining MACT standards. Under the 24 month timetable
in the current promulgated section 112(j) rule, we would expect to
promulgate all MACT standards before any Part 2 applications are due,
so that no sources would be affected. However, if the timetable is
changed as a result of the legal challenge to the rule that has been
filed, a significant number of Part 2 applications could be required.
The number of affected facilities is greatest for the MACT standards
that we expect to promulgate last. Of the 84,000 facilities,
approximately 79,000 are in source categories for which we expect to
issue a final standard more than 1 year after the submission of Part 1
applications.
Question. EPA's current failure to meet the May 15, 2002 ``hammer''
deadline is perplexing to the Committee given the Agency's previous
public comments that assured state regulators and sources that the
deadlines would be met. For instance in a May 19, 1999 letter, Ms.
Sally L. Shaver, Director of the Emission Standards Division, wrote a
letter to STAPPA and ALAPCO stating that ``EPA intends to promulgate
all standards by the hammer date.'' Why now, less than 2 years later,
is EPA saying that it will miss the hammer date for many source
categories? What has happened to change this picture so dramatically
that was not foreseen in May 1999?
Answer. In May 1999, when the letter was written, the Agency was
being realistic about the completion of the 10-year MACT standards. We
did intend to promulgate all standards by the ``hammer date.'' We
continued reinvention approaches such as consolidating rules,
partnerships with states in making presumptive MACT determinations,
generic MACT approach where rulemakings for source categories with four
or fewer major facilities would be developed as a broad-based rule, and
working with partners to reduce cost of rules to help with our goal to
meet the ``hammer date.'' We had less information on the 10-yr MACT
sources categories than we had on earlier MACT source categories,
therefore we needed information from industry as we developed the
standards. We did not anticipate the amount of information we received
on these source categories, and in some cases the information was not
received in a timely manner, so additional time was required to analyze
the information. There were also procedural changes in our review
process for the standards.
Question. Even as recent as last year, the Agency's budget
justification for fiscal year 2002 stated that: ``EPA plans to have all
the 10-year MACT standards proposed and completed in fiscal year
2002.'' Will EPA meet even this deadline and, if not, why not?
Answer. No, but we plan to have all the 10-year MACT proposed by
November 2002. We fully intended to have the 10-year MACT standards
completed by the ``hammer date,'' but due to reasons mentioned in the
previous response, we will still have 36 standards to promulgate.
EPA's failure to meet the hammer date is all the more troubling
when considering EPA's repeated decisions to ``retarget'' resources
away from MACT standard setting activities. For instance:
Fiscal year 2000 budget justification.--``(+$6,600,000) The Agency
proposes to retarget resources from setting MACT and residual risk
standards to better characterize total environmental toxic risk,
particularly in urban areas.'' (Page I-47)
Fiscal year 2001 budget justification.--(+$10,600,000) The Agency
continues to retarget resources from setting MACT and residual risk
standards to better characterize the total environmental toxic risk,
particularly in urban areas.'' (Page I-52)
Fiscal year 2002 budget justification.--(-$2,030,300) This
reduction reflects that resources have been decreased for MACT standard
development since EPA plans to have all the 10-year standards proposed
and completed in fiscal year 2002. Some resources have been
reprogrammed from MACT development for modeling and emission inventory
efforts to characterize air toxics risk and exposure and for residual
risk assessments on implemented MACT standards. In addition, resources
were reduced for the one year effort to ensure all stakeholders have
the latest information about air pollution control technologies and
full access to RACT/BACT/LEAR Clearinghouse for Control Technologies.''
(Page I-62)
Question. Why did the EPA repeatedly propose to redirect resources
away from MACT standard setting given the costly and onerous
consequences for states and sources if the Agency fails to meet the
statutory deadlines?
Answer. Section 112 of the Clean Air Act has many requirements.
Title III of the Amendments, which contains major stationary and area
source requirements, lists 188 HAPs and requires EPA to develop
standards for major stationary sources of these pollutants. Within 8
years after promulgating these MACT standards, EPA must evaluate the
residual risk posed by these sources and promulgate risk-based
standards, if needed, to provide an ample margin of safety to protect
public health or the environment.
As part of its ongoing efforts to protect public health in urban
areas, and in response to the requirements of sections 112(c)(3), (k)
and 202(l), EPA released the Integrated Urban Air Toxics Strategy which
builds on the substantial emission reductions already achieved from the
larger industrial stationary sources. While the Strategy is not a rule,
additional regulations are required to establish emission standards for
additional categories of area sources, and may be needed to fully
address remaining risks posed by the combination of emissions from
mobile, major stationary, and area sources. The goals of the Strategy
are to reduce by 75 percent the risk of cancer associated with air
toxics from large and small industrial/commercial sources, to
substantially reduce noncancer health risks (such as birth defects and
reproductive effects) from small industrial/commercial sources known as
areas sources, and to address disproportionate impacts such as those in
``hot spots,'' highly exposed population subgroups such as children and
the elderly, and predominately minority and low income communities.
Because of these requirements, we started retargeting resources to
meet these goals. In addition, some of the MACT resources were
allocated to address litigation on the 2-, 4-, and 7-year MACT
standards, which we continue to be sued on. Our focus continues to be
the completion of the 10-year MACT standards, but because of new
industry information, procedural changes and other issues mentioned in
previous responses, we did not meet the MACT standard deadlines.
Question. Why did the Agency believe that other activities, such as
obtaining more information on the nature of the air toxics problem, was
more important than assuring that Congressional deadlines are met?
Answer. As mentioned in prior response, EPA was trying to meet the
many requirements of Section 112 of the Clean Air Act. We intended to
meet the goal of completing the 10-year MACT standards and started
shifting resources into risk-based activities and balance funding
between residual risk and national, urban, and community assessment
activities. Also, inventories are an integral part of the risk-based
program and are needed to meet the residual risk requirements with
technically-credible assessments.
Question. What is the Agency doing now to avoid the mistakes of the
past and assure that sufficient resources are now being dedicated to
assure that all of the MACT standards will be issued before the Part II
applications are due?
Answer. We are doing our best to develop and promulgate the
remaining MACT standards. We believe that the resources are adequate,
but the critical resource is time. Many of these standards are very
involved and cannot be sped up, while adhering to the Agency's internal
review process and quality control procedures and allowing for
appropriate stakeholder involvement as the standards are developed. We
cannot assure with certainty that all remaining MACT standards will be
promulgated before the Part 2 applications are due, especially if
litigation settlement discussions result in a change in the timetable
for submitting Part 2 applications.
Question. Please provide the Committee with yearly estimates of the
number of FTEs and budget resources that have been dedicated to MACT
standard development for fiscal years 1999 to 2002 and your current
proposal for fiscal year 2003.
Answer. The following are the yearly estimates of the FTEs and
budget resources that have been dedicated to MACT standard development:
----------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 request
----------------------------------------------------------------------------------------------------------------
FTE............................. 102.1 92.8 88.4 63.7 61.4
Contract........................ $10,890.0 $8,286.0 $10,700.0 $8,237.0 $8,162.0
----------------------------------------------------------------------------------------------------------------
Question. The existing 112(j) MACT rule states that the Part 1
application must include an identification of the ``types of sources''
that belong to the source category. Please explain to the Committee
whether this requires sources to identify and list specific equipment
or emission points at the source.
Answer. The Part 1 application is designed to be relatively general
in nature and not require specific information. The more detailed,
specific information is intended to be supplied in Part 2 of the
application. We do not intend sources to identify and list specific
equipment or emission points when identifying the ``types of sources''
that belong in a source category. Instead, the source should generally
describe what types of emission points are included by the source
category at the source. For example, an asphalt processing facility
(covered under the asphalt processing source category) would be
composed of asphalt flux storage tanks, oxidized asphalt storage tanks,
one or more blowing stills, and oxidized asphalt loading racks.
hydraulic fracturing: timetable
Question. Provide a timetable describing EPA's review of questions
surrounding hydraulic fracturing and study to review this issue.
Answer. EPA's coalbed methane hydraulic fracturing study grows out
of issues concerning the scope of EPA's Underground Injection Control
authorities. In August 1997, the 11th Circuit Court of Appeals (the
Court) ruled that either Alabama must regulate hydraulic fracturing in
coalbed methane wells or EPA must take over Alabama's program and
regulate the process under the SDWA as underground injection (LEAF v.
EPA, 118 F. 3d 1467). In 1998, the Court issued a writ of mandamus
ordering EPA to withdraw Alabama's UIC program or approve a revised
program by December 1999.
EPA worked with Alabama to modify the state's program consistent
with the Court's decision, and published approval to a revised UIC
program for Alabama in January 2000. Concurrent with the Agency's
efforts to modify the state's program, members of Congress began to
contact the Agency in March 1999 to recommend that EPA collect more
information on the possible contamination of aquifers, and the
Administrator responded within weeks to inform the Congress of the
Agency's intentions to conduct a study. In April 2000, EPA launched a
process to develop a study to evaluate the impacts to underground
sources of drinking water (USDWs) from hydraulic fracturing of coalbed
methane wells.
In addition to requesting written comments on its draft study
design, in August 2000 EPA held a public meeting in Washington, DC to
receive stakeholder input on the scope of the study and the process EPA
would follow in completing the study. After considering the extensive
written and oral comments from a wide variety of stakeholders,
including industry, state oil and gas agencies, public interest groups,
and concerned citizens, EPA proposed its final design in the Federal
Register in July 2001.
Question. Why has the study taken so long to complete and why it is
so far behind the original schedule?
Answer. The study was designed to have three possible phases, and
at the completion of each phase, EPA must determine whether the
findings to-date warrant continuation into the next phase. The Agency
is currently engaged in Phase I, a limited assessment designed to
enable the Agency to determine whether hydraulic fracturing of coalbed
methane wells clearly poses a threat to USDWs. If EPA decides further
investigation is warranted, the study will continue into Phase II.
Phase II would consist of additional data collection and the completion
of a risk assessment. Phase III would be a review of existing
regulations and a regulatory determination.
Early in the implementation of Phase I of the study, EPA proposed
the initial schedule with the expectation that we would find no
hazardous constituents in the fracturing fluids. We have identified
several constituents of concern, however, including diesel fuel.
Further, the Agency intends to thoroughly investigate the economic as
well as environmental implications identified in the process of
implementing the study.
EPA is taking the time necessary to ensure that the study is
thorough and accurate before publishing a draft for stakeholder
comment. And because the study results could have a great impact on
many stakeholders, including states, industry, and other Federal
agencies, the Agency is attempting to engage all affected interests at
an appropriate level to collaborate on the data collection.
hydraulic fracturing: peer review process
Question. Could you please explain the peer review process for this
study?
Answer. The hydraulic fracturing study is carefully designed to
ensure extensive peer review by experts in industry, academia, and
state and Federal agencies of the study's data sources, analytical
approaches, and conclusions. The peer review process has been conducted
in four stages: (1) internal Agency review by headquarters offices and
EPA Regions; (2) inter-agency review by the U.S. Department of Energy,
U.S. Geological Survey, and state agencies dealing with ongoing
hydraulic fracturing issues; (3) independent peer review by an EPA-
convened scientific panel of experts from industry, academia, and state
and Federal agencies; and (4) stakeholder review.
All supporting documentation and data from the study are part of
the project files, and all reviewer comments are preserved as a part of
the public record.
hydraulic fracturing: peer review panel
Question. In correspondence with members of the peer review panel
on the study, EPA apparently indicated that the panel would have a
final review prior to the public release of the study. More recent
correspondence with the peer review panel has indicated that the panel
will not see the study again until it is released publicly, at which
time the panel would be invited to comment as part of the public
comment process. This seems to violate the Agency's commitment to peer
review studies to produce the best possible science. Why was the peer
review panel denied the opportunity to again review the study prior to
its public release and doesn't this weaken the study and throw into
question its scientific validity?
Answer. EPA's Peer Review Policy establishes the criteria and
requirements for independent evaluation of scientific and technical
studies and documents. The Agency has conducted the peer review for the
hydraulic fracturing study consistent with that policy, and assembled
an expert panel with representation from industry, academia, and State
and Federal agencies. The charge to the peer review committee was to
review the report to determine if (1) the report is complete, thorough,
and accurate and (2) the scientific/technical studies reviewed are
applied in a sound, unbiased manner. The peer review panel has provided
extensive and useful comments. After addressing the panel's comments,
EPA determined that no additional review was necessary from the panel.
The peer review panel members will have additional opportunities to
comment once the study is released.
hydraulic fracturing: state oil and gas agencies
Question. States in the United States have for decades regulated
hydraulic fracturing in the United States. Were State Oil and Gas
agencies contacted directly by the authors of the study to determine if
and how states regulate hydraulic fracturing? If so, please document
those contacts. If not, why not?
Answer. An initial investigation by the Ground Water Protection
Council (GWPC) into state regulation of hydraulic fracturing raised
questions about whether technical requirements regulating the practice
of hydraulic fracturing exist. In its investigation, GWPC contacted
state oil and gas agencies for information related to complaints on the
impacts of hydraulic fracturing.
EPA did contact state oil and gas agency officials during Phase I
to determine how they were responding to citizen complaints, to
understand states' unique geologic conditions, and to learn more about
hydraulic fracturing industry practices in individual states. The
Agency is close to completing the final draft report for Phase I of the
study; if it necessary to continue on to Phase III of the study, EPA
will contact state oil and gas agencies again specifically to determine
how states regulate hydraulic fracturing.
hydraulic fracturing: landowners
Question. Were landowners contacted directly by the authors of the
study in an attempt to determine if any landowner's wells were damaged
by hydraulic fracturing? If so, please document those contacts. If not,
why not?
Answer. In the implementation of Phase I of the study, landowners
contacted EPA, concerned that coalbed methane development had impacted
their drinking water wells. Landowners voiced their concerns to EPA
through electronic mail, letters, telephone interviews, and local
meetings. The Agency responded to these concerns by conducting follow-
up phone interviews with nine individuals. Through these conversations,
EPA has heard from citizens in all of the most active coalbed methane
production basins: Black Warrior (Alabama), San Juan (Colorado and New
Mexico), Powder River (Montana and Wyoming), and the Central
Appalachian (Virginia). In response, the Agency contacted more than 30
employees at state and local agencies to better understand ground water
issues, investigations, and any actions taken in response to citizens'
concerns.
A few citizens reported that they believed their drinking water
wells were impacted from hydraulic fracturing of coalbed methane wells;
others expressed concern about the risks associated with hydraulic
fracturing. Most of the citizens reporting problems did not specify
hydraulic fracturing, but noticed that their problems started after
coalbed methane production began. Citizens and county agency employees
also reported that the ``dewatering'' of coal seams that occurs during
production creates several environmental problems, such as: (1)
contamination of wells with methane, hydrogen sulfide, and bacteria;
(2) explosive levels of methane and toxic levels of hydrogen sulfide
accumulating under buildings and in living spaces; (3) spontaneous
combustion and continued burning of completely dewatered coalbeds; and,
(4) flooding from water pumped to the surface.
Based on its discussions with landowners, coalbed methane
production may be negatively impacting drinking water wells. In two of
the most active basins (San Juan and Powder River), drinking water
wells appear to have been negatively impacted because large amounts of
ground water are removed from coalbed formations in order to release
the methane in coal seams. The hydraulic fracturing study conducted by
EPA's UIC Program, however, is narrowly focused on hydraulic fracturing
in coalbed methane wells, and does not address the potential impacts of
ground water removal and subsequent discharge.
Subsequent to these conversations, in July 2001 EPA published a
notice in the Federal Register requesting further information from the
general public. The Agency then sent copies of the notice to nearly 500
local agencies to ensure that communities with aquifers that may have
been impacted by coalbed methane development would contact EPA. EPA
received four responses from counties it had not heard from previously,
but none of these contacts produced information confirming that
drinking water wells had been impacted from hydraulic fracturing
activities. EPA heard from only two county agencies representing
citizens that had contacted EPA to express concern that coalbed methane
development had impacted their drinking water. This low response rate
was not unexpected, however, since each of the Federal Register notices
was accompanied by a cover note explaining our project and a request
that agencies not contact EPA if they had already provided information
to the Agency.
lead: bio-availability of lead sulfides vs lead oxides
Question. What is the bioavailability of lead sulfides as opposed
to lead oxides?
Answer. ``Bioavailability'' is a simple term used to describe a
complex concept. Aside from chemical influences, bioavailability is
also very dependent on particle matrix (micro structure of the
particles) and particle diameter (particle size) as well as
physiological status (pregnancy, age, nutritional status, etc) of the
receptor. It is dependent upon the solubility/availability (both
intensity and capacity) of the compound in an exposure matrix and its
transport (active and passive) across a biological barrier. One
suggested definition is ``that fraction of the total amount of material
in contact with a body portal-of-entry (lung, gut, skin) that enters
the central compartment (blood).'' This is the definition used in the
comparison described below.
EPA Region 8 has evaluated in vivo (swine) bioavailability for a
number of lead contaminated soils as well as soil spiked with lead
minerals. Additionally, the soils have been evaluated by in vitro
bioavailability techniques. Both techniques have illustrated that lead
mineralogy influences bioavailability. Galena (lead sulfide) has low
bioavailability (0-5 percent in vivo Relative Bioavailability) whereas
litharge (lead oxide) has high bioavailability (80-100 percent in vivo
Relative Bioavailability). The Agency considers these bioavailability
factors and other factors, such as particle size and timing of soil/
dust ingestion relative to meals, in making adjustments to the IEUBK
model default value.
lead: lead sulfide in galena form vs lead in oxide form affect on human
body
Question. Does lead sulfide, as it is found in its natural state of
galena and mined to obtain lead, taken up and affect the human body
differently than lead in the oxide form as found in lead-based paint or
emissions from smelting?
Answer. It is reasonable to assume that, all other factors being
the same, lead oxide would dissolve more quickly than equal amounts of
lead sulfide, in an acidic environment. However, small amounts of
either form of lead might completely dissolve, or nearly so, in the
stomach environment over a period of hours. The total amount of dust
and the residence time in the stomach are key factors in this. The
combination of the warm, chemically acidic environment, the constant
agitation, and the 2-3 hour time period virtually assures the
dissolution of the 80-130 mg of small particles ingested per day, which
is the default range of age-related ingestion rates in the Integrated
Exposure Uptake Biokinetic (IEUBK) model (discussed in the following
question). However, as this gastric solution is passed into the
duodenum, a sudden change to a basic pH occurs which, in the presence
of normal amounts of phosphate, causes a precipitation of all lead to
the highly insoluble form of lead pyrophosphate. From this point on,
only about 1 percent of the pyrophosphate lead is available for
absorption in the small intestine at any given time. If larger
particles were ingested that didn't totally dissolve in the stomach,
some of this lead, whether in the sulfide or oxide form, would continue
to be slowly dissolved in the small intestine at different rates and
made available for absorption at different times from ingestion. As the
small amount of soluble lead from both the pyrophosphate and the
partially dissolved particles is absorbed, more lead is dissolved, and
during the total residence time in the small intestine, about eight
hours, about 30 percent of the total amount of lead would be absorbed.
In the IEUBK model, the default absorption percentage is 30 percent
(regardless if ingested as lead sulfide or lead oxide) for lead in both
soil and dust, based on the assumptions discussed here.
lead: potential risk of different forms of lead to regulatory decisions
Question. What information does EPA have on this issue and how does
it analyze and apply the varying potential risk of different forms of
lead to its regulatory decisions?
Answer. EPA has access to the published literature on the topic as
well as knowledge of ongoing work and unpublished data. In performing
risk assessments for childhood exposure to lead (Pb) in support of
regulatory decisions, U.S. EPA routinely uses the Integrated Exposure
Uptake Biokinetic (IEUBK) Model for Lead in children. This model
developed by U.S. EPA's National Center for Environmental Assessment
(NCEA), considers all normal sources of lead in its various chemical
forms. Under current guidance, ``total'' contaminant concentration in
soils is used to establish risk based clean-up levels. In the case of
Pb, the IEUBK model is used to establish acceptable levels of soil Pb.
The IEUBK is designed to predict the probable blood Pb concentration
(PbB) for children between 6 months and 7 years of age who are exposed
to Pb through multiple environmental media (e.g., air, water, soil,
dust, and diet). Using an assumed (30 percent) absolute bioavailability
of soil Pb, the PbB level is estimated by the model.
In the case where there is evidence for a percentage other than the
default 30 percent absorption, the model permits the risk assessor to
make such an adjustment to this parameter, either more or less than the
default 30 percent. Risk assessors are always encouraged to use non-
default parameters in the IEUBK model whenever they can present
scientific evidence to support their use.
EPA Region 8 has encouraged exposure-based monitoring aimed at
quantitative evaluation of site-specific risk. The use of an immature
swine model to estimate site-specific oral Pb bioavailability in
children who are exposed to Pb has been used. Approximately 20
different Pb contaminated soils on 10 different hazardous waste sites
have been analyzed. Preliminary site-specific estimates of relative
soil Pb absorption (relative bioavailability) range from 6 percent to
greater than 85 percent when compared to soluble Pb acetate. These
values translate to 3 percent to 42.5 percent absolute bioavailability,
as used in the IEUBK model. The use of these values in the IEUBK model
rather than the 30 percent default value results in different cleanup
values. For example, a site-specific bioavailability study of Bingham
Creek Utah (costing approximately $100K) provided a bioavailability
factor of 19 percent. The use of the site-specific bioavailability of
19 percent rather than the assumed default value (30 percent) resulted
in reductions in estimated remedial costs on the order of $4 million.
water infrastructure funding: reasonable level of funding to preserve
existing infrastructure
I consider the status of our Nation's water infrastructure as the
most pressing issue facing the EPA, and one of the most important
issues for the Nation, both for quality of life and public health. In
particular, while I support the funding of $850 million for the
Drinking Water State Revolving Fund, I am extremely disappointed that
EPA has requested only $1.212 billion for the Clean Water State
Revolving Fund, a reduction of $138 million from the fiscal year 2002
level.
This is especially troubling since the next EPA Gap Analysis is
expected to confirm the need for some $350 billion in water
infrastructure needs over the next 2 decades. Moreover, outside groups
have indicated that the need could be as high as some $740 billion over
the next 20 years, with $200 billion more in financing and another $980
billion for local governments to maintain and operate this
infrastructure. These additional costs are intended to include the cost
to replace aging and failing infrastructure, activities which are not
currently eligible.
Question. These funding estimates are far in excess of any current
level of funding and likely far in excess of any funding proposed at
least in the foreseeable future. What is a reasonable level of funding
needed to preserve the existing infrastructure?
Answer. The financial demands that communities face in providing
clean and safe water to all Americans are substantial, and the
Administration is committed to helping find ways to meet those demands.
The Federal government has provided more than $80 billion in wastewater
assistance since passage of the Clean Water Act, which has dramatically
increased the number of Americans enjoying better water quality. This
includes replacement of aging and failing infrastructure, which is
certainly an eligible use of the Clean Water State Revolving Fund
(CWSRF) under Section 212 of the Clean Water Act in fact, the CWSRF has
provided some $5.8 billion to repair aging and failing wastewater
collection systems alone.
For fiscal year 2003, the President's requests of $850,000,000 for
the Drinking Water State Revolving Fund and $1,212,000,000 for the
Clean Water State Revolving Fund, for a total of $2,062,000,000, is the
largest-ever combined request for the State Revolving Funds.
EPA's most recent Drinking Water and Clean Water Needs Surveys have
identified $150.9 billion and $150.5 billion, respectively (both in
1999 dollars), in documented needs eligible for SRF assistance in the
coming decades. More recent estimates associated with correcting
sanitary sewer overflows may increase the estimated total Clean Water
needs, and the Agency expects to release a new Clean Water Needs Survey
in August 2002.
Over the past year or so, several stakeholder groups have issued
reports estimating water infrastructure needs that are substantially
higher, based on different methodologies and definitions. With that in
mind, the Agency is actively working to improve information about long-
term infrastructure needs, assess different analytical approaches to
estimating those needs, and estimate the gap between needs and
spending. We expect to release the Agency's Gap Analysis this summer.
While the Agency's Gap Analysis can help quantify the Nation's
infrastructure challenges, the numbers themselves do not take into
consideration how the various roles of Federal, State and local
governments should be balanced. For the last 30 years, Federal, State
and local governments have shared responsibility for infrastructure
financing. Under any funding arrangement, therefore, the vast majority
of future funds likely will come from local sources. It is also
important to reduce capital, operation and maintenance costs through
better management and more efficient service delivery, and by capturing
productivity gains through innovations.
water infrastructure funding: prioritizing funding needs
Question. How should we prioritize the funding needs in the Nation?
For example, what do we do about the aging and obsolete water
infrastructure which is the concern of many cities and communities in
the East and Midwest? How do prioritize these funding needs with new
infrastructure requirements which have been created by the new arsenic
standards?
Answer. EPA recognizes the challenges facing America's communities.
The Agency believes that the touchstone of our strategy to meet these
challenges should be building fiscal sustainability. In particular,
several basic principles should guide our pursuit of clean and safe
water through fiscal sustainability:
Utilizing the private sector and existing programs.--Fostering
greater private sector involvement and encouraging integrated use of
all local, State, and Federal sources for infrastructure financing.
Promoting sustainable systems.--Ensuring the technical, financial,
and managerial capacity of water and wastewater systems, and creating
incentives for service providers to avoid future gaps by adopting best
management practices to improve efficiency and economies of scale, and
reducing the average cost of service for providers.
Encouraging cost-based and affordable rates.--Encouraging rate
structures that cover costs and more fully reflect the cost of service,
while fostering affordable water and wastewater service for low-income
families.
Promoting technology innovation.--Creating incentives to support
research, development, and the use of innovative technologies for
improved services at lower life-cycle costs.
Promoting smart water use.--Encouraging states and service
providers to adopt holistic strategies to manage water on a sustainable
basis, including a greater emphasis on options for reuse and
conservation, efficient nonstructural approaches, and coordination with
state, regional, and local planning.
Promoting watershed-based decision-making.--Encouraging states and
local communities to look at water quality problems and drinking water
source water protection on a watershed scale and to direct funding to
the highest priority projects needed to protect public health and the
environment.
The Agency has developed a comprehensive strategy to help drinking
water systems that are affected by the new arsenic in drinking water
standard. As described in its Report to Congress entitled ``Small
System Arsenic Implementation Issues,'' beginning in fiscal year 2002
the Agency will engage in three major activities: (1) a review EPA's
small system affordability criteria to address affordability concerns
raised by stakeholders and small communities; (2) develop and implement
a small community drinking water assistance plan, which will enhance
small systems' access to financial assistance and expand technical
assistance and training; and (3) spend $20 million over fiscal year
2002 and fiscal year 2003 for research, development, testing and
implementation of effective, practical, and affordable treatment
technologies to reduce compliance costs for drinking water systems
affected by the new arsenic in drinking water standard.
In addition, the Agency will continue its ongoing work with states
to take full advantage of the suite of tools the SDWA provides to help
small systems achieve compliance not only with the arsenic standard,
but with other drinking water standards, including those for microbial
contaminants, disinfectants, and disinfection byproducts, and for radon
and radionuclides. A key component of this work is to maximize the
availability of financial assistance to small systems under the
Drinking Water State Revolving Fund (DWSRF). Finally, EPA and the U.S.
Department of Agriculture (USDA) have signed a Memorandum of Agreement
(MOA), under which USDA's Rural Utilities Service (RUS) commits to
assigning high funding priority to projects that assist small
communities in complying with the new arsenic in drinking water
standard. The Agency further commits to enhance coordination of EPA and
USDA programs to ensure that the maximum possible assistance is
available to small communities for compliance with the new arsenic in
drinking water standard.
superfund cleanup: pace of superfund cleanup
Question. What is the pace of Superfund cleanup compared to recent
years and what can we do to ensure that the cleanup of SF sites are
expedited to the extent possible?
Answer. Conducting cleanups and achieving construction completions
are Agency priorities. The amount of cleanup work the Agency has been
performing during the last few years has been relatively stable.
However, with nearly two thirds of the sites on the NPL cleaned, the
remaining sites are lager and more difficult. (We are enclosing below a
chart that explains Superfund cleanup compared to recent years).
To make sure Agency resources are properly focused to achieve
maximum results, we have initiated a Pipeline Management Review of
Superfund sites that will result in a multi-year, site-specific
strategy to ensure construction progress. Additionally, we are working
to further enhance the ``enforcement first'' approach to increase early
Potentially Responsible Party (PRP) involvement and maximize our use of
PRP-funded special cleanup accounts.
Question. I understand that some states are pushing for greater
control over the SF program. To what extent do you support this
approach and what are the pluses and minuses to greater state control?
Answer. The Superfund program over the past several years has
sought to ensure greater State involvement in the program. We have
worked with states to support the development of State programs, such
as voluntary cleanup programs, with a goal of getting more sites
cleaned up by more people. The maturing of State programs, coupled with
personnel and funding ceilings at the State level, in most cases has
led to mutually agreed upon worksharing, where states and EPA strive to
do the work each is best suited for. Let me provide a few examples.
Since 1996, Superfund has followed a State concurrence policy that
requests State or governor concurrence in decisions to place sites on
the National Priorities List. This builds on fiscal year 1995 and 1996
appropriations language. There has only been one exception to this
policy since 1996. That site remains proposed to the NPL and EPA is
working with the State (Wisconsin) in an effort to address the site
without the need to finalize. Further, states frequently work with EPA
in workshare arrangements where sites are assigned to EPA or the State
for study and possible cleanup.
In March 1998 Superfund published a Plan to Enhance the Role of
States and Tribes in the Superfund Program. This allowed states to
pilot activities that would establish new areas of involvement in the
Superfund program. There were eight State pilots, most centering on the
cleanup part of the process. As a result of the plan, Superfund
developed an internal workgroup to continually explore ways of
enhancing State and tribal roles, and is working with the Association
of State and Territorial Solid Waste Management Officials towards this
end.
Both Superfund and RCRA management are working with State managers
on the Senior Cleanup Council to increase understanding and cooperation
across waste remediation programs. This is an issue that has long been
of concern to states. Finally, the recently-signed Brownfields
legislation requires extensive interaction between EPA and States in an
effort to develop guidance and criteria for implementing the
legislation. States are on a number of workgroups related to
Brownfields legislation needs, limited by the requirements of the
Federal Advisory Committee Act. We anticipate that the opportunity for
states to continue to build and expand their own programs will continue
to have Federal and State programs complement each other.
EPA has been and will continue to be supportive of greater State
involvement because it reduces duplication of effort and makes better
use of resources.
Number of Superfund sites cleaned up each year, 1990 to present
Number of sites cleaned up
Year
1990.............................................................. 8
1991.............................................................. 12
1992.............................................................. 88
1993.............................................................. 68
1994.............................................................. 61
1995.............................................................. 68
1996.............................................................. 64
1997.............................................................. 88
1998.............................................................. 87
1999.............................................................. 85
2000.............................................................. 87
2001.............................................................. 47
2002 target....................................................... 40
2003 target....................................................... 40
superfund cleanup: adequate funds to continue superfund cleanups
Question. How do we ensure there are adequate funds in the future
to continue Superfund cleanups?
Answer. For fiscal year 2002, the President requested $1.3 billion
for the Superfund program, excluding post 9/11 supplemental resource
requests, consistent with the previous year's budget. For fiscal year
2003, the Administration requested a similar budget to enable a
comparable level of activity, while increasing the request for homeland
security resources. The fiscal year 2003 budget will allow Superfund to
continue to make cleanup progress at sites. We are currently
considering what level of funding to request for fiscal year 2004 to
ensure maximum Superfund performance and balance with other
Administration priorities.
climate change kyoto accord
Question. The United States has made it clear that it would not be
bound to the Kyoto Protocol until developing nations are subject to
binding emission targets. This is a key economic concern as well as a
fairness issue. Nevertheless, sound science on global climate change
issues also is key to both the United States domestic policy decisions
on climate change and international agreements. While the EPA is not
the primary Federal agency with regard to U.S. policy on international
climate change issues, the EPA is an important partner in developing
the environmental modeling and scientific research that will be
critical to the continued evolution of U.S. policy. From your
perspective as Administrator of EPA, what is the current status of the
United States' international policy on climate change issues and what
are the key issues and challenges facing the United States?
Answer. Climate change is a complex, long-term challenge that will
require a sustained effort over the long term. The Administration is
opposed to the Kyoto Protocol because it exempts many countries from
its requirements and could cause serious harm to the U.S. economy.
However, America is committed to the United Nations Framework
Convention and its central goal to stabilize atmospheric greenhouse gas
concentrations at a level that will prevent dangerous human
interference with the climate, though, as the President has noted, we
do not yet know what that level is.
The Administration's immediate goal, announced by President Bush on
February 14, is to reduce the greenhouse gas intensity of the U.S.
economy by 18 percent in the next 10 years, thereby slowing the growth
of net emissions as they relate to economic output. While we have yet
to determine what level of ghg concentrations would be dangerous, the
Administration recognizes that achieving long-term stabilization of
atmospheric greenhouse gas concentrations will require as the science
justifies stopping and reversing greenhouse gas emissions growth.
Slowing the growth of these emissions through expanded use of voluntary
initiatives and proposed tax incentives will enable the development of
technology to substantially reduce greenhouse gas emissions in the long
term without the risk of harming the economy in the short term. The
President has also committed that if progress is not sufficient by 2012
and sound science justifies further action, the United States will
respond with additional measures that may include a broad, market-based
program, as well as additional incentives and voluntary measures
designed to accelerate technology development and deployment.
EPA is working to accomplish the President's commitment though
reducing greenhouse gas emissions in partnership with businesses and
consumers through our voluntary programs. We have found that these
programs, such as Energy Star and Natural Gas STAR, can be incredibly
effective, and we have every confidence that they will be able to lead
us toward our goals for emissions reductions. We have also launched new
programs such as Climate Leaders, which enables companies to
voluntarily evaluate their impact on the environment and then act to
change for the better in order to build on the successes of these
voluntary programs.
We are also looking beyond our borders to address this challenge.
The United States has recently reached agreements with Australia and
Canada which will focus on practical and economically efficient
solutions to the climate issue, such as common approaches for emissions
measurement, climate change science, technology development, and
market-based approaches. We have also identified similar areas for
cooperation with Japan and Italy specifically on the development of
climate science and technology. Finally, we have formed Working Groups
on climate change with China and India. The struggle to halt the
effects of climate change does not recognize political boundaries, and
we must work together with interested partners from around the world if
we are going to effectively to address this long term, global issue.
global and cross-border environmental risks
Question. What is EPA doing to minimize pollution in the United
States from pollution hazards originating outside the United States,
such as from Mexico or Canada?
Answer. EPA is actively engaged in a range of activities intended
to reduce, prevent or otherwise minimize the impacts on the U.S.
environment and public health from sources of pollution originating
outside of our borders. The broad responses address a wide range of the
contaminants of concern, a diversity of pollution source types and
media transport mechanisms. EPA's activities include working along our
borders with Canada and Mexico and cooperation with a substantial
number of other countries across a wide area of the globe, for example
by participating in multi-lateral agreements to address identified
regional and global transboundary pollution threats. Many of EPA's
major program offices, regional offices and laboratories are involved
in these efforts, and in many of its endeavors the Agency also
cooperates with other Federal and State agencies, non-governmental
organizations and multilateral/international bodies.
EPA's international efforts include environmental protection
capacity building, technical assistance, technical information
exchange, international monitoring and assessment, cooperative research
and development, and negotiation of international agreements. However,
the specific responses are a function of the particular pollutant's
chemical behavior, media transport mode, nature of the source types and
circumstances of the foreign involvement.
The Agency is also concerned with conducting research and
assessments of new or unaddressed risks, and improving the scientific
basis of our general understanding of the known transboundary
environmental threats, such as the global flows of mercury. EPA has
both internal and international cooperative efforts aimed at improving
our understanding of the problems, including research into the chemical
and physical processes involved in long-range transport and
transformation of pollutants, such as the global flows of mercury. The
Agency also engages in technology development addressing the
international problems.
EPA's major efforts in addressing transboundary pollution impacting
the U.S. mostly fall into the following four broad categories:
--the U.S. border areas with Mexico and Canada and general
cooperation with these immediate U.S. neighbors on
transboundary contamination problems,
--efforts addressing regional Arctic contamination and threats to
Alaska and indigenous populations, mostly from pollution
sources in Russia,
--international cooperation and agreements addressing global sources
of persistent organic pollutants (POPs) and other toxic
substances, and
--very long-range air transport of a variety of pollutants and the
problem of global cycling of mercury
program specifics
U.S. border Areas with Mexico and Canada and General Transboundary
Contamination Cooperation with these Immediate U.S. Neighbors:
U.S.-Mexico
The U.S. and Mexico cooperate on a number of programs to protect
the U.S. from transboundary pollution. Formal cooperation dates back to
1983, when the U.S. and Mexico signed the La Paz Agreement to promote
cooperation for the protection and improvement of the environment in
the border region. This agreement serves as the basis for joint
activities to protect public health and the environment in both the
U.S. and Mexico. Two formal ``environmental plans'' have been
implemented by EPA and its Mexican counterpart, SEMARNAT, and we are
currently working on a plan that will cover the next 10 years. Detailed
information on these activities is available in the U.S.-Mexico Border
XXI Program: Framework Document and the U.S.-Mexico Border XXI Program-
Progress Report 1996-2000. Examples have some of these activities are
provided below:
Air
Binational air quality planning and management activities have been
conducted in the sister cities of San Diego-Tijuana; Imperial Valley-
Mexicali; Nogales-Nogales; and Douglas-Agua Prieta. Recent efforts have
concentrated on establishing and operating air quality monitoring
networks in Tijuana and Mexicali, similar to those operating in San
Diego and Imperial Valley.
A Joint Advisory Council for the Improvement of Air Quality in the
Ciudad Juarez/El Paso/Doa Ana County Air Basin (JAC) was created to
provide locally-based recommendations to the Air Workgroup on how to
manage air quality in the region. The JAC, completed a strategic plan
in May 1999 that includes 26 priorities for improving air quality.
Hazardous Wastes.--The EPA and Mexico's National Ecology Institute
(Instituto Nacional deEcologRa, or INE) have operated the Hazardous
Waste Tracking System (Haztraks) for several years. In 1998, Haztraks
was replaced in Mexico with INE's version of a hazardous waste tracking
system, known as SIRREP (Sistema de Rastreo de Residuos Peligrosos).
The use of both systems has considerably improved the ability to
monitor transboundary hazardous waste shipments in the U.S.-Mexico
border region. It is worth noting that a 1999 study carried by the
Texas Natural Resources Conservation Commission (TNRCC) determined that
the operation of SIRREP and the Haztraks systems is the most effective
way of tracking the movement of hazardous wastes between the two
countries.
A Consultative Mechanism for the Exchange of Information on New and
Existing Facilities for the Management of Hazardous and Radioactive
Waste within 100 Kilometers of the U.S.-Mexico Border has been
developed. This mechanism serves to address public concern on both
sides of the border as it relates to the siting and operation of
hazardous and radioactive waste facilities in the border region. The
agreement will allow for both countries to exchange data and other
information on new and existing treatment, storage, and disposal
facilities for these types of waste in the border region.
In addition to the activities under the border plan, two binational
institutions were set up between the U.S. and Mexico under a
supplemental agreement to the North American Free Trade Agreement
(NAFTA). These institutions are the North American Development Bank
(NADB) and the Border Environment Cooperation Commission (BECC), which
were established to develop and finance solid waste, waste water and
drinking water infrastructure in the border area to reduce the
possibility of cross border pollution. To date, 55 projects have been
certified and more than 30 are either operational or under
construction. When all 55 projects are completed they will serve more
than 9 million people. In Juarez, Mexico a city of over 1 million, the
first wastewater treatment systems are now operational.
The EPA Office of Pesticides Programs (OPP) has a number of
programs and activities concerned with the transport of agricultural
products across the border. These actions have contributed to the
reduction of pesticide residues on the imported agricultural products.
U.S.-Canada
The U.S. and Canada cooperate extensively on monitoring,
assessment, reporting and control and prevention of chemical, physical,
and biological pollution, including increasing their focus and
cooperation on biological pollution (e.g., invasive species of
concern). A great deal of this cooperation includes overarching goals
to better protect many, diverse, shared ecosystems and the public
health of populations (including indigenous peoples) particularly along
the shared extensive border areas, but also in the inland areas of both
countries. In addition, binational cooperation has been underway since
the early 1990s to better protect U.S.-Canada marine regions such as
the Gulf of Maine.
The U.S. and Canada have a long history of working together to
control, reduce, and prevent cross border pollution. The Boundary Water
Treaty of 1909 , which applies along the entire 5,500-mile inland
border area, was in part designed to protect transboundary waters and
U.S.-Canada watersheds, including protecting the public health of
populations in both countries from the adverse effects of water
pollution. Many major projects and activities addressing actual or
potential pollution of transboundary waters continue to be conducted
under the water pollution control and prevention requirements of the
1909 treaty.
Specifically, binational cooperation is underway to fulfill the
treaty requirements for binational surface waters: e.g., St. Croix
River, Lake Champlain, Great Lakes Basin including the Upper St.
Lawrence River, Rainy River, Red and Souris Rivers system, Poplar
River, Flathead River, Columbia River, Puget Sound-Georgia Basin, Taku
River, and the Yukon River. The U.S.-Canada International Joint
Commission (IJC) assists both countries with boundary waters management
and protection for a number of the listed watersheds. 1909 Treaty
cooperative efforts protect the U.S. portions of many shared U.S.-
Canada watersheds.
Since the 1970's up to the present, the U.S. and Canada have
steadily increased their binational cooperative frameworks and
attendant activities along the common border area.. These activities
concerned with improved management and prevention of transboundary
pollution, have been conducted between Federal, provincial, state,
tribal, and some local governments, and frequently include involvement
of the NGO community, the private sector and the general public as
well.
Cooperation with Canada under the Great Lakes Water Quality
Agreement, beginning in 1972, has resulted in substantial progress in
restoring the quality of these important natural resources. Lake Erie,
once considered an ecological wasteland, is now substantially restored,
with fish eating birds, like eagles and ospreys, having made strong
recoveries. DDT and PCB contamination has been reduced by 80 or 90
percent. U.S.-Canada cooperation to protect and restore the Great Lakes
Basin ecosystem includes many goals that serve to better protect U.S.
public health and the U.S. parts of the shared aquatic ecosystems.
EPA Region 5 has the lead on Great Lakes water quality issues, with
many activities conducted or coordinated by the Great Lakes National
Program Office (GLNPO). In addition, Regions 2 and 3, the Office of
Water (OW), the Office of Prevention, Pesticides and Toxic Substances
(OPPTS), as well as the Offices of Research and International Affairs
(ORD and OIA) have all been active in these activities.
Unfortunately, although a lot of progress has occurred, many large
Great Lakes fish are still unsafe to eat due to their accumulating
burden of toxic pollutants. Also, the Great Lakes basin ecosystem is
being subjected to harmful changes due to the effects of a substantial
number of foreign alien invasive species, so that the two countries
continue to address new challenges.
Under the 1991 U.S.-Canada Air Quality Agreement, emissions of
sulphur dioxide and nitrogen oxides (key contributors to acid rain)
have been substantially reduced, benefitting the Northeastern United
States. A recently negotiated annex to the Agreement, signed in
December 2000, will lead to reductions in ground level ozone pollution.
Priority cooperation under the Agreement also covers particulate
matter, ensuring certain existing or proposed point sources of air
pollution along the common area do not cause significant transboundary
air pollution which can harm one side or the other. Efforts are also
underway to protect visibility in natural areas along the border. On
air quality activities, EPA's Office of Air and Radiation (OAR) leads;
other EPA offices involved include ORD and EPA Regions 1,2, 5, 8 and
10.
EPA also is furthering the existing bilateral agreements concerning
mercury and other toxic substances, such as the1997 Great Lakes
Binational Strategy, with the goal of 50 percent reduction in use and
emissions of mercury by 2006. The Northeast Mercury Study of the U.S.
Northeast States and Eastern Canadian Provinces, has focused on
reduction of uses and emissions of mercury and safe management of the
mercury life cycle. In 1997, Canada and the United States signed an
agreement for the Virtual Elimination of Persistent Toxic Substances
(PBTs) in the Great Lakes. The strategy sets long-term goals to promote
emissions reductions of these toxic substances. EPA coordinates the
U.S. activities by engaging all relevant stakeholders, developing
action plans, coordinating reduction activities and reporting on
progress. OPPTS and OSWER in EPA have major involvement in matters
concerning PBTs and other hazardous substances.
The two national governments have established three binational
agreements that cover preparedness and response to pollution release
accidents/emergencies which could arise along the border. These
agreements could also be used by one country, in certain emergency
instances, to call upon the other country to assist with a response to
an emergency which may occur inland away from the binational border.
One of the three agreements covers the four U.S.-Canada marine water
regions and Great Lakes waters for oil and hazardous materials. Another
one covers the rest of the inland border for oil and hazardous
materials. The more recent third one covers radiological emergencies.
Since September 11 , 2001, the two national governments are also
carrying out special cooperation on security issues along the border
and on related domestic issues of common concern related to homeland
security.
North American Trilateral Cooperation between the U.S., Mexico and
Canada
In the 1990s, co-led by the U.S. and Canadian Federal governments,
the U.S. and Canada developed new trilateral cooperation with Mexico to
increase multilateral cooperation on major issues such as persistent
bioaccumulative toxic (PBT) pollutants, their sources, air transport,
fate and deposition. Long-standing shared goals by the U.S. and Canada
under their Great Lakes Water Quality Agreement on PBTs helped catalyze
and focus larger trilateral efforts. The three countries are focusing
together on PBTs and other pollutants, their environmental transport
and other pathways. The U.S. , Canada and Mexico have increased their
consultations and cooperation on the northward migration, or
introduction, of animals, plants, and pathogens not native to North
America (i.e., invasive species), with the shared goal of improving
protection of the biological integrity of many North American
ecosystems, and in the case of some invasive species, to protect the
public health of populations of North America.
In 1993, Canada, Mexico, and the United States established the
Commission for Environmental Cooperation (CEC) under the North American
Agreement on Environmental Cooperation (the NAAEC) to address regional
environmental concerns. The NAAEC complements the environmental
provisions of the North American Free Trade Agreement (NAFTA). The CEC
is facilitating tri-national coordination and cooperation on matters of
cross-border flows of air pollutants, as well as invasive biological
species. Capacity building, public participation, and facilitation of
risk management actions through pollution prevention, market-based
incentives, and technological controls are priorities.
In 2001, two meetings of air quality experts were sponsored by the
CEC to address the exchange of emissions information for criteria air
pollutants and greenhouse gases and to address air quality impacts of
transboundary trade and transport corridors. To support environmental
capacity building, a Mexican association of air quality experts has
been established and a newsletter has been created to inform
stakeholders in Mexico about the air quality program. The CEC is also
providing funding for Mexican participation in the meetings of North
American air quality experts addressing problems common to the three
countries.
Under the auspices of the NAAEC, in 1995, Mexico, Canada and the
United States have developed a regional initiative on the sound
management of chemicals. Under this initiative, CEC has already
established regional action plans for PCBs, DDT, and chlordane and is
developing an action plan for dioxins, furans and hexachlorobenzene.
U.S.EPA provides technical input to these plans and coordinates
relevant capacity building activities, such as providing support for
dioxin measurements, and assisting Mexico with obtaining international
funding to address DDT stockpiles.
In 2001, the CEC air program collaborated with the Sound Management
of Chemicals (SMOC) program and developed a national mercury air
emissions inventory in Mexico. It is being combined with the national
inventories in Canada and the United States to give a continental
perspective for the globally cycling pollutant. Data comparability and
information access are key to its success.
In addition to mercury, air quality experts in the three countries
are developing inventories for sulfur dioxide, nitrogen oxides, carbon
monoxide, volatile organic compounds, particulate aerosols, and
greenhouse gases. They are also developing plans to obtain the needed
information through monitoring and other implementation tools for any
significant data gaps that may be identified.
Under SMOC, the North American Regional Action Plan (NARAP) on
monitoring and assessment of persistent toxic substances, with a
leading effort addressing mercury, is being carried out through a tri-
national task force of experts, with peer reviewed and published
results. The monitoring effort is being coordinated with the
development of EPA's routine monitoring strategy, and another important
component is focusing on family and child environmental health
indicators and monitoring parameters for mercury and other PBTs.
Workshops facilitate the progress in the assessments and capacity
building, and a leveraging of funds supports the implementation for
phase 2 of the mercury NARAP, and those for DDT and PCBs, dioxins,
furans and hexachlorobenzene. These are all being examined to ensure
that objectives are met.
Consideration also is being given to how the CEC, and particularly
SMOC, could facilitate the regional implementation by the Parties to
the 2001 Stockholm Convention on Persistent Organic Pollutants. The
effects of persistent toxics on wildlife are being monitored as well as
human health endpoints. A North American Pollutant Release and Transfer
Register project addresses the sources, handling and stewardship of
toxic chemicals from industrial activities in North America, and allows
for better management of these transboundary pollutants.
EPA's Office of International Affairs has the overall Agency lead
on environmental issues concerning the U.S.-Mexico border. There is
also major participation by EPA's Office of Water (OW), OPPTs and most
EPA Regions. Other EPA program offices are also involved to varying
degrees.
Regional Cooperation Addressing Contamination Threats to Alaska and
the Arctic, Including Indigenous Populations:
The fragile Arctic environment and ecosystems, Alaska and
indigenous populations are threatened by transboundary contamination
mostly from sources in Russia. Transboundary transport mechanisms
include atmospheric and ocean circulation and biological transmission
through the Arctic food chain. The Russian contaminant sources are
largely a legacy of the Soviet Union's armaments and military
activities in the far North, the Cold War era industrial/agricultural
infrastructure and practices, and related un-managed waste. The
principal contaminant sources of concern include radioactive waste and
spent nuclear fuel, PCBs mostly from the power grid system, dioxins/
furans from incinerators and industrial sources, obsolete pesticides
from huge collective farm era stockpiles, and heavy metals such as lead
and mercury from industrial activities.
In the 1990's Russia had the highest concentrations of unsecured
Cold War legacy radioactive waste in the world, and very little waste
management infrastructure to address the deteriorating situation. The
problems mounted rapidly as the nuclear submarine dismantlement program
obligatory under the START treaty continued to generate large amounts
of radioactive waste and unsecured spent nuclear fuel. Russia dumped
the low-level liquid radioactive waste produced in the submarine
decommissioning and dismantlement process in the Arctic, while the
spent nuclear fuel accumulated in unsecured circumstance at Arctic
coastal sites in Northwest Russia.
Under an EPA initiative responding to a Russian request for
assistance, the U.S. (EPA, DOS/AID, DOD, and DOE) undertook in 1994 a
multilateral project with Russia and Norway to upgrade and expand
Russia's only operational radioactive liquid waste processing facility
(originally developed for the Russian nuclear icebreaker fleet) to
process the low-level liquid waste from the nuclear submarine
disarmament program. The facility is now undergoing final operational
testing and Russia terminated all ocean dumping of radioactive liquid
waste since the start of the project.
The unsecured spent nuclear fuel in the Russian Northwest
constitutes 95 percent of the high level radioactive waste threat to
the Arctic environment. EPA proposed the development of a prototype
transportable spent nuclear fuel dry storage cask as a means of
securing Russia's inventory of spent nuclear fuel arising from the
decommissioning and dismantlement of large portions of their strategic
submarine fleet under START. The U.S. nuclear power industry had
pioneered dry cask storage, and the EPA proposal was to develop a low-
cost prototype transportable storage cask for use in Russia, based on a
unique Russian concrete-metal cask concept.
The Transportable Spent Nuclear Fuel Storage Cask Project was
organized as a trilateral effort between the U.S., Russia and Norway
under a military environmental cooperation declaration involving the
three countries and lead by their respective defense establishments.
For the U.S., the effort has involved cooperation among DOD, EPA, DOE
and DOS. The successful testing of the prototype cask has caused serial
production to start under separate programs within Russia and,
bilaterally, as part of the cooperative threat reduction efforts
between Russia and the U.S. A prototype concrete storage pad was
proposed by EPA to hold the loaded casks. This portion of the
cooperative program is also nearing completion.
Since 1998, the EPA multilateral strategy on Arctic contamination
has been shifting emphasis to the problem of non-radioactive chemical
threats to the Arctic environment and Alaska emanating from Russia's
Cold war era legacy. The U.S. proposed a three phased project to the
Arctic Council to assist Russia in addressing its PCB problems: (1)
development of a PCB inventory for the Russian Federation, with
emphasis on sources potentially impacting the Arctic, (2) assessment/
feasibility of available technologies to address the particular major
source problems identified by Russia, (3) selection and demonstration
of at least one technology addressing one or more major source
categories.
The Russian PCB Project was endorsed as an official project of the
Council's new Arctic Council Action Plan and EPA was asked to provide
the project technical lead. The project has received funding from EPA
and DOS plus all other Arctic nations and the Netherlands. The first
(inventory) phase is now completed and the second phase is nearing
completion, with the focus on PCB destruction technologies and
alternative dielectric fluids. The project model is being applied under
the Arctic Council to ``Russian Sources of Dioxin/Furans'' under
Swedish project lead and U.S./EPA co-lead and to ``Obsolete Pesticides
in Russia'' under U.S./EPA project lead.
International Cooperation and Agreements Addressing Global Sources
of Persistent Organic Pollutants (POPs) and Other Toxic Substances:
Many Persistent Organic Pollutants (POPs) are subject to long-range
transport processes, and consequently pose a common threat to human
health and the environment ( particularly sensitive ecosystems), all
over the world. The United States has taken a leading role to reduce
and/or eliminate POPs and their releases on a regional and global
basis. In 2001, the U.S. signed the Stockholm Convention on POPs and is
working to ratify the treaty. The 1997 Canada-U.S. agreement for the
Virtual Elimination of Persistent Toxic Substances in the Great Lakes
and the and the 1993 tri-national NAAEC agreement between the U.S.,
Mexico and Canada and establishment of the CEC have all been discussed
previously.
Since the early 1990's, EPA has been involved with activities
concerned with identifying and quantifying sources of contamination
impacting the Arctic environment, ecosystems and populations under the
Arctic Environmental Protection Strategy (AEPS). Subsequently, the AEPS
was subsumed under the Arctic Council, a consultative mechanism whereby
the eight Arctic nations collaborate and, for example, provide
assistance to Russia in meeting environmental goals.
In 1998, the United States signed the legally binding regional
protocol with other members nations of the United Nations Economic
commission for Europe (UNECE) on POPs under the Convention on Long-
Range Transboundary Air Pollution. This agreement seeks to eliminate
production and reduce emissions of POPs in the UNECE region and
addresses the 12 Stockholm Convention POPs and 4 additional chemicals
(hexachlorocyclohexanes, hexabromobiphenyl, chlordecone, and polycyclic
aromatic hydrocarbons). U.S. EPA is involved in ensuring the U.S. meets
the obligations of the protocol and is actively engaged in the
scientific assessment of potential additional chemicals. The EPA also
continues activities under the Convention on Long-Range Transboundary
Air Pollutants (LRTAP Convention) Heavy Metals Protocol, signed by the
U.S. in June 1998 and ratified in January 2001, whereby nations of the
UN Economic Commission for Europe agree to control emissions of
mercury, lead and cadmium.
EPA has initiated activities (previously described) under the
Arctic Council/Arctic Council Action Plan (ACAP) intended to assist
Russia in accepting and implementing the LRTAP protocols, as well as
the Stockholm Convention. Russia has now signed the Stockholm
Convention. The United States has also provided technical and financial
assistance for POPs-related activities to a variety of countries
besides Russia and regions other than the Arctic, including Mexico,
Central and South America, Asia, and Africa. Examples of this
assistance include projects led by the U.S.EPA on the development of
dioxin and furan release inventories in Russia and Asia, the Chemicals
Information Exchange and Networking Project for chemical managers in
targeted countries in Africa and Central America, the destruction of
pesticide stockpiles in Africa and Russia, and the reduction of PCB
sources in Russia and the Philippines.
Other international work has addressed trade in hazardous
substances, some of which are POPs. The United States, along with 71
other countries and the European Community, have signed the Rotterdam
Convention on the Prior Informed Consent (PIC) Procedure for Certain
Hazardous Chemicals and Pesticides in International Trade, building on
a 10-year-old voluntary program. The PIC Convention identifies
pesticides and industrial chemicals of concern, facilitates information
sharing about their risks, and provides countries with an opportunity
to make informed decisions about whether they should be imported. U.S.
EPA has been actively involved in the voluntary program by engaging in
the development and implementation of the PIC procedure.
The following two successful projects, are examples of efforts
involving EPA that the U.S. has supported within a regional context, in
cooperation with other organizations and countries:
Connecting POPs Managers Via the Internet: the Chemicals Information
Exchange Network (CIEN)
In a partnership with the United Nations Environment Programme
(UNEP), and funding from the U.S. State Department, U.S.EPA is
providing Internet access and training to chemical management officials
and other stakeholders in Africa. Africa was chosen for initial focus
because it is the continent with the lowest Internet connectivity and
the greatest need. It is planned that the project will be expanded to
Central America in the near future, and beyond that as resources become
available. Internet access will assist implementation of the Stockholm
Convention by providing POPs chemical information to decision-makers.
Internet access also will enable chemical and pesticide regulators, as
well as health and safety ministries, to access information on best
practices and funding opportunities, and will allow them to promote
regional cooperation and action plan development. EPA is also
participating in the information Exchange Network on Capacity Building
for Sound Management of Chemicals (INFOCAP) under the auspices of the
Intergovernmental Forum on Chemical Safety.
PCBs in Russia
The U.S. State Department has funded and U.S.EPA is implementing a
project in Russia to address environmental problems resulting from the
manufacture and industrial use of PCBs. Partners in this effort include
Norway, Denmark, Sweden, the United Nations Environment Programme
(UNEP), and the Arctic Council. The project aims to reduce emissions of
PCBs and enable Russia to meet the requirements of both the Stockholm
Convention and the LRTAP POPs Protocol. The project involved conducting
a PCB inventory, the results of which were presented at an official
ceremony at the Norwegian Embassy in Moscow in September 2000. It will
also entail a demonstration project to evaluate and showcase a selected
PCB destruction technology.
Very Long-Range Air Transport of Pollutants and Global Cycling of
Mercury:
Very long-range air transport of pollutants and the global cycling
of mercury is a rapidly growing area of attention for the U.S. and
other countries. At the present time these matters, are heavily
concerned with research, monitoring and development. EPA has taken many
steps to better understand the sources and mechanisms of long-range
transport of persistent bioaccumulative toxic (PBT) substances and
other air pollutants, as well as undertaking some initial steps in
developing co-benefit technologies for emissions control, promoting
pollution prevention.
In May 2000, the EPA Office of International Affairs (OIA) and the
Office of Air (OAR) initiated an agency-wide workgroup on the
International Transport of Air Pollutants (ITAP). The first year was
devoted to developing an appreciation for all the activities ongoing
within the Agency related to long-range transboundary transport,
including monitoring, modeling, emissions inventory development,
control technology development, technology and information transfer,
and analysis related to international policy development.
In July 2000, OIA, with support funding from OAR and the Office of
Research and Development (ORD), co-sponsored the First International
Conference on Trans-Pacific Transport of Atmospheric Contaminants,
involving scientists from both sides of the Pacific Basin, including
China, Japan, Russia, South Korea, Canada, and the U.S. The conference
discussed the state of science on long-range atmospheric transport in
the North Pacific region, identified uncertainties and gaps in our
knowledge, and promoted a network of individuals and organizations
interested in these issues to further international collaboration.
In June 2001, OAR co-sponsored a workshop with Environment Canada
entitled ``Photo-oxidants, Particles, and Haze Across the Arctic and
North Atlantic: Transport Observations and Models.'' This conference
was conducted as part of the U.S. participation in the Convention on
Long Range Transboundary Air Pollution (LRTAP Convention) and the
Arctic Monitoring and Assessment Program (AMAP) under the Arctic
Council. The meeting focused on identifying the research needed to
quantify the sources-receptor relationships for ozone and fine particle
transport across the North Atlantic and Arctic.
EPA is currently shaping a PBT routine monitoring strategy,
coordinating with other agencies, states, tribes, intergovernmental
organizations and the private sector, which will incorporate the
international dimension. Such a strategy will help establish trends for
long-range transport, and also help us evaluate effectiveness of our
risk management actions.
For mercury specifically, the Agency priority pollutant which
cycles globally, ORD was instrumental in developing new methods for
measuring the various species to assess long-range transport
mechanisms. EPA is developing state-of-the-art knowledge about
transformation of mercury into various species in the atmosphere and
the transport consequences. The species determines distance traveled
and ultimate fate. Research utilizing these new analytical methods has
been ongoing in South Florida, Cheeka Peak, Washington; Barrow, Alaska;
and Mauna Loa, Hawaii to distinguish local sources of mercury from
external sources. These studies have involved the first aerial
measurements and studies at elevation as well as at ground level.
In regard to pollution emissions minimization abroad, OIA is
sponsoring a mercury-SO2 co-benefit demonstration project at
a small coal-fired facility in Russia, in order to evaluate the
effectiveness of emissions reduction using an electrostatic
precipitator (ESP) add-on system. If the expected minimum of 50 percent
reduction in mercury is achieved, it will be possible to utilize this
low-technology approach in many countries where similar Russian ESP
systems are in place. Additionally, a higher technology, although
higher cost, approach has also been identified which is expected to
reduce mercury by 99 percent in conjunction with SO2
reduction, is being considered for application in China.
In conjunction with the Department of State Cooperative Threat
Reduction Program, OIA has initiated development of a proposal for
mercury bioremediation at a former chloralkali facility in Kazakhstan,
and in preparation for this project, sponsored a meeting in May 2002 of
all scientists engaged in mercury research and pollution prevention in
Kazakhstan and the neighboring countries of Kyrgystan, Azerbaijan, and
Russia.
The Office of International Affairs also played an instrumental
role with Department of State during the UNEP Governing Council session
in February 2002, at which UNEP launched a global mercury assessment,
with a technical report and set of alternatives for decisions to be
presented to the February 2003 UNEP Governing Council.
pesticides
Question. The administration is again proposing to replace
appropriations to fund the pesticides reregistration program with a
fee-based system. Many small businesses believe that a fee registration
program would hurt their economic viability and place them at an unfair
business disadvantage to larger businesses. How would the EPA address
these concerns?
Answer. There are a few different fee programs in the pesticide
program. All of the programs have provisions for reduced fees or
waivers for companies that are small businesses or can demonstrate
economic hardship. The various fees are discussed below.
Registration Fees.--These fees were originally enacted in 1988 and
immediately suspended by amendments to the Federal Insecticide,
Fungicide and Rodenticide Act (FIFRA) in 1988. However, that
prohibition expired in September 2001 and was renewed for 1 year by the
Congress. These fees could not be used for pesticide reregistration,
since they are based on recovering costs of the registration program.
The fees are currently set up to go directly into the Environmental
Services account at Treasury. While the receipts could be separately
appropriated to the Agency, generally such fees are deposited to
Treasury and are not available to the Agency. When last in effect, the
registration fee rule provided for fee waivers or refunds in whole or
in part for minor uses, if the action was in the public interest, or
upon request by the applicant if they can demonstrate severe economic
impact.
Reregistration/Maintenance Fee.--Reregistration/maintenance fees
were first introduced in FIFRA 1988 and re-authorized in Food Quality
Protection Act (FQPA). This fee will expire on September 30, 2002. The
maintenance fee addresses small business concerns in two ways. First,
the per product fee for each registrant's first product is discounted
by 50 percent. In fiscal year 2002, the fee structure was $1,225 for
the first product and $2,550 for each subsequent product. Second, the
fee structure includes caps. No registrant pays more than $55,000 for
their first 50 products and $95,000 total. For small businesses these
caps are set at $38,500 for the first 50 products and $66,500 total.
Although all companies not paying at one of the caps benefit from this
discount, it especially helps the nearly 800 companies that pay for
only one product.
Tolerance Fees.--The proposed fee is authorized by FQPA 1996
amendments to FIFRA and Federal Food, Drug and Cosmetic Act (FFDCA).
The proposed rule essentially updates the existing tolerance fees. This
fee is intended to recover all costs for processing tolerance actions,
including petitions and reassessed tolerances. The fee is structured so
that the first tolerance of an active ingredient (a single ingredient
may have many tolerances) would be assessed the highest fee, then
quickly diminish per each successive tolerance relating to the active
ingredient. The proposed rule was published in the Federal Register on
June 6, 1999 (OPP-30115), however in 2000, 2001 and 2002, Congress
prohibited EPA from promulgating a final tolerance fee rule.
The proposed rule provides that the Administrator may grant a
waiver on a case by case basis when requested in writing by the
petitioner or registrant, for an application for a tolerance or a
tolerance reassessment action that meet the criteria for safer
products, products that are in the public interest, and registrants who
can demonstrate an economic hardship. The concerns of small business
would be one of the Agency's priorities in reviewing the requests.
______
Questions Submitted by Senator Pete V. Domenici
environmental air quality: contribution to public health burden
Question. In the environmental air quality arena, most of the
Agency's research effort is being directed toward understanding the
health effects of fine particles. This effort responds to congressional
direction and current public concerns, and is based on the
epidemiological evidence that airborne particles are statistically
associated with death and illness. Yet, all recent studies that examine
the effects of multiple air pollutants indicate that not only
particles, but also other air pollutants are associated with death and
illness. Is it not true that many air pollutants are likely to
contribute to the public health burden?
Answer. We agree that many air pollutants are likely to contribute
to the public health burden of air pollution. For example, recent
National Scale Assessment of air toxics based on 1996 data revealed
several pollutants with health risks to the American population. The
third external review draft of the Air Quality Criteria Document for
Particulate Matter summarizes the body of science associating fine
particles (and other air pollutants) with death and illness. This draft
has recently been released and will be undergoing review by the EPA's
Science Advisory Boards CASAC Committee. The document evaluates the
strength and coherence of the statistical associations between health
effects and particulate matter (PM). The extent that the associations
with PM also apply or are confounded by other pollutants is a matter of
much debate and continued research. In general, associations of health
effects with air pollutants seem to be dominated by PM, with occasional
emergence of other pollutants as co-factors or appearing as an equal
determinant. These co-pollutants have ranged from nitrogen dioxide to
sulfur dioxide to carbon monoxide depending on study venue. But these
co-pollutants have been of inconsistent importance, suggesting that
they may indeed be important considerations but are likely of secondary
contribution. The extent to which toxicological evidence has provided
biological plausibility to the findings regarding PM supports this
contention.
environmental air quality: effect of air pollutants and contaminants
Question. What is the Agency doing to determine how the mixtures of
air pollutants that people actually breathe affect health, and which of
the hundreds of air contaminants are most important?
Answer. Several of the Agency's current research efforts relate to
understanding how complex air pollutant mixtures affect health.
Particulate matter (PM) is itself a complex mixture of components
contributed by various air shed sources and secondary transformations.
The health effects research under EPA's PM research program will help
our understanding of the observed excess mortality and morbidity
associated with particulate air pollution. This research is evaluating
the contributions of individual constituents as well source-attributed
mixtures in both epidemiological and toxicological studies. Results
from these studies will help: (1) determine the biological mechanisms
underlying PM-related effects; (2) identify which PM components (or
sources) are most responsible for health effects; and (3) quantify the
factors affecting susceptibility in the population. In addition,
research to elucidate whether, and to what extent, the effects
attributed to PM exposures are confounded by other commonly occurring
pollutants such as SO2 and ozone will be performed to
improve interpretation of the epidemiological studies on which the
NAAQS are based.
The Agency also has additional efforts underway to understand and
quantify air pollution risks in the air toxics program. Air toxics
research covered by the draft Air Toxics Research Strategy (ATRS) and
the draft Air Toxics Multi-Year Plan (MYP) have grouped and prioritized
air toxics to aid in determining risk across multiple scales and from
stationary (residual risk), mobile, and indoor air sources. The ATRS
also identifies key research directions for mixtures including
identification of those not following the default assumption of
additive toxicity and identification of the constituent interactions of
mixtures.
environmental air quality: incorporating national environmental
respiratory center research strategy into agency's assessment of public
health burden and future regulatory strategies
Question. In New Mexico, the National Environmental Respiratory
Center (NERC) is pursuing a strong research strategy aimed at
dissecting the contributions of many different classes of air
pollutants to the death and illness associated statistically with
airborne particles and the few other pollutants that are measured
routinely. How does the Agency plan to incorporate this program into
its assessment of the public health burden from air pollution, and the
future regulatory strategies that may be required to address multi-
pollutant effects?
Answer. EPA believes the research approach taken by the NERC will
eventually provide important insights into appropriate approaches to
addressing multiple air pollutants. One way we are involved in NERC is
our active representation on the Scientific Advisory Committee of the
NERC, which meets twice a year to advise the program on its strategic
plan as well as to review program progress. This involvement
incorporates the Agency view and communicates program status back to
the Agency.
As the NERC recognizes, the assessment of the health effects of air
pollution is complicated by its complex nature. The regulatory
approaches taken by EPA have focused both on single pollutant classes
as in the National Ambient Air Quality Standards (NAAQS; e.g., ozone,
lead, SO2, etc.) as well as control of complex mixtures that
are emitted from a number of regulated source categories. Even the
NAAQS regulations often result in multiple pollutant control, and at
least one NAAQS pollutant, particulate matter, is itself a complex
mixture. Reductions of multiple pollutants in these programs has
undoubtedly benefitted public health, but we need more information on
pollutant and source combinations to improve both the effectiveness and
efficiency of such programs. As the approach of the NERC to the study
of air pollutants, which is inclusive of the complex emissions of
sources, is complicated by design, analyses of the findings is also
complicated. However, there is growing interest in the integrated
control of air pollution by source,' and when paired with new
statistical applications (e.g., principal component analyses) to both
epidemiological and toxicological studies of complex mixture exposures,
we anticipated that the more complete understanding of source
contributions to health rather than individual pollutants will lead to
significant advances in public health protection.
EPA is paying close attention to how these research developments
can inform and improve air quality management. At present there is no
clear best method' for incorporating the health impacts of complex
source emissions, since often multiple sources emit the same pollutants
in varying quantities and under various conditions of operation.
Appreciating how source emissions affects health is also complicated by
factors such as aging of the atmosphere, photochemical processes, and
multiple source contributions. Yet, it is clear that health will be
better protected if the entire matrix of a polluted air shed can be
considered in developing control strategies and our understanding of
source-based health impacts will allow the Agency to target pollutant
control with greater efficacy and reduced overall cost to governments
and the economy.
One non-regulatory area in which we would like to consider multiple
pollutants is the system for providing air quality information to the
public. Currently, public notices on daily air quality are usually
driven by an individual pollutants, reported to the media as an Air
Quality Index that can be better appreciated by the lay community. We
are currently examining research from NERC, EPA's internal research
program and other programs to determine whether and how the current
index might be modified to differentiate the message when multiple as
opposed to single pollutants are elevated. This examination will help
us formulate additional research questions for NERC and others to
facilitate improved public health communication in the future.
environmental air quality: research to understand health effects
Question. The Agency's air pollution research tends to focus on a
few classes of pollutants, such as particles, that are reviewed,
debated, and regulated one-at-a-time. Although the single-pollutant
approach stems from the language of the Clean Air Act, which has
certainly helped to clean up the air, epidemiological studies have now
made it clear that all routinely measured air pollutants are associated
to some degree with death and illness. These are signals that the
single-pollutant approach may not continue to serve us well in the
future. What research is the Agency supporting to understand the health
effects of the much larger number of air pollutants that people
actually breathe every day?
Answer. The Agency supports both single pollutant and multiple
pollutant research. Epidemiology studies, by their very nature, include
multiple pollutants in their analyses of health outcomes. By and large,
a single pollutant (usually PM or ozone) dominate the responses, but
other pollutants also have an impact on the outcomes and the importance
of these multiple factors is widely appreciated and considered in the
risk assessments. Additionally, both panel/field (human) and laboratory
toxicological studies (both human and animal) that incorporate mixture
approaches are supported with the view that complex air pollution
exposure scenarios are the reality. The Agency's involvement with the
National Environmental Respiratory Center in New Mexico provides one
example where this ``top-down'' approach to the study of emission
mixtures is currently be employed. Analogous and complementary studies
with fuel oil and coal emissions are being studied intramurally by EPA.
There is growing appreciation of the potential for source-based
analyses of exposures in the field and the laboratory (e.g.,
concentrated air particulate exposure units) to improve understanding
of health effects and control opportunities. These analyses are gaining
in importance in study design and assessments.
In addition the draft Air Toxics Research Strategy and draft Multi-
Year Plan have grouped and prioritized the 188 air toxics listed in the
Clean Air Act Amendments of 1990 as a way that allows health effects
research to focus on those associated with the likely worst health
effects. For example, research in the areas of mode of action, shape of
dose response curves, irritancy of the respiratory system, and
physiologically-based pharmacokinetic models have potentially broad
application across several air pollutants.
environmental air quality: national environmental respiratory center
incorporated into agency's strategy for understanding effects of
complex air pollutant mixtures
Question. How does the Agency propose to incorporate the forward-
looking multi-pollutant research of the National Environmental
Respiratory Center in New Mexico into its strategy for understanding
the effects of complex air pollution mixtures?--And evaluating how
regulatory strategies may need to evolve in the future?
Answer. The NERC recognizes that the assessment of the health
effects of air pollution is complicated by its complex nature. As
stated in Question 3 above, EPA believes the research approach taken by
the NERC will yield insights into appropriate approaches to managing
multiple air pollutants as well as information on pollutant and source
combinations that can improve both the effectiveness and efficiency of
our regulatory programs. There is growing interest in the integrated
control of air pollution by source', and when paired with new
statistical applications (e.g., principal component analyses) to both
epidemiological and toxicological studies of complex mixture exposures,
we anticipate that a more complete understanding of source
contributions to health rather than individual pollutants will lead to
significant advances in public health protection.
EPA is paying close attention to how these research developments
can inform and improve air quality management. At present there is no
clear best method' for incorporating the health impacts of complex
source emissions, since often multiple sources emit the same pollutants
in varying quantities and under various conditions of operation.
Understanding how source emissions affect health is also complicated by
factors such as aging of the atmosphere, photochemical processes, and
multiple source contributions. Yet, it is clear that health will be
better protected if the entire matrix of a polluted air shed can be
considered in developing control strategies, and our understanding of
source-based health impacts will allow the Agency to target pollutant
control with greater efficacy and reduced overall cost to governments
and the economy.
______
Questions Submitted by Senator Patty Murray
coeur d'alene basin: final record of decision (rod)
Question. Is the EPA still planning to issue the final Record of
Decision (ROD) for the Coeur d'Alene Basin this summer? Has EPA
responded to the Idaho delegation's request for an NAS study on EPA's
proposed ROD and for a delay in the final ROD? If not, when does EPA
expect to respond? If so, what was EPA's response?
Answer. EPA Region 10 still intends to issue the Record of Decision
(ROD) for the Coeur d'Alene Basin this summer. In letters dated April
15, 2002, Regional Administrator John Iani replied to the Idaho
congressional delegation's requests for a ROD delay and an NAS study.
The reply assured the delegation that EPA is working closely with the
State of Idaho regarding their concerns on the ROD, and is also
supportive of the State's recently formed Coeur d'Alene Basin
Improvement Environmental Project Commission. EPA welcomes an
independent review by the NAS but would like to move forward with the
ROD with a commitment to modify the ROD in the future based on any new
information or findings.
In addition, EPA is working with the Federal trustees, tribes,
local communities, the State of Washington and other stakeholders.
superfund tax: administration's opposition to tax chemical and
petroleum industries
Question. Is the Administration still opposed to reinstating the
Superfund tax on the chemical and petroleum industries?
Answer. A number of years have passed since the Superfund taxes
expired. Although the Superfund taxes expired, the annual
appropriations for the program have remained relatively steady. It is
important to note, that the expiration of the taxes has not affected
the appropriated funding for the Superfund program. I am confident that
Congress and the Administration will continue to work together to
provide appropriate funding for the Superfund program.
The Administration continues its strong commitment to the polluter
pays principle. In fiscal year 2001 EPA successfully managed the
Superfund enforcement program whereby 70 percent of Superfund long-term
cleanups at non-Federal facility sites are performed or paid for by
parties responsible for the contamination (PRPs). Last year (fiscal
year 2001), EPA produced a near record amount in private party cleanup
commitments for cleanup and cost recovery--$1.7 billion--an increase
from the previous year of almost $300 million. Of the $1.7 billion, EPA
obtained commitments from PRPs to reimburse EPA $413 million in past
cleanup costs--a large increase from the $145 million achieved in the
previous year.
superfund cleanup: adequate funding in fiscal year 2003 for washington
state superfund cleanups
Question. I am concerned that the Administration has not requested
enough funding for Superfund to keep cleanups in Washington state (and
throughout the nation) on schedule--I am especially concerned about
potential slowdowns at the Asarco site in Tacoma, Washington, and the
Midnight Mine site on the Spokane Reservation. Will the
Administration's request of $1.29 billion for Superfund in fiscal year
2003 provide enough additional funds to ensure that Superfund cleanups
in Washington state are not delayed because of insufficient funding?
Answer. Status of Asarco.--Based on the current schedule,
approximately $60 million in work is scheduled in the next 3 years.
This includes completion of excavation and filling the onsite landfill,
armoring the shoreline, completion of cleanup of approximately 500
yards, and beginning offshore sediment remediation. Asarco has been
identified as the Potentially Responsible Party (PRP), and the Agency
is working to have Asarco as the fund lead for this site. However,
Asarco currently does not have funds to do more than a fraction of the
work. Due to the financial situation of the PRP, the burden of
completing the cleanup may, at some point in the future, fall on the
Superfund program.
Status of Midnight Mine.--Contaminated water emerging from the
Midnight mine is currently captured for treatment in an on-site
treatment system; however, a long-term solution is needed to address
the site as a whole. Data evaluation, hydrologic modeling and
preparation of the remedial investigation report are currently
underway. Human and ecological risk assessments and a feasibility study
of cleanup alternatives will be initiated in fiscal year 2003. The
schedule for completion of the study and selection of a remedy will be
based on EPA regional funding allocations and priorities for fiscal
year 2003 and beyond. EPA continues to work with the Spokane Tribe on
the issues surrounding this complex site. The Agency is also attempting
identify PRPs to conduct the cleanup.
asbestos: libby, montana asbestos clean-up
Question. What is the Administration's request for funding in
fiscal year 2003 to clean up contaminant asbestos from Libby, Montana?
What is the Administration's request to address broader issues
surrounding asbestos, such as implementing recommendations from the
EPA's Inspector General (for example, creating the Blue Ribbon Panel on
Asbestos, updating EPA's IRIS for asbestos, developing a NESHAP for
contaminant asbestos etc.).
Answer. EPA has committed more than $60 million in fiscal years
2000 through 2002 for environmental investigations, cleanup actions and
medical investigations in Libby. Current estimates place fiscal year
2003 needs at approximately $21 million. These projections include many
assumptions about the number of homes or additional properties which
may require clean up, and may be subject to significant revision as
field work progresses.
In addition to the Administration's request for funding in fiscal
year 2003 to clean up contaminant asbestos from Libby, Montana, EPA's
fiscal year 2003 request also addresses the broader issues surrounding
asbestos, which includes funding for implementing recommendations from
the EPA Inspector General's report and recommendations to be developed
in 2002 by a Blue Ribbon Panel, and funding for other actions to reduce
potential asbestos risks, such as lung cancer, asbestosis, and
mesothelioma.
EPA recently signed a cooperative agreement with former EPA Deputy
Administrator Hank Habicht and the Global Environment Technology
Foundation to convene a Blue Ribbon Panel (formerly the Asbestos Focus
Group) of national experts to provide the Agency with guidance on how
best to respond . Discussions are currently underway to identify the
team of national experts that will comprise the Panel. The panel is
expected to meet several times over the course of the next several
months.
In response to the Inspector General's report EPA also created an
Asbestos Coordination Team (ACT) to facilitate internal and external
communications and information sharing on asbestos issues. EPA is also
a member of the OMNE committee (consisting of the Occupational Safe and
Health Agency [OSHA], the Mine Safety and Health Administraion [MSHA],
the National Institute for Occupational Safety and Health [NIOSH] and
the Environmental Protection Agency [EPA]) within the Department of
Labor to coordinate on asbestos and other worker chemical safety
issues.
Other actions EPA has already taken or will take in 2002 and 2003
to reduce asbestos risks include updating lists of producers and
processors of vermiculite, reviewing and updating other pertinent
documents and studies, and developing a product sampling and analysis
plan for gardening products and home attic insulation. EPA published
its horticultural study of vermiculite products in August, 2000. The
results indicated that, in general, the use of these products poses
minimal risk to recreational gardeners, but there may be cause for
concern for occupational exposures. EPA's study of asbestos
contaminated vermiculite home attic insulation began in January 2001,
is being peer reviewed in July and August 2002, and is expected to be
published in September 2002.
asbestos: broadening and changing the definition of asbestos
Question. Does EPA have any plans at this time to look into
broadening and/or changing the definition of asbestos to include
nonasbestiform varieties and/or additional minerals which may pose
health threats?
Answer. EPA's Office of Research and Development is updating the
Agency's Integrated Risk Information System (IRIS) file on asbestos,
which may address expanding the definition of asbestos, but the Agency
is awaiting the deliberations of the Asbestos Focus Group (formally
called the asbestos Blue Ribbon Panel) before coming to any conclusions
regarding future actions on this issue. The Asbestos Focus Group
assists the Agency with recommendations on how best to use its
resources for the oversight of Asbestos in use in products and in
buildings and its manufacture, processing and distribution in commerce.
Final recommendations will be provided to the Agency in early 2003.
SUBCOMMITTEE RECESS
Senator Leahy. With that, let us have a recess.
[Whereupon, at 11:30 a.m., Wednesday, March 20, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, APRIL 17, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:30 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Johnson, Bond, and Domenici.
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
STATEMENT OF LESLIE LENKOWSKY, CHIEF EXECUTIVE OFFICER
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. Good morning. The Subcommittee on VA-HUD
appropriations will come to order. This hearing will focus on
the appropriations request for the Corporation for National and
Community Service. I want to warmly welcome the National
Service CEO, Dr. Leslie Lenkowsky.
I was pleased to hear from him last week at the Health
Committee, where we were authorizing the service and working
with the President of the United States in his review, and
invigorated call for service. I'm glad to have you here today
before this subcommittee, because this is where the so-called
rubber meets the road here. We operationalized those good
intentions that are envisioned in authorizing with, of course,
our own perspective.
Dr. Lenkowsky comes to us with a great deal of experience.
His long history of national service is going to make him, I
believe, the right man at the right time. Appointed by
President Bush I to serve on the original commission to
establish the Commission on National Service, National and
Community Service, but when it was meant to be a demonstration
project, then President Clinton as part of a bipartisan effort
appointed him as one of the founding Directors of the
corporation.
So he knows the whole history, he knows the story, he knows
the intent, so as well as coming with an incredible background
from the academic community, where really his career has been
focused on the role of philanthropy and its intersection with
public policy, but how to stimulate innovation, creativity,
accountability without big bureaucracy, so you are the kind of
guy this committee likes.
So we look forward to working with you and to bringing all
of this experience to bear, because National Service is in a
new century, and we need to meet the new challenges of our
country while at the same time retaining that very important
value base of neighbor helping neighbor.
Last week, the President released his principles for
National Service reauthorization. We are pleased the President
has embraced National Service, and look forward to working with
him in a bipartisan way to foster those objectives.
Some of my goals in this hearing are going to be twofold,
one a continuation of last week's hearings to have a better
opportunity to look at the President's principles, and then how
that would be put into the appropriations. Second, how to work
with this Director as a part of our appropriations to see how
we can take National Service into the new century, continuing
to create the habits of the heart that make our Nation great,
but at the same time providing qualitative and quantifiable
service to the communities, reducing student debt, and
maintaining proper fiscal management.
Volunteerism is our Nation's trademark. It highlights what
is best about America. It is the backbone of our communities.
Preserving safety nets for seniors, keeping communities safe,
and getting kids ready to learn. The idea behind National
Service was to link values to public policy, and to help young
people with an opportunity to serve their communities while
helping to pay for higher education, either to reduce their
debt or to have like a nugget, particularly for poor kids to be
able to go on to higher education.
It was also to link responsibility to opportunity, and we
must remember that, so that for every opportunity there is an
obligation, whether it is a legal one, or one that you feel in
your heart for being a citizen of the greatest Nation in the
world.
But while we're looking at the noble aspects of community
service, we really have to be accountable to the taxpayer and
financial management, which has not been one of the National
Corporation's strong suits. We want to commend the corporation
for a clean audit two years in a row, with no material
weaknesses and only one reportable condition, and we will be
discussing that with you.
We have come a long way since 1996, when accountants were
unable to audit the corporation's financial statements because
they were in such a mess. The reportable condition is in grants
management, which is crucial, but we have every faith, Doctor,
in your ability, both your programmatic ability as well as your
management ability. This is not about how do we get the
accounting right. It's how do we get the corporation right.
In the budget review, the President asked for $638 million.
This is the biggest request that we've gotten in a long time.
It is in addition to $397 million requested under Labor-HHS,
and also in addition to what is asked for in FEMA. The 2003
request asked for $403 million for AmeriCorps State and
national programs, $162 million more than last year. The
President wants to add 25,000 new AmeriCorps volunteers for a
total of 75,000 volunteers. Twenty-three thousand of these
would be AmeriCorps State and national programs.
Second, the request would be to expand the National
Civilian Conservation Corps $10 million over last year for 35,
opening two new campuses and adding 500 members responding
primarily to public safety. Also, $57 million for the National
Service Trust to pay for AmeriCorps education awards. In 2002
we did not appropriate into the trust because there simply was
not enough funding. This year, we want to make sure we have the
figure right.
The budget eliminates $11.5 million designated by this
subcommittee for national organizations, and as I have
discussed with you privately, and I want to say publicly, we've
got to look at how we support those national programs.
Those large corporations are like large caps. They are the
blue chips of volunteerism in our country. We know what
dividends they can pay, and we have to see how we are going to
be a public investor as a part of their efforts.
The Challenge Grants offer an opportunity to discuss this.
We look forward to working with the President in his
reauthorization, his new ideas for the Freedom Corps, and we
are pleased that at this juncture, both a new century and after
September 11 a new call to duty, that we work with him. We
believe that this President himself is a duty-driven kind of
guy, and he wants the rest of America to embrace those values
of honor and duty and a call to citizenship.
So we look forward to working with you, and I would turn to
my colleague, Senator Kit Bond, who as the chairman of the
subcommittee over the years has played an absolutely critical
role in sustaining National Service when those in the other
body wanted to terminate it.
Senator Bond.
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you, Madam Chair. It is a pleasure to
join you in welcoming Dr. Les Lenkowsky as Chief Executive
Officer of CNCS.
Les, my sincere thanks to you and the Director of USA
Freedom Corps, Josh Bridgeland, for a very constructive meeting
on Monday, and as I told you then, not only is our chair really
the godmother of AmeriCorps and National Service, she has been
the greatest champion, and it is with great excitement that
together we look at the new reinvigorated budget request, the
spirit that the CNCS has, because really--I guess it was de
Tocqueville who said that the real spirit of America comes from
the volunteer sector, that great fire that burns in the
churches and the voluntary organizations.
We look to you to nurture that fire and to provide the
fuel, because along with--and I stop to compliment you on the
progress you have made on turning the corner on the management
problems and now we can start addressing the performance of the
corporation's program, because along with the Peace Corps, the
CNCS does play a unique and leading role in volunteer
activities.
We saw out of the tragedy of the terrorist attacks on
September 11 a public cry for citizens to become more involved
in public service and help communities respond to the new
threats. As I told you, I have never seen more people in my
home State wanting to volunteer. As I travel across Missouri,
people from all walks of life, college graduates, high school
students, senior citizens have all come up and said they want
to help.
Retired health care professionals want to be able to
participate if there is another tragedy. I have had World War
II veterans who want to sign up and go back to war, and I said,
maybe we can use your enthusiasm and your training, but
probably we are not going to send you to the mountains of
Afghanistan.
Really, the events of September 11 reinvigorated our spirit
of public service and compassion and responsibility, and I
think we now have the unique opportunity to capture and harness
this spirit to improve our communities. We won this spirit out
of the great tragedy of September 11. It came at a great cost.
We cannot afford to lose that which was so expensively won for
us, but I am concerned the current structure of the programs,
the corps may not essentially meet effectively and efficiently
the volunteer needs of Americans, and I question whether the
corporation is getting the biggest bang for its buck, and I
think we need to work together on fundamental reforms.
My view is very strongly that the corporation ought to be
focusing less on retail activities and more on wholesale
activities. That means we need to focus the funds, the
training, the work of the CNCS on training the volunteers to
mobilize other volunteers. In other words, the corporation
should train the trainers, because there is a much broader
reach of people with volunteer time and talents that I believe
that the members of the organization can mobilize.
As the chair said, she and I both sit on the authorizing
committee as well as the appropriating committee, and so you
will get your fill of us this year, and we look forward to
working on the reauthorization programs. I think we can truly
make volunteerism more meaningful and accountable.
There have been, as we have discussed, inadequate
management systems and oversight practices have been lacking,
and a lack of performance outcome data, and these have made it
a little bit more difficult to get the budget through in the
Congress, and it has made it an easy target of criticism, and I
think we are all best served if we can avoid that, those
openings for attack up front.
You have received a clean opinion with only one general
question, and this is the second year in a row. We do know that
the President has released his principles and reform for a
Citizens Service Act, and one of the noteworthy items is
improving the accountability of the corporation's grantees.
I like the fact that he has called for clearly defined
performance goals that are measurable. One of my first stints
in public office was as a State auditor, and we did performance
audits and asked people, what is it you are trying to provide,
and how do you know you are doing it? Do not just give us the
inputs, how much you spend on it, what good comes out of it,
and I think the corporation needs to be taking a much harder
look to see those grantees that get the job done, and more
money, and those who do not, move them out the door.
I think this kind of strong tough love is going to be
important. As we work, we hope to expand the budget and the
responsibilities of the corporation, but management and
accountability are our top priorities.
One other issue is the National Service Trust Fund. Last
year, the chair and I requested the CNCS Inspector General to
review the financial condition of the corporation's trust fund.
I'm not going to go into details here, but there is a major
discrepancy between what the corporation is requesting, and
what the OIG is estimating for the trust fund. It just does not
compute. Maybe we do not know how to figure, but there is some
major disconnect there.
Finally, I will focus in the Q&A on the issue of
sustainability. By law, Congress envisioned the corporation
would consider the grantees' reliance on Federal funding. In
reviewing the application it expected some grantees would
eventually operate without Federal funding, but in practice the
corporation continues to fund the same grants. It is a problem
we see throughout Government. The rich get richer. Whoever got
last year gets this year.
The corporation provided funding year after year for really
good organizations, and I have no complaint about the
organizations--Habitat for Humanity--these are worthwhile
organizations and perform valuable service, but should the
corporation be looking for new areas to encourage and enhance
and support with the programs that have not had the benefit of
Federal assistance?
With that, Madam Chair, I look forward to the questions and
answers, and we will see how much we can do before they ring
the bell for us.
Senator Mikulski. Thank you very much. Senator Johnson, do
you have an opening statement?
Senator Johnson. No, Madam Chairwoman. I would simply
submit a statement of welcome to Dr. Lenkowsky. The AmeriCorps
and National Service Corps are obviously very important to my
State of South Dakota, and I am pleased you are holding this
hearing and look forward to working to provide an adequate
budget.
Senator Mikulski. Thank you very much.
With that, we would ask you to proceed, Doctor.
Dr. Lenkowsky Thank you very much, Madam Chair, Senator
Bond, Senator Johnson. I greatly appreciate having the
opportunity to appear before you this morning. As a former
board member, I am most grateful for the efforts you have put
into making the Corporation for National and Community Service
what it is today, and laying the groundwork for what it can
become in the future.
Senator Mikulski. Doctor, this is your oral statement, is
that correct?
Dr. Lenkowsky. That is correct. I have both an oral and a
written statement.
Senator Mikulski. I did not mean to interrupt.
Dr. Lenkowsky. Again, thank you for all you have done to
lay the groundwork for what this corporation can become in the
future. This is an extraordinary moment in the history of our
country, and for the agency I head. Since the terrible events
of September 11, we have seen expressions of patriotism in the
United States unlike any I can remember in my lifetime, and at
a tragically high price. All of us have again realized how
precious our freedoms are and why it is important for all of us
to accept the responsibilities of being citizens.
A survey taken in January by a research center at the
University of Maryland found that 81 percent of young adults
between the ages of 15 and 25, cutting across all demographic
groups and political affiliations, favor a year of voluntary
national or community service to earn money towards college or
advanced training. Applications to AmeriCorps and SeniorCorps
are up substantially over what they were a year ago, and a blue
ribbon committee chaired by former Senator John Glenn has just
called upon the Nation's schools to invest more heavily in
service learning.
Despite all of the renewed interest in serving, however,
what Americans have been doing lately tells a different story.
The University of Maryland survey, for example, reported that
37 percent of those young adults never volunteer, up from 27
percent in 2000. Fewer people volunteer occasionally as well in
that 2-year period.
To make what so many Americans have been feeling since
September 11 into a lasting change in what they do, President
Bush has called on all Americans to give at least 2 years of
their lives to serving their country, and established the USA
Freedom Corps as a White House Council to mobilize the
resources of the Federal Government to help them do so.
Along with the Peace Corps and a new Citizens Corps, which
will focus on homeland security, the Corporation for National
and Community Service is proud to be one of the operating arms
of this historic new initiative. Through our programs,
AmeriCorps, Senior Corps, and Learn and Serve America, we
support the President's call to service by helping to create
opportunities for all Americans to serve full-time, part-time,
and while they are students.
We will also work closely with our Nation's many worthwhile
charities and nonprofit organizations to assist them in
recruiting and managing volunteers, as well as accomplishing
their missions, including providing security for our homeland.
The budget request before you aims to provide the resources
necessary for the corporation to do this, and last week the
President submitted to Congress principles and reforms for a
Citizens Service Act which will be the first reauthorization of
the corporation since it was created in 1993.
We believe strongly that for the corporation to play the
role the President wants us to in the USA Freedom Corps, we
need to make AmeriCorps, Senior Corps, and Learn and Serve
America more responsive to State and local needs, more able to
support and encourage volunteering, more accountable for
results, and more effective in assisting hard-pressed
charities, especially faith-based and community organizations.
I would like to submit these principles for the record as
well, and would be glad to answer questions about them. We are
currently working with the Senate Health and the House
Education and Workforce Committee on reauthorization of the
corporation's programs. We will keep you and your staffs fully
informed on our progress.
While our existing authorizing laws, together with the
management improvements we have made in recent years, are
enabling the corporation to make progress, we believe that the
changes the President is calling for would produce more
volunteers and more help for nonprofit organizations for each
Government dollar spent. Our request to the subcommittee totals
$638 million, an increase of about $229 million over the amount
appropriated for 2002.
Included in this increase are funds for 25,000 additional
AmeriCorps members, two additional National Civilian Community
Corps campuses, and a Challenge Grant program to expand private
support for teaching and other National Service programs. Other
elements of the President's proposed budget for the
corporation, including an increase of 100,000 members in Senior
Corps, and an additional 1,000 AmeriCorps VISTA and AmeriCorps
NCCC members, will be considered by the Appropriations
Committee's HHS-Labor Subcommittee.
We are mindful that this is going to be a difficult year
for the Federal budget. The requirements of the war on
terrorism and homeland security, as well as the lingering
effects of the economic recession, have created sizeable
demands for additional spending. However, President Bush feels
strongly, and we agree, that our Nation has a window of
opportunity that occurs only once or twice a century.
Through the USA Freedom Corps we have a chance to help
bring forth a new, great generation whose contributions to
addressing our most serious problems will be felt far into the
21st Century. By investing a relatively modest amount of
additional resources in the work of the corporation for
national and community service, you will be assisting Americans
to answer the question, what can I do to help, by increasing
the opportunities they have to be good citizens.
We have a written statement which we have submitted for the
record, and I would be glad to answer your questions.
[The statement follows:]
Prepared Statement of Leslie Lenkowsky
Madam Chair, Senator Bond, and Members of the Subcommittee: Thank
you for the opportunity to discuss the views of the Administration
concerning the fiscal year 2003 budget request for the Corporation for
National and Community Service.
This is my first opportunity to appear before you, since the Senate
confirmed my nomination by President Bush to be the Chief Executive
Officer of the Corporation for National and Community Service. Prior to
this appointment, I served three consecutive terms as a Member of the
Corporation's Board of Directors and the Board of its predecessor
organization.
Most importantly, this is an extraordinary moment in the history of
our country and the Agency I head. Since the terrible events of
September 11, we have seen expressions of patriotism in the United
States unlike any that I can remember in my lifetime. At a tragically
high price, all of us have again come to realize how precious our
freedoms are and why it is important for all of us to accept the
responsibilities of citizenship in order to preserve them.
To make this a lasting change in our civic consciousness, President
Bush has called on all Americans to give at least two years of their
lives in service to their country. As the President has said, we can
build a stronger Nation and fight terrorism by making a commitment to
service in our own communities, whether that be tutoring a child,
volunteering at a hospital, or participating in a neighborhood crime
watch.
Most of our Nation's civic work is being done without the aid of
the Federal Government. That is as it should be, as the Federal
Government did not create this civic spirit. At the same time, the
Federal Government can do a better job in helping to support and
encourage it where it can.
Therefore, through an Executive Order, the President established
the USA Freedom Corps, which will build on existing Federal programs
that engage citizens in service, as well as create new opportunities
related to homeland security and meeting other critical needs.
The USA Freedom Corps initially will have three major components,
which will be administered separately but coordinated through a White
House council. It includes an improved and enhanced set of programs
supported through the Corporation for National and Community Service.
Specifically, the Administration has proposed additional community-
based service opportunities and leveraging thousands of additional
volunteers by adding 25,000 new AmeriCorps members and 100,000 new
volunteers in senior service, and by removing current barriers to
service.
As part of the announcement of the USA Freedom Corps, the
Administration indicated its intent to work closely with the Congress
on a bill that will reform and extend the Corporation's programs and
authorities. The Administration's reforms were outlined in the document
entitled ``Principles and Reforms for a Citizen Service Act,'' released
on April 9.
For the Corporation to play the role envisioned by the President
under the USA Freedom Corps, we need to make AmeriCorps, Senior Corps,
and Learn and Serve America more responsive to State and local needs,
more accountable for results, more adept at leveraging private
resources, and more effective in assisting hard-pressed charities,
including faith-based and community organizations.
The $229 million increase the President has requested for fiscal
year 2003 for the Corporation, in the VA-HUD appropriations bill, is
less than one-quarter of one percent of the total bill--but it is a
vital part of the President's initiatives to strengthen our Nation at
this critical time in our history. Defending our Nation requires more
than a strong military--it requires a strong and enduring civic spirit
and commitment to serving our neighbors, our communities, and our
country.
Following is a summary of the Administration's plans for service
and volunteerism and the fiscal year 2003 budget request.
usa freedom corps
In his State of the Union address, President Bush announced the
formation of the USA Freedom Corps--a White House council that
coordinates and is working to enhance the many service opportunities,
both domestic and international, available to Americans of all ages.
The Freedom Corps, which is chaired by the President, brings together
under one umbrella, the Corporation for National and Community Service,
the Peace Corps, and a new Citizen Corps dedicated to homeland
security.
As part of the USA Freedom Corps announcement, President Bush
called on all Americans to serve their country for the equivalent of
two years--or 4,000 hours--over their lifetimes. Some Americans--such
as those just graduating from high school or college or those beginning
their retirement--may want to perform one or more years of
uninterrupted service. Other Americans may wish to commit service hours
over many years. Some citizens will serve for many more than two years,
others for less. This initiative is not a Federal mandate--it is a
profound individual commitment and a worthy national goal.
The President's Budget for 2003 includes more than $560 million in
new funds to support these new citizen service initiatives. Of these
increases, $290 million is earmarked for the programs of the
Corporation for National and Community Service, the largest share of
which, $229 million is under the jurisdiction of this Subcommittee.
The USA Freedom Corps initiative is directed by an Assistant to the
President, John Bridgeland. The Freedom Corps Council, established by
an Executive Order and comprised of a number of Federal departments and
agencies, will make further policy recommendations to the President on
new ways to enhance service, help agencies recruit and mobilize
volunteers, chart civic progress, and recognize the participation of
Americans in serving their neighbors, their communities, and their
country.
principles for a citizen service act of 2002
As part of the announcement of the USA Freedom Corps, the
Administration indicated its intention to work closely with the
Congress on a bill that will reform and extend national and community
service programs. The legislation that authorized these programs has
proven to be remarkably resilient, but there are significant
opportunities to make the programs more effective.
On April 9, the President presented to the Congress a set of
principles for legislation that would reauthorize and reform the
Corporation's programs. The principles seek to: (1) support and
encourage the greater engagement of citizens in volunteering; (2) make
Federal funds more responsive to State and local needs; (3) make
Federal support more accountable, and more effective by focusing on
sustainability of community service programs; and (4) provide greater
assistance to secular and faith-based community organizations.
fiscal year 2003 budget request
The budget request before this Subcommittee totals $632.6 million.
This is an increase of $229.4 million above amounts available in fiscal
year 2002.
strengthening americorps
The majority of the requested funding increase would support 25,000
additional AmeriCorps members, an increase of 50 percent above the
level of 50,000 that we are supporting in 2002. AmeriCorps members
mobilize, manage, and train volunteers. The members, and the volunteers
they help organize, engage in a wide variety of activities, for example
teaching children to read, working to make neighborhoods safer, and
helping build affordable homes for low-income families. With the coming
class this fall, more than 300,000 Americans, 18 or older, will have
participated in AmeriCorps since it was created in 1993 through
amendments to the National and Community Service Act of 1990 (``the
Act'').
Still today, many members of the public do not understand how
AmeriCorps functions.
AmeriCorps members serve in nonprofit and community organizations
like Habitat for Humanity, neighborhood watch organizations, the
American Red Cross, Boys and Girls Clubs, local faith-based
organizations, and many more local community organizations. These
organizations, not the Federal government, select most of the members
and manage them. The members assist those organizations in meeting
community needs, as the organizations define them.
AmeriCorps is largely decentralized. State commissions on community
service, led by citizen volunteers appointed by governors, select most
of the programs in which AmeriCorps members serve. Most of the
projects, and the needs being met, are determined in States and local
communities, not in Washington.
AmeriCorps has both full-time and part-time members. Slightly more
than half of the individuals in these programs serve full-time and
receive a very modest living allowance, slightly over $9000 per year,
in order to be able to serve. The other half serve part-time; they
generally do not receive any living allowance from the Corporation.
All AmeriCorps members, both full-time and part-time, receive an
education award, available for seven years, to help finance college or
pay back student loans upon successful completion of service. At the
end of this year, we estimate the first AmeriCorps class will have used
about 72 percent of the education award amounts that were earned.
It's also important to understand that States, local communities,
and the private sector make financial commitments to AmeriCorps. There
are various statutory provisions that mandate such cost sharing.
There are three main components to the AmeriCorps program: First,
``AmeriCorps*State and National'' provides grants to States and to
national organizations to support members in local nonprofit
organizations across the country. Second, ``AmeriCorps*VISTA''--the
continuation of the Volunteers In Service To America program--focuses
its members' activities on supporting community and faith-based
organizations in meeting the needs of low-income communities. And
third, the ``AmeriCorps*National Civilian Community Corps,'' or
``NCCC'', is a ten-month, full-time residential service program for men
and women that combines the best practices of civilian service with the
best aspects of military service, including leadership and team
building. As you know, AmeriCorps*State and National, and NCCC are
funded by your VA-HUD appropriations bill and the AmeriCorps*VISTA
program is funded through the Labor-HHS-Education appropriations bill.
Since it was created in 1993, AmeriCorps projects have involved our
members in meeting community needs in education, health and human
services, public safety, and the environment. Initial evaluations have
found positive results. For example, a review of tutoring programs
found that ``tutored students at all grade levels improved their
reading performance from pretest to post-test more than the gain
expected for the typical child at their grade level.'' \1\ Other
studies have identified positive results consistent with the basic
purposes of the legislation.\2\ In addition, we are currently
conducting a ``longitudinal'' study to measure the long-term impact of
AmeriCorps service upon the individuals who have served.
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\1\ Abt Associates. 2001. AmeriCorps Tutoring and Student Reading
Achievement. Final Report. Cambridge, MA.
\2\ Aguirre International. 1999. Making a Difference: Impact of
AmeriCorps*State/National Direct on Members and Communities 1994-1995
and 1995-1996. San Mateo, CA.
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At the same time, the program has had its share of challenges and
problems over the years. As a Board member, I called for more
independent assessments and evaluations, and upon becoming the Chief
Executive Officer I promptly established a new Office of Research and
Policy Development, reporting directly to me, for this purpose.
Further, over the years, several members of Congress have
identified the need to achieve greater efficiency and accountability.
As a result, AmeriCorps has tightened its financial management, reduced
its per-member costs, and adopted and enforced tough rules on political
activity. I am very pleased to report to the Subcommittee, that the
Corporation has just received its second consecutive ``clean opinion''
from outside auditors, and for the first time the opinion finds ``no
material weaknesses.''
Having come this far, this Administration is seeking to strengthen
AmeriCorps and create additional opportunities for national and
community service. Specifically, our fiscal year 2003 budget requests:
--$57 million for the National Service Trust. When combined with the
balances in the Trust and interest earnings, these monies will
support the anticipated education award and interest costs of
up to 75,000 members.
--$403.3 million for AmeriCorps* State and National Programs. These
funds are used by State commissions and nonprofit organizations
to support AmeriCorps programs. The Budget proposes an increase
of $162.8 million above current levels in order to add 24,000
members in 2003. (The other 1,000 additional members are to be
supported through the National Civilian Community Corps and
AmeriCorps*VISTA). Within this category, we propose funding
for:
--Homeland Security.--In general, activities in this area fall
within the categories of public safety, public health, or
disaster response and preparedness. We support thousands of
volunteers serving police departments, fire departments,
rescue teams, emergency response agencies, and land
management agencies. They are not armed, nor can they make
arrests, but they carry out vital tasks including
organizing neighborhood watch groups, community policing,
victim assistance, fingerprinting and other tasks that free
up officers and other professionals to do front line work.
Volunteers in public health roles assist in immunizing
children and adults, serving as case managers, distributing
health information, and providing health screenings.
AmeriCorps members also have a long track record of working
with FEMA and other relief agencies in helping communities
respond to disasters and will work actively with Citizen
Corps councils throughout the country on homeland security.
--A Senior Service Initiative.--The Corporation requests AmeriCorps
funding for up to 10,000 seniors to serve 900 hours over a
1-2 year period and earn a part-time education award of
$2,362.50. This award could be used by the senior for
education or given to a grandchild or other designated
individual as a scholarship for future education. This
initiative is intended to build on successful pilot
programs known as the Experience Corps, which uses retirees
for activities requiring significant skills or training. An
independent evaluation of the Experience Corps' school-
based programs concluded that 92 percent of students
measured showed improved reading during the school year. In
addition to tutoring, as with other AmeriCorps programs,
seniors would perform a wide range of services to meet
community needs, including homeland security.
--A Literacy Initiative.--The Corporation will continue to
emphasize the placement of members in programs designed to
help teach reading. These efforts will be conducted in
coordination with the Department of Education.
--A Technology Initiative.--The Corporation will continue its
emphasis on involving AmeriCorps members in programs that:
(1) assist in delivering internet access and other
technologies to low-income individuals and families; (2)
help train school teachers and staff in community
organizations in using technology in their work with young
people; (3) build the technology skills of Americans,
especially children, who have not yet been exposed to
computers; and (4) use technology to meet the needs of
communities.
--AmeriCorps Education Award Program.--This program--providing
education awards, but no living allowances--is currently
funded from demonstration authority under Subtitle H of the
Act. The President's Budget proposes to fund this as an
ongoing program (within Subtitle C), in order to increase
the types of programs and organizations in which AmeriCorps
members may serve, while minimizing the cost to the
Corporation.
--An AmeriCorps ``Promise Fellows'' Program.--The activities under
this program, previously funded from Subtitle H
demonstration authority, are also proposed to be funded
through Subtitle C, AmeriCorps*State and National. This
change would more fully integrate the activities of
AmeriCorps members serving in support of the ``five
promises to youth'' under America's Promise. With this
transfer to subtitle C, States and nonprofit organizations
would have the flexibility to determine the level of
support for AmeriCorps*Promise Fellows, who specialize in
helping organizations and communities increase their
capacity to help needy young people.
--Faith and Community-Based Activities.--Building on the initiative
begun in fiscal year 2002, program guidelines will continue to
reflect an increased emphasis on supporting and expanding
activities related to faith- and community-based programs,
including additional outreach and capacity-building, and the
expectation that grantees will include faith-based and small
community organizations as they develop and implement their
programs. In fiscal year 2003, the Corporation anticipates a
significant increase in the number of faith-based and small
community organizations participating in AmeriCorps, either
directly or through intermediaries. As has been the case ever since
the Federal Government began the VISTA program in the 1960s,
assistance to faith-based organizations will continue to be
strictly for secular activities.
--Volunteer Mobilization and Management.--For the current fiscal
year, a fundamental objective of AmeriCorps is to help
mobilize, support, and manage the vast networks of
volunteers assisting non-profit organizations in meeting
community needs. This includes working cooperatively with
the many volunteer networks that already exist in the
field. In fiscal 2003, we will seek to further strengthen
AmeriCorps' capacity-building activities.
--$35 million for the AmeriCorps*National Civilian Community Corps.
Under this budget request, the AmeriCorps*National Civilian
Community Corps would expand from five to seven campuses. This
expansion would permit the most cost-effective deployment of a
proposed 1700 members in fiscal year 2003. The expansion is
planned in areas of the country that do not currently have
adequate support from AmeriCorps*NCCC--the South and the
Midwest. Homeland security and disaster response will continue
to be a high priority for AmeriCorps*NCCC.
--$10 million for funding of challenge grants to enhance
sustainability of non-profits by the private sector. The
Corporation requests $10 million under Innovation,
Demonstration and Other Activities for challenge grants to
support the expansion of teaching and other national service
programs under AmeriCorps. Private sources would provide at
least 50 percent of the amount required to expand existing
national service programs under AmeriCorps. The Corporation has
supported effective teaching programs in the past, such as
Teach for America and Notre Dame's Alliance for Catholic
Education, but has not used an authority that targets Federal
funds to challenge the private sector to help expand these
efforts. Further, this request would support other national
service programs that have the capacity to raise substantial
amounts of new private funds. When fully implemented, we
estimate that up to 5,000 additional members could be supported
with these funds.
I'd like to take a few minutes now to address some of the questions
that you and others may have about our budget requests.
One question you may have is whether nonprofit organizations will
be able to recruit 25,000 additional AmeriCorps members. We believe
that many Americans want to serve and that nonprofit organizations,
with appropriate funding and lead times, will have little difficulty in
recruiting an additional 25,000 members. Since the State of the Union,
the number of applications submitted through our on-line recruitment
system, when compared to a comparable period a year ago has increased
by more than 100 percent (although on-line applications are still a
minority of applications received). Individual programs have
experienced increases as well. For example, Teach for America (TFA), an
AmeriCorps program, told us a couple weeks ago that they have seen more
than a 180 percent increase in applications compared to a year ago. As
a result, they are projecting an incoming corps this year of between
1,700 and 1,900--up from 900 last year.
Not all of the more than 900 programs across the country have seen
these results. But our informal surveys this past fall indicate that
they are seeing greater interest in service among young people. In
short, we believe that people will apply and that the national service
network will be able to recruit many thousands of additional
participants in AmeriCorps, who will in turn recruit many more
volunteers--at least 3 for every AmeriCorps member. We call this
leveraging of additional volunteers.
A second question you may have is whether organizations have the
capacity to use these additional participants effectively. That is a
question we have also discussed with existing programs, and potential
new grantees. A sample of programs surveyed last fall indicated that
many are hoping to double in size. In addition, a conference of small
community and faith-based organizations last year revealed a strong
interest in accessing additional national service resources, as long as
we take steps to minimize the administrative burdens on these
organizations. Also State service commissions, as well as the
Corporation, each year turn down many qualified applicants. And,
finally, it's important for you to know that we are committed to
actively assessing the effectiveness of all existing and new grants
through an aggressive set of outcome measures.
A third question you may be considering is whether more Federal
resources are needed in order to generate 25,000 additional members.
Couldn't we rely on other sources of funding to do this? In fact, our
budget assumes approximately $350 million in financial and in-kind
support for AmeriCorps from non-Corporation resources, including
funding from the private sector, individuals, States, and community
organizations. We believe there are opportunities to expand this
funding, such as through the challenge grants mentioned above. At the
same time, the Federal Government has an important role to play in
enabling thousands of additional Americans to make a substantial time
commitment to national service thereby building a vital non-profit
infrastructure. In addition, small hard-pressed community organizations
need our assistance to build their capacity to provide services. Except
for individuals with substantial means, providing these organizations
with full-time assistance requires the availability of modest living
allowances, and educational awards provide additional important
incentives.
I intend to continue to work with the Congress to achieve the
proper balance of public and private sector support for national and
community service.
effective service-learning
Our budget request includes $43 million for the support of service-
learning programs--known as Learn and Serve America--in our Nation's
elementary and secondary schools and institutions of higher education.
Over the last decade, growing numbers of our Nation's elementary and
secondary schools and institutions of higher education have used
service-learning as a way of integrating education and service.
A 1999 U.S. Department of Education study found that 32 percent of
all public schools organized service-learning as part of their
curriculum, including nearly half of all high schools. In addition, an
impressive fifty-seven percent of all public schools organized
community service activities for their students. This growth is
significant when compared to a similar study conducted in 1984 that
found only 9 percent of all high schools offered service-learning, and
twenty-seven percent of all high schools offered some type of community
service.\3\
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\3\ National Center for Education Statistics. 1999. ``Service-
Learning and Community Service in K-12 Public Schools.'' Statistics in
Brief. Office of Educational Research and Improvement. U.S. Department
of Education.
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A 1999 study by the Rand Corporation found that Learn and Serve
America participants had a positive impact on the organizations they
served. Student volunteers helped community organizations reach more
people and improve the quality of their services. These accomplishments
included: improving (younger) students' school achievement; promoting
children's readiness for school; improving the English skills of
immigrants; improving adult literacy and job skills; and strengthening
parents' child care skills.\4\
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\4\ Gray, Maryann J., E. H. Ondaatje, and L. Zakaras. 1999.
Combining Service and Learning in Higher Education: Summary Report,
RAND.
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Our objective is to encourage schools at all levels to respond to
the President's call to service--for 4000 hours of service over one's
lifetime--and institute more service-learning programs. Such programs,
which tie rigorous school studies to worthwhile volunteer work in the
community, are critically important if we are to instill the ethic of a
lifetime of service and civic involvement in a rising generation of
Americans.
We do not propose additional funding for Learn and Serve, but
instead propose to target more Learn and Serve resources on improving
the quality of programs. And, as we did in the reauthorization of the
Elementary and Secondary Education Act, we will propose to add more
accountability to this system of Federal support.
For higher education, in fiscal year 2003 we propose to continue
individual campus grants, designed to allow individual institutions of
higher education to create sustainable programs that are conducted in
collaboration with schools, nonprofits, and other local organizations
and institutions. We also propose new grants to higher education
associations and to consortia that include higher education
institutions and other organizations. Examples of previously funded
higher education consortia include Campus Compact, the American
Association of Higher Education, the United Negro College Fund, and
Community-Campus Partnerships for Health.
management and administrative improvements
All of us involved with national and community service--the
Corporation's Board, its previous CEOs, the Congress, State Service
Commissions, and programs across the country--have recognized the
significant management and administrative challenges that have faced us
over the last decade. The Corporation has made progress over the last
couple years, but much more remains to be done and the Bush
Administration is committed to making the necessary reforms.
In this effort to improve the Corporation and its operations,
fiscal year 2000 was a landmark year. The Corporation received an
unqualified opinion on its financial Statements for the first time.
This achievement resulted from a commitment to strong management
controls and accountability for financial resources. In addition, we
have during the last month received the results of the 2001 audit from
the independent auditor under contract to the Office of the Inspector
General, and the Corporation received an unqualified opinion for the
second year in a row. Significantly, this year, the auditors reported
no material weaknesses.
In general, the Congress has provided the Corporation with the
tools and support necessary to achieve management improvements.
However, we have additional ideas that are intended to strengthen our
ability to carry out our programs efficiently and effectively. As you
know, we are discussing these ideas in with our authorizing committees.
Our budget request for fiscal year 2003 includes $35 million for
program administration, of which $14 million would support State
Service Commissions. Most of the $4 million increase in requested
administrative funds would be targeted to State Commissions to support
the program expansion to 75,000 AmeriCorps members, and their efforts
to meet standards we have developed for Commission accountability. The
other portion of the increase would support inflationary costs,
including civilian pay raises proposed in the President's Budget, as
well as further improvements in our financial and systems performance.
Having completed installation of a new accounting and financial
management system--that has proven essential to our positive financial
audits in 2000 and 2001--the Corporation is now implementing a new
electronic grant system, using funding provided specifically for this
purpose by the Congress. We expect to complete systems development and
testing this fiscal year, conduct training, and begin implementation on
a phased basis throughout fiscal year 2003, consistent with our
established grant cycles. When completed and fully operational, the
Corporation will have an integrated grants management system providing
comprehensive financial management information for all grants and
cooperative agreements. Grantees will apply for and receive assistance
electronically, thereby greatly reducing current paperwork burdens. And
the grant system will interface with the Corporation's financial
management system. The design meets the Grants Financial System
Requirements of the Joint Financial Management Improvement Program, and
the requirements of the Government Paperwork Elimination Act and the
Federal Financial Assistance Management Improvement Act.
other budget requests
Innovation, Demonstration, and Other Assistance
In the area of innovations and demonstrations, the Administration
is requesting $25.5 million (in addition to the $10 million identified
above for challenge grants) for various purposes, including: training
and technical assistance, recruitment, Martin Luther King, Jr. Day
grants, and other activities that are critical to the support of high
quality programs. Moreover, if Congress approves our request to
transfer the AmeriCorps Education Awards program and the Promise
Fellows program from this category, we will have greater flexibility in
carrying out the original intent of this type of support which is to
develop new methodologies for encouraging service. I continue to
believe that a critical role for the Corporation is to support those
innovative activities that will lead to the overall strengthening of
programs and service experiences across the country.
evaluation
The Corporation conducts or contracts for evaluations of its
programs, initiating several studies each year on a range of issues.
These studies originate from several sources. The National and
Community Service Act mandates several evaluation studies. Other
studies are an important part of the Corporation's compliance with the
Government Performance and Results Act (GPRA). Other research derives
from the Corporation's Strategic Plan, which is developed through our
Board of Directors. In fiscal year 2003, we are requesting $5 million
to support the studies identified in our budget justification.
These evaluations are a major part of the effort to enhance program
performance and collect data addressing critical program issues. I
believe strongly in the centrality of research and evaluation to the
future of national and community service, and have therefore created an
Office of Research and Policy Development (RPD), reporting directly to
me, to focus greater attention in this area.
Increasingly, I expect the Corporation's new Office of Research and
Policy Development to be recognized by the broader governmental,
philanthropic and nonprofit communities as a resource on a wide range
of research and evaluation issues.
Points of Light Foundation
The fiscal year 2003 budget requests $10 million for the activities
and operations of the Points of Light Foundation that are designed to:
1. Encourage every American and every American institution to help
solve the Nation's most critical social problems by volunteering their
time, energies, and services through community service projects and
initiatives;
2. Identify successful and promising community service projects and
initiatives with nonprofit organizations, corporations, families, and
youth, and disseminate information concerning such projects and
initiatives to other communities in order to promote their adoption
nationwide;
3. Build the capacity of institutions to support volunteer service,
and develop individuals as leaders to serve as strong examples of a
commitment to serving others and to convince all Americans that a
successful life includes community service; and
4. Expand its efforts to build the capacity, visibility, and
sustainability of a unified nationwide network of local Volunteer
Centers.
America's Promise: The Alliance for Youth
The 2003 budget requests $7.5 million for America's Promise: The
Alliance for Youth. That organization, founded by Secretary of State
Colin Powell and currently led by former Senator and CEO of the
Corporation, Harris Wofford, seeks to act as a catalyst to challenge,
energize, and inspire individuals, organizations, and communities to
expand efforts to ensure that youth become productive, responsible
adults.
Earmarked Grants
The fiscal 2002 appropriations for the Corporation for National and
Community Service marked the third year of funding for ``earmarked
grants'' and included $11.5 million for five specified organizations:
Communities in Schools, the Parents as Teachers National Center, the
Youth Life Foundation, Teach for America, and the YMCA of the USA.
Although it is Congress' prerogative to set earmarks, I would urge
restraint in this area. The Corporation's Board of Directors and I
believe very strongly that the best results occur when organizations
are required to compete for available public funds. The fiscal year
2003 budget therefore does not propose any earmarks. Moreover, several
grants awarded under this category in fiscal years 2001 and 2002 were
for multi-year efforts, thereby eliminating the need for any additional
funding for the activities of those organizations in fiscal year 2003.
Office of the Inspector General
As a separate request, the President's Budget requests $5.1 million
for the audit and investigative activities of the Office of the
Inspector General.
I value the important work of that office to conduct independent
and objective audits and investigations and to prevent and detect
fraud, waste, and abuse. Furthermore the reforms being put in place to
strengthen program accountability will require an active partnership
between that Office and the Corporation's senior management.
The President has nominated J. Russell George to be the Inspector
General of the Corporation for National and Community Service. Mr.
George has an extensive background in working to promote effectiveness
and efficiency in government. Most recently, he has served as the Staff
Director and Chief Counsel to the U.S. House of Representatives
Committee on Government Reform, Subcommittee on Government Efficiency,
Financial Management and Intergovernmental Relations, that has
jurisdiction over the Inspector Generals program nationwide.
Madam Chair, that concludes my statement concerning the
Corporation's budget request for fiscal year 2003. We are clearly at an
opportune moment in the history of Federal support for service, and I
look forward to working with you, Senator Bond, and the other Members
of this Subcommittee and the Congress to make the President's proposals
a reality. I am available to address any questions that the
Subcommittee may have.
FREEDOM CORPS
Senator Mikulski. Thank you very much, Doctor. Let me go
right to our questions.
I think that there is confusion over the Freedom Corps,
AmeriCorps, and so on, and could you share with the committee
what is the Freedom Corps, and second, how does the national
and community service fit into this?
Dr. Lenkowsky. Thank you, Senator. We do have a bit of what
I call a corps identity crisis going on at the moment. The
Freedom Corps is a White House Coordinating Council. It is a
Cabinet-level council chaired by the President, consisting of
Members of the Cabinet and heads of independent agencies such
as myself, and staffed by John Bridgeland, the Special
Assistant to the President. It can be thought of as analogous
to the National Security Council or the National Economic
Council.
The USA Freedom Corps was established by executive order,
but it does not affect the legislative authority or my
responsibility to you as CEO of the Corporation for National
and Community Service. The same would be true of my colleagues
in the Peace Corps and the various agencies in the Citizens
Corps.
There are three major operating arms right now under the
umbrella of the Freedom Corps. One is the Peace Corps, which
engages in overseas volunteer activities. The second is the
corporation. We're going to continue to do the range of
activities we currently do on the domestic front. The third one
is the Citizens Corps. That's the new one. It will be chaired,
coordinated through the Federal Emergency Management Agency,
and it consists of a number of programs, such as the Department
of Justice's Neighborhood Watch organization, that are focused
on homeland security.
The corporation's role vis-a-vis the Citizens Corps is to
provide support to it. About 30 percent of our AmeriCorps and
Senior Corps members are already engaged in public safety,
public health, and disaster preparedness activities. We expect,
as part of the State and local level planning, that this will
go on under the aegis of Citizens Corps. In the event, which we
hope will not occur, of another tragedy striking our cities or
rural areas, there is going to be a need to get people.
Senator Mikulski. So essentially it is like just, I will
call it a coordinating council?
Dr. Lenkowsky. That is correct.
Senator Mikulski. Then within this subcommittee we are
being asked to fund two programs, one, the National Service
Corporation that you are here for, and the other one is the
Citizen Corps, which would be under FEMA.
Dr. Lenkowsky. That is correct.
Senator Mikulski. Now then, what President Bush is asking
under our subcommittee is the expansion of the programs as we
know it, which means AmeriCorps, the Senior Corps, and the
Learn and Serve America, am I not correct?
Dr. Lenkowsky. That is correct.
Senator Mikulski. So it does not break new ground. He wants
an expansion of what we have, and will work with us and the
authorizing on what should be a new framework for the new
century?
Dr. Lenkowsky. That is correct.
Senator Mikulski. And it would be to essentially call for
the new, reinvigorated sense of patriotism, is that correct?
Dr. Lenkowsky. That is correct, Senator.
SENIOR CORPS
Senator Mikulski. Now, I am going to come back to the
Citizens Corps in a minute but for now let's go to the Senior
Corps. You are talking about expanding the number of
volunteers, but also saying that the seniors--first of all you
want to change the age.
Dr. Lenkowsky. Correct.
Senator Mikulski. Then you want to change what they do. You
want to have them have a benefit that they can use either for
their own education or to give it to a grandchild, is that
correct?
Dr. Lenkowsky. We want to make a Silver Scholarship
available to seniors who commit a significant amount of their
time to the Senior Corps program, that is correct, Senator.
Senator Mikulski. This would be up to 10,000 seniors who
serve 900 hours over 2 years would get a $2,300 education
grant. Now, here is my question, okay, because first of all I
am going to ask you, do you think you will need authorization
to do this, and number two, then do you think you need the
Finance Committee's permission, or legislative permission,
shall we say, to do this, and are we--it is hard enough to fund
AmeriCorps for young people to have education. Why are we
getting into this? Would you comment?
Dr. Lenkowsky. There are two provisions related to seniors,
Senator. The one you cited, the $2,300 for 900 hours, is
actually part of AmeriCorps today. In AmeriCorps you can be a
senior and serve, and you can earn an education award. That is
the law today, so you are absolutely right, we do not have any
authorization issue there. The problem that has arisen is that
for a senior who is serving at, say, age 55 or older, to get an
award useful only for their own education is not necessarily
the most valuable way we can thank them for their service.
I was on a talk show, and a woman who served in VISTA, or
in the Senior Corps, or in AmeriCorps at age 62 said, well,
thanks for the ed award, but you know, my education is done.
Can I not transfer this award, say, to a child or grandchild,
or maybe a tutee that I have been working with, or someone I
have been mentoring. We do need legislative authority to enable
us to do that, Senator.
Senator Mikulski. And does the administration believe that
that should be tax-free?
Dr. Lenkowsky. Senator, we do not think the ed award for
anyone should be taxable. This is a major part of our proposals
for all age groups, not just the senior group.
Senator Mikulski. Well, my time has expired. Is it the
administration's position, then, that the education awards,
regardless of how they are garnered, either in AmeriCorps or
Senior Corps, should not be taxable?
Dr. Lenkowsky. That is correct, Senator.
Senator Mikulski. And this is going to require an action by
the Finance Committee?
Dr. Lenkowsky. I think that is probably correct, Senator,
but I can tell you, I was just visiting our NCCC campus in
Denver and there I heard what I hear whenever I meet with
AmeriCorps members regardless of their age, that the taxability
of this ed award is their single largest complaint. Remember,
these people, particularly the young people, do not actually
see the money. The money goes from our trust fund into the
school, or to pay back a loan, but what they do see is the tax
bill, and since they are young people, often going to school,
they do not have a lot of money stored away to pay taxes.
Senator Mikulski. I am not arguing with the merits. I am
arguing where we are. In other words, as we authorize it, do
you have a Finance Committee--are you discussing this with the
Finance Committee?
Dr. Lenkowsky. We will be talking with the Finance
Committee, yes.
Senator Mikulski. Well, I will come back for other
questions, but I think this helps clarify Freedom Corps, then
the National Service program within it, and then your desire to
both expand it, as well as for Senior Corps change the age and
change what can be done with the education, am I correct in
that?
Dr. Lenkowsky. There is a separate provision for Senior
Corps. It is a little bit different. That one also requires
authority. The Silver Scholarship is a much smaller amount,
$1,000 for seniors who commit through Senior Corps and not
through AmeriCorps a substantial amount of time.
Senator Mikulski. I think we need to get a list of these
education benefits.
Senator Bond.
Senator Bond. Thank you, Madam Chair. It appears that the
vote has started, but that always makes it interesting around
here.
Senator Mikulski. Senator, if I would suggest, why don't I
leave and you pursue your line of questions, and Senator
Domenici, if you feel comfortable with the vote, and if I am
not back just recess, and then we will come back for a second
round. Does that sound good?
Senator Bond. That is my suggestion. Thank you, Madam
Chair. It is always good to get the gavel back, even though it
is briefly.
Senator Mikulski. That has a geopositioning device on it.
CITIZEN CORPS
Senator Bond. Dr. Lenkowsky, I am concerned, as the chair
is, as I discussed with you yesterday, locating the new
proposed Citizen Corps to be run by FEMA. Frankly, FEMA has not
run volunteers. You are the people that run volunteers, and
FEMA is going to have an awful lot of work to do when we get
finished with all the funds we dump on them, so we want to
continue to discuss with you whether in fact FEMA would be
better off describing and defining the roles that volunteers
need to play, and tasking CNCS to mobilize the volunteers.
There is a heck of a lot of difference between running the
FEMA programs and doing what you do, which is a very staff-
intensive effort to mobilize volunteers, but we will continue
to work with you on that.
Dr. Lenkowsky. I can assure you, Senator, that is
appropriate. At both the State and local level we will provide
as much support to that effort as we can, and the larger
questions I think are questions you need to discuss with your
colleagues.
Senator Bond. That may not be at your pay grade. We will
work with others on that.
On the sustainability question I mentioned some fine
organizations that are getting funded regularly, and I just
would like your view on why would AmeriCorps continue to fund
Youth Build when it already receives substantial funding, much
more funding really from HUD, and do you expect that these
existing grantees will just continue getting the money that is
available, or should there be some effort to move dollars into
new promising programs to get them started?
Dr. Lenkowsky. As a board member, Senator, I was strongly
in favor of making sure that sustainability was emphasized in
all our programs. Our proposals envision a number of steps to
enhance sustainability by grantees, and especially by the kinds
of grantees that are large and well-established.
The most important is our Challenge Grant program. The
Challenge Grant has been part of our authority since the
corporation was established, but if I am not mistaken, until
President Bush, no one has proposed actually funding it. We
have put a fairly modest amount of $10 million in the budget
request. We can discuss that if you would like, but the aim of
the Challenge Grant program is, of course, to give well-
established organizations a real incentive to develop private
support for their activities, and to move to less dependence on
funding from the corporation so we can reach out to the smaller
groups.
As you suggested, Senator, we are also going to put a
greater emphasis on capacity building, part of which involves
the capacity to go out and get resources from throughout one's
community, so we want to help them become sustainable that way.
The challenge we are facing, of course, is that one of the
glories of our nonprofit world is, there is a lot of variation
in it, and we do not want to create a cookie-cutter approach
that says, 3 years and you are out. We want to be sensitive to
what different organizations are doing and what their
situations are.
I visited an AmeriCorps program in Red Hook, New York,
which is taking back a neighborhood that for 40 years has been
the object of benevolent but misguided intentions on the part
of public policy. Until AmeriCorps got there, people were
afraid to walk out their doors. Now the Red Hook Public Safety
Patrol is bringing back this neighborhood. It is cleaning it
up. Crime rates are down, drug use is down. The members come
predominantly from the community, and they are using AmeriCorps
as a stepping stone to getting higher education themselves.
We have been there 7 years. That is a long time, but I
visited that one personally, and frankly, I think while we
obviously want to push towards sustainability, and there is a
fair amount of support coming from the City of New York. As
with all of our programs, as you know, there is a matching
requirement. We do not want to arbitrarily say, enough is
enough, because this is a deep-seated poverty situation.
Senator Bond. Well, I think that is a unique situation, but
the Challenge Grant was going to be my next question. We are
inundated with earmarks, with scores of wonderful organizations
such as the Girl Scouts, Camp Fire USA. Because they do not
appear to fit into the strict AmeriCorps funding programs you
have urged that the best results occur when organizations are
required to compete for available public funds. If we expanded
the Challenge Grant program, would you be able to allocate
grants to these people and make these choices?
Dr. Lenkowsky. Yes, Senator. Again, we have to have a
competitive process for doing so, but the whole idea is that
the other area I would like to call your attention to as well
is our National Direct program, which is also a vehicle for
funding. Most of the groups, in fact, you mentioned I think are
probably National Directs. We want to make that more
competitive as well. We proposed additional funding for
National Directs. We want to be competitive.
Senator Bond. If you will excuse me, I want to turn to
Senator Domenici so he can ask questions before we have to go
vote.
SPECIFICS OF THE PRESIDENT'S BUDGET
Senator Domenici. Again, I cannot come back, but before we
finish, are you going to be able to straighten us out as to
which programs we are going to be funding and which ones the
President is asking us to fund? There are so many things we
have going that he does not want any more, but he wants some
new things in this area of public service, is that correct?
Dr. Lenkowsky. That is correct. The only things before you
now are what have always been part of the National Community
Service Act legislation. That is to say, funding for AmeriCorps
in particular, and for the National Civilian Community Corps
Challenge Grants. There is a separate appropriations bill as
you know, Senator, that deals with VISTA and some of our senior
programs. There is no change at all in what we have done in
years past.
Senator Domenici. So the President's budget supports
AmeriCorps continuation?
Dr. Lenkowsky. That is correct.
Senator Domenici. And what is the President's proposal?
Dr. Lenkowsky. We are proposing a Citizens Service Act
which encompasses the reforms of AmeriCorps and our other
programs. I think it is very important to emphasize that. I
think we have listened to the members of this committee and of
other committees, learned from our own experience, and as a
former board member I have been particularly involved in this
discussion, so what we are proposing is not simply an expansion
of our existing programs at all. It is really a significant
overhaul and improvement.
The expansion really reflects two things. First, once we
have done that, we think we can really make these programs
work. Second, the moment in our time when so many people are
looking for ways to serve this country, we think through these
improved programs we can be helpful.
Senator Domenici. Now, the new approaches by the President,
could you just state quickly what that is going to be? Are we
going to pay those volunteers like we did under AmeriCorps?
Dr. Lenkowsky. A portion of them are stipended, that is
correct, Senator, but it is now less than half, and we have
added to our mix various kind of nonstipended or partially
stipended programs. One of the President's principles, in fact,
is to take the education-award-only version of AmeriCorps,
where participants do not receive a stipend from the Federal
Government, just an education award on the completion of their
service, move that from the demonstration phase, where we are
limited to how many of those we can do, and into the regular
AmeriCorps, giving more discretion to the State and local folks
as to whether they want to use that approach or other
approaches.
Senator Domenici. I just wanted to comment for the record,
and to my good friend from Missouri, I was unaware that in my
little State, there are 12,000 New Mexicans that are in this
American Service Corporation program, and the amount of money
spent just on us is $6.7 million. Do you believe that the
corporation is now on track as far as carrying out the work
that Congress intended when it authorized these programs?
Dr. Lenkowsky. I think we are certainly moving in the right
direction. We have, as has been noted, our second clean audit
in a row, and while I would like to take full credit for that,
the truth of the matter is that a lot of the hard work to get
there reflects the efforts of the career employees and other
board members in the agency. We are going to build on that, and
we think through the proposal in our reauthorization package we
will move even further in the right direction and make this a
program we are all going to be proud of.
Senator Domenici. Senator Bond, there are several types of
programs that are funded by the corporation we are speaking of
in New Mexico, and they have gone to existing institutions, so
you do not have to go back and start over, like the
Boys and Girls Club, and it is wonderful to see us
fund a Boys and Girls Club and expand in a poverty area.
It would take them 2 years of fundraising and all kinds of
activity to double the size. Instead of doing work helping
these kids the adults are busy trying to put the building
together and come up with the money, and so I am one who thinks
that Boys and Girls Clubs, existing organizations, if they
apply and are doing the kind of work you are generally doing,
that you would get a very good bargain by not starting over
with a whole new staff trying to add criteria.
The Boys and Girls Clubs in New Mexico, I do not know about
yours, but there are eight or nine that receive funding from
your bill, and it is a very good way to spend our money in my
opinion.
Dr. Lenkowsky. That is the challenge of sustainability as
well. You do not want to throw out good organizations that are
doing good work.
I should also tell you about a wonderful program at the
University of New Mexico, where we are getting students out
into some of the poorer communities. They are all just getting
an award from the corporation. They may have received some
stipends locally, but basically these are getting college
students engaged.
Senator Domenici. Can you give us that name for the record?
Dr. Lenkowsky. I will make sure you get that in the record.
[The information follows:]
The Learn and Serve America Higher Education Program at University
of New Mexico--Gallup (UNM-Gallup) involves 525 college students and
600 K-12 students in conducting service-learning projects in McKinley
County, a highly impoverished area in which 72 percent of inhabitants
are Native Americans. The UNM-Gallup students mentor kindergarten-
through 12th-graders and tutor Family Literacy, Adult Basic Education,
and college developmental students. They also conduct human service,
housing, conservation, and environmental service-learning projects and
leadership development activities in conjunction with 40 community
organizations. The project uses summer institutes, in-service
workshops, and mini-grants to assist 100 faculty members in adding
strong service-learning components to their curriculum and instruction
designs in order to ensure that service-learning will be sustained over
the long-term at UNM-Gallup and in the surrounding community.
In the past year, UNM-Gallup, has provided tutor/mentor assistance
to over 400 students in family literacy and adult basic education
programs in McKinley County, New Mexico. These students, ranging in age
from youth to senior citizens, have received over 9,000 hours of one-
on-one tutoring.
The college has conducted two regional ``College, Career and
Service'' fairs drawing 400 high school students and over 300 college
students to an exploration of more than 50 public service, education
and business opportunities. This initiative offers students the
opportunity to be of service to others and become more civically
engaged.
During their annual Earth Week activities, the college initiated a
community clean-up effort in central public area where car bodies,
glass and other trash have been dumped for years. This clean-up effort
has lead to the city and county collaborating to introduce three
sponsored clean-up days this spring addressing litter hotspots and
citizen involvement. The Learn and Serve America program also organized
a forum in which nearly 100 community members and representatives from
the Navajo Nation Division of Forestry, the Zuni Department of Natural
Resources, the Plateau Sciences Society, UNM-Gallup, K-12 institutions
and other interested citizenry, met concerning community environmental
issues. A planning group was formed to pursue an academic and service-
learning program at UNM-Gallup that will focus on the study and use of
native plants and indigenous knowledge in pursuit of a new vegetation,
soil and water management system for the Southwest and beyond.
The Learn and Serve America program provides mini-grants for a
number of service-learning programs designed to link older with younger
students or students with others in the community. This year for
example, middle and high school students participated in an essay
contest on the issue of safety in our communities, families and
individual lives. Students read their essays before 150 peers and other
community members and the contest was judged by college students. Mini-
grants also supported a pre-school program involving 40 students in
planting flower gardens at the school, who then presented the flowers
to the senior citizen residents of Red Rocks Care Center. In another
project, a class of 4th graders created activity packs containing
books, writing and thinking activities for pre-schoolers and instructed
40 children in the activities included in the packs. One mini-grant
funded an innovative ``Listening, Language and Literary Skills''
project in which high school students recorded elementary level books
for younger students to check out of the library for use in building
reading comprehension and fluency. Other projects this year focused on
building arts, geometry and science skills through community
beautification.
To ensure the long-term sustainability of service-learning and
partnerships among schools, colleges, and community groups over time,
the Learn and Serve America program provided seven training events this
year alone. Through these events, 180 college students, 60 faculty, and
40 community members a better understanding and appreciation of
service-learning as an educational method linking academic work with
community service.
Senator Domenici. Thank you, Mr. Chairman.
Senator Bond. Senator Domenici, thank you very much for
your comments and your interest. This is a very exciting time,
and I think we have an opportunity to support the corporation.
It is truly exciting, but we hear our master's voice, and I
will take the prerogative of the chair and declare a recess
until the chair returns.
NATIONAL PROGRAMS
Senator Mikulski. The subcommittee will reconvene. Doctor,
I want to raise the issue of the national program, which is to
get the administration's perspective on how it wishes to fund
the national programs. This committee is challenged by the fact
that these outstanding programs like Teach for America, the Y,
and a list that I could have, have--and this committee has
pursued an earmark strategy that leaves--but that is not a way
to do it.
In this year's request alone we have $38 million worth of
requests and each one has merit, so we are not even disputing
that. I would like to get your perspective on, number 1, how do
you think we should work together to handle this? What should
be the role of the national groups, and how--again, there is no
relationship between the money they ask for and the number of
people they serve. There is not a clear--and I am not saying we
should go to a formula.
Some have been flat-funded, like Teach America over the
years when they were just a small start-up, and they were like
an IPO, and they are now a blue chip, and paying enormous
dividends. The Scouts, that really goes to leadership money,
not directly to individual Scouts, and I am going to support
them, and I ask you for your advice on really--this is both an
authorizing and an appropriations question. Could you share
your thoughts from the administrative perspective on how we can
deal with this, or how do you propose to deal with this in this
year's appropriations?
Dr. Lenkowsky. Yes, Senator. I was really taken by your
analogy yesterday to large caps, mid caps, and small caps, but
it fits well with what I have thought ever since I began my
career years ago as a grant-maker for a private foundation,
that good grant-making--and that is what we do here--ought to
be like good investing. You need to diversify the portfolio,
and a good balance, some that are your blue-chippers, some that
are your organizations that may have a niche appeal, that would
be the mid-cap kind of approach, and some that are the start-
ups, the innovators that you think can grow, and some are
risky, but you want to take that risk prudently because you
think they do have that potential.
Our view is, in fact, to try to have that kind of
diversified portfolio. We share your concern about doing things
through earmarks. We also need to improve the way I think we
report on a lot of these organizations, and what we do
administratively. For example, while it is true, if you look at
Teach for America--which is a wonderful program. I was
privileged to have known its founder when she was just getting
it going--it looks like we do not give them a lot of money, a
little more than $1 million, but that money pays for their
recruitment and training efforts, which are critical, but the
big value-added of the corporation's involvement with Teach for
America is for our award-only program.
Every member of Teach for America receives an ed award on
the completion of service, which amounts to millions of
dollars. It does not show up in the budget because it is a
trust fund expenditure. We want to be very clear on how we are
funding organizations. We want to focus them a little bit more,
and make sure that our National Directs are, in fact, national
organizations, blue-chippers are really blue-chippers, and not
organizations that may work in one or two States and somehow
have gotten into the National Direct pool.
The big issue we need to talk about in the context of
authorization and appropriation is the cap that exists on
National Directs in current law, and our authorization
proposals. We do not propose to change this. One-third of the
AmeriCorps allotment is reserved for these blue-chippers. The
other two-thirds under our proposals for reauthorization would
go to the States, and through the formula grants, and that
would be to handle those mid-caps as you put it, the State-
relevant programs.
However, through the budget process there has been a second
cap put on, which is about 18 or 19 percent of the funding for
AmeriCorps slots. We have proposed in the President's budget a
substantial increase in dollars for the National Directs, but
we chose not to increase the percentage in relationship to the
State funds. That may be something you would like to revisit as
we go forward here, because a lot of the groups that come in
for earmarks could just as easily be competitive in the
National Direct pool, and that would also give us a good check
on quality.
Let me just say a word about the small caps, the
innovators. One of the things we are proposing in this budget
and in our reauthorization principles is to move a couple of
things we have been trying, the ed award only program, the
America's Promise Fellows, out of the demo phase and into the
regular AmeriCorps funding pool. We think they have proven
their worth and it is time to make that change. That would have
a very nice consequence as well, since we are proposing
continued funding of our research and demo phase at its current
levels to free up some funding for us to try to do a little
more demo type activity and really try to find those small
caps, those start-ups, or those new approaches to AmeriCorps.
One interesting one that I have been considering is our
NCCC program, the National Civilian Community Corps. It is a
great program but it is an expensive program, because in
addition to a stipend we have to provide room and board,
because these are people who live on campuses like the one in
your State at Perry Point.
Well, we ought to think a little bit about some new models
to take the best of in NCCC, but apply them in a new way. I
like to say the equivalent of the ready reserve. If you think
of NCCC as the Regular Army, maybe we ought to think a little
bit about the Ready Reserve type that not only gives the
experience of NCCC to more people, potentially at a lower per-
member cost, but enable us to partner with other kinds of not-
for-profit organizations that want to do the kind of NCCC work
which is very much a part of our homeland security effort. Our
range for experimentation and innovation is going to be broader
under the President's proposal.
CHALLENGE GRANTS
Senator Mikulski. I am going to come back to that. Going
back to the days of the original administration project, the
part-time versus full-time, the belief that the poor have
capacity to serve and not only be beneficiary of services. That
was one of the innovations of Senator Dodd, actually, in the
early days of our work, as our thinking evolved from military
service to National Service.
Tell me your vision of the Challenge Grants. This
subcommittee, though authorized, has never funded the Challenge
Grants simply because we were under very spartan circumstances,
and political prickliness, and we did not fund it. We just did
not have the money and there was not the political will within
the Congress. Working now with this bipartisan effort under
President Bush, how do you see--and presuming we get a decent
allocation, what do you see the role of the Challenge Grants as
being, does this deal with maybe the earmark ideas, and
essentially your thoughts on the Challenge Grants.
Dr. Lenkowsky. The Challenge Grants are going to be very
useful, we think, for those organizations that are requesting
earmarks, because these are usually well-established
organizations that have a proven track record, but have not
always generated the level of private support that they are
capable of generating.
A lot of our National Directs do generate a lot of private
support. City Year gets about two-thirds of its revenues from
the private sector. The percentage for Teach for America is
even greater, but we think there is probably room to expand,
and through the Challenge Grant process we want to put up a
relatively small amount of Federal funds that will have to be
matched by private contributions.
As you know, the matching grants provide often a great
inducement for private funders to join in a project. We want to
give our successful, well-established organizations
opportunities to go to potential private supporters,
corporations, foundations, wealthy individuals and say, okay,
if you provide support for these volunteer service activities
it will be matched by the Corporation for National Community
Service.
What we propose is a one-to-one match. One corporation
dollar for every private one, but in our reauthorization
proposal after a number of years we increase that to two to
one--two private for every one public, to give a stronger
incentive for the private sector to get behind these excellent
groups, and hopefully reduce the pressures for earmarks or just
for competition through our National Direct pool.
Senator Mikulski. Senator Bond, I was asking Dr. Lenkowsky
about the whole issue of the national groups and the earmarks,
and he gave us some really excellent insights, but in my
conversation with him yesterday what I was talking about was,
first of all, or often, we encourage Government to be run like
a business.
And I said, so let us think like a business, and we are
public investors, and this was just kind of fun that we think
about the national groups like the Y, and Teach for America,
which you have been so supportive of, as large caps, and then
there is the wonderful programs run by the States under the
Governor's Commission, so they are responsive to the States and
the needs of that community.
And then third, there is the kind of small cap, and that is
the small start-up, really new, social entrepreneurs that have
new ideas, maybe with part-time, or weekend, or generational
issues, et cetera, so that is what we were also talking about.
You are here, and let us give you time for a second round,
and then I am going to come back to the part-timers.
Senator Bond. Thank you, Madam Chair. Not to flog the
investment analogy too far, but if you are investing in a large
blue chip or mid cap or small cap, the only reason you do it is
to see a return on your investment, and I would suggest that
whether you are looking at a large organization that we know is
great, or a small organization that is just starting up, one of
the tests ought to be, what new are you going to get from this
investment, and you talked about the Red Hook and the
tremendous progress.
Okay, you are seeing a pay-off there. Are there new things
where we can get these existing agencies to expand? If you are
just putting money into a grant program that is going to
continue to go on, there may be other needs, and so I would
urge you and the corporation to look very carefully at again
performance measurements, expectations, standards by which to
measure what are you going to get when you put the money in,
and I would really like to see that test applied.
I need to go back to the very first question I mentioned
earlier about the National Service Trust. Senator Mikulski and
I asked the OIG to review the trust fund, and no new funds were
needed in 2002, and recommended $75 million in new funds for
2003 to enable the corporation to meet its liabilities to fund
43,000 AmeriCorps members.
The administration's request, however, assumes the funds
for 75,000 volunteers but only requests $57 million. Where does
the money come from?
NATIONAL SERVICE TRUST FUND
Dr. Lenkowsky. What we are dealing with here, Senator, are
the differences between financial statements, which are
retrospective, and actuarial estimates, which as you know are
prospective and depend on such things as estimates of the take-
up of what rate of utilization of the ed awards will we see
going forward, and so on.
We brought PriceWaterhouseCoopers in to look at this as
well, and we have been working very carefully to try and get an
accurate estimate of how much we need so that going forward we
will have the funds on hand to meet the anticipated usage of
the education awards. We think the $57 million proposed in the
President's budget will enable us to do that, but we would also
be glad, together with our IG, to sit down with your staff and
review these calculations with you.
It is like anything else in this financial business.
Senator Bond. The cash flow, and I am no fan of accrual
accounting for small business. We work with the IRS to give
them some relief, but if you say that you are going to start up
new programs and going to be accruing, say, roughly $150
million in obligations, you need to put that in the budget
authority even if you only cash-flow out $57 million, because
we do not have a bow wave coming down where you load up a whole
bunch of volunteers and say, well, we can cover them this year,
because the cash-out is only $57 million.
If you are incurring those liabilities, that is where we
need you to come up with the budget authority to make sure we
do not wind up with programs that we cannot afford as the bills
come due.
Dr. Lenkowsky. We certainly agree with you on that. We
ought to work together and let your staff have a look at these
estimates, and if you think there are some things we need to do
to adjust them, we would be glad to do that.
HOMELAND SECURITY
Senator Bond. Now, I mentioned the concern I have about the
Citizen Corps being in FEMA. Could you discuss the
corporation's current activities related to homeland security
and disaster relief? For example, is the corporation planning
to award grants this year to support communities and
organizations in initiatives like public safety, health,
disaster preparedness? Is this different from the supplemental
proposal for $50 million to jump-start a Citizen Corps in 2002,
and where do we stand on this?
Dr. Lenkowsky. Our request has nothing to do with the
supplemental. We do have in the 2002 budget about, $20 million
of additional spending that is to be used for homeland
security. This was immediately after September 11. We have just
put the notices of fund availability out. I am glad to tell you
we had an extraordinary response from not-for-profit groups
interested in participating.
Senator Bond. Was this done in cooperation with FEMA?
Dr. Lenkowsky. No. I should make it clear, and I believe we
are submitting to you at your request a copy of our memorandum
of understanding with FEMA. We have a longstanding
understanding with FEMA, so while we are moving forward with
our own programming this is nothing new qualitatively. It is
just an increase in the amount, in light of the conditions we
have seen in this country post September 11. As we go forward
in 2003, we expect that we will continue to see about 30
percent or so of our AmeriCorps and Senior Corps slots engaged
in public safety, public health, disaster preparedness. These
are things that the groups have identified as priorities for
their own activities.
I think, and you are aware, that a number of our NCCC folks
came into your State after some recent weather-related damage
to help work with all of the other first responders and
volunteer groups.
Senator Bond. That was the Kansas City ice storm.
Dr. Lenkowsky. Exactly, to help get things back in working
order. We are going to continue to do this. What Citizens Corps
does, though, is going to give a little more structure at the
State and local level so that our State commission, our
gubernatorial State commission folks will be able to
participate at the State level in inventorying and planning a
little more systematically for the use of our assets should
disaster strike. The same will be true at the local level. It
is really our participation in the coordinating effort, and not
really to change our programming as such.
Senator Bond. Well, this obviously will be continued, but I
have made my views clear as to who is better running
volunteers, and we will take that up later.
Thank you very much.
CITIZEN CORPS
Senator Mikulski. Thank you very much. I would like to pick
up just for one quick moment on the line of questioning of
Senator Bond for the Citizen Corps. First of all, we support
what the President wants to do in terms of a new call to
service. Senator Bond and I have been working for almost a
decade on the reform of FEMA, really, because when President
Bush I was in, and Hurricane Andrew devastated Florida, FEMA
was the second disaster to hit Florida, and Bush I sent down
Andy Card, so we have had a rocky road, but it has developed
into a good road.
We now are working with Joe Allbaugh to help FEMA become an
all-hazards agency, and there are issues there over what--Tom
Ridge wants to expand it. Senator Bond and I have really
serious yellow flashing lights over FEMA's ability to organize
and train and sustain volunteers, not to do the FEMA job, and
for us to continue now to do our reform, because it takes in
homeland security and all hazards. That is a big job. Allbaugh
has a big job, and working very hard to do it very well, so we
are clear about that.
There is a myth about volunteers, that people can just show
up, and give them a rake, and it is going to be all fine. There
is the issue of screening, training, and then sustaining both
their motivation and their skills, and we really do not think
that FEMA is the place to really think about doing this, but
perhaps we should have a memorandum, perhaps with you.
And then there is this whole issue of how Citizen Corps
fits in with the volunteer fire fighters who they think are
already the Citizen Corps, so we have got some real issues
here. I hope to meet with the Director of Freedom Corps, but we
would hope that perhaps we can resolve this in some collegial
way, keeping the momentum that the President has created. We
want to keep that momentum, and yet at the same time have what
he wants to do in the right place with the right policies and
the right funding.
Dr. Lenkowsky. I understand completely, Senator. All I can
say for our agency is, everybody in this agency and all of our
members of AmeriCorps, Senior Corps, and Learn and Serve are
ready to serve when and how asked.
NATIONAL SERVICE VS. NATIONAL GUARD
Senator Mikulski. Right. Let me then go back to two other
issues while Senator Bond is here. I just want to have us also
for the record--two things. Because you were part of the
founding of National Service and the commission, I want to get
your view--well, first of all, as I recall, when we founded it
National Service, meaning citizen volunteers, were never to
compete with the National Guard, who were citizen soldiers, and
the reason for that is that both offered education grants. The
guard was always worried that it could not compete, so we were
very clear there was a distinction.
Senators' Bayh and McCain have a proposal of 18 months'
military duty, 18 months' reserves, 18 months of community
service, a total of 54 months, very different from what we
have. Is it your recollection--and also a reaffirmation of
policy that the National Guard, and whatever we do to expand
AmeriCorps or other opportunities for volunteerism were never
to compete with the National Guard. In other words, that there
were two distinct routes for service.
Dr. Lenkowsky. That is exactly right, Senator. I was a
National Guardsman myself many years ago. I know the
differences. I know the distinctive and valuable contributions
the National Guard makes and National Service makes, but they
are separate and should be kept separate. People who want to
serve at both in various points in their life, they should be
able to do that. That is great. But we certainly understand the
distinction between the two, and should not confuse it.
PART-TIME MODEL FOR NATIONAL SERVICE
Senator Mikulski. Now, let me go to the part-time, and we
invented again National Service, and this goes to the
innovations that you have talked about. Even in homeland
security there was an understanding that not everyone could go
away, or should go away. It was essentially a model of a 2-year
affluent person using the Peace Corps model. We knew that for
many they had technical skills, like now in technology, where
they could not go away but they wanted to serve. Or second, it
might be that single mother who in the process of volunteering
is getting an incredible experience and an education voucher
maybe to go on and get that nursing degree at the local
community college.
Could you share with us, number 1, your view of the part-
time model, and is there funding in your request to affirm
this, and is this also a tool for, again, creativity within
this new framework that not everybody can do 2 years, and it
also has meant, quite frankly, we did not have a housing
allowance but you could get the education.
Dr. Lenkowsky. Yes, Senator, that is exactly still our
understanding. Whenever I travel, I am really quite privileged,
because I often go into some of the worst parts of every
community and see the best people. These are people who are
bringing back their own neighborhoods. They are people who are
not Ivy League college graduates. They live in those
neighborhoods. They are engaged in AmeriCorps full-time or
part-time, a mixture of both, usually, and through their work
they are contributing not only to their communities in a very
positive way but also to themselves, taking the next step up
the ladder of social mobility.
I was doing a little research recently and it turns out
that one out of every five AmeriCorps members had a parent who
received food stamps, so AmeriCorps looks like America. We want
to keep it that way, and we want to have the kinds of
flexibility in how we can bring people into AmeriCorps to make
sure that a very diverse group of people can participate. The
President's budget does contemplate that partly by moving our
ed award, which also includes a lot of our part-time, into the
general AmeriCorps mix, where we will have more room to offer
those kinds of positions.
We made certain assumptions just coming up with the number,
but basically there is lots of room within that number for a
mixture of full-time, part-time, and ed award only placements.
Finally, under our innovation area, one of the things I am
very eager to try and have actually written a little bit about
this, are more varieties of AmeriCorps that would enable people
to participate in different ways. For example, if you were a
young person living in Madison, Indiana, and you wanted to join
AmeriCorps today, the odds are you would have to move, because
we probably do not have an AmeriCorps grantee in Madison,
Indiana.
Now, that puts an additional burden on somebody to
participate who wants to participate, but suppose we had a
variety of AmeriCorps, or form of AmeriCorps which you might
call individualized model, where you could actually become a
member of AmeriCorps through a selection process. If you were
chosen, you could find an organization within certain limits,
such as an accredited organization, or United Way organization.
It could be a nursing home that took care of your grandmother
for years and years, and you would like to spend a year or two
giving back that way. I mean, an individualized model rather
than the kind of group models which we have, which are typical
right now.
There are some disadvantages to it. It probably makes the
problems of accountability and management a little trickier, so
we want to test it. We do not want to jump right into it. But
it also gives us the flexibility to get people from all walks
of life into our programs.
Senator Mikulski. I think that is excellent. I want to come
back to the variety, because it could very well be someone who
has technology skills and says, well, there is nothing in
Madison, but I would like to work in the Police Athletic League
program. They have tech centers, and I would like to help all
of the people there to be able to teach tech to the kids.
Dr. Lenkowsky. Exactly.
Senator Mikulski. Senator Bond.
Senator Bond. Madam Chair, I am going to submit the rest of
my questions for the record.
CHALLENGE GRANTS
Senator Mikulski. I am just going to clarify the Challenge
Grants, then, one other thing related to variety, but with the
Challenge Grants, what do you see as being encountered in the
Challenge Grants? There is confusion now whether State and
local funds would be counted in the Challenge Grant, and I am
not talking necessarily about the teacher's salary being paid
to a teacher in AmeriCorps, but where the City of Baltimore,
along with the Abell Foundation was contributing to the
administration of Teach for America in Baltimore.
Dr. Lenkowsky. As you know, there is a matching requirement
in existence today for AmeriCorps. I believe it is a 15-percent
match, and that could be accomplished by any non-Federal
source, including State or city funding and, of course, private
funding.
To be honest, I do not think we have really thought
carefully enough yet about the Challenge Grants. My own
instincts, given what we are trying to accomplish, would be
that the match would come from private sources, but I think we
need to consult with our grantees, the Teach for Americas, the
City Years to make sure that as we set up the provisions of
this program we are doing it in a way which ultimately achieves
the goal, which is to enable them to generate the kinds of
resources they need to become as self-sufficient as possible,
so we want to keep the goal in mind here, and my view would
generally be that Challenge Grants ought to be matched with
private money, but I think we need to consult carefully with
our grantees.
COMMUNITY SERVICE IN RURAL AREAS
Senator Mikulski. Well, as we move forward with our
appropriations and the desire to see if we cannot fund
Challenge Grants this year, we really need very clear guidance
from you on that matter.
One of the things I would like to just bring to your
attention is the issue around rural communities, or where they
do not have foundations. I have been struck, and I know my
colleague has been a real advocate for rural communities, where
we have county commissioners who are part-time people who run a
county.
My mountain county in Garrett, my Somerset County on the
shore do not have these foundations--the Abell Foundation, or
the kind of United Way we have, and yet I have been so
impressed by their dedication to try to empower and help people
in their own community, and if they put some money in I think
you ought to look at it.
I am going to really ask you for the policy recommendation,
but communities that do not have access to foundations, where
there are at least a modest, or modicum of local effort and
local commitment, I would like us to see how we could recognize
that, because that is the point. We have challenged that.
Dr. Lenkowsky. We might also need to think of the Challenge
Grant also valuing volunteer time. A major part of the
President's principles calls for judging AmeriCorps programs by
their ability to leverage nonstipended volunteers, those
occasional volunteers who on average give 3\1/2\ hours a week.
Senator Mikulski. It would be simple enough to implement.
You are very good at that, but I would like to have guidance on
whether, in addition to foundations or any type of private,
literally private money, to look at also State and local or
other income.
We are going to say goodbye to Senator Bond. I am just
going to ask another set of questions related to your
testimony. I want to go to your written testimony, and I want
to give you the Challenge Grant part, because we really have
worked in partnership, and I cannot say enough about Senator
Bond's commitment to sustaining this program during very
difficult times.
ESTABLISHMENT OF ECORPS
I want to go to page 6 of your testimony, where you talk
about the senior initiatives, the literacy initiatives, and the
technology initiatives, all of which are really quite
interesting. I want to go to things like technology. I am
trying to establish an eCorps within AmeriCorps. Now, I am
really asking your advice as to how--and I think we can agree
upon the technology, and that goes to my concern about the
digital divide, that second--the digital divide, as I define
it, as access to technology and access to people who can teach
you how to use it.
I was thinking about it in schools and community-based
centers, PAL programs and so on. But the eCorps from AmeriCorps
was literally teaching the people who need to teach, who in
many ways themselves have not had access, in other words, an
eCorps. I call it an eCorps. I do not care what we call it, but
what I was looking for, that there are a lot of people who are
not even infotech majors, but have those skills, and they could
be the part-timers, and again I am going to leave it to your
creativity.
I do not think this has ever really quite gotten off the
ground, and I just wanted to lay out my picture, and could I
hear from you, your description, and we have had a good
discussion on the Senior Service initiative, but on the
literacy and the technology side, and see what your thoughts
are to be able to stimulate that.
Dr. Lenkowsky. Let me start with the technology one,
because I know that is an interest of yours. We are, in fact,
funding a large number of technology initiatives now, and would
be glad to submit a list of those to you for the record, but I
completely agree. I think with what you are suggesting, that
what we really ought to be doing in our technology efforts is,
again, part of our general theme of capacity-building.
We ought to be teaching the teachers. We ought to be
helping the organizations develop the capacity to use modern
technology. You usually talk about the digital divide as being
one between different people, and there is one, but there is
also a great digital divide between different kinds of
organizations, those big national organizations are moving very
quickly into all sorts of electronic technology, electronic
fundraising, membership development, all sorts of things, but
our smaller groups stay level who are often on the front line.
They are ones that need the help getting that new capacity. I
think that is a very valuable part of what we can do through
programs like VISTA and so on.
I think where I might differ a little with you, Senator,
is, I would not want to limit this to AmeriCorps. As you know,
we are also proposing a significant increase in the Senior
Service Corps.
Senator Mikulski. That is an excellent recommendation.
Dr. Lenkowsky. You and I talked a little bit yesterday
about trying to make sure that our senior programs and senior
volunteers generally is as attractive to the rising generation
of seniors, and I am on the front end of that one, approaching
retirement, as it has been to the previous generation who have
that strong sense of duty to country.
We know that a lot of the motivation behind the rising
generation of seniors is related to using the skills they
acquired in their working years, but putting them to some other
use once they are approaching their retirement years, and I
think if we could engage our seniors in some of these
technology activities, too, we have a win-win here. We will get
more attention on the part of the rising generation of retirees
and bring a lot of valuable skills to organizations and people
in the technology arena, so that is my vision for the use of
technology.
Literacy, as you know, a very large fraction of our
AmeriCorps members are engaged in tutoring and mentoring. I
would expect not only to continue that, but to expand that. One
of the President's proposals which is not before this committee
is an appropriations matter, and we did discuss a bit in my
testimony with the Health Committee concerning the Federal
Work-Study program.
The Federal Work-Study program is really a very creative
idea. Back in the 1960's it was part of the war on poverty, and
the idea was that young people from modest backgrounds who had
got the grades, the ability to go to college, would get a
certain amount of financial aid that would be premised on their
going back into their communities and tutoring and mentoring
younger people just like them who needed that sense of hope and
aspiration, and that has changed.
Work-Study programs are used by colleges and universities
for all sorts of things these days, and I am sure they are very
valuable. The President's proposals call for making available
setting a target of 50 percent of Federal Work-Study slots
which will be used for community service, and I would expect
that if we were able to do this a fairly large proportion of
those would be related to literacy.
The colleges and universities have very justifiable
concerns with that proposal, and we are going to be sensitive
to that and work with them, but there are a lot of ways that
you can achieve the President's goal.
For example, I learned of a program--I believe it is at
Harvard--where they are doing distance tutoring. They have
really set this up through technology to be able to tutor
children all around the country in reading and other skills,
and these are Federal Work-Study students, so the opportunities
here to be creative are enormous.
One of the things that is most inspiring to me about the
President's call to service is when you start thinking
seriously about this you see there are all sorts of creative
ways to do it using a lot of existing resources. This is not
something, as we discussed earlier, where we have got to have a
10-year R&D effort before we can figure out some good things to
do.
LITERACY AND TECHNOLOGY
Senator Mikulski. Well, we know that the First Lady is
devoting herself to education, and we salute her on that, and
her mother-in-law, Barbara Bush, really did an outstanding job
on the whole issue particularly of adult literacy, to show that
there was not something to be ashamed or stigmatized about, and
I really think did an important service. We want to be able to
support the literacy issue, and we will work that out in
appropriations and authorizing, but we see literacy and
technology as linked. Often, technology is a tool for literacy,
as you have indicated, and we look forward to how we can foster
those, but not have so many specific line items that we don't
lose out of creativity and flexibility.
The whole idea, when we were working to create this,
Senator Nunn, myself, and folks like yourself and the Mandel
Foundation, was that this was not to be just one more
Government program. It was not meant to be one more social
program. It was to be about a social movement around the habits
of the heart, for every opportunity there is an obligation and
so on, and it was meant to be flexible, not so prescribed. In
other words, get away from the mentality of the sixties
programs, not the value base of those, but remember how they
were overprescribed, over-line-itemed, and over what I call--
you would have 30 line-item boutique programs, but you could
not get a critical mass to achieve a critical mass of social
good.
So I am looking out for these initiatives, but really I am
going to again invite you to keep us in the spirit of
creativity, flexibility, local needs, because they are
different, and at the same time national standards that we
expect for training, appropriateness, fiscal accountability and
so on, but we really do want to keep that local flexibility and
creativity.
Dr. Lenkowsky. I could not agree more with that, Senator.
Senator Mikulski. I think we have really covered
everything. I want to thank you for your excellent testimony. I
think your written testimony also provides a very good road
map. We are going to be as good as our allocation, which is
kind of sitting out there. I am going to need the Hubbell
telescope to see it, but it is on the horizon for us, and again
we just welcome you with enthusiasm and hospitality.
Dr. Lenkowsky. I look forward to working with you, Senator.
SUBCOMMITTEE RECESS
Senator Mikulski. This subcommittee stands in recess until
next Thursday--excuse me, next Wednesday, on April 24, in which
we will be taking testimony from the Neighborhood Reinvestment
Corporation and the CDFI.
Thank you very much, and we are recessed.
[Whereupon, at 11:10 a.m., Wednesday, April 17, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, APRIL 24, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:37 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski and Bond.
NEIGHBORHOOD REINVESTMENT CORPORATION
STATEMENT OF ELLEN LAZAR, EXECUTIVE DIRECTOR
ACCOMPANIED BY:
MARGO KELLY, DEPUTY EXECUTIVE DIRECTOR
CLARENCE J. SNUGGS, DEPUTY EXECUTIVE DIRECTOR/TREASURER
JEFFREY BRYSON, GENERAL COUNSEL
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. Good morning, everybody. The VA-HUD
Committee will now come to order.
And we want to welcome Ellen Lazar, the Executive Director
of the Neighborhood Reinvestment Corporation, and her team; and
Mr. Tony Brown, the new Director of the CDFI Fund, who we also
welcome. Both Neighborhood Reinvestment and CDFI seek to
improve conditions in low income neighborhoods.
We asked you to testify together at the panel, recognizing
the distinct, but complementary, missions in a way that we
could get right to the questions. And some of the questions
deal with predatory lending, the ability of nonprofits to
really function in neighborhoods and community development
corporations. There are many questions that really go both to
your distinct missions. There are parallels or even
collaborations, so we thought we would do that.
And also, we have a markup in Senator Kennedy's committee
at quarter of 11:00. So we are going to try to move very
rapidly.
First of all, both of your institutions recommend, really,
the area of community development. And we are very interested
in wanting to know what is working, what is not, what are the
lessons learned.
Also, we are very cognizant of the fact that in terms of
the President's budget, the President has proposed level
funding of $105 million for the Neighborhood Reinvestment
Corporation. And we want to know the consequences of flat
lining.
Though when I took over this subcommittee in 1988, it was
$10 million, and I am not sure, if it were indexed and all,
where it would be. But Congress has had a steady commitment to
the Neighborhood Reinvestment Corporation.
For CDFI, the President's budget request is at $68 million,
a $12 million or 15 percent cut from last year. I have a lot of
yellow flashing lights about that.
And, Mr. Brown, we would like to know what are the
consequences of this cut, and get a picture from you.
This hearing will focus on really the role, the mission,
and the resources of both institutions. We are very impressed
that in fiscal year 2001 at Neighborhood Reinvestment, which
has been an important tool in assisting communities with
housing and economic development, but also community
development and capacity building. I think that is one of the
signatures of Neighborhood Reinvestment, and that you are not
just another housing program. You are not a real estate
program. You are a real community program. And it is about
community development and capacity development.
We know that what has been so impressive to the Congress
over the year is the way that Neighborhood Reinvestment has
leveraged funds right at the local level to promote economic
development, neighborhood stability, and home ownership. We
know that you have helped many first-time home buyers in
purchasing and keeping their homes.
Due to our concern about the shortfall in rental housing,
we know that you have had a real effort to explore innovative
ways to produce mixed income rental housing for very low income
families and have a whole new initiative on that. And we are
very much interested in the whole multi-family area.
The whole issue of promoting Section 8 for home ownership,
everyone says ``Let us do that,'' but I am concerned about the
ability of new homeowners who are very poor and often have not
been given the financial literacy skills that they need to
sustain this. I do not want an American dream to become a
family nightmare, and how we can avoid that from happening.
This committee has been troubled for some time about the
whole issue of FHA defaults in neighborhoods, where they become
what they call HUD houses. And that is the way they are
referred to, ``Senator Mikulski, there's a HUD house in my
neighborhood.''
And rather than remarking on how wonderful it is, it
usually has been someone has defaulted on their mortgage,
usually because of no fault of their own. And HUD wants to sell
it, and HUD becomes a slum landlord and then just unloads it,
sometimes to even predatory or scum-bum people. So we want to
know kind of where you are on that.
And also, in terms of CDFI, CDFI provides financing and
technical assistance while the BEA program awards banks and
such for providing similar services. We know that you are doing
a new market program, and we want to hear about that. We know
that you are working hard on performance measures and your
experience in the private sector.
We are particularly pleased that there is a Native American
initiative, so that the only money coming in is not more of the
old Federal stuff that has not worked or casino money. And I am
not knocking casino money, but there needs to be other forms of
empowerment for our Native American community.
For both of you, I know that you have done significant work
in the rural communities. And this is really an outstanding
achievement because often they do not have access to technical
assistance, foundations. The Big Macs do not always want to
come to the little nuggets in the rural communities.
PREPARED STATEMENT
So we look forward to hearing from you about your work,
about what you need to do your work, and is the resource that
is being proposed adequate and, at the same time, really
remaining the stewards on taxpayers' funds. Not only what you
do, Mr. Brown, for example, better management of the legacy of
CDFI, but really to make sure that--there are those out in the
neighborhoods, not the poor themselves, but who gouge the poor
and gouge our taxpayers, and that kind of fraud really I find
doubly despicable.
[The statement follows:]
Prepared Statement of Barbara A. Mikulski
Today we welcome two witnesses to testify on their fiscal year
budget submissions: Ellen Lazar, the Executive Director of Neighborhood
Reinvestment Corporation, and former director of the CDFI Fund, and
Tony Brown, the new Director of the CDFI Fund.
We are delighted to have you both here. Both Neighborhood
Reinvestment and the CDFI Fund seek to improve conditions in low-income
communities. Neighborhood Reinvestment trains nonprofits and builds
capacity, while CDFI provides grants and loans to financial
institutions serving low-income neighborhoods
In the area of community development, we want to know: what is
working out there, what isn't, and what are the lessons learned? I am
especially interested in two areas--how you certify your members, and
what you are doing to stop predatory lending.
If we are asking nonprofits to take on more responsibility, then we
must make sure they are ready. Last year, Neighborhood Reinvestment
provided over 200,000 training hours to nonprofits and community
leaders in support of this goal. As the federal government sends more
money to nonprofits, we need to make sure that they are ready for prime
time. But we also need to remember that community based groups are not
a substitute for government--they are a partner to government.
We also want to know what Neighborhood Reinvestment and CDFI are
doing to help communities fight predatory lending. In my own hometown
of Baltimore, non-profits like St. Ambrose Housing Aid Center are on
the front lines fighting flipping. This is an area that I know your
members have spent a lot of time on, whether its providing loans,
homeownership counseling or doing damage control in the neighborhoods
hardest hit by the predators. We really need you to tell us what can be
done to prevent these scum--be it lenders, appraisers or investors--
from destroying neighborhoods and dreams. And also, how do we help
neighborhoods devastated by these practices to pick up the pieces.
My own goals for community development have grown out of my own
experiences, as a community activist, a social worker, and an
appropriator. I believe there are three types of neighborhoods: stable,
stress and siege. I believe we are best off focusing our resources on
neighborhoods under stress that are teeter-tottering on the edge of
siege. We want to move them into the stable column and fight to make
sure they don't come under siege. I know that both Neighborhood
Reinvestment and CDFI support this goal. Neighborhood Reinvestment
builds capacity of community-based nonprofits by providing capital and
``training the trainers'' and CDFI gets capital to underserved
communities where there has been little investment.
These two agencies are in a unique position. They play a support
role for community-based groups on the front lines in their
neighborhoods. So they are able to respond to the unique needs of each
community. Too often we make the mistake of confusing program
development with community development when we know that no two
neighborhoods are the same, and no two neighborhoods have the same
needs. Low-income neighborhoods can't afford to navigate giant
bureaucracies and the federal government can't afford to maintain them,
which is why we need to target resources carefully.
In considering the President's budget, we want to learn from you
what the impact of the fiscal year 2003 budget submission will be. The
President has proposed level funding of $105 million for Neighborhood
Reinvestment and funds CDFI at $68 million, a $12 million, or 15
percent cut from last year. I am disappointed by this because I know
how important community development funds are to our neighborhoods. We
want to know what the consequences of this cut will be and how CDFI is
working to better measure the impact it's having in communities.
Today we hope to learn what is working to revitalize our
communities, and what is not working as well. We need to ensure that
Neighborhood Reinvestment and the CDFI Fund make the best use of scarce
resources to create communities where families can live, work, worship
and shop. We look forward to your testimony.
Senator Mikulski. So I am going to turn to my very able and
dear friend, Senator Bond, for any comments he wishes to make.
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you very much, Madam Chair. And I share
the concerns that you raised.
As I am sure that you all know, this committee operates in
a very bipartisan way and we are very proud of the work that
the agencies under this committee's jurisdiction have
performed, and we share the concerns to make sure they continue
to serve as they should.
I join in welcoming Ellen Lazar and Tony Brown. I think,
Mr. Brown, this is your first appearance before the
subcommittee. Fasten your seat belt. It is always interesting.
We never know what is going to happen next.
Ms. Lazar is probably on the verge of breaking a
subcommittee record in the number of appearances that she has
testified as head of CDFI in the past.
NRC and CDFI are two of the smaller agencies within the VA-
HUD jurisdiction. But clearly, they are not forgotten, and we
do not want to overlook them. You do not have the same level of
resources of other Federal agencies and departments with which
we work, but both of your agencies play a vital role in serving
the needs of distressed communities. And that is why this
separate hearing is designed to focus on your work.
It would be very difficult for me to forget Neighborhood
Reinvestment due to the great work it has done and is doing in
my home State of Missouri. NRC affiliates in St. Louis and
Kansas City have been working in some of the most distressed
communities and have been instrumental in revitalizing the
neighborhoods. I am proud of the work they have done. I have
seen the value that they have added.
I am also excited about the merger between Neighborhood
Housing Services of St. Louis and another successful
organization called Beyond Housing. These are two of the
leading CDCs in the St. Louis area. And it seems to me that the
combining of their talents is a great move. I hope this merger
may become a model for other CDCs in St. Louis, where there are
dozens of small-sized, specialized organizations that may not
have the capacity to take on much-needed, larger-scale housing
and economic development projects.
Today I would be interested in hearing more about NRC's
activities, especially in affordable housing programs.
Addressing the shortage of affordable housing is one of my
highest priorities. It has to be one of the highest priorities
of this committee. It is obviously clear that we need to
stimulate and support the production of more affordable
housing, especially for extremely low income families.
We have a situation in St. Louis County, Missouri, where we
do not even apply for more Section 8 vouchers, because there is
no place for them to be used. A voucher without a house to go
with it is not very useful.
In the 2002 VA-HUD appropriations bill, I worked to add $5
million for Neighborhood Reinvestment to expand their multi-
family housing programs. However, the administration and OMB,
in their wisdom, did not continue this important initiative in
the budget request. I am disappointed. I do not agree. But I am
not deterred. And we will continue to seek support for multi-
family production.
Further, we need to know how NRC has been involved in
helping HUD dispose of its single-family assets and administer
the new Section 8 home ownership program. Like the Chair, I
have questions about some of these things.
First, HUD's decision to impose a moratorium on the asset
control program, I think it makes a lot of sense to suspend
those organizations that have not performed or have not
complied with program rules. But punishing good nonprofits
puzzles me. It is sort of like throwing the baby out with the
bath water.
The alternative of HUD using its own resources to dispose
of the assets is definitely a worse option. And as the Chair
said, we want to make sure that the home ownership, the Section
8 home ownership program, does not become a trap for families
that are not prepared to assume the responsibility of home
ownership.
Now with regard to the CDFI, I commend Treasury Secretary
O'Neill's initiative to have the fund develop real outcome
measurements of its program and past reports. It has focused
too much on the outputs or how much money it spent rather than
the outcomes. I hope that this effort will help us understand
how cost-effective and efficient the CDFI programs are,
especially in comparison to other similar Federal activities.
If you are not giving more value-added for the buck, then we
are going to cut it back. We want to see programs and agencies
that work. And we need to be convinced that they are making the
kind of difference that warrants the allocation of resources to
them.
There are two other issues I need to highlight. One, again,
I am disappointed by the administration's decision not to fund
the Native American CDFI technical assistance program. It is a
modest $5 million program for a population that has significant
needs. The Treasury Department's own study identified
significant barriers to capital access for Native Americans.
And it recently released the Native American lending study,
which found that many communities located in Indian lands face
economic and social challenges that place them significantly
behind the rest of the U.S. economy. To me, it is clear from
the report that CDFI should be playing a role in Native
American lands.
The second issue I would like to raise is the future of
CDFI. What are you, fish or fowl? With the addition of the new
markets tax credit program, I want to know whether this program
will be the fund's primary activity. In other words, should
CDFI focus its activities on grant-making, as it has in the
past, or is it going to be an allocated tax credit to meet its
mission? Which one is it going to be? And I am concerned that
there may be different skills needs. And I want to see where
you can get the most effective result of the resources
allocated.
PREPARED STATEMENT
Lastly, I am concerned about the fund's effort in
addressing distressed communities in rural areas. I happen to
live in a rural area. And I know many of our colleagues do, and
they share my concerns. I would like to hear how the fund has
proposed and has been addressing this issue, because this
clearly is a concern as much as the concern about distressed
communities in urban areas.
With that, Madam Chair, I thank you and look forward to
hearing the testimony of our two good friends and witnesses.
[The statement follows:]
Prepared Statement of Senator Christopher S. Bond
Thank you, Madam Chair. I also welcome Ms. Ellen Lazar from
Neighborhood Reinvestment and Mr. Tony Brown from the CDFI. This is Mr.
Brown's first appearance before the Subcommittee but I think that Ms.
Lazar may be on the verge of breaking a Subcommittee record in number
of appearances since she has also testified as the head of the CDFI.
NRC and the CDFI are two of the smaller agencies within the VA/HUD
jurisdiction but they are not forgotten. While these agencies may not
have the same level of resources of other Federal agencies and
departments such as HUD, both agencies play a vital role in serving the
needs of distressed communities.
It is especially difficult for me to forget Neighborhood
Reinvestment due to the great work it has performed in my home state of
Missouri. NRC affiliates in St. Louis and Kansas City have been working
in some of the most distressed communities and have been instrumental
in revitalizing neighborhoods. I am proud of the work they have done
and I have seen the value they have added. I am also excited about the
merger between the Neighborhood Housing Services of St. Louis and
another successful organization called Beyond Housing. These are two of
the leading CDCs in the St. Louis area and combining their talents is a
great move. I hope that this merger will become a model for other CDCs
in St. Louis where there are dozens of small-sized, specialized
organizations that do not have the capacity to take on much needed
larger scale housing and economic development projects.
Today, I would like to hear more about NRC's activities, especially
its affordable housing programs. Addressing the shortage of affordable
housing is one of my highest priorities. It is obviously clear that we
need to stimulate and support the production of more affordable
housing, especially for extremely low-income families. In the fiscal
year 2002 VA/HUD appropriations bill, I sponsored the addition of $5
million for Neighborhood Reinvestment to expand their multifamily
housing programs. However, the Administration and OMB did not continue
this important initiative in its budget request. I am disappointed but
not deterred, and I will continue to advocate for multifamily
production.
Further, I would like to hear how NRC has been involved in helping
HUD dispose of its single-family assets and administer its new Section
8 homeownership program. I have questions about HUD's decision to
impose a moratorium on the Asset Control Area program. While I support
the suspension of those organizations that have not performed or
complied with program rules, punishing good non-profits is puzzling to
me. HUD's decision is like ``throwing the baby out with the bath
water.'' And, the alternative of HUD using its own resources to dispose
of its assets is definitely a worse option.
In regards to the CDFI, I support Treasury Secretary O'Neil's
initiative to have the Fund develop real outcome measurements on its
programs. In past reports, GAO found that its programs emphasized
outputs rather than outcomes. I hope that this effort is able to help
us understand how cost-effective and efficient the CDFI programs are,
especially in comparison to other similar Federal activities.
There are two other issues I would like to highlight. One, I am
disappointed with the Administration's decision to not fund the Native
American CDFI Technical Assistance program. This is a modest $5 million
program for a population that has significant needs. The Treasury
Department's own study identified significant barriers to capital
access for Native Americans. Its recently released Native American
Lending Study found that ``many communities located in Indian Lands
face economic and social challenges that place them significantly
behind the rest of the U.S. economy.'' It is clear from this report
that the CDFI must play a role in Native American lands.
The second issue I would like to raise is the future of the CDFI.
With the addition of the New Markets Tax Credit program to the CDFI
portfolio, I am interested in whether this program will become the
Fund's primary activity. In other words, should the CDFI focus its
activities on grant-making or the allocation of tax credits to better
meet its mission?
Lastly, I am concerned about the Fund's efforts in addressing
distressed communities in rural areas. Many members of this
Subcommittee share this concern. I would like to hear how the Fund has
addressed this issue.
Thank you.
Senator Mikulski. Well, we welcome both of our witnesses.
And we ask them to proceed with their testimony. Ms. Lazar, you
come with considerable background in public service. And we
would just ask you to proceed.
Ms. Lazar. Thank you. Good morning, Madam Chair Mikulski,
and Ranking Member Bond. My name is Ellen Lazar, and I am the
Executive Director of Neighborhood Reinvestment Corporation.
I am joined today by Margo Kelly and Clarence Snuggs, who
are my Deputy Executive Directors, and Jeff Bryson, our General
Counsel.
This past year, we were fortunate to have very strong
leadership from our board of directors. Governor Edward
Gramlich of the Federal Reserve, serves as our chair. John M.
Reich, Director of the Federal Deposit Insurance Corporation,
serves as our vice-chair. Among the other members of our board
are James E. Gilleran, the Director of the Office of Thrift
Supervision; Deborah Matz, Director of the National Credit
Union Administration; John C. Weicher, Assistant Secretary for
Housing and the Federal Housing Commissioner; and Julie
Williams, the Deputy Comptroller from the Office of the
Comptroller of the Currency.
I am here today to talk about Neighborhood Reinvestment and
the experience of over 225 affiliated community development
nonprofits, known as the NeighborWorks network, that serves
over 2,000 urban, suburban, and rural communities in 49 States,
the District of Columbia, and Puerto Rico, and to talk about
the work these organizations are doing to revitalize
communities and help low- and moderate-income families achieve
a personal stake in the renewal of their communities.
Neighborhood Reinvestment supports and strengthens
NeighborWorks affiliates through technical assistance,
training, direct funding through grants, program review and
oversight, and access to a unique secondary market. I ask you
to support Neighborhood Reinvestment's budget request of $105
million. There are three reasons why a continued investment by
Congress in Neighborhood Reinvestment----
Senator Mikulski. Wait a minute. I am lost here in
testimony, Ms. Lazar.
Ms. Lazar. I am sorry.
Senator Mikulski. I have an oral testimony. And then it
talks about Neighborhood Reinvestment. And then I have your
formal testimony. What are you--where are we here?
Ms. Lazar. I am on the second page of the oral testimony.
Senator Mikulski. I have it now. Thank you.
Ms. Lazar. Okay. Thank you.
There are three reasons why a continued investment in
Neighborhood Reinvestment is a wise use of this Nation's
Federal resources.
STEWARDSHIP OF FEDERAL RESOURCES
First, Neighborhood Reinvestment takes very seriously its
stewardship of its Federal appropriation by maximizing the
effectiveness and efficiency of the NeighborWorks network. We
use Federal funding to attract private sector resources. For
every dollar appropriated to Neighborhood Reinvestment, the
NeighborWorks system generated more than $15 from private
sector and other sources, resulting in a direct investment of
nearly $1.4 billion.
We can achieve this level of impact because our programs
and services are highly flexible and tailored to fit the credit
and resource gaps that cannot be filled otherwise. We use a
community-based approach to direct our activities. Essentially,
we ask each NeighborWorks organization to identify the specific
challenges in their communities. We respond with a unique
combination of training, technical assistance, and financial
support.
As you know, two-thirds of our budget goes out to
NeighborWorks organizations as direct grants, but we provide
much more than just funding to local community development
organizations. Our capacity-building services include technical
assistance, which responds to intricate and timely
organizational issues; our risk management system, which
monitors the organization and its financial health,
productivity, and viability; and our training institutes, which
help to educate and ensure that local staff are well informed.
In fiscal year 2001, we trained more than 4,200 people. Our
training institutes not only serve our network, but the broader
community development and housing field. Our services improve
the local organization, mitigate long-term risk, and maximize
the impact of the Federal resources we use.
Secondly, Neighborhood Reinvestment continually looks
toward the horizon, seeking new opportunities to address
persistent challenges, thereby serving as the laboratory
environment Congress intended. The challenges facing this
country are ever changing. Neighborhood Reinvestment was
chartered and directed to serve as a laboratory for the
community development field.
HUD's Section 8 home ownership option is a good example.
NeighborWorks organizations provide a bridge between private
lenders and public housing authorities to make home ownership a
reality. Organizations receive technical and grant support from
Neighborhood Reinvestment. And this subcommittee has provided
the resources that have created this laboratory and seeded this
effort.
We have assisted 21 NeighborWorks organizations, working
with 26 public housing authorities, and have trained over 1,000
professionals on this option through courses we offer.
Our multi-family funding has been another significant area
for us. Last year we received $5 million, which was designated
to explore ways to serve families with incomes below 30 percent
of area median income in mixed income rental housing. This is
especially difficult since low-income families' income is often
unable to cover the operating costs of the rental unit.
The majority of the allocation that we received is going
out to NeighborWorks organizations to fund the development of
mixed income properties that house families with incomes below
30 percent of median income. The organizations will employ a
variety of strategies. We will gather information on how these
properties and others will financially support a wide mix of
incomes. We appreciate the opportunity to examine viable
options in this important area and to report our results to
you.
Our most visible laboratory effort to date is the
NeighborWorks Campaign for Home Ownership. In fiscal year 1998,
Congress seeded our home ownership efforts with a $25 million
set-aside. That funding has helped produce some remarkable
results. The average income of the families we serve is nearly
half of the national average, $29,300. Ninety-five percent of
these folks are first-time home buyers. Fifty-two percent are
ethnic minorities. Forty two percent are female buyers.
We have produced a series of integrated strategies,
including comprehensive home buyer education, NeighborWorks
Home Ownership Centers, and a financial literacy initiative. We
are on target to surpass our 5-year goal to create 40,000 new
home buyers.
Lastly, Neighborhood Reinvestment provides strategies for a
range of housing and community development challenges. The one-
size-fits-all approach does not work. We are addressing the
needs of under-served communities and populations with a
particular sensitivity to the needs of low-income families,
immigrants, the disabled, and the elderly. This requires more
than grants. We need strong organizations led by strong
community leaders, local resident leaders, leading to greater
civic involvement, which helps effectuate positive change.
CONCLUSION
Let me close by thanking Madam Chair Mikulski and Ranking
Member Bond for the wonderful opportunity you and the
subcommittee have given this organization to serve America's
communities and by asking for your continued support.
At the $105 million level, we will leverage $1.6 billion in
direct total investment in distressed rural, suburban, and
urban communities. We will assist more than 71,000 families
obtain and maintain safe and affordable rental and home
ownership housing. We will provide pre-and post-purchase home
ownership counseling and financial literacy to nearly 70,000
families.
You have encouraged us to be flexible, creative, nimble,
and responsive in designing and delivering our services and
resources. And this flexibility and your demonstrated
confidence in us has created remarkable results. We know that
your investment in Neighborhood Reinvestment is an investment
and expression of confidence in America's communities. And all
of America benefits when its communities are healthy, strong,
and safe.
PREPARED STATEMENT
Thank you. And I am happy to take any questions.
Senator Mikulski. Thank you very much, Ms. Lazar. And with
unanimous consent of the committee, your entire testimony will
be included in the record.
[The statement follows:]
Prepared Statement of Ellen Lazar
Good morning, Chairman Mikulski, Ranking Member Bond, and members
of the subcommittee. My name is Ellen Lazar and I am the Executive
Director of the Neighborhood Reinvestment Corporation. I am here this
morning to talk with you about the work that Neighborhood Reinvestment
is doing to revitalize communities and help low- and moderate-income
families achieve a personal stake in the renewal of their communities.
My testimony is based on the experience and considerable successes
of 225 community development organizations serving more than 2,000
urban, suburban, and rural communities. These nonprofits are
collectively known as the NeighborWorks network and operate
in 49 States, the District of Columbia, and Puerto Rico.
The Neighborhood Reinvestment Corporation was created by Congress
in 1978. Since that time, Neighborhood Reinvestment and its affiliated
NeighborWorks network have continuously evolved to become
increasingly effective and efficient in leveraging significant private-
sector resources for community revitalization and affordable housing.
This could not have been accomplished without this subcommittee's
commitment of Federal funds. In fiscal year 2001, the
NeighborWorks system generated nearly $1.4 billion in direct
investment, helping nearly 64,000 families obtain and maintain safe and
affordable rental and homeownership housing.
I thank the subcommittee for supporting Neighborhood Reinvestment
through the fiscal year 2002 budget appropriation of $105 million.
Neighborhood Reinvestment's fiscal year 2003 Budget Justification
outlines proposed activities at a $105 million budget level. This
includes $10 million to further expand a groundbreaking effort to
utilize the HUD Section 8 program in support of home ownership for low-
income families.
Before I move further into the details, I would like to express my
immense pride, and my good fortune, in leading a Corporation that works
to build community and public-private cooperation as its fundamental,
day-to-day business. Throughout the Corporation and the
NeighborWorks network, we feel an increased responsibility to
the concepts of positive action, purposeful change, and communitywide
commitment that is so critical to our country today.
the neighborworks system
The NeighborWorks system is three-pronged
Neighborhood Reinvestment Corporation.--Is a Congressionally
chartered, public nonprofit corporation, headquartered in Washington,
D.C., and staffed in nine regional offices. Neighborhood Reinvestment
has five core activities:
We charter new NeighborWorks organizations through an
extensive educational and partnership-building effort, involving
residents, business leaders and government representatives.
We provide funding for capital projects and operating grants to
NeighborWorks organizations, enabling them to create and
build their own community-revitalization initiatives from a solid asset
base.
We provide a high degree of management and technical assistance to
NeighborWorks members and the broader community development
field, in order to expand their delivery programs and better serve
their communities.
We conduct extensive reviews of NeighborWorks
organizations, focusing on their capacity to successfully manage their
resources and programmatic risks. These program reviews monitor
performance on an ongoing basis and serve as a platform for providing
management and technical assistance. They also unearth best practices
at the street level. Our goal is to increase the health, performance,
productivity and effectiveness of the entire NeighborWorks
network.
We conduct national Training Institutes in major cities throughout
the United States for anyone interested in affordable housing and
community revitalization, particularly private- and public-sector
practitioners and community leaders. Typically, 70 courses centered on
such topics as management and leadership, community building, community
economic development, neighborhood revitalization and affordable
housing are offered at each Training Institute. We conduct at least
five Training Institutes each year, attracting up to 1,200 participants
at each venue. We also offer other training opportunities such as
specialized resident leadership workshops and regional trainings.
These activities individually and collectively help build the
productivity and strength of local community development organizations.
The NeighborWorks network.--Was founded by Neighborhood
Reinvestment. This network of community-based nonprofits has evolved
from 34 organizations operating in about a dozen States in the 1970s to
the impressive 225-member network working today in more than 2,000
communities across the country. NeighborWorks organizations
operate in our Nation's largest cities and in some of its smallest
rural communities. Regardless of their target communities,
NeighborWorks organizations function as partnerships of local
residents, lenders and other business leaders, and local government
representatives. They produce creative strategies, share best
practices, and develop flexible financing mechanisms.
Neighborhood Housing Services of America (NHSA).--Is a secondary
market for a range of investment vehicles originated by
NeighborWorks organizations. It is funded primarily by social
investors that purchase loans made by NeighborWorks
organizations, thus replenishing local revolving loan funds and
enabling them to finance even more homeownership, rehabilitation and
multifamily housing. NHSA's services focus on lower-income borrowers;
the median borrower income is $24,652. Over the years, NHSA has
purchased more than $461 million in loans from local
NeighborWorks organizations and their local lending partners.
The NeighborWorks system is the only coordinated effort
of its type in the Nation. It is unique in that it:
--Provides a national delivery system built on locally-directed,
community-based partnerships;
--Fosters local and regional leveraging of scarce Federal resources;
--Serves as a laboratory for developing and testing creative
solutions to problems that impede affordable housing production
and neighborhood revitalization;
--Sets high standards for participating in the network and maintains
them through a strenuous approval process and a comprehensive
system of ongoing performance reviews; and
--Facilitates a learning environment for benchmarking and
disseminating best practices in the field.
The system's unique qualities pay off in increased reinvestment.
Through the guidance of the Corporation's Board of Directors, the
experience of Neighborhood Reinvestment staff, and the willingness of
NeighborWorks organizations to share the fruits of their
labors, the NeighborWorks system will, with your support,
continue to strengthen communities and improve lives throughout America
in the year ahead.
stewardship of federal resources
As a recipient of congressional appropriations, Neighborhood
Reinvestment recognizes its responsibility for proper stewardship.
Neighborhood Reinvestment has an established track record for using the
resources granted to us by Congress in a productive and efficient
manner. Further, Neighborhood Reinvestment extends its stewardship by
maximizing the effectiveness and efficiency of the
NeighborWorks network in ways that strengthen communities,
transform lives and bring more of America's families into the economic
mainstream.
Neighborhood Reinvestment and the NeighborWorks network
use Federal funding to attract private resources. The typical
NeighborWorks organization receives most of its funding
support from private sources and fees. Private investors have viewed
the NeighborWorks network as an increasingly sound
investment. In fiscal year 2001, for every $1 appropriated to
Neighborhood Reinvestment, the NeighborWorks system generated
more than $15 from private sector and other sources, resulting in a
direct investment of nearly $1.4 billion in communities served by
NeighborWorks organizations. We can achieve this level of
impact because our programs and services are highly flexible and
tailored to fill credit and resource gaps.
Neighborhood Reinvestment bridges the gap between public and
private funding by integrating public and private support. One critical
financing vehicle that we provide to NeighborWorks
organizations is equity capital, for real-estate development and
lending grants, and for local revolving loan funds. The
NeighborWorks organizations, in turn, use these funds to draw
private capital in a variety of ways, including:
--Equity and gap financing for home purchase loans, including down
payment and closing costs;
--Capital for property rehabilitation, micro-enterprise and small
business loans; and
--Capital costs associated with the acquisition and development of
residential and commercial real estate for long-term ownership
by NeighborWorks organizations.
Locally directed revolving loan funds are essential to the
network's success. Revolving loan funds provide flexible funding for
community priorities, such as homeownership, rehabilitation,
multifamily housing, and commercial and economic development.
Neighborhood Reinvestment Corporation supports these revolving loan
funds through technical expertise, training, and funding. NHSA aids the
liquidity of the local revolving loan funds by buying revolving loan
fund loans.
Most of the funding for revolving loan funds comes from local
sources--loans and grants made by banks, insurance companies,
foundations, local governments and other local investors. Loan
recipients are typically underserved families. Seventy-one percent of
loans made through NeighborWorks revolving loan funds are
made to very low- or low-income households, 53 percent to minority-
headed households, and 43 percent to female-headed households. Loans
carry a rate and term that the borrower can afford to pay back.
The NeighborWorks system is the only national nonprofit
network with expertise in designing, originating and servicing small
non-conventional loans to lower-income families. These loans help
create first-time homebuyers, often prevent mortgage delinquencies,
provide money for repairs, and may ensure accessibility for those with
disabilities. Generally, the loans offered by local
NeighborWorks organizations provide a blanket of security for
neighborhoods of modest means. By designing loans to fill the gap
between the capacity of the borrowers and the parameters of
conventional lenders, the NeighborWorks organizations
complete transactions that could not otherwise be prudently realized.
Neighborhood Reinvestment employs a grassroots-directed approach to
our service design or service delivery. We ask each
NeighborWorks organization to identify the specific
challenges they face in attempting to ensure strong, safe neighborhoods
of choice. Neighborhood Reinvestment responds with a tailored and
solution-oriented combination of training and technical assistance in
balance with any necessary financial support, including:
--Our national Training Institutes, which provide education and
practitioner-focused training, to ensure that local staff is
well-equipped and informed. Last year, more than 4,200
community development professionals and others attended the
Training Institutes.
--On-site specialized technical assistance in areas such as lending,
loss mitigation, resource development and marketing, community
revitalization, and business planning. This on-site assistance
is coordinated with and augmented by the extensive array of
formal training conducted at our Institutes and in other
trainings.
--On-going and responsive program reviews through our Risk Management
Unit that monitors the organizational and financial health of
each NeighborWorks organization. We make a site visit
to each NeighborWorks organization at least every 24-
36 months.
Together, these supportive services help ensure that funding is
used responsibly, efficiently and effectively at the local level.
Over the years, Neighborhood Reinvestment has earned a reputation
for helping communities achieve their revitalization goals. I am
convinced we can further improve. We have undertaken a corporate-wide
strategic planning process that will better position our organization
and our network to meet the challenges of America's communities with
even greater creativity and success. Emerging goals for our future
include bringing more private investment into our neighborhoods,
building stronger community leaders and civic commitment, collaborating
with new partners and building new alliances with long-standing
friends, continuing our dramatic success in creating homeownership
opportunities, and assisting in the effort to create safe, affordable,
attractive housing for low- and moderate-income families.
The plan encompasses our commitment to do several things:
--Increase the capacity of NeighborWorks organizations to
help underserved communities meet their revitalization goals;
--Expand the impact and reach of the NeighborWorks network;
--Increase private-sector resources for the work of the
NeighborWorks network;
--Provide responsive, integrated, seamless and efficient customer-
oriented services; and
--Be in the vanguard of the community development field.
community development laboratory
Neighborhood Reinvestment continuously looks toward the horizon,
seeking new opportunities to address persistent and emerging challenges
facing America's communities. The constant evolution of communities did
not escape the notice of Congress when Neighborhood Reinvestment was
chartered and directed to serve as a laboratory for the community
development field.
The flexibility of our dollars and the broad reach of the
NeighborWorks network allows the Corporation to directly
tackle some of the serious issues that impact communities, as well as
contribute to broader public policy discussions. Neighborhood
Reinvestment and the NeighborWorks network have played a
creative, collaborative role in effecting positive community change--
and we are well positioned to continue our efforts in fiscal year 2003
and beyond.
I would like to share with you some of the successes of our
laboratory environment, and how they have helped strengthen the
community development field and America's communities.
Section 8 Homeownership.--A good example of our laboratory
environment can be seen in Neighborhood Reinvestment's work with HUD's
new Section 8 homeownership option. With strong technical support from
Neighborhood Reinvestment, local NeighborWorks organizations
have been able to serve as an efficient and effective bridge between
private lenders and public housing authorities to make homeownership a
reality for qualified Section 8 recipients. This subcommittee provided
the resources that seeded our effort, allowing the
NeighborWorks network to provide high-quality counseling and
small second mortgages that are paid off by the Section 8 voucher.
The $5 million that you allocated in our fiscal year 2001
appropriation allowed us to expand our efforts--from four to 21
NeighborWorks organizations. The funds helped capitalize the
revolving loan funds of these NeighborWorks organizations,
which served as a source for second mortgages. A portion of the set-
aside was used for capacity building, which helped some
NeighborWorks organizations tailor their housing counseling
services to the specific needs of their Section 8 population, and to
work with public housing authorities.
Of the families assisted by NeighborWorks organizations
in fiscal year 2001, 85 percent of the borrowers are single, female-
headed households, and 35 percent are very-low income. The median
purchase price of the homes is $85,000.
The Administration and this subcommittee were supportive of the
strides made in fiscal year 2001; subsequently this subcommittee
allocated $10 million of Neighborhood Reinvestment's fiscal year 2002
budget to continue our work on helping Section 8 voucher holders move
into homeownership. Over $9.2 million of this allocation is going to
NeighborWorks organizations as grants and we expect to
announce grantees in early May. In fiscal year 2002, we expect to
attract a number of new public housing authority partners to this
option, as well as assist experienced Section 8 homeownership
NeighborWorks organizations in their partnerships to include
additional public housing authorities. Through your support,
Neighborhood Reinvestment and the NeighborWorks network have
become sophisticated in our approach to this option. We have and will
continue to share or successful strategies with others in the field.
We have concentrated heavily on sharing what we have learned
through our Section 8 homeownership laboratory with the broader field.
We have developed a course for the Neighborhood Reinvestment Training
Institute solely on this program that attracts many beyond the
NeighborWorks network. Through the Neighborhood Reinvestment
Training Institute and other training partnerships, we have conducted
over 28 outreach sessions, which educated more that 1,000 public
housing authority professionals, nonprofit staff, and lender partners.
We are also coordinating our training and information efforts with HUD
and public housing trade groups. We will continue these efforts
throughout fiscal year 2002 and 2003.
The NeighborWorks system has made significant headway in
establishing positive, productive relationships with public housing
authorities across the country and has made scholarships available for
public housing officials to attend Section 8 courses at our Training
Institutes. The strong partnerships established between
NeighborWorks organizations and their local public housing
authorities is expected to open the doors of homeownership to more than
500 families that were previously dependent on ongoing Section 8 rental
subsidies. With continued support from this subcommittee, Neighborhood
Reinvestment will continue to play a leadership role in making the
Section 8 homeownership option available to voucher recipients across
the country.
Mixed-Income Rental Housing.--Last year, this subcommittee provided
Neighborhood Reinvestment with a $5 million set-aside to support our
work in establishing mixed-income, multifamily rental developments and
explore ways to serve families with incomes below 30 percent of area
median income. This allocation recognizes that the challenge of
affordably housing this Nation's extremely low-income families is
complicated. We appreciate the opportunity to test a range of
approaches and eventually report our results to you.
Understanding the importance of multifamily rental housing in a
comprehensive neighborhood revitalization strategy, a group of
NeighborWorks organizations formed the NeighborWorks
Multifamily Initiative in 1999. Together, these organizations own more
than 30,000 rental housing units that provide attractive and affordable
housing for families where renting is currently a more appropriate
option than owning. The members of the NeighborWorks
Multifamily Initiative make it their mission to provide sustainable
multifamily homes, which are marked over the long-term by:
--Affordability;
--Well-maintained and attractive physical condition;
--Access to on-site learning centers designed to support the
technological and social infrastructure of educational success;
and
--Ongoing economic viability.
Research by the NeighborWorks Multifamily Initiative has
demonstrated that in all markets, the fundamental economics of serving
families with incomes under 40 percent of area median income requires
some level of on-going subsidy. A housing cost equal to 30 percent of
this household's income yields a rent payment that is less than the
operating expenses for their unit--leaving no funds for the payment of
debt service. Similarly, in many markets, creating new housing for
those at 60 to 100 percent of area median income is equally difficult,
since many existing subsidies are targeted to households with incomes
below 60 percent of area median income. Nevertheless, with creativity,
tenacity and resolve, the Multifamily Initiative members are creating
mixed-income properties that serve families under 30 percent of area
median income in a variety of ways.
We have used the $5 million set-aside to promote mixed income
properties that dedicate a portion of their units to extremely low-
income families. The elements of this program include:
Mixed Income Property Development Grant Incentive Set-Aside. Our
goal under this component of the allocation was to promote the
production of units affordable to extremely low-income families within
mixed-income properties. We have received 17 applications from
NeighborWorks organizations for this allocation, totaling
$6.1 million for 191 units affordable to those at or below 30 percent
of the area median income, in developments that total 1,400 units. We
will select a set of demonstration projects that serve diverse market
settings and employ a variety of subsidy strategies. Awards will be
finalized by the first week of June 2002.
Neighborhood Capital Corporation. The Multifamily Initiative was
the catalyst for creating the Neighborhood Capital Corporation (NCC),
which provides affordable, short-term financing to
NeighborWorks organizations to acquire multifamily properties
that are at risk of deterioration or of being lost as affordable units
available in a community. NeighborWorks organizations and
other nonprofit developers find the primary obstacle to purchasing a
property is the lack of flexible pre-development and acquisition
financing that allows an organization to respond quickly when a
property becomes available. Neighborhood Reinvestment responded to this
problem by making an initial investment in NCC. NCC provides essential
loans so that NeighborWorks organizations can purchase
multifamily properties, many of which are preservation properties. This
funding will support the production pipeline of mixed-income properties
by financing acquisition and preservation of existing properties. The
Corporation expects that over the next 2 years, NCC will leverage $20
million from private sector investments.
Symposium on Mixed-Income Properties.--A symposium was conducted in
April 2002 to foster dialogue among experienced practitioners from
across the real estate development, finance, and public agency arenas,
including housing finance agencies and public housing authorities. This
symposium examined various real estate development models, operating
strategies, existing finance tools, and the impact of State and local
policy and regulations on achieving mixed income properties that can
house extremely low-income families. The Symposium, which attracted
some of the best minds in our field, was held on April 4, 2002 during
Neighborhood Reinvestment's recent Training Institute in Chicago.
Research Findings.--A portion of this set-aside will also allow us
to prepare and present a report on strategies and financing currently
employed to develop mixed-income properties. This report will examine
properties already in the NeighborWorks portfolio and will
make observations on those funded through Neighborhood Reinvestment's
special set-aside for mixed income housing. We expect to have a full
report to share with you by the end of the year.
Advanced Training for Experienced Practitioners.--Our national
Training Institutes are widely acknowledged to be at the cutting edge
of training for housing and community development practitioners. As we
have monitored the capacity of the professionals in this field, it has
become apparent that there are huge benefits to be gained from
additional training and coaching of the most experienced housing and
community development practitioners. To respond to this capacity need,
we are collaborating with Harvard's Hauser Center to develop state-of-
the-art training for seasoned leaders in an intensive learning
environment. Our goal is to advance the quality of community
development leadership, analyze more thoroughly the challenges facing
America's neighborhoods, and develop even more powerful strategies to
strengthen our communities.
New Homeowners.--Perhaps our best-known laboratory effort to date
is the NeighborWorks Campaign for Home Ownership, our very
successful effort to assist families of modest means become successful
long-term homeowners. In fiscal year 1998, Congress seeded our
homeownership efforts with a $25 million set-aside. That funding has
helped produce remarkable results--the average income of the homebuyer
is nearly half of the national average, $29,300; 95 percent are first-
time buyers; 52 percent are ethnic minority buyers; and 42 percent are
female buyers. Currently, we are on target to surpass our 5-year goal
to create 40,000 new homebuyers.
The NeighborWorks Campaign for Home Ownership has
identified a series of well-integrated strategies to help lower income
Americans become homeowners. These strategies include comprehensive
homebuyer education, Full-Cycle LendingSM,
NeighborWorks HomeOwnership Centers, and an emerging
financial literacy pilot. We are currently planning for the next 5
years of the Campaign, and I know we will continue to strive to help
lower-income Americans successfully achieve the American dream.
solutions to a range of challenges
No ``one size fits all'' approach can match the wide range of
economic markets, housing stock, and employment challenges experienced
in this Nation's urban, suburban and rural communities. Older rural
communities vary significantly from first-ring suburbs, which differ
distinctly from Native American lands.
The flexibility that you have allowed us in designing strategies
and targeting our resources has given us the ability to devise
extraordinarily successful tools and strategies, as well as build a
network of strong and diverse local community development
organizations. The power and impact of our grants are directly
attributable to their flexibility. We are in the business of helping
develop a network of strong nonprofit organizations that can respond to
vulnerable neighborhoods in a changing environment. Underserved
populations need to be connected--to private markets, mainstream
lenders, and conventional products. Since its inception, Neighborhood
Reinvestment has always been about addressing the needs of underserved
communities and populations. This focus has allowed the Corporation and
its affiliated NeighborWorks organizations to develop a
particular sensitivity and approach to the specialized needs of low-
income families, immigrants, minorities, the disabled, and the elderly.
Serving the needs of these populations requires more than grants. We
are committed to building strong organizations, led by strong community
leaders. We are especially committed to developing local resident
leaders because we believe greater civic involvement helps effectuate
positive change in communities.
Resident leadership development continues to be a core value in the
NeighborWorks network's approach to community revitalization.
To respond to a need for enhanced resident leadership development, we
sponsor regional Community Leadership Institutes. These programs enable
resident leaders to share their experiences, hone their leadership
skills and bring innovative ideas back to their communities. This
reflects the Corporation's conviction that while new homeowners,
improved housing and increased investment are essential to
revitalization, the most essential ingredient for long-term success is
informed, effective and motivated resident leaders.
To examine the strategies and best practices of outcome-based
community organizing, the NeighborWorks network has recently
developed a community organizing pilot. Twenty NeighborWorks
organizations have developed action plans and will be documenting their
progress toward their goals. Over the next year, this pilot will
develop best practices as well as produce a framework for evaluation of
community organizing. Our increased focus on the needs of rural
communities is an example of Neighborhood Reinvestment's commitment to
diverse communities. In 1990, three NeighborWorks affiliates
identified their primary service areas as rural communities. By fiscal
year 2001, that number had grown to 59 organizations, which is 27
percent of the total number of organizations in the
NeighborWorks network. The network has proven its efficiency
in addressing housing needs in rural communities, particularly through
our partnership with a peer organization, RNA Community Builders. With
seed funding from Neighborhood Reinvestment and the Northwest Area
Foundation, rural NeighborWorks organizations have
transformed this peer-to-peer membership organization into a shared
revolving loan fund that provides bridge financing for local housing or
economic development projects at below-market rates.
Last year, we worked closely with our rural members to deliver a
week-long sequence of courses at our Training Institute specifically
focused on the unique barriers to community development in rural areas.
While the challenges in rural, suburban and urban settings are, in many
instances, similar, the means to effectively address them are often
very different. We are engaged in a similar effort to design courses
that address the very acute barriers to creating homeownership and
economic development opportunities for Native Americans.
In fiscal year 2000, more than 50 NeighborWorks
organizations provided housing for non-elderly persons with
disabilities, assisting more than 800 families. More than 45
organizations provided housing services for the elderly, benefiting
more than 3,300 households. And as the needs in these communities grow,
our capacity to serve them responds in tandem.
As you can see by the vast network of services that Neighborhood
Reinvestment provides--either directly or through integrated channels
and partnerships--we are committed to building strong communities. The
needs of underserved communities are as diverse as the Nation itself.
Therefore, our approach to revitalization must reflect those diverse
needs.
conclusion
For fiscal year 2003, we are requesting an appropriation of $105
million, which includes $10 million to further Neighborhood
Reinvestment's and the network's pioneering efforts in using Section 8
vouchers to purchase a home. At this funding level, Neighborhood
Reinvestment will be able to maintain its current level of services to
the NeighborWorks network and produce modest increases to the
outputs and measures.
A $105 million appropriation will assist the
NeighborWorks network to:
--Leverage nearly $1.6 billion in direct total investment in
distressed rural, suburban and urban communities;
--Assist more than 71,000 families obtain and maintain safe and
affordable rental and homeownership housing;
--Provide pre- and post-purchase homeownership counseling and
financial literacy training to nearly 70,000 families,
including many potential Section 8 buyers; and
--Continue to educate the public housing industry and potential
partners on the homeownership option.
To support and expand these significant accomplishments, the
Neighborhood Reinvestment Corporation and NHSA expect to:
--Add 12 new organizations to the network, increasing the
NeighborWorks network to 245 organizations serving
2,200 communities;
--Conduct 240 reviews of member organizations;
--Provide over 190,000 training contact hours to community
development leaders and practitioners, not only through the
Neighborhood Reinvestment Training Institute but also through
local and district training opportunities; and
--Purchase $60 million in loans from NeighborWorks
organizations.
Let me close by thanking the subcommittee for the wonderful
opportunity you have given Neighborhood Reinvestment and the
NeighborWorks network to serve America's communities, and by
asking for your continued support. Because Neighborhood Reinvestment is
efficient in the services it provides, communities and residents
benefit. Because our systems continually evolve to address ever-
changing needs, communities and residents benefit. And because the
communities and residents are many in number and need, we are
continually aware of ground-level challenges across this great Nation.
With your assistance, we will continue to strengthen underserved
communities and populations across this country. You have encouraged us
to be flexible, creative, nimble and responsive in designing and
delivering our services and resources, and this flexibility and your
demonstrated confidence in us has created remarkable results. In
addition to transforming lives and neighborhoods in incredibly diverse
settings, the NeighborWorks network now serves as an
increasingly effective laboratory for testing new ideas and solutions
to new and long-standing problems. We know that your investment in
Neighborhood Reinvestment is an investment and expression of confidence
in America's communities. And all of America benefits when its
communities are healthy, strong and safe.
Neighborhood Reinvestment Corporation is committed to building
healthy, strong and safe communities all across America. Your continued
support is vital to us in accomplishing this goal.
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
STATEMENT OF TONY T. BROWN, DIRECTOR
Senator Mikulski. We want to welcome for his first time Mr.
Tony Brown, who began his tenure at CDFI in August. Prior to
that, he was a senior vice-president for Bank of America in
Jacksonville, Florida. And he is a graduate of Xavier
University in Ohio with a master's in business, with a
specialty in finance and a degree in international affairs in
business. So he comes with a very strong background,
educational background, in the area of finance, as well as
considerable private sector experience, particularly in the
field of banking.
And we do know that Bank of America is one of the real
recognized banks in reaching out, in fulfilling its obligation
on the Community Reinvestment Act.
So you come with a lot of experience. And we really do need
it. So we welcome you for your first time. We look forward to
getting better acquainted with you. And this is a good way to
do it. So we ask you to please proceed.
Mr. Brown. Thank you, Madam Chair, Senator Bond, and
members of the subcommittee. I thank you for the opportunity to
testify before you today on behalf of the Department of
Treasury's CDFI Fund and in support of the President's fiscal
year 2003 budget. I do apologize. We did not submit a formal
oral statement. I do request respectfully that the written
testimony be included for the record. And I will keep my
remarks brief.
As Chairwoman Mikulski indicated, I come to the government
with 20 years' prior banking experience and with over a decade
of community development experience. Community development has
been a career. Community development is a passion. And I thank
the President and Secretary O'Neill for the opportunity to be
part of the CDFI team. And I know, and I have witnessed
firsthand, the remarkable work of CDFIs and the value of
community development lending and investment services in
improving our low income communities.
And so when the Secretary asked us to find ways to help
show how CDFIs improve and have impact in our Nation's low
income communities, I knew, I know, from firsthand experience
that that would be an easy undertaking from the standpoint of
the things I have witnessed firsthand. And I will share some of
those with you as I speak.
As you know, the CDFI Fund is a wholly owned government
corporation within Treasury that promotes access to capital and
local economic growth in distressed communities and with under-
served populations through community development finance. And
it is that statement, community development finance, that I
think best highlights what the value of the fund is and what we
do.
CDFIs support and provide loans and investments in
financial services to improve the economic vitality of our low
income communities. And they do it in ways that are more
flexible and innovative than regulated financial institutions.
To date, we have certified 565 CDFIs covering all 50 States.
These CDFIs provide a wide range of investment and lending
activities. And I would like to just highlight a few.
Our leading fund categories are those that we categorize as
housing and facility loan funds. These entities provide loans,
as an example, to nonprofit housing developers to help them
secure site control or conduct due diligence. Our partnership
with NeighborWorks and NRC is an example. We have certified 66
NeighborWorks organization of 565 CDFIs. And as Ellen has
indicated, they show a tremendous record of providing housing
loan funds to improve our low income communities.
Other examples in the housing and facility loan category
would include loans to nonprofit healthcare providers in order
to provide healthcare centers in low income communities. And
again, the distinction is that they do it in ways that are
innovative and more flexible than our regulated financial
institutions. They may take second and third mortgage positions
in order to make those facilities happen.
Our second leading category are business loan funds.
Senator Mikulski. What page are you working on?
Mr. Brown. As I said, I apologize, I did not submit an oral
statement. So----
Senator Mikulski. No, but it would helpful if you were
following in order from your written testimony. It is very
informative, but it is hard for us to follow, Mr. Brown. If you
could work off the outline of your testimony, so we know at
least the topic, sir.
Mr. Brown. I will do that, then. I will speak from----
Senator Mikulski. Sure.
Mr. Brown [continuing]. The written testimony.
Senator Mikulski. We appreciate that.
Mr. Brown. Okay. The first two pages.
As I was explaining, on the first page of my written
testimony in talking about the CDFI Fund being a wholly owned
government corporation in that second paragraph, I am
highlighting information about 565 certified CDFIs by giving
you a few examples of what they do. I just highlighted
information on the housing loan funds.
Another example of the 565 certified CDFIs, 25 percent of
those CDFIs are engaged in business loan funds. They provide
financing to low income immigrant, minority, and women
populations, again with innovative and flexible underwriting
guidelines.
Our third category of the CDFIs that I have highlighted in
that second paragraph on page one are community development
credit unions. These credit unions are specialized
neighborhood-based financial service centers. Many of them have
been formed out of the basement of churches and have come
together as a result of faith-based initiatives.
The remaining category of funds are those that have been
formed by bank holding companies, those that are engaged in
micro-enterprise lending, and then we have venture capital
funds.
On page two of my written testimony, as I indicated, our
vision for the CDFI Fund is to become a leading vehicle and
best practice government agency for financing economic and
community development activities. Our mission is to help make
America a place where all of its people have affordable access
to credit, capital, and financial services. This administration
is committed to shifting the fund from merely a grants-making
organization to one that addresses the economic ills of low
income communities through targeted investments and community
development finance.
Also on page two, I talk about the vision of the fund for
2003 and beyond. And in that we make mention of our New Markets
Tax Credit Program. And highlighting that is the fact that the
opportunity for the fund to achieve major impact is not
isolated or sporadic, when you consider that 40 percent of the
Nation's low income--40 percent of the Nation's census tracks
are low income areas that qualify for our major programs. What
that means for the State of Missouri is that nearly half, 48
percent, of your census tracks qualify for our major programs.
And in Maryland, that number compares to the national average
at about 38 percent. So I share that information to let you
know that we understand how important the CDFI program is to
you and your constituents. And we are committed to making it a
world-class organization.
Some of our successes this past year have included, as you
indicated, release of the Native American Lending Study. And
along with that was the first year that we provided our Native
American CDFI Technical Assistance Program. We are quite
pleased at both products. And the fact that our NACTA Program,
our Native American CDFI Technical Assistance Program, has
brought in 45 applications totaling nearly $6 million in
requests. And it is a program that we are committed to and
that, though our budget does not contain a set-aside, it is
included for 2003. And we do plan to issue another NOFA related
to our NACTA Program.
Also, this past year was the first year of our SECA
program. This is the investment program that we make to small
and emerging CDFIs. We are pleased to announce that we awarded
over $8 million to 70 small and emerging CDFIs throughout the
country.
NEW MARKETS TAX CREDIT PROGRAM
Last year we received comments on the New Markets Tax
Credit Program. This year, and within the next 30 days, we will
be issuing our Notice of Allocation Availability, which will
officially start the application process for the New Markets
Tax Credit Program. And we are certainly pleased to have the
opportunity to use tax credits as an incentive to see an
increase in private sector capital, a goal of $15 billion in
private sector equity, flowing into low income communities.
Now our budget does respectfully request $68 million in
appropriations. This comes in recognition of tight budget
concerns related to tough priorities for international and
homeland securities. We feel that the reduction in the budget
will be made up through increased private sector investments,
through our New Markets Tax Credit Program. We have retooled
our organization, and we think that more efficient operations
with quicker disbursement processes will also aid in providing
the dollars that our communities so vastly need to work in
improving their low income neighborhoods.
Senator Bond, to your question of the value of New Markets
Tax Credit relative to our other Programs, we see it as being
an integral part of what we do. I often say that our strategy
at the Fund is a three-part strategy. One is the investments we
make, our traditional investment programs, our Core and SECA
Programs and what we do to help our communities create
specialized loan funds. It is an important part of the strategy
and one that we are committed to maintaining.
The second part of that strategy is the Bank Enterprise
Award Program. We have substantial financial institutions that
are willing to leverage their balance sheet, their income
statements, to make a difference in the communities we serve.
And many have been the major investors to many of the CDFIs
that have been formed on the local level.
And then, obviously, the third part of that strategy is the
New Markets Tax Credit Program. In order to have sustaining
economic activity, we must have an increased flow of private
sector dollars into our low income communities.
PREPARED STATEMENT
So with that, I will end my opening remarks. And, again,
thank you for the opportunity to testify. And I am available to
answer any questions you may have.
[The statement follows:]
Prepared Statement of Tony T. Brown
introduction
Madam Chair, Senator Bond and members of the subcommittee, I
appreciate the opportunity to testify before you today on behalf of the
Department of Treasury's Community Development Financial Institutions
(CDFI) Fund and in support of the President's fiscal year 2003 budget.
I am Tony Brown, the new Director of the CDFI Fund. The Secretary of
the Treasury selected me as Director in August of last year. I bring a
20-year prior experience in banking to the CDFI Fund with a decade of
service in community development where I managed the community
development program for the largest financial institution in the State
of Florida. Joining me today are Fred Cooper, Deputy Director for
Policy and Programs, and Owen Jones, Deputy Director for Management/
CFO.
As you know, the CDFI Fund is a wholly owned government corporation
within the United States Department of the Treasury. The Fund promotes
access to capital and local economic growth by directly investing in
and supporting community development financial institutions (CDFIs)
that provide loans, investments, financial services and technical
assistance to underserved people and economically distressed
communities. CDFIs are specialized financial institutions operating in
market niches that have not been adequately served by traditional
financial institutions. Included in the various types of CDFIs are
community development banks, credit unions, business loan funds,
housing/facilities loan funds, microenterprise loan funds, and venture
capital funds. As of February 15, 2002, the Fund has certified 565
institutions as CDFIs. These CDFIs operate in all 50 States.
Our vision for the CDFI Fund is to become a leading vehicle and the
best practice government agency for financing economic and community
development activities in low-income areas to improve the standard of
living for Americans living in distressed and underserved communities.
Our goal is to help make America a place where all of its people,
including those in such communities, have access to affordable credit,
capital and financial services so that they too can realize the
American dream. We characterize fiscal year 2003 as a transition year
where the Fund shifts from an organization seen primarily as a grants-
making organization to one that addresses the economic ills of low-
income communities through targeted investments and community
development finance.
By so doing we will help the Department of Treasury achieve its
economic mission of a prosperous and stable America. This ambitious
undertaking is explained in this testimony.
My testimony will focus on four key areas: the performance of the
CDFI Fund in 2003 and beyond; the President's fiscal year 2003 budget;
management and operations; and CDFI Fund programs.
performance of the cdfi fund: 2003 and beyond
Treasury Secretary O'Neill has challenged all employees of the
Department to make the Treasury a world-class organization.
Additionally, he has instructed the CDFI Fund to develop procedures to
provide a meaningful measurement of the impact and results of taxpayer
dollars awarded through CDFI Fund programs. In order to successfully
work toward the goals set by the Secretary, I have asked CDFI Fund
staff to help me establish the CDFI Fund as a leading vehicle for the
delivery of community development finance, capital and service
activities within the Federal Government as well as in the Nation, so
that we have a demonstrable impact on low-income communities. I
envision the CDFI Fund becoming an ``expert'' source in this regard.
As we reported last year, Treasury Secretary O'Neill intends that
performance measures of the CDFI Fund and all Treasury activities be
more useful and relevant to the decision-making process, and improve
the timeliness and accuracy of the information systems that capture and
report performance data. To move forward on this commitment, the
Secretary has called for a fundamental review within all Treasury
bureaus of what we do and why we do it, resulting in a determination of
what measures of outputs and outcomes best capture what we are trying
to achieve. This points out the need for consistent ways to evaluate
the effectiveness of the various incentives for investment in low-
income communities so that we have a better understanding of what works
and what does not work. The CDFI Fund is committed to working with the
Secretary in this important initiative. Our budget includes $500,000 in
additional administrative funding so that we can collect loan-level
data to report performance and impact of CDFI activities similar to the
administration of the Community Reinvestment Act and the Home Mortgage
Disclosure Act.
This initiative will, I believe, enable us to measure the types of
impact of our funding that Secretary O'Neill is seeking. The CDFI Fund
is working with the community development industry to build a set of
performance measures and establish a ``performance matrix'' for our
awardees. This matrix will rate financial stability and community
development impact. By using financial and economic factors, we intend
to assess how CDFIs improve economic conditions of communities that are
underserved by traditional financial institutions.
Our plan is to use this rating system to better manage the CDFI
Fund's portfolio of investments and to identify under performing
entities and create a compliance ``watch list.'' We believe a
significant investment to collect and analyze loan-level data will
enhance our ability to report impact in various forms. These
initiatives will be incorporated into the CDFI Data Project, making
that industry-wide data collection effort even more useful to the CDFI
Fund and others interested in CDFIs.
Turning to the impact that CDFI Fund awardees are having in their
communities, the CDFI Fund is keenly interested in the issue of impact
and how it is measured. The Fund is on the forefront of improving data
collection and reporting in the CDFI industry and is one of the
founders of the CDFI Data Project (CDP), a collaborative effort of 13
entities--including the Ford and MacArthur Foundations and the six
major CDFI trade associations--to develop a standardized data
collection system for the CDFI industry. The goal of the CDP is to
produce comprehensive, high-quality activity and performance data on
CDFIs. The CDFI Fund and other CDP participants issued their first
collaborative annual survey last spring; selective results for CDFI
awardees are described below.
Measuring community development impact has been a challenge to the
CDFI Fund and the industry overall. The General Accounting Office (GAO)
recognized this in its 1998 report, entitled ``CDFI Fund Needs Better
Systems to Measure, Monitor, and Evaluate Awardees' Performance.'' In
the next 2 years, the CDFI Fund increasingly will focus on identifying
additional measures of impact. For example, the Fund has begun an
initiative to collect loan-level data from CDFIs. This data will show
exactly where CDFIs are lending relative to more traditional lenders
and thus give us a better idea of the role CDFIs play in filling the
gap in affordable financial services. The MacArthur Foundation has
embraced this initiative, and the CDP has incorporated loan-level data
collection as well as broader impact measurement research into its
strategic plan.
Internally, the CDFI Fund is reviewing the way we collect outcome
information from our awardees. To date, each awardee's performance
goals and measures have been tailored to their specific activities.
While these measures were rich in their uniqueness, the outcomes they
measured could not be aggregated across CDFIs because they were not
comparable. The CDFI Fund plans to revise its awardee performance goal
and measurement system so that it produces standardized information on
all CDFIs. To the extent possible, we will incorporate the CDFI Fund's
reporting requirements in the annual survey in order to minimize
reporting burdens on CDFIs and facilitate data analysis at the Fund.
Finally, the CDFI Fund is beginning to conduct peer analyses in an
effort to develop industry performance benchmarks for each type of
CDFI. We will use this information to ``risk rate'' our portfolio of
awardees. Once it is tested and proven, we will consider other uses
such as incorporating it into our award decision-making process. All of
these efforts respond to findings and recommendations in the 1998 GAO
report.
It is incumbent upon the CDFI Fund to continually improve its
processes and develop a system for accurately measuring the real impact
of CDFI Fund dollars in the communities served by our customers.
president's fiscal year 2003 budget
The President's fiscal year 2003 budget requests $68 million in
appropriations for the CDFI Fund. This is the same funding level as
requested in last year's Presidential budget. The Administration
request should be considered in light of several factors.
First, the proposed budget for the CDFI Fund reflects overall
Federal budget priorities for increased National Security and Homeland
Security.
Second, the fiscal year 2003 budget level of $68 million maintains
a basic level of funding to support CDFI Fund programs and assumes
significant improvements in how we process applications. To do this we
hope to successfully streamline our award approval and disbursement
processes. We believe substantial savings in staff time will occur
through streamlined efforts. This will enable us to provide the much
needed community development capital to qualifying organizations with a
quicker disbursement of funds for those organizations who meet all
program criteria at the date of application.
Third, the enactment of the Community Renewal Tax Relief Act of
2000 will devote substantial additional resources to new incentives for
investment in low-income communities. This includes the New Markets Tax
Credit (NMTC) Program, to be administered by the CDFI Fund. The NMTC
Program is a new and, we believe, an exciting program for the CDFI
Fund. The NMTCs are expected to generate $15 billion in investments in
low-income communities over the next 7 years. We are working diligently
to allocate credits this year and measure their impact in fiscal year
2003, or as quickly as these credits are used, as an incentive to
attract equity capital. Although the allocations for NMTCs are expected
to be announced in the fall of calendar year 2002, we may not see the
effect of the NMTC-leveraged equity investments in low-income
communities before calendar year 2004. Obviously, the first year of
this program will be a work in progress since we have a limited sense
of the demand or actual appetite of investors for these types of tax
credit allocations. The successful implementation of the NMTC Program
is one of our highest priorities. The NMTC Program offers us a unique
opportunity to measure the increased flow of private capital into low-
income communities. Our resources are mobilized to ensure a successful
introduction of the NMTC Program this calendar year.
Lastly, we anticipate that approximately $30 million of the
proposed fiscal year 2003 budget will be used to fund the Core and
Intermediary Components of the CDFI Program and Training Program;
approximately $11 million (including the carryover from the prior year)
will be made available for the Small and Emerging CDFI Assistance
(SECA) and the Native American CDFI Technical Assistance (NACTA)
Components of the CDFI Program; and $20 million will be used to fund
the Bank Enterprise Award (BEA) Program. The remainder will be used to
cover the CDFI Fund's administrative costs, including the costs of
administering the NMTC Program.
The CDFI Fund will continue to focus efforts on serving those
markets, including rural and Native American communities, that have
relatively low levels of CDFI activity and inadequate access to
financial services. In these areas, we will continue to conduct
workshops (both in-person and via satellite broadcasts) detailing the
CDFI certification and funding application processes. We also expect
that the SECA Component, the NACTA Component, and the Training Program
will be of particular benefit to CDFIs and CDFIs in formation that
serve these difficult markets.
management and operations
The CDFI Fund has implemented effective financial and management
controls as verified by our independent auditors (KPMG, LLP). These
controls have allowed the CDFI Fund, for the fifth consecutive year, to
receive an unqualified (clean) audit opinion. Additionally, this marks
the fourth consecutive year that the independent auditors have
identified no material weaknesses or reportable conditions. KPMG's
opinion affirms the CDFI Fund's Statements of Financial Position,
Operations, and Changes in Net Position and Cash Flow are fairly
presented. These findings reflect the commitment of the CDFI Fund to
sustaining and improving upon its internal controls, operating policy
and procedures, and awards management.
The CDFI Fund continues to comply with the Federal Managers'
Financial Integrity Act (FMFIA) and the Federal Financial Management
Improvement Act (FFMIA). The CDFI Fund's system of internal management,
accounting and administrative controls are operating effectively.
During my 7 months as Director, I have spent a significant amount
of time reviewing the internal operations at the CDFI Fund. It is my
intention to make necessary changes, which will streamline and make
more efficient our processes and procedures. It is my hope that, once
implemented, these changes will accomplish four key goals. First, as
mentioned above, we need to reduce the amount of time currently
required for our award processes. This includes reducing time used for
application reviews, awards obligation and disbursement of funds.
Second, our plan will successfully integrate the NMTC Program within
our existing operations without significantly increasing the number of
new employees above fiscal year 2002 levels. Third, we need to enhance
the CDFI Fund's ability to perform research, market and portfolio
analysis to measure the availability of financial services in
underserved markets and critique the financial and program performance
of existing CDFIs. Finally, I want to position the CDFI Fund to be
better prepared and anticipate future responsibilities.
cdfi fund programs
The CDFI Fund supports its economic development mission of
providing capital to underserved persons and in underserved markets by
investing in CDFIs, and by providing incentives for mainstream
financial institutions to invest in CDFIs and increase their activities
in distressed communities. In addition to three traditional programs
(the CDFI Program, the Bank Enterprise Award (BEA) Program, and the
Training Program), the CDFI Fund has introduced two new programs. We
anticipate these programs will provide additional capital in the
markets served by our customers. These new programs are the New Markets
Tax Credit (NMTC) Program, described above, and the Native American
CDFI Technical Assistance (NACTA) Component of the CDFI Program.
CDFI Program
The CDFI Program provides financial assistance in the form of
grants, loans, equity investments or deposits to CDFIs. Since its
inception, the CDFI Fund has made over 780 CDFI Program awards totaling
$357 million. The CDFI Program is composed of three separate funding
components, each attempting to reach a different type of CDFI or
market: the Core Component; the Small and Emerging CDFI Assistance
(SECA) Component (formerly the Technical Assistance Component); and the
NACTA Component.
CDFIs also provide their clients with training and technical
assistance that help organizational clients to better manage community
development projects and help individual clients to improve their
financial decision-making skills and increase their options for
accessing credit. This type of borrower education is the foundation for
mitigating losses in the CDFI industry overall. In fiscal year 2000,
the CDFI Fund's awardees provided business training, financial
management education, credit counseling, and homebuyer training to
51,059 individuals and 6,298 non-profits and other organizations.
In addition to financing activities, CDFIs are also depository
institutions; 159 of the 553 certified CDFIs are regulated financial
institutions (banks, thrifts, and credit unions). In a survey completed
in 2000, 21 depository awardees--primarily low-income designated credit
unions and community development banks--provided 141,440 checking and
savings accounts, with $257 million on deposit for an average of $1,815
per account. Each of these institutions has a mission of reaching low-
income and underserved populations, and some provide products
specifically designed to help low-income individuals build wealth, such
as Individual Development Accounts. In all, 985 Individual Development
Accounts held savings of $388,545, an average of $395 per low-income
account holder.
Finally, CDFI Fund awardees have leveraged significant additional
capital. A sample of non-depository CDFIs estimated that they were able
to raise an additional $69 million over and above the required 1:1
match due to being a CDFI Fund awardee or certified CDFI, representing
an additional $1.48 raised for every CDFI Fund award dollar. This
capital has come from banks, foundations, State and local government,
and others.\1\
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\1\ Source: CDFI Fund Fiscal Year 2000 Annual Survey of Core
Awardees.
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The Core Component is directed at building the financial capacity
of CDFIs by enhancing the capital base. Awardees of the Core Component
represent some of the Nation's largest loan funds and financial
institutions. At the end of fiscal year 2000, 122 Core awardees
reported $2 billion in outstanding loans and investments.
For the fiscal year 2001 funding round the CDFI Fund provided 51
Core Component awards totaling $48 million. These 51 awardees are based
in 27 States. There are now CDFI Program awardees in 49 States, the
District of Columbia, Puerto Rico and the U.S. Virgin Islands. Of these
51 awardees, 10 have multi-State or national service areas; 38 serve
rural markets.
In addition to geographic diversity, the types of CDFIs assisted
and the array of loan or investment products provided is broad: 26
provide loans for housing development or ownership; 20 have micro- or
small-business loan products; five are credit unions; three are
community development bank holding companies; and two are venture
capital funds.
Entities selected for Core Component awards typically have business
strategies that support economic stabilization or building wealth in
low-wealth markets. A few examples include:
Homeward Inc. of Allison, Iowa, was formed out of a consortium of
eight rural electric cooperatives to provide loans for housing
development and for economic development activities.
Home Headquarters of Syracuse, NY helps to stabilize distressed
neighborhoods and build assets in Onondaga County through home purchase
financing targeted to lower income households.
Kentucky Highlands Investment Corporation is a nonprofit business
development firm founded in 1968 to provide venture capital and debt
financing to start-up and expanding businesses. In a nine-county region
of Appalachia, Kentucky Highlands, through its financial products, has
helped to create or retain 7,000 jobs. This means that, on average, 12
percent of the households in this rural nine-county region have a
family member employed by a company that Kentucky Highlands assisted.
In the local Empowerment Zone, which is located within the nine-county
region, this CDFI's impact is even greater: since 1994, Kentucky
Highlands helped create or retain 3,086 jobs in the area that is now
part of the Empowerment Zone. This translates into an average of 39.7
percent of EZ households with a family member employed by a company
that Kentucky Highlands helped.
On September 24, 2001, the CDFI Fund published a Notice of Funds
Availability (NOFA) announcing the availability of $36.9 million in
Core Component awards for fiscal year 2002. The application deadline
was December 11, 2001; we received 136 applications, requesting a total
of $198 million.
The Intermediary Component allows the CDFI Fund to invest in CDFIs
through intermediary organizations that support other CDFIs and
emerging CDFIs. These intermediary entities, which are also CDFIs,
generally provide financial and technical assistance to small and
growing CDFIs. Like Core awardees, Intermediary awardees are required
to obtain matching funds in comparable form and value to the financial
assistance they receive from the CDFI Fund.
Since inception, the CDFI Fund has obligated awards totaling over
$20 million to 11 different intermediary institutions. Beginning with
the fiscal year 2001 funding round, the Intermediary Component has been
announced and evaluated as part of the Core Component and CDFI
Intermediaries now compete directly with other Core Program applicants.
The Small and Emerging CDFI Assistance (SECA) Component was
initiated in fiscal year 2001. It replaces the Technical Assistance
(TA) Component, which was first introduced in 1998 to build the
capacity of CDFIs to serve their target markets--particularly ``start-
up,'' young and small institutions. Under the TA Component, the CDFI
Fund directed relatively small amounts of funds--generally $50,000 or
less--to CDFIs that could demonstrate significant potential for
generating community development impact, but whose institutional
capacity needed to be strengthened in order to fully realize this
potential. Some typical uses of TA grants included: computer system
upgrades and software acquisition; developing loan underwriting
policies and procedures; evaluating current loan products and
developing new ones; and training staff. Under the SECA Component, the
CDFI Fund has augmented the range of assistance provided under the
predecessor TA Component. In addition to TA grants, eligible applicants
can also request Financial Assistance, generally used for enhancing the
applicant's lending capital, up to $150,000. Small and emerging CDFIs
generally have less than $5 million in assets and have never received
Financial Assistance from the CDFI Fund. Requests for Financial
Assistance must be matched dollar-for-dollar with other non-Federal
funds.
In fiscal year 2001, the Fund provided 70 SECA/TA Component awards
totaling $8 million. Of the fiscal year 2001 awardees, 32 (45 percent)
are start-ups. We are pleased to report that the SECA Component has
been particularly responsive to the needs of community development
credit unions: 20 (or almost 30 percent) of the fiscal year 2001 SECA
awardees are credit unions. The SECA Component also has proved to have
national reach: the 70 SECA awardees are located in 26 States,
Washington, D.C., and Puerto Rico. Of these 70 awardees, about half
(37) include rural markets within their service areas.
On September 24, 2001, the CDFI Fund published a NOFA announcing
the availability of $5.6 million under the SECA Component for fiscal
year 2002. A total of 120 applications was received, for $18 million.
SECA Component awardees are serving some of the Nation's most
economically distressed and hardest to serve markets and are exhibiting
important programmatic innovations. The CDFI Fund's SECA Component
awards are helping to build the organizational infrastructure to
increase the flow of capital in economically distressed areas and to
low-wealth populations:
The Bushwick Federal Credit Union is a recently chartered start-up
serving the economically distressed Bushwick neighborhood of Brooklyn,
New York. It provides financially literacy to a largely unbanked
population. It proposes to use its award to capitalize a micro loan
product and to expand its ATM services.
Nevada Microenterprise Initiative, based in Reno, provides training
and financing to lower income entrepreneurs that lack sufficient
collateral for conventional financial institutions and proposes to use
the award to obtain staff training and to refine its business plan.
Azteca Community Loan Fund of San Juan, Texas, proposes to build
its capacity to help build assets among very low-income people through
development services and loans that will increase the rate of
homeownership in colonias in the south Texas border region.
The Bank Enterprise Award (BEA) Program
The Bank Enterprise Award (BEA) Program is the principal means by
which the CDFI Fund achieves its strategic goal of expanding financial
service organizations' community development lending and investments
through regulated institutions. The BEA Program recognizes the key role
played by mainstream depository institutions in promoting the growth of
CDFIs and the revitalization of distressed communities.
The BEA Program provides monetary incentives for banks and thrifts
to expand investments in CDFIs and/or to increase lending, investment
and service activities in distressed communities. BEA Program awards
vary in size, depending upon the type and amount of assistance provided
by the bank and the activities being funded through the bank's
investments. In general, banks that provide equity investments to CDFIs
are likely to receive the largest awards relative to the size of their
investments.
Through 2001, 577 BEA Program awards totaling over $182 million
have been provided to banks and thrifts. Banks and thrifts receiving
BEA Program awards have provided $959 million directly to CDFIs, and
$2.5 billion to distressed communities \2\ in the form of direct loans,
investments and services.
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\2\ Distressed Community is a defined area that must have a poverty
rate of at least 30 percent and an unemployment rate that is at least
1.5 times greater than the national rate.
---------------------------------------------------------------------------
Of the fiscal year 2001 funding round awardees, the CDFI Fund made
139 BEA Program awards totaling $46 million. On September 24, 2001, the
CDFI Fund published a NOFA announcing the availability of $16.5 million
in BEA Program funds for fiscal year 2002. The application deadline for
this NOFA was November 13, 2001.
The CDFI Fund has made BEA Program awards to 386 different
institutions since 1996. The average Total Assets of the 386 BEA
Program awardees is just under $10 billion. BEA Program awardees range
in size from $585 billion in assets to $8 million. BEA Program awardees
have an average Return on Assets of 1.1 percent and average Tier One
Capital of $407 million. The BEA Program award as a percentage of Tier
One Capital is less than 3 percent on average. All BEA awardees whose
BEA Program award represents more then 10 percent of Tier One Capital
are certified CDFIs.
All but two BEA Program awardees have Satisfactory or Outstanding
Community Reinvestment Act (CRA) ratings. About one-third have
Outstanding CRA ratings and about 60 percent have Satisfactory ratings.
The BEA Program awardees with Outstanding CRA ratings have an average
size (in terms of assets) of $17 billion, while awardees with
Satisfactory Ratings have an average of $6 billion in Total Assets.
A few examples of BEA Program awardees include:
AmSouth Bank of Birmingham, Alabama received an award of $221,600
for providing $300,000 in grants and $1.6 million in loans to ten
CDFIs: Affordable Housing Resources; Community Equity Investments;
Enterprise Corporation of the Delta; Florida Community Loan Fund; Local
Initiatives Support Corporation; Neighborhood Housing Services;
Southern Development Bancorporation; Nashville Housing Fund;
Chattanooga Neighborhood Enterprise; Structured Employment Economic
Development Corporation; and Technology 2020 Finance Corporation. The
awardee is a State chartered bank with total assets of $39 billion.
Providian National Bank of Tilton, New Hampshire, received a BEA
Program award of $1,110,000 for making a $7.5 million equity like loan
to the National Community Capital Association, a certified CDFI.
Providian's investment will help fund the first national childcare
facilities fund, which will provide financial assistance to childcare
providers and thereby increase the availability of affordable childcare
slots for disadvantaged families and communities in New Hampshire and
throughout the country. The awardee is a national bank with total
assets of $15 billion.
Since first participating in the BEA Program in 1996, KeyBank, a
national bank based in Cleveland, Ohio, has received a total of $2.3
million for providing over $22 million in financial support (including
grant, equity-like loans, and loans) to several CDFIs: Cascadia
Revolving Loan Fund, Coastal Enterprises, Coastal Ventures Limited
Partnership, Coastal Ventures II, LLC, Cincinnati Development Fund,
Columbus Growth Fund, Community Capital Development, Capital District
Loan Fund, Community Preservation Corporation, Denver Neighborhood
Housing Fund, The Enterprise Foundation, Funding Partners for Housing
Solutions, the Housing Partnership Development Fund, Growth Finance
Corporation of Oxford Hills, Housing Partner Development Fund, Impact
Capital, Jubilee Community Loan Fund, Local Initiatives Support
Corporation, Mutual Financial Services, NHS of Toledo, Northern
Community Investment Corporation, Progressive Neighborhood Federal
Credit Union, Rural Opportunities Enterprise, Vermont Community
Development Loan Fund, and Western Maine Finance. The awardee is a
national bank with total assets of $76 billion.
The Training Program
The Training Program, begun in fiscal year 1999, is aimed at
supporting the CDFI Fund's strategic goal of strengthening the
organizational capacity and expertise of CDFIs and other Financial
Service Organizations. The Training Program provides funds that support
the development and delivery of training products to CDFIs and other
entities engaged in community development finance. Training is
addressed via classroom instruction, web-based distance learning, and
other electronic formats. The CDFI Fund is particularly excited about
providing the support to help build the electronic teaching capacity of
the CDFI industry. Through distance learning, the cost of accessing
training is reduced for the CDFIs (elimination of the time and cost of
travel) and the ability of CDFIs that are either of limited resources
or of remote locations to access training is enhanced.
In fiscal year 2001, the CDFI Fund awarded contracts to four
training providers for curriculum development and the delivery of three
courses: How to Do a Market Analysis; How to Prepare Financial
Projections; and How to Develop and Operate a Community Development
Lending Program. Training has already begun under each of these
courses. Through February 2002, there have been 60 offerings of the
three courses supported by the Fund. Each class usually serves up to 30
participants. Through February 2002, it is estimated that 1,200
individuals will have participated in Fund-supported training. Of the
four training providers, two providers (the National Community Capital
Association and the National Federation of Community Development Credit
Unions) are CDFI trade associations. Support to their members and
others is provided through advisory services, which is now enhanced
through these training products. The CDFI Fund has found these trade
associations and other contractors to be good partners in helping to
build the capacity of CDFIs in serving their communities--they couple a
deep knowledge of the circumstances of the industry with a mission to
serve.
New Markets Tax Credit (NMTC) Program
Congress enacted this program in December of 2000 to attract
private sector investment in businesses located in low-income
communities to improve economic conditions in such communities. Under
the NMTC Program, taxpayers will be provided a credit against Federal
income taxes for qualified investments made to acquire stock or other
equity interests in designated Community Development Entities (CDEs).
In turn, substantially all of the proceeds of qualified investments
must be used by the CDE to make qualified investments in low-income
communities. These qualified low-income community investments include
loans to or equity investments in, businesses or CDEs operating in low-
income communities. The credit provided to the investor covers a 7-year
period. In each of the first 3 years, the investor receives a credit
totaling 5 percent of the total value of the stock or equity interest
at the time of purchase. For the final 4 years, the value of the credit
is 6 percent annually.
This calendar year, NMTCs will be allocated annually by the CDFI
Fund to for-profit CDEs under a competitive application process. These
CDEs in turn will pass the credits to investors (such as banks,
corporations, mutual funds, and/or individuals). To qualify for CDE
designation by the Fund, an entity must be a domestic corporation or
partnership that: (1) has the primary mission of serving, or providing
investment capital for low-income communities or low income persons;
and (2) maintains accountability to residents of low income communities
through representation on a governing or an advisory board.
On April 20, 2001, meeting its statutory mandate, the CDFI Fund
issued Guidance relating to the certification of CDEs and the
competitive allocation of NMTCs. The Guidance was published in the
Federal Register on May 1, 2001--the same day that the IRS issued an
Advanced Notice of Proposed Rule Making (ANPRM) announcing its
intention to develop regulations covering all tax-related aspects of
the NMTC Program. Both the Guidance and the ANPRM requested public
comments, which were due to the Fund and IRS, respectively, on July 2,
2001. The CDFI Fund received public comments from over 40 different
organizations and trade associations.
On December 20, 2001, less than 1 year after Congress enacted the
NMTC Program, the CDFI Fund released application materials enabling
organizations to apply to the Fund for designation as CDEs--effectively
launching the NMTC Program. The CDFI Fund has fully implemented rules
to permit entities to becoming certified CDEs. To date, approximately
211 organizations have been certified as CDEs or currently have CDE
applications pending with the CDFI Fund.
The CDFI Fund's objectives for the remainder of the year are to
publish an NMTC allocation application, select qualified CDEs to
receive an allocation of tax credits, and complete the awards
allocation process for 2001/2002 tax credits. The CDFI Fund expects to
issue a Notice of Allocation Availability (NOAA) next month announcing
the availability of tax credits supporting up to $2.5 billion worth of
equity investments in CDEs. The CDFI Fund will review applications from
CDEs under a competitive review process, with the goal of finalizing
award decisions by the fall of 2002. In this manner, investors making
equity investments into eligible CDEs would be able to claim tax
credits during this calendar year.
By offering a tax credit, the NMTC Program encourages private
investment in underserved communities. If investors embrace the
program, it will be a significant source of new capital that could help
to stimulate new industries and entrepreneurs, diversify the local
economy, and generate new jobs in low-income communities. Our fiscal
year 2003 budget requests $2.7 million in administrative funds to
operate this program. This request accounts for 24 percent of our
administrative budget.
Native American CDFI Technical Assistance (NACTA) Component
A second recent initiative at the Fund is focused on Native
American communities. This initiative includes the Native American CDFI
Technical Assistance (NACTA) Component of the CDFI Program and the
Native American CDFI Training Program. The CDFI Fund's fiscal year 2001
and 2002 appropriations bills each include a $5 million set-aside for
this effort. The purpose of this initiative is to increase access to
capital in Native communities. In response to the set-aside contained
in the fiscal year 2001 budget, the Fund issued a Notice of Funds
Availability (NOFA) on September 24, 2001, requesting applications
under the NACTA Component. Approximately $3.5 million of the $5 million
set-aside will be available for this round.
The CDFI Fund has received 46 applications for assistance under the
NACTA Component. The applications, which are currently under review,
represent 21 States. A second NACTA NOFA will draw from the set-aside
contained in the fiscal year 2002 CDFI Fund appropriations. Funds will
be allocated under the NACTA Component through direct grants to Native
CDFIs, Tribal organizations, and other financial institutions and
organizations serving these communities. It is anticipated that these
funds will: (i) enable financial institutions to enhance their capacity
to provide access to capital and credit to these communities; and (ii)
assist such communities in establishing their own CDFIs.
Another $1.5 million of the set-aside is being used to develop a
training program. This training program will be designed to help Native
American communities build leadership skills enabling them to create
and manage CDFIs.
The need for this new initiative was identified during the
workshops organized by the CDFI Fund in conjunction with the
development of the Native American Lending Study/Action Plan. This
Study examines the key barriers to accessing debt capital and equity
investments in Native American communities. Numerous actions that could
be taken by Tribes, lenders, and local and national policy makers were
identified. These ranged from the adoption of the Uniform Commercial
Code by Tribal governments to the capacity-building efforts now
underway at the CDFI Fund. The final report was distributed in December
2001 to the House and Senate Committees who hold jurisdiction over the
CDFI Fund and Native American issues, as well as to the President.
In developing this study, the CDFI Fund conducted 13 regional
workshops across the country and two roundtable meetings. The CDFI Fund
also administered a national survey of 860 tribal organizations and 750
financial institutions located near Indian reservations, Alaska Native
Villages, and Native Hawaiian Communities. The survey collected data
such as barriers to accessing capital, accessibility of bank services
and products, availability of technical assistance, industrial sector
financing gaps and strength of internal tribal resources and policies.
The CDFI Fund also administered an equity investment research project
to assess the gap and potential opportunities for Native Americans to
access this kind of investment.
Rural Community Assistance
Lastly, the fiscal year 2002 appropriations for the CDFI Fund
contained report language requesting an update on rural lending
practices as part of the fiscal year 2003 budget submission. Core
Component and BEA Program awardees are indeed reaching rural areas. Of
123 surveyed Core awardees, 21 (17 percent) estimated that 100 percent
of their activities went to rural areas and an additional 15 (12
percent) estimated that 51 to 99 percent of their activities went to
rural areas. Out of 160 surveyed BEA awardees, 11 (7 percent) said that
100 percent of their business activities went to rural areas, and an
additional 18 (11 percent) said that 51 to 99 percent of their business
went to rural areas. Considering that 22 percent of U.S. households
reside in non-metropolitan areas, the percentage of Core awardees that
target more than half their activities to rural areas (29 percent)
compares favorably, while BEA falls slightly short at 18 percent.
The CDFIs focusing on rural areas tend to be smaller than their
urban counterparts and the actual dollar amount that awardees' lend to
rural areas is proportionally less than the percent that serve rural
areas. An estimated 17 percent ($351 million) of Core Component
awardees' lending and 11 percent ($161 million) of BEA awardees'
lending went to non-metropolitan counties \3\. The CDFI Fund has
identified several options that may increase the flow of CDFI Program
and BEA Program awardees' dollars to rural areas. For the BEA Program,
the most significant of these would require changes to the Fund's
authorizing statute. For example, under the BEA Program, a ``distressed
area'' must have a population of at least 4,000. Distressed areas are
composed of census tracts. Many rural census tracts do not have 4,000
people, which in many cases precludes their eligibility as BEA
distressed areas. Eliminating the BEA Program population requirement
for rural areas would result in more people becoming eligible for
consideration under the BEA Program.
---------------------------------------------------------------------------
\3\ Core Component awardee dollar amounts were estimated by
applying the awardees' estimated percentage of fiscal year 2000
customers located in rural areas to the awardees' total financing
closed in fiscal year 2000. BEA Program awardee dollars were estimated
by applying the awardees' estimated percentage of total lending in
rural areas to the sum of their total community development and service
activities, and CDFI support activities during the BEA assessment
period.
---------------------------------------------------------------------------
In addition, almost all of the new NACTA Component dollars are
expected to flow to rural areas: 46 of 47 current NACTA applicants
target rural areas.
summary
Treasury Secretary O'Neill and the Administration have set the bar
high for the expected performance from us at Treasury as well as the
entire Federal Government. As you can see, I have laid out a blueprint
for the CDFI Fund to enable us to reach goals that will improve and
enhance our performance and service to our customers. These goals will
hopefully provide an increased efficiency in the use of taxpayer
dollars. Our goals are numerous and in some instances, very ambitious.
It undoubtedly will require a very focused and conscientious effort by
all of us at the CDFI Fund. During my short time at the CDFI Fund, I
have developed the utmost confidence in the commitment of our staff
toward our customers and the communities that they serve. I am certain
that we will all rise to the occasion to meet our goals and do so in a
timely and professional manner. I look forward to working with the
members of this subcommittee towards achieving these goals. Again, I
thank you for the opportunity to present my testimony in support of the
President's 2003 budget request and look forward to answering any
questions you may have for me.
Senator Mikulski. Well, thank you. You did very well, Mr.
Brown and Ms. Lazar.
Let us move right to the questions. And I am going to start
first with really the President's budget. Ms. Lazar, you talked
about in your testimony what you would do with the $105
million, which, of course, are both the goals and specific
objectives that you wish to achieve. What can you not do that
you would like to do this year?
Ms. Lazar. We would like to do more the multi-family work.
I am cognizant of how desperately we need more rental housing
opportunities in this country for low-income people. Our
groups, through our multi-family initiative, have capacity, and
their capacity is growing, to explore a variety of means of
developing and preserving affordable rental housing. So that is
certainly a piece that we only have limited funds to explore.
Senator Mikulski. And what would it take to keep that
momentum going? Because one of the issues that both the
Chairman and I share is our great concern for the lack of
production in the area of rental housing for people of very
modest incomes. And also, the success in some neighborhoods
means that people no longer really want to take Section 8. We
keep funding Section 8 and now there is a backlog of unused
vouchers in many of our communities, because people just will
not accept them.
Do you have--so is it----
Ms. Lazar. I have----
Senator Mikulski. Go ahead.
Ms. Lazar. I have a sense that if we were to receive an
additional $5 million to $10 million for multi-family housing,
for the work that we began this year, we could continue to
expand that activity. I would want to make sure, before I gave
you a firm number, that that money would really be able to be--
--
Senator Mikulski. But that is generally the area of the
priority that you would like to continue to keep the momentum
going----
Ms. Lazar. Yes, absolutely.
Senator Mikulski [continuing]. That you have undertaken.
And I am going to come back to some of the policy questions,
but I wanted to get that on the record.
Ms. Lazar. Sure.
Senator Mikulski. Mr. Brown, in your first appearance
before the community, you certainly are a good administration
soldier. You said 15 percent does not bother you a bit. It is
going to be made up in private sector investment. And you
outlined the 3 priorities. So Secretary O'Neill, he did the
right thing.
But let us go to really the CDFI and two issues that arose
that I would like to raise in both the expenditure. First of
all, we want to compliment you on focusing on internal
controls. And there has been a lot of issues in the transition
over the last year.
And the second issue that you raised, though, is CDFI is
now involved in funding healthcare centers. This is something
the committee was not aware of. We want to hear your views.
Number one, what are you talking about? Number two, why did you
get into this? And are you being a healthcare bonding authority
by proxy? And number three, why do you think this is an
appropriate role for CDFI, because just the demands in housing,
micro-enterprise, and that venture capital that we have talked
about, where you, too, are an incubator agency?
Could you share with us this healthcare? And then I will go
on to some other questions, if my time permits.
Mr. Brown. Senator, what I was merely doing was giving you
an example of the types of things our CDFIs do. I think that
the value of the CDFI program, and one of the things that I
think is remarkable about the program is that our funds are
driven based on what the needs are in the local community.
And in the category of housing and facility funds,
obviously the major needs in our communities, low income
communities, are what we call community facilities. Examples of
community facilities could be a retail shopping center that our
CDFIs may fund. Some have provided assistance to helping create
charter schools. Others in my example I gave have helped to see
that there is the availability of healthcare centers. One in
particular that has demonstrated what I consider to be a world-
class example is in New York City. And we highlighted them in
our last newsletter, that they have played a leading role----
Senator Mikulski. Tell me what you did. And why did you do
it?
Mr. Brown. We did it because we matched the funding,
because there was a need to provide services to low, very low,
income people who are in dire need of medical or healthcare
services. The money----
Senator Mikulski. But what did you do? Did you provide
funds for a building? Did you match funds?
Mr. Brown. We matched funds for the financing of the
building. In several examples, the organization provided
financing to a nonprofit healthcare provider who renovated a
grocery store that had left the community. So it provided the
value of turning a vacant storefront facility into a medical
center for residents that were in need of healthcare services.
Our money was matched to help that organization to continue
to provide financing for nonprofit healthcare providers, in
this case in New York City.
Senator Mikulski. So just to be clear, this was one
initiative. But it is not one of your core things. This is just
an example of trying to be creative and respond to local
community need.
Mr. Brown. Yes.
Senator Mikulski. And where really the conversion of that
grocery store into a supermarket of healthcare, if you will, I
mean, this is not like a hospital, like a Hopkins or a Mercy or
a Sinai going to get bonding authority to build a new wing.
Mr. Brown. That is correct.
Senator Mikulski. This is really very small. It is almost
like a micro-enterprise healthcare. Am I correct?
Mr. Brown. And in this example, maybe to clarify further,
in the example that I am giving in this case, the organization
helped finance what I would consider a full-care medical
service center in not only providing family care, but they had
an office for dentistry, psychiatric assistance.
Senator Mikulski. Yes. I understand the services that would
go on. I just wanted to know what CDFI was doing.
Mr. Brown. Yes.
Senator Mikulski. I have other questions that I am going to
pursue on predatory lending and so on. But let me turn to my
colleague for his questions.
Senator Bond. Thank you, Madam Chair.
Mr. Brown, following up on that question, there is no
question that many of our communities need accessible
healthcare. As a matter of fact, one of my major initiatives in
another subcommittee has been to, along with Senator Hollings,
double the funding for community health centers, because
community health centers are the ultimate safety net. We are
trying to make sure that those are robustly funded, that we
have funds available for capital improvements.
So I do not doubt that a community needs, health centers.
And we are working hard to fill more of the gaps. But I get a
little concerned when I try to figure out what your focus is.
And you are getting over into other areas.
I think that we need to get a better handle on what the
focus will be. You have said that it is all part of one
strategy. We are going to be handing out grants, and we are
going to be allocating tax credits. But which do you see as the
main focus? Do you need more staff? What do you have on board?
Do you have the staff that is proficient in allocating credit?
What is going to be your focus?
This is a small agency. There is a lot of work to do. To
make an impact, you have to focus and do a job well. What job
are you doing? And what is the staff you are utilizing to do
it?
Mr. Brown. And Senator, again, to clarify, our primary
mission, our core competency is to help eliminate impediments
that deal with the flow of capital, and particularly the flow
of capital in low income communities. So if the need in your
community is jobs and small business, and the flow of that
capital has been an impediment to help businesses with their
financing needs, then our role at the CDFI Fund and working
with your local communities is to provide the cash by which
those loans can be made to small businesses.
Senator Bond. I have another hat. I also am ranking member
on the Small Business. What is the difference between the 7A
program and the micro-loan program and the small business
investment company? You are in that area now.
Mr. Brown. You are asking the same type of questions that
Secretary O'Neill has asked. How does our mission and the
mission of the fund, relative to the Treasury, coincide with
SBA, with HUD, who does housing, NRC and their community-
based----
Senator Mikulski. The community development block grant
money.
Mr. Brown. All the above. But if you have been engaged in
community development, you understand that you need equity, you
need bank financing, you may need the SBA. And then maybe in
some cases, that is not enough. You might need the financial
assistance of your local CDFI, or the loan may have been done
in a way, as I mentioned in my opening remarks, that is more
innovative and flexible than perhaps the SBA guidelines, as
well as what you may get from your local lender.
So that is in general the best way I can categorize the
unique role that our specialized, certified, community
development financial institutions play. And they have created
a niche, a market, in providing the type of financing that is
needed to get the types of specialized services in low income
communities.
The second part of your question relative to our budget and
our staffing needs is one that we have concentrated on here at
the fund. As I mentioned earlier, we have reorganized our
staffing in order to take on a very important program of new
markets tax credits. Our budget request includes a significant
amount to help with our performance measuring systems and our
ability to collect low level data to report on the types of
loans in rural communities, in prominent areas, et cetera, that
CDFIs are doing in conjunction with and complementary with
traditional financial institutions.
We are currently undergoing our strategy plan in
preparation of our 2004 budget that, when I come to you next
year, will be more directional in terms of what we need in
order to maintain compliance with the New Markets Tax Credit
program, as well as other programmatic changes we may propose
at that time.
Senator Bond. Thank you very much, Mr. Brown. I am
delighted that you would come and testify before our committee.
We may have to have you testify before the full committee. It
seems that your breadth of activity is as broad as Governor
Ridge. And we are certain to have a coordinating entity like
CDFI that covers the waterfront from Health and Human Services
and CHCs to small business to lending.
So, Madam Chair, I am impressed.
Mr. Brown. Senator, I would add it seems that was the
vision of the fund when it was formed. As a reminder, our
advisory board does include representatives from Commerce, HUD,
SBA, Interior, and Treasury.
Senator Mikulski. Mr. Brown, we are not being critical. You
have $16 million. HUD has $32 billion. And both of you are
meant really to be incubators. And I think what Senator Bond is
saying is, how do we get maximum coordination and yet not for
CDFI become these other programs by proxy because of a variety
of reasons. We pass no judgment on it. We just are looking for
focus.
But let me go to a focus that this committee has had. And I
must, again, thank my colleague for his bipartisan support on
this. And that is the issue of predatory lending.
As you know, for a number of years now I have been raising
the issue of predatory lending and also on the issue of what we
call in Baltimore flipping, where someone buys a house, even a
HUD house, for a very low, flips it with just a patina of
repair, sells it to the poor at really exaggerated prices, but
they think they are paying $500 a month. And then they end up
with like balloon payments at the end of 15 years of $70,000.
I would like to know from both of you what is the
leadership, as well as concrete action that you are taking to
deal with the issue of predatory lending. The committee is
particularly interested in where you are promoting home
ownership. So that home ownership, when people enter into that,
like the Section 8, that they can sustain it.
So we really want to know what you are doing and your view
of the problem. What are you doing about it? And do you have
the adequate resources to really do this, because it gouges the
poor. It gouges the taxpayer.
Ms. Lazar. I am happy to start and tell you about what we
are doing, both through the NeighborWorks organizations and
what Neighborhood Reinvestment is doing in partnership with
others. We have been very, very focused on public education, as
well as product development. And we are working on both paths
to make sure that we can address predatory lending issues.
Neighborhood Reinvestment has established a national
financial literacy pilot to promote financial literacy
education for consumers in 24 cities across the country. This
work will help us establish baseline for financial literacy
training for individuals, which we hope will give them the----
Senator Mikulski. What do you mean by that?
Ms. Lazar. What I mean by that is the resources to
understand what their obligations are as a homeowner.
Senator Mikulski. How will this work? How will this work at
the neighborhood level?
Ms. Lazar. At the neighborhood level, our NeighborWorks
organizations have classes on a regular basis, financial
literacy classes. People sign up for them. They make a
commitment to come. We also do fairly intensive training of the
trainers for those classes. We just entered into a partnership
last week with the Federal Deposit Insurance Corporation to use
their Money Smart curriculum as part of our financial literacy
training.
Through our HomeOwnership Centers, we have the facilities
where there is always ongoing classes to help get people better
acquainted with their----
Senator Mikulski. Okay. Now how does this work with your
Section 8 program? Secretary Martinez has a great passion for
promoting home ownership as well. And he has been really great
to work with on many of these issues. Again, how does this go
to the Section 8 program that you have.
Ms. Lazar. Sure.
Senator Mikulski. And how does that work?
Ms. Lazar. For the Section 8 program, we again bring
families into our HomeOwnership Centers for financial literacy
and other home ownership counseling services. What we have been
finding is that we have to work much more directly on a one-on-
one basis with the individuals who have already gotten some
training through the Family Self-Sufficiency Program, through
the PHAs that they have been working with.
So we bring them in and really get them acquainted with the
housing, housing finance, home ownership maintenance issues,
the long-term obligation----
Senator Mikulski. How are you different than HUD with what
they want to do on such Section 8?
Ms. Lazar. Our home ownership campaign has developed a set
of counseling curricula that we use on a regular basis. It has
been fairly well recognized around the country as a strong
basis and a strong curriculum for bringing families into home
ownership and helping them maintain sustainability over the
long term.
Senator Mikulski. Well, I would like to be able to come
back to that. But, Mr. Brown, could you just comment on
predatory lending? Because I know you do not want to
inadvertently end up underwriting it.
Mr. Brown. Yes. Well, as you know from Treasury, addressing
predatory lending is one of Secretary O'Neill's highest
priorities. In fact, his focus is on financial literacy, and
how do we make credit education an integral part of our
education system in that regard, as well as Assistant Secretary
Bayer has been promoting a national code of ethics in
addressing a lot of the lending ills related that could lead to
predatory practices.
What we have done at CDFI has been a number of different
things. Many of our certified community development financial
institutions, banks, thrifts, credit unions provide IDA type of
accounts. Many of our CDFIs provide, as part of their service,
credit counseling to potential borrowers.
One particular leading example is an organization out of
North Carolina, a self-help credit union, which has been on the
forefront of addressing predatory lending practices and getting
legislative changes in North Carolina that have led to other
State----
Senator Mikulski. We appreciate North Carolina, but what do
you at your headquarters do in terms of having an organized,
systematic message out to all CDFIs on this issue of predatory
lending? I know you are big on data collection. And we love
that. Do you have a watch list that you are watching trends?
And are you doing training for CDFIs and so on?
Mr. Brown. Senator, specifically to that question, we have
not collected data specifically to how CDFIs have addressed the
impact of predatory lending. But what we have measured and
recovered is the types of loans that our organizations make to
provide affordable credit to low income communities.
Examples, our bank enterprise award program provides a
major incentive for financial institutions to target their
mortgage products in low income communities. And many do
provide those loans at below market rates in order to get loans
to low income people at affordable rates. The example I was
going to provide with self-help is that one of the issues of
some of the traditional financial institutions that, as they
underwrite these loans, a typical sub-prime loan historically
has not met the underwriting or the secondary market guidelines
for Fannie and Freddie. So as a result, many of the CDFIs have
perhaps negotiated with local banks to do portfolio lending.
In the self-help example is that they have created a
secondary mechanism so that those banks that are doing
portfolio lending, in order to provide affordable mortgage
loans to low income communities, have found a way to buy those
loans and to put those loans out in the secondary market. And I
think that that is an example of a model that we are looking
at. And, in fact, we are currently conducting a study to see if
there is a way that we can create a whole loan or a secondary
market mechanism that could allow for loans that do not meet
Fannie or Freddie guidelines, as well as other community
development loans, if they can be sold in the secondary market.
Senator Mikulski. I have to think about this. First of all,
I am going to come back to my original point. Number one, I
would encourage you at CDFI to have some type of national way
of watching the trends on predatory lending that the CDFIs
might inadvertently be getting into or become aware of, because
predatory lending has the right name. It is about predators.
And they look at every opportunity to gouge. They are
predators. And we have gotten lots of programs that I find the
predators have really milked, squeezed, and so on, that then
did not result in value for the poor, a different way of life,
a different opportunity.
We need you to really be watching this. So that is number
one.
Number two, CDFI was meant to come into small areas where
banks or others would not have come in. And what I want you to
be very careful about what you underwrite that does not meet
other guidelines, so we do not end up with a whole set of
bankruptcies on our hand or defaults. I really am going to
insist on this, because we have gone down the line of promoting
home ownership. We have gone down the line of FHA. And we have
been pushing FHA and home ownership.
And I have in Baltimore City in FHA 50 percent of the
people in default. Now something is real wrong somewhere. So
before we get into how do we underwrite and so on where there
are not even usual and customary guidelines, I just want you to
be very careful because the predators will come in. That is
number one. Or number two, the whole issue of financial
literacy, which I really think could be one of the most
important areas for both of you to pursue, using the
appropriate tools available to you.
And I know this goes to the civil rights organizations are
interested in it. Reverend Jackson and others have spoken to
this. Financial literacy is the way to have people clean up
their credit, get ready for another opportunity, make sure that
opportunity is sustainable.
But anyway, I have gone over my time. Senator Bond, why do
you not----
Senator Bond. Thank you, Madam Chair.
Ms. Lazar, to follow up on a question that the Chair asked
earlier about production, what kind of experience has NRC had
in producing rental housing for extremely low-income families
while maintaining the property's long-term viability? Is it
possible to structure properties with only up-front capital so
that ongoing subsidy needs are not necessary? And how much
money is NRC dedicating to the multi-family activities? And
what other resources are you using?
Ms. Lazar. Senator, as you know, last year this committee
provided us with $5 million to look at the possibility of
maintaining, and creating mixed income properties that serve
some families below 30 percent of area median income. We have
just received the applications for the grants that we are going
to make in June. Some of the uses that have been proposed
include reducing a property's mortgage debt, which will then
allow the property to charge lower rents for percentage of
units, rents that are affordable to extremely low-income
people.
Other applicants are working with local housing authorities
to make a percentage of units available to extremely low-income
holders of housing choice vouchers and using the grants to
support the additional resident services and more intensive
management as appropriate to support a mixed income profile.
We are continuing to look through the applications for
funding that we received this year at a range of options to
create mixed income housing. We just sponsored a symposium in
Chicago a couple of weeks ago, where we brought the best
thinkers around the country to think and talk----
Senator Bond. You are still in the planning stage.
Ms. Lazar. We are still in the planning stage on pursuing--
--
Senator Bond. You have not done it.
Ms. Lazar [continuing]. The work that we had been funded
for this past year. We are working on a study that we will have
probably for you later in the fall, early winter, on mixed
income housing opportunities. We are doing a wide range of
activities that will help us develop more of an educational
base of what is possible.
Senator Bond. In sum, it is all planning.
Ms. Lazar. Most of it is in the planning stage right now.
We will be getting grants out in June. And it will start going
into real properties in the summer.
Senator Bond. Well, being from Missouri, I would like for
you to show me.
Ms. Lazar. I will.
Senator Bond. Planning is great.
Ms. Lazar. I will be glad to.
Senator Bond. Yes. Planning is fine and all that, but we
want to know not what you plan, but what you do.
Ms. Lazar. We expect to have the grant list available in
June. We will come up and share it with you, so that you know
what is on the board.
Senator Bond. Okay. Appreciate that.
Let me turn back to an area that is very closely related to
the problems that my colleague has indicated may be existing in
Baltimore. NRC and other organizations are involved in
disposition of HUD assets located in designated distressed
neighborhoods called asset control areas. Recently you
conducted a review of the program. One of the studies' major
findings was that the use of other Federal programs, such as
HOME, CDBG, HUD, neighborhood initiative grants, and Hope 3,
went into the ACA program.
At least from my standpoint, I do not know about anybody
else in Congress, but I never contemplated that this
disposition program would involve the use of other funds. We
put the other funds out there for other programs.
What has been NRC's experience with HUD's asset control
program? Do you have any suggestions on how to improve it? And
why is there a need for other Federal subsidies? Something is
amiss here.
Ms. Lazar. I think I could answer that question concisely.
The asset control area program has been an effective tool,
particularly for our NHS organization in Chicago, to gain back
positive momentum in the Back of the Yards and the Chicago Lawn
neighborhoods. There has been an increase in sub-prime and
predatory lending in that community. And there has been some
very serious resultant foreclosures.
When neighbors see rehab activities on homes that have been
vacant for months or even years, they are more inclined to
invest in the upkeep of their own properties. This activity has
helped preserve the values of other homes in the neighborhood
rather effectively.
Now the ACA program in Chicago had some additional funding
put in it to help close the appraisal gap. When we are rehabing
houses throughout the NeighborWorks network, we want to make
sure that the rehabilitation creates a safe, sound unit that is
going to be housing for that family over the long term. What we
were finding was that the cost of the house, plus what was
necessary for the rehab costs, went beyond the appraised value
of the property. The additional funding that the NHS was able
to negotiate through Congressman Gutierrez's office has really
helped bridge that appraisal gap.
Saying that, I think if my colleague, Bruce Gotchall from
the NHS, were here, he would say that if he had gotten the
house for $1, had been able to make the necessary repairs to it
and then split the proceeds with HUD, they would have had a
much more successful transaction.
Senator Bond. Yes. I think that is the 50-percent
requirement. That seems to be the real problem.
Madam Chair, if I may just ask one final question.
Senator Mikulski. Please keep going.
Senator Bond. I would like to hear from both of you what
your agencies are doing in rural communities and how are you
working with USDA and HUD and other Federal agencies. Let us
start with Mr. Brown. How is your rural effort?
Mr. Brown. Our rural effort is a significant part, Senator,
of what we do. And it is important to the CDFI Fund. What we
have done in the past is we have surveyed our core recipients
to get an understanding specifically of the markets that they
serve and the types of services that they provide into our
rural communities.
What we do know is that when we surveyed our core
recipients from 1996, the lending activity between 1996 and
1999, they reported that over half of their products and
services were in rural communities. And when we surveyed the
banks that are participating in our bank enterprise award
program, they indicated that 60 percent of their services and
loans were made in rural communities.
We are putting the finishing touches on our rural findings
and survey as part of the appropriation language that was
attached last year. And we will provide you and staff a full
copy of that report.
[The information follows:]
Community Development Financial Institutions Fund Activities: Tracking
Rural Outcomes
The conference report for the fiscal year 2002 VA, HUD, and
Independent Agencies appropriations bill requested that the CDFI Fund
report on its rural activities:
The Committee remains concerned about [the CDFI Fund's] lending
activities in rural areas, especially the Fund's use of its Bank
Enterprise Award (BEA) Program. The Committee urges [the CDFI Fund] to
increase its activities in rural areas, especially in light of the
abundance of Federal programs already dedicated to urban areas.
Further, CDFI is directed to include details on its rural lending
activities in its fiscal year 2003 budget justifications. These details
should include the number of CDFIs approved [for funding] in rural
areas by State and the amount of funds provided to each rural area by
program activity [Core/Intermediary Component, Small and Emerging CDFI
Assistance (SECA) Component, and the Bank Enterprise Award (BEA)
Program].
Findings
Thirty-two percent ($73.5 million) of all the CDFI Program dollars
awarded to the 121 1996-2000 Core Component Awardees went to CDFIs for
whom a majority of their customers are located in rural areas.
Seventeen percent of the 542 certified CDFIs (as of December 2001)
are headquartered in rural areas.
The CDFI Fund has made $62.5 million in awards (12 percent of 1996-
2001 total awards) to CDFIs and banks headquartered in rural areas.
Eligible Census Tracts
Forty-one percent of the Nation's census tracts qualify as eligible
Target Markets under the CDFI Program's Investment Area test.\1\ Of
these total eligible tracts, 25 percent are defined as non-metropolitan
areas (see Table 1). Large expanses of rural areas are eligible,
including most of central Appalachia, the Mississippi Delta, most of
the non-metropolitan counties along the Mexican border, and Native
American lands. Certified CDFIs provide services to a minimum of 38
percent of the Nation's eligible tracts, including 25 percent of
eligible tracts in non-metropolitan areas. It should be noted that
these coverage figures understate the actual coverage of certified
CDFIs because they include only the 355 CDFIs that designated
Investment Areas. It does not include the 187 CDFIs that designated a
Low-Income Targeted Population or an Other Targeted Population. Neither
does it include the 18 CDFIs that report a national service area. If
the national service areas had been included, the table would show 100
percent coverage in both non-metropolitan and metropolitan areas. We
did not include these because we cannot validate that the national
CDFIs have had actual lending or investment activity in every eligible
census tract in the country.
---------------------------------------------------------------------------
\1\ This does not include those non-metropolitan census tracts
that, based on the census data for those census tracts, do not qualify
on their own but would qualify if included in a county that qualified
based on county-wide census data. (CDFI Fund regulations allow non-
metropolitan counties or census tracts to qualify as Investment Areas;
however, metropolitan areas may only qualify based on census tracts).
---------------------------------------------------------------------------
The Fund recognizes the importance of tracking the precise location
of CDFIs' lending activity. Therefore, in fiscal year 2003 the Fund
plans to collect detailed loan-level data that will show which census
tracts CDFIs are lending and investing in. When the Fund has that loan
level data, it will be able to report exactly how many loans and
investments CDFIs made in eligible census tracts, which resulted from
the leverage of our direct investments.
CDFI Fund Awards
The Fund can provide a more detailed analysis of rural coverage for
a subset of all awardees. These are the 121 CDFIs that received Core
Component awards from 1996 through 2000. These awardees respond to a
detailed annual survey, from which this data is analyzed. As Table 2
shows, nearly one-third of all the CDFI Program dollars awarded to
these 121 CDFIs went to CDFIs for whom a majority of their customers
are located in rural areas. An additional 8 percent went to CDFIs for
whom 25 percent to 50 percent of their customers are located in rural
areas. For a complete list of surveyed CDFIs and their locations by
State, see Table 3.
The 121 Core Component Awardees report that an estimated 24 percent
of their financing went to customers in rural areas. This estimate is
based on the percentage of customers that each CDFI reported as located
in rural areas and the CDFI's financing outstanding at the end of
fiscal year 2000. This estimate is the closest the Fund can get given
the data we now collect. Once loan-level data is collected, the Fund
will be able to report exactly how many loans and investments CDFIs
made in rural areas and what the total dollar amount was.
Another, less accurate, measure of rural activity is the location
of the institutions' headquarters. As Table 4 shows, 17 percent of all
certified CDFIs are headquartered in rural areas. From 1996 through
2001, 19 percent of all SECA/TA Component award dollars went to rural-
based CDFIs. 15 percent of Core Component and 4 percent of Bank
Enterprise Award (BEA) Program dollars have been awarded to
institutions headquartered in rural areas. However, many CDFIs that are
headquartered in urban areas provide services to rural areas and may
even have rural branch offices. Table 4 does not include that data.
We cannot estimate BEA Awardee services provided to rural areas
because of the unavailability of data. The statutorily prescribed
definition of ``Distressed Community'' under the BEA Program restricts
award dollars to rural communities. First, rural areas have difficulty
meeting the program's 30 percent poverty requirement because
populations in rural areas are often scattered, with Low-Income
households mixed with households of higher incomes, and have fewer
concentrations of poverty than is often found in urban areas. Second,
over 40 percent of the Nation's rural population resides in communities
with fewer than 2,500 people but located in metropolitan areas. These
communities are too small to meet the BEA Program's statutorily
required population minimum of 4,000 people in metropolitan areas.
Further, in non-metropolitan counties there is a minimum population
requirement of 1,000 people in a qualifying census tract. This figure
also precludes otherwise qualifying economically distressed rural areas
from BEA Program eligibility.
Senator Bond. Well, we look forward to seeing that.
The other, for the NRC, Ms. Lazar, what do you----
Ms. Lazar. We have a rural initiative, which is one of our
four major initiative programs, that has had steady growth.
Fifty-nine of our 225 NeighborWorks organizations, or 27
percent of the network, is serving rural areas. We are a
resource for training and technical assistance provider to
these organizations.
We provide them with grant funding. We established an
organization called RNA Community Builders, which is a national
CDFI intermediary, which is supporting the work of rural
practitioners around the country.
We are working closely with the Department of Agriculture,
through the Department of Agriculture's 504 program. We are
looking at other ways of using Agriculture's programs in
helping to deliver services to these rural communities. We do a
great deal of work through our education programs. Next week we
are hosting a conference in Oak Ridge, Tennessee, for our rural
organizations, to help them do some problem solving together.
We do specialized courses and programs of study at our training
Institute. And we have actually a very unique partnership in
Montana, which is a model for statewide activity, where we work
with our organization in Montana to increase home ownership
through a statewide counseling program. We have gone from 134
home buyers in 1998 to 409 new home buyers in 2001.
As you know, Montana is a good example of great geographic
distances and a very, very hard place to do community-based
work. The Great Falls NHS has done a fabulous job partnering
with a variety of agencies and with a variety of players on the
State and local level to really provide services all across the
State.
Senator Bond. Thank you very much, Ms. Lazar.
Thank you.
Senator Mikulski. I want to support those initiatives that
you have just discussed and also my colleague's area of
questioning in that area. My observations as a Senator, having
been a city councilwoman and a congresswoman from one of the
poorest areas of our State, is that rural poverty is so
different. And often, people in rural areas do not have the
resources, as I said, to technical assistance, foundations, the
kinds of things that are available in a St. Louis or a
Baltimore or a Bethesda. And so we really want to encourage you
on this.
I want to ask a question about faith-based engagement.
Wherever I go in my State, people are saying to me,
particularly institutions, where the leadership are people of
color, are saying, ``Senator, what is this faith-based
initiative, and how can I get in on it?'' That is one thing.
The second thing is, everywhere I go I am seeing the
merging of community development corporations, which were a
very important tool at the grassroots, but they are popping up
like flowerbeds and that they vary in capacity. And I am
concerned about the issue of capacity building, is that new
people coming into new organizations, with new access to funds,
without the capacity to move into sound financial management.
My observation of community development is often it is a
charismatic leader, who gets involved in solving a neighborhood
problem. The people come together in a very dynamic and
exciting and wonderful, energetic way. They become a CDC. They
start to get grants. And that charismatic leader's experience
has been on household finance, not organizational finance. And
then we get into all kinds of other issues.
Could you share with the subcommittee, because both of you
are there, what you see, number one, in your work in faith-
based organizations, because these will not necessarily be the
big churches. They might be mid-sized. And for whatever we do,
we want it to work. We really want it to work and not have
either homeowners in default or CDCs in default.
As you know, Washington, D.C., has had some really bad
experiences of late. And we do not want this to be throughout
the country. Could you share with us that?
Ms. Lazar. I will be glad to get started.
Senator Mikulski. And am I raising very real issues?
Ms. Lazar. Oh, absolutely. I would like to invite Margo
Kelly, my deputy, to join me, because she has had a great deal
of experience with this and how we have been working with
faith-based organizations over time.
When the administration came in last year and brought a lot
of focus on faith-based organizations, our first reaction was,
so what is new? Those of us working in the CDC field for many
years had had experiences with leaders, particularly through
Catholic Charities and other faith-based organizations, for
very many years. I know that the earliest organizations I
worked with were all an outgrowth of faith-based organizations.
Within our network, we have a number of organizations that
are rooted in faith communities. We treat them like we treat
everybody else wanting to make sure----
Senator Mikulski. Well, what do you do about capacity
building? We are really talking about the African-American
churches, the Latino communities. Because the big associates,
like the Catholic Charities associations, they know how to work
with agencies. They are constitutionally compliant. But this is
a new thing that the President wants to start. And we think it
is worth taking a look at, as long as there is constitutional
compliance and capacity, particularly because these are new
startups.
Ms. Kelly. I began my career in this organization doing
start-up organizations. I know that one of the first places you
go when you are in a new community is to the churches, because
that is where the leadership is.
I think Neighborhood Reinvestment has provided four aspects
of capacity building that have worked, both with the faith-
based organizations that are in our network and with our other
organizations. The first one is technical assistance. When an
organization is interested in joining the network, we take a
close look at their performances in six key areas that we refer
to as PROMPT planning, resource development, oversight,
management system, financial systems, et cetera. We help them
to develop in the areas where they are weak.
The second place we provide assistance is in training
through our national training institutes and on-site. This is
another critical aspect of building capacity. We also, in
conjunction with our training and technical assistance, provide
grants. In some cases with a small organization, one of the
critical needs that they have is for financial management
systems. Sometimes it is for computers, hardware or software.
Sometimes it is for training for their staff who need to learn
those systems and how to operate them.
And our fourth area, which is very critical, is an area
that we refer to as risk management or program review. This is
an annual process, where a unit that works with Clarence
Snuggs, our other deputy, spends time on-site reviewing these
organization and gives them a report card. It tells them how
they are doing in these areas. If there are serious
shortcomings, we ask them to develop a corrective action plan
with our assistance and to address them.
So it is a multifaceted approach. It works very well on the
ground. And I think it has kept our network quite strong.
Senator Mikulski. Well, that is outstanding. I am going to
turn to Mr. Brown. But does HUD do this, also?
Ms. Kelly. Madam Chair, I do not know exactly what HUD
does. I think that the training, the resources and the tools
that we use are available. Actually, our training institutes
are a really good opportunity for people to access those tools
and apply them for themselves.
Senator Mikulski. Thank you very much. What we like to have
is really that specific description of PROMPT. I like that. And
I think we want to also discuss this with Secretary Martinez.
We do not want the taxpayers gouged and, you know, the
capacity--Mr. Brown, and then I am going to turn to Senator
Bond. This will then conclude our testimony.
Yes?
Mr. Brown. Senator Mikulski, building capacity and
technical assistance is the cornerstone of the CDFI program. As
I mentioned earlier, 100 of our 550-some-odd certified
community development financial institutions are community
development credit unions. Our SECA program this past year, 20
percent of the awards were made to community-based credit
unions.
And as I stated in my opening testimony, many of the credit
unions were formed and came out of church basements. And so our
SECA program, as an example, particularly in your State, we
funded the Faith Fund of Baltimore, which is a startup, multi-
faith entity with a technical assistance award.
So we dedicate 20 percent of our budget to building
capacity and expertise of CDFIs. And our SECA program has been
one of the ways in which local community-based, faith-based
initiatives have been able to take advantage of our funding.
Senator Mikulski. Well, thank you. We could pursue this.
The little white light means that there is a vote.
But we will let this point of light ask his questions here.
Senator Bond. Well, my bulb is dimmed. And I am going to
put the rest of my questions in for the record, Madam Chair. We
have miles to go before sunset. And we have another couple
things going.
So I appreciate very much your testimony. It is two small
agencies with very big responsibilities. And we appreciate your
dedication to trying to bring all these things together. You
certainly have broad scopes of interest that mirror in many
ways this committee. And we thank you for your testimony and
look forward to reading your written responses to the questions
we submit.
Thank you, Madam Chair.
ADDITIONAL COMMITTEE QUESTIONS
Senator Mikulski. I, too, will have written questions. We
want to thank you, first of all, for appearing today and the
work that you do in every way. I think we have articulated the
areas that we have concern about. But most of all, it is that
American dreams really are American dreams, whether they are an
individual buying a home or a community development
corporation.
And we will be having further discussions with you. And we
look forward to working with you in this year's appropriation.
[The following questions were not asked at the hearing, but
were submitted to the Agencies for response subsequent to the
hearing:]
Questions Submitted to the Neighborhood Reinvestments Corporation
Questions Submitted by Senator Barbara A. Mikulski
predatory lending
Question. Describe what your membership is doing to combat
predatory lending?
Answer. We have been increasingly concerned with the growth of
predatory lending practices. The concern focuses on protecting new
homebuyers the NeighborWorks network has assisted, but our
concern also extends to the threat predatory lending poses to entire
communities and to the safety and soundness of regulated financial
institutions and its impact on their ongoing work in expanding
responsible ownership opportunities for low- and moderate-income
families. We have pursued a number of efforts to document and analyze
predatory-lending practices and create a series of strategies to combat
abusive lending practices.
Financial Literacy Training
Neighborhood Reinvestment has established a national pilot program
to promote financial literacy education for consumers in 24 cities
across the country using the FDIC's Money Smart curriculum. The purpose
of this program is to assist the NeighborWorks network to
establish a high-quality financial literacy training program for lower-
income families across the Nation. In 2001, the 24
NeighborWorks organization participating in this pilot
accomplished the following:
--2,491 graduates of program;
--Average of 10 contact hours per participant (total of 27,400
contact hours);
--Average income of participants is $22,927;
--93 percent of program participants are renters;
--67 percent of participants are female;
--39 percent of participants are very-low income households;
--36 percent of participants are African-Americans; and
--21 percent of participants are Latino or Hispanic.
``Don't Borrow Trouble'' Campaign
Neighborhood Reinvestment is participating with Freddie Mac to
expand a consumer education program called ``Don't Borrow Trouble''.
With Freddie Mac's support, the campaign has been expanded to 12 major
cities to launch local campaigns that will alert millions of Americans
about the dangers of predatory lending and set up special hotlines they
can call to get advice and report problems. The innovative campaign
uses a combination of ads, billboards, Web sites, and public service
announcements in English and Spanish to educate borrowers about
predatory lending practices and encourage them to call a toll-free
number for referrals to local government and non-profit agencies to
help them understand and resolve specific lending problems.
NeighborWorks HELP Program
In response to an increase in predatory lending activities,
Neighborhood Reinvestment Corporation has worked with Freddie Mac to
develop a product that is currently being tested in 10 communities. The
NeighborWorks Home Equity Loss Prevention (HELP) product
offers victims of predatory lenders an opportunity to refinance out of
their predatory mortgage to a reasonable and fair mortgage product,
thereby helping targeted homeowners avoid imminent foreclosure.
The product is designed to help homeowners with impaired credit and
excessive debt to refinance on affordable terms. Freddie Mac is using
the HELP initiative to buttress the ``Don't Borrow Trouble'' ad
campaign in select cities, where the HELP program is introduced as a
possible refinance program with local government participating in the
marketing effort.
Through this pilot effort, Freddie Mac will purchase up to $20
million in HELP loans, which will be originated by Wells Fargo Mortgage
Corporation and insured by Mortgage Guaranty Insurance Corporation of
Milwaukee and PMI Mortgage Insurance Company. The
NeighborWorks HELP loan is a fixed-rate, 30-year market rate
mortgage.
As part of the refinancing, homeowners will obtain intensive and
personalized financial counseling and may use up to 10 percent or
$10,000 of the new refinanced mortgage--whichever is greater--for
property improvements or debt consolidation, provided borrowers meet
certain requirements. Borrower debt-to-income ratio is limited to 42
percent and may go up to 50 percent provided that the borrower's
overall monthly payments after the debt consolidation are less than
before the refinance.
Research and Education
Neighborhood Reinvestment has funded and participated in research
studies of the growth of subprime lending and foreclosures in several
cities and regions. The studies have been conducted in Atlanta,
Chicago, Boston and Connecticut. Abt Associates, the research firm that
conducted some of these studies, has done follow-up research and
analyses with HUD on the impact of subprime lending in Baltimore,
Atlanta, Chicago and Boston.
Neighborhood Reinvestment also conducted a symposium--``Tools and
Tactics to Combat Predatory Lending: A Practitioners' Forum.'' Major
speakers represented Fannie Mae, Freddie Mac, Atlanta Legal Aid
Society, Center for Community Self-Help and the Office of Thrift
Supervision. Workshops presented a range of cutting-edge tools on
prevention, education, analysis and intervention. More than 200
community-development practitioners attended.
Neighborhood Reinvestment and the Joint Center for Housing Studies
of Harvard University together published a research paper,
``Understanding Predatory Lending: Moving Toward a Common Definition
and Workable Solutions,'' that explored the range of predatory-lending
practices and proposed three potential regulatory and legislative
solutions.
Post-Purchase Services
Counseling prospective buyers and following up new homeowners with
post-purchase education are key elements of the proven system for
promoting affordable home ownership that local NeighborWorks
organizations pursue, in partnership with residents, local business and
government. Post-purchase services build the capacity of new
homebuyers, strengthen the neighborhoods they move into, and reinforce
the effectiveness of their local NeighborWorks organizations.
In Chicago, for instance, Neighborhood Housing Services of Chicago
has initiated a comprehensive neighborhood stabilization program that
fights predatory lending and its almost-inevitable consequence,
foreclosure. The Neighborhood Ownership-Recovery Mortgage-Assistance
Loan (NORMAL) program is a partnership among lenders, the city and
Neighborhood Housing Services of Chicago. One main goal is to create a
loan fund to refinance qualified borrowers who have been victims of
predatory-lending practices.
Question. What success has Neighborhood Reinvestment Corporation
had in its collaboration with Freddie Mac? How many loans have you
restructured? Is the program replicable on a national scale?
Answer. The HELP program is an aggressive, innovative mortgage
product that can provide relief to those who have been victimized or
are vulnerable to the practice of predatory lending. It is the first
national program that incorporates the assistance of the secondary
market to combat predatory lending.
In order to restructure loans, a lender partner had to be
identified at a national level; after a concerted search, Wells Fargo
Mortgage Corporation was selected as the loan originator nationally.
All partners recognized that this was a groundbreaking effort--one that
would include changing systems, and labor-intensive counseling that
could last up to a year.
The customer service system is currently being refined, and the
pipeline homebuyers in need of refinancing is being built. Under HELP,
225 homeowners have received credit counseling and foreclosure
intervention services. Unfortunately, the number of owners that have
closed on a HELP loan is negligible. We continue to work with Wells
Fargo and Freddie Mac on customer service, and NeighborWorks
organizations on technical assistance and best practices. We are
hopeful that HELP will provide an appropriate route for victims of
predatory lenders in keeping their homes, and it will be readily
replicable nationally; however, at this time, we continue to work with
our partners in refining the product.
Question. Are you developing any training materials on predatory
lending, or putting together a report for use in other communities?
Answer. Since 1999, a total of 184 practitioners have completed a
special course offered at our national Training Institutes on
preventing predatory lending called ``Helping Homeowners Avoid
Delinquency and Predatory Lenders.'' This two-day course covers:
--Delinquency prevention and financial trends;
--Debt warning signs for homeowners;
--Outreach and programs for debt management;
--Post-purchase delinquency and debt management counseling;
--Recognizing lending abuses; and
--Strategies for success.
Additionally, over the past year we have been working with a number
of NeighborWorks organizations to assess their ability to act
as mortgage brokers in their communities. Many of these organizations
are pursuing this activity as a way to prevent further predatory
lending from occurring in their markets. The ``NeighborWorks
Network Mortgage Broker Handbook'' publication details a range of
issues that organizations should consider prior to launching a mortgage
brokerage. In particular, the Handbook contains two assessment tools
that help organization measure the feasibility of assuming the broker
role.
The broker feasibility tool was created to assist
NeighborWorks organizations with initial planning activities
for an in-house mortgage brokerage. The feasibility tool uses a series
of questions to help network members evaluate issues related to the
mortgage operation. The resolution of these questions provides the
organization with a framework to pursue the mortgage broker activity,
or the justification to decline it.
We developed the broker production tool to assess the financial
benefits of developing an in-house mortgage brokerage. The production
tool projects income, expenses, and production for a 24-month period.
It is meant to provide nonprofit organizations with projections that
supplement the decision-making process.
affiliation of neighborworks organizations
Question. Explain the process, step-by-step, that Neighborhood
Reinvestment Corporation uses to make a non-profit a part of the
NeighborWorks network?
Answer. Interested organizations must apply to Neighborhood
Reinvestment for membership. Since the application process is a
competitive and membership is extended to a limited number of
organizations every year, meeting all national criteria and district
priorities does not automatically guarantee an organization will be
extended the opportunity for membership in the network.
The national threshold criteria for membership include:
--The organization must be a partnership of residents, the private
sector, and the public sector;
--The organization must be resident led;
--The organization must engage in community revitalization and
housing production;
--The organization must have garnered broad support in the community;
--Potential affiliates must have the organizational capacity to
accomplish the mission, strong financial support from local
sources, and a high quality financial management and internal
operating systems.
Neighborhood Reinvestment reaches under-served communities and
populations by bringing organizations into the NeighborWorks
network. In all cases applicant organizations must have a clear
understanding of the expectations and benefits of membership and have a
demonstrated enthusiasm for becoming an active network member.
The average length of time from submission of application to
charter eligibility is 12 to 18 months. The length of time does vary
depending on the scope of development work that an organization must do
to comply with all of the chartering requirements. The length of time
is also dependent on the capacity--staff and resources--of Neighborhood
Reinvestment to work with the organization throughout the process.
Once interested organizations have submitted an application, the
review process for membership in the NeighborWorks network
begins with a careful evaluation and screening of all applications. At
present, the current growth strategy for the NeighborWorks
network is focusing priority attention on:
--States and cities with populations over 500,000 where we have no
current presence,
--Sites that are significantly underserved in terms of community
development efforts and resources,
--A blend of organizations representing single and multi-family
producers who work within the context of neighborhood or
community revitalization,
--Sites where the specific needs identified are a good match for the
specific resources we currently offer, and
--A geographic mix that represents rural, small city, large city and
suburban sites.
A select group of applicant organizations that meet specific
membership criteria and are considered to be competitive for membership
participate in a rigorous review and assessment process. The assessment
process may include an initial site visit, a detailed field assessment,
and an analysis by Neighborhood Reinvestment.
Requirements of NeighborWorks membership include an
unqualified annual audit and compliance with a variety of other
operating standards that we regularly review. We are the only network
of community development organizations that has implemented a series of
formal conditions and standards of operations as a prerequisite for
membership. Any NeighborWorks organization that wishes to
benefit from the Corporation's resources must subscribe and continue to
meet these conditions and standards.
capacity building
Question. How do you increase the capacity of non-profits?
Answer. Neighborhood Reinvestment Corporation engages in five key
activities specific to increasing the capacity of
NeighborWorks organizations:
We charter new NeighborWorks organizations through an
extensive educational and partnership-building effort, involving
residents, business leaders and government representatives.
We provide funding for capital projects and operating grants to
NeighborWorks organizations, enabling them to create and
build their own community-revitalization initiatives from a solid asset
base.
We provide a high degree of management and technical assistance to
NeighborWorks members and the broader community development
field, in order to expand their delivery programs and better serve
their communities.
We conduct extensive reviews of NeighborWorks
organizations, focusing on their capacity to successfully manage their
resources and programmatic risks. These program reviews monitor
performance on an ongoing basis and serve as a platform for providing
management and technical assistance. They also unearth best practices
at the street level. Our goal is to increase the health, performance,
productivity and effectiveness of the entire NeighborWorks
network.
We conduct national Training Institutes in major cities throughout
the United States for anyone interested in affordable housing and
community revitalization, particularly private- and public-sector
practitioners and community leaders. Typically, 70 courses centered on
such topics as management and leadership, community building, community
economic development, neighborhood revitalization, home ownership and
community lending and affordable housing are offered at each Training
Institute. We conduct up to five Training Institutes each year,
attracting up to 1,200 participants at each venue. We also offer other
training opportunities such as specialized resident leadership
workshops and regional trainings.
We are undertaking advanced training to build capacity of the most
seasoned practitioners for the future. We have accepted 45 executive
directors into an Achieving Excellence program, which includes
coursework at Harvard that is specifically focused on community
development and application of that learning when those directors
return to their communities.
These activities individually and collectively help build the
productivity and strength of local community development organizations.
Neighborhood Reinvestment also increases organizational capacity by
bridging the gap between public and private funding through integrating
public and private support. One critical financing vehicle that we
provide to NeighborWorks organizations is equity capital, for
real estate development and lending grants, and for local revolving
loan funds. The NeighborWorks organizations, in turn, use
these funds to draw private capital in a variety of ways, including:
--Equity and gap financing for home purchase loans, including down
payment and closing costs;
--Capital for property rehabilitation, micro-enterprise and small
business loans; and
--Capital costs associated with the acquisition and development of
residential and commercial real estate for long-term ownership
by NeighborWorks organizations.
Locally directed revolving loan funds are essential to each
organization's and the collective network's success. Revolving loan
funds provide flexible funding for community priorities, such as
homeownership, rehabilitation, multifamily housing, and commercial and
economic development. Neighborhood Reinvestment Corporation supports
these revolving loan funds through technical expertise, training, and
funding. Neighborhood Housing Services of America aids the liquidity of
the local revolving loan funds by buying revolving loan fund loans.
With this increased loan fund capability, NeighborWorks
organizations experience a tremendous surge in their capacity, and the
increase is ultimately felt at the community level.
Network capacity is further enhanced through the flexibility that
you have allowed us in designing strategies and targeting our
resources. This has given us the ability to devise extraordinarily
successful tools and strategies, as well as build a network of strong
and diverse local community development organizations. The power and
impact of our grants are directly attributable to their flexibility.
Question. What is your strategy for working with members who are
having problems?
Answer. We manage risk through our standing Risk Analysis
Committee, which meets quarterly to review NeighborWorks
members classified as ``vulnerable.'' The Risk Analysis Committee
examines the results of data collection and analysis, on- and off-site
program reviews and the ongoing technical assistance and capacity
building efforts of Neighborhood Reinvestment. The Risk Analysis
Committee reviews thoroughly all data on targeted organizations and
maintains an approved risk ranking system.
Based on an on-site review, organizations failing to meet
performance standards in any of the eight PROMPTSM
dimensions will receive a request for ``corrective actions.'' We
require organizations to file a corrective action plan; Neighborhood
Reinvestment's technical assistance and grants will be targeted toward
resolving the conditions underlying the organization's vulnerability.
Neighborhood Reinvestment staff then ascertain whether corrective
action has been taken and whether a recommendation can be made to the
Risk Analysis Committee for a stable or exemplary ranking. We also
provide many other forms of technical assistance to build capacity in
organizations. This may be in the areas of financial management and
accounting, fund-raising and marketing, funding, partnership building
and the development of resident leaders. Staff may also work with an
organization's partners to explore mergers with other community
development organizations in their community. The Corporation also
provides scholarships to staff and board members of
NeighborWorks organizations to participate in the
Neighborhood Reinvestment Training Institute.
Ultimately, the responsibility for the continued viability and
successful management of risk in an environment of growth lies with the
skills and commitment of an organization's board and staff.
Neighborhood Reinvestment provides strategic funding and assistance for
organizations to pursue strategies in preserving affordable housing and
revitalizing communities.
board of directors
Question. Do you train the boards of these non-profits? How? Why is
this important?
Answer. Each of our nine districts has at least one staff member
whose expertise is in organizational development, including training
and orientation of nonprofit boards of directors. As community
development organizations have become more complex, we find that to
maintain an informed, partnership-based board with engaged resident
participation is a growing challenge. However this kind of board
composition--one that includes the private, public and community
sectors--is a cornerstone of Neighborhood Reinvestment's beliefs about
how credible community development needs to be accomplished.
We continue to prioritize board orientation, training and
leadership development as a key area for technical assistance. While
our national Training Institutes provide an outstanding venue for
training, it is difficult for many board members to devote time during
the week, out of town, to take advantage of the courses available.
Presently we are seeking new ways to provide training to board members,
including designing joint trainings of several boards at the district
or regional level.
In addition to helping board members understand their appropriate
roles and responsibilities, we also work closely to assist them to
understand and exert conscientious oversight of program operations. The
check-and-balance system that can be achieved by an informed and
empowered local board of directors is irreplaceable. While we wish we
had more resources to devote to this increasingly challenging and time-
consuming effort, it is an area of endeavor that we will never abandon.
We will continue to seek new, more effective and efficient ways to use
our staff skill and resources to create positive, measurable outcomes
in this area.
certification of nonprofit organizations
Question. Do you think other Federal agencies that partner with
nonprofits should be certifying them?
Answer. Neighborhood Reinvestment utilizes a process that combines
both:
--A formal chartering process; and
--A methodology for monitoring the ongoing health of an organization,
through program reviews and risk evaluation procedures.
We have developed this system in order to protect the investment of
the Corporation in local organizations--grants, as well as training,
technical assistance--to mitigate exposure to risk encountered by
individual organizations and the NeighborWorks network as a
whole, and to increase the confidence level of other investors in the
activities of these organizations.
This process has worked well for Neighborhood Reinvestment.
However, for other Federal agencies, circumstances and capacity vary
greatly. Certifying nonprofit organizations is a labor- and cost-
intensive process. Therefore, the question of other agencies' ability
and willingness to certify nonprofits would seem to depend on a number
of considerations, including issues such as:
--The level of funding being provided;
--The type of funding relationship--one time funding or a long-term
funding arrangement; and
--The maturity of the organization receiving funding--a more mature,
sophisticated organization might take less time to certify,
versus an upstart, emerging organization that might not meet
certification standards, or might require slight technical
assistance to achieve those standards.
Most Federal programs, particularly those available to nonprofit
organizations, fund specific programmatic initiatives. In contrast,
Neighborhood Reinvestment emphasizes underwriting the nonprofit
organization through its certification process. With a paradigm shift,
Federal agencies could embrace this model as the first step to
certifying and more efficiently funding nonprofit organizations. More
specifically, Federal agencies' underwriting and oversight of any
specific project could be commensurate with their level of funding in
that project.
As an example of today's practices, HUD provides a fairly
consistent degree of underwriting and oversight for any project
utilizing HUD grant funds--regardless of whether the total project cost
includes two percent of its funding from HUD, or 80 percent. In the
conventional lending environment, it is commonplace for several lenders
to participate in financing a real estate project. Typically, one
lender functions as a lead lender. The lead lender typically provides
the highest percentage of funding in the transaction, and the other
participating lenders agree to accept the underwriting and project
oversight decisions and actions provided by the lead lender.
Similarly, Federal agencies could view their funding in specific
projects as participation with other investors in the project. If
another investor is providing a higher level of funding to the project,
the Federal agency should regard that investor as the lead-lender and
reduce their level of underwriting/oversight involvement accordingly--
commensurate with their reduced financial exposure and risk.
To summarize, Neighborhood Reinvestment would not fund an
organization without thoroughly reviewing the ability of that
organizations to execute the activities for which its seeking funding.
While up-front costs would be high, if other Federal agencies were to
follow the Neighborhood Reinvestment model, the long-term benefits
would include a reduced risk of fraud, waste, and abuse of Federal
funds, and a more efficient, streamlined, and user-friendly process for
certified organizations seeking Federal funds.
neighborworks multifamily initiative
Question. Does Neighborhood Reinvestment Corporation's multifamily
initiative have lessons for communities like Prince George's County,
that have dilapidating multifamily developments because of delinquent
landlords?
Answer. Members of the NeighborWorks Multifamily
Initiative believe that multifamily properties should be cornerstones
of community health. To achieve this end, the property must be both
capitalized and owned/operated according to principles of ``sustained
excellence.'' We believe the key markers of sustained excellence in
affordable rental properties should include:
--Ongoing economic viability
--Well-maintained and attractive physical condition; and
--Resident access to learning centers for the technological and
social infrastructure of educational success.
Guided by these principles, NeighborWorks organizations
attempt to make units affordable without sacrificing the long-term
economic viability of the property. These principles do not happen
without a dedicated owner--one who is committed to making the property
a long-term neighborhood asset, and not solely an income stream. Often
the choices made by the latter sacrifice the long-term viability in
favor of short-term gain.
The lessons of the Multifamily Initiative include:
Select owners not just properties.--The ownership of multifamily
properties is critical. Property owners must be motivated to provide a
long-term housing resource to their community. Strong property owners
can demonstrate successful portfolio performance over time, have a
strong track record with regards to capital expenditures on their
properties, and pay close attention to management and resident
selection at their properties. These owners are beginning to be called
``preservation owners''. They stand in stark contrast to those
motivated strictly by real estate depreciation tax shelter, who are not
apt to be strong long term owners.
Capitalize properties for long term success.--We focus on what we
call ``sustainability'' planning, structuring and financing properties
so that they will not need future subsidies. One important principle is
reserves that are adequate to cover the property's expected future
capital replacement needs--for appliances, carpets, roofs, and so
forth. The second important principle is to be realistic about what it
will really cost to operate the property, over the long term, realizing
that in some years operating conditions may be difficult. This requires
being particularly careful in our underwriting. However, in practice,
it is very tempting to under-fund properties, in the name of producing
more housing right now.
Services can be an important enhancement.--Depending on the target
market, services such as employment training, after school academic
support, or financial literacy and homeownership preparation can go a
long way to building a resident base as committed to the neighborhood
as homeowners.
Use restrictions can protect the public sector investment.--As
cities, counties or States invest tax credits, HOME or CDBG, the use
restrictions and liens that are established can establish important
long term oversight in the hands of the public sector investor. In
addition to long term affordability restrictions, periodic property
inspections, crime reviews, and occupancy compliance reviews can be
required as part of the public investment and can help ensure that the
community is getting what it was investing to obtain.
The price of better housing is somewhat deeper equity subsidies.--
To achieve this type of sustainable housing and long-term
``preservation owners'', public funders may need to fund properties so
that less mortgage debt is needed. This will mean the units produced
are far more desirable, and are designed, overseen, owned and operated
to provide a cornerstone housing resource in the community.
Question. Can you share the results of the fiscal year 2002 mixed
income demonstration program? What have you learned?
Answer. We would like to thank you again for the additional $5
million to fund the demonstration program in mixed-income housing that
will serve extremely low-income households. We issued our request for
grant proposals in February, and funded 14 proposals to produce 1,364
units, 120 of which would be affordable to extremely low-income
families. A full analysis of the ``lessons learned'' that can be
obtained from our demonstration applications will be completed by the
end of June.
We also sponsored a national symposium on mixed income rental
developments in April. This symposium included nationally recognized
and respected participants from the various parties needed to develop
and maintain high-quality, affordable rental properties--from State
housing finance agencies, to nonprofit, for-profit and PHA owners and
developers, to lenders. Participants explored how to develop and
sustain these properties in five different market environments. Each
market environment had its own advantages and challenges. We came away
from the symposium with a healthy respect for the high level of
flexibility that is needed to make mixed-income communities work across
our very diverse country. A primary theme that emerged was that mixed
income neighborhoods ``trump'' mixed-income properties--implying that
if the neighborhood has a strong income mix, then the property itself
might bring (or preserve) a more deeply skewed income mix (more lower-
income residents) and still produce a very healthy property and
community. In other words, there is no one ``right income mix'' to
attain the benefits of mixed-income and sustainability. Participants
also identified a number of areas in which existing programs do not
promote mixed-income properties as we would want. Our research will
yield a paper later this summer on the leading barriers to the
development of mixed income housing.
The initial feedback on the applicants is that, as we hoped, the
grant applicants want to pursue a wide variety of approaches.
Some applicants propose to use the grant to reduce a property's
mortgage debt, thereby allowing the property to charge lower rents for
a percentage of the units--rents that are affordable to extremely low-
income households.
Other applicants are working with the local Housing Authority to
make a percentage of units available to extremely low-income holders of
Housing Choice Vouchers, and using the grant funds to support
additional resident services and more intensive management, as
appropriate to support a mixed-income resident profile. Using Housing
Choice Vouchers seems particularly useful in areas in which the Housing
Authority reports a shortage of units available to voucher holders.
One applicant is seeking to extend the income range upwards as well
as downwards--to incorporate additional higher-income households as
well as additional extremely low-income households, to provide for both
a healthier income mix, and create a cross-subsidy aimed at reducing
the housing cost burden of the extremely low-income families.
Applicants have identified a variety of management and operations
innovations, to provide the more intensive management that mixed-income
communities often require. We are very excited about putting this money
to work to serve extremely low-income households, and about using the
demonstration grants to learn more about what it takes to develop and
sustain successful mixed-income communities in a diverse range of
communities.
Question. Will the lessons learned in the mixed-income demo be
applicable to HOPE VI developments?
Answer. We believe most of the lessons learned from the $5 million
demonstration will have broad application, including to projects such
as HOPE VI.
aging
Question. What sort of strategies are your members using to address
the needs of our aging population?
Answer. NeighborWorks organizations plan, develop and
execute programs based on the needs of local populations. Their work
involves people from all backgrounds, genders, ages and abilities. The
NeighborWorks network is primarily ``place-based'', rather
than ``population-based''; in other words, Neighborhood Reinvestment
does not typically seek particular populations such as the elderly or
the disabled. The focus for our attention and resources is on
strengthening communities-- and most of the communities served by our
network include the elderly and the disabled. While working with the
aging or with disabled populations may not be a planned initiative,
NeighborWorks organizations routinely provide rehabilitation
counseling, work write-ups and loans to elderly homeowners on fixed
incomes and to disabled homeowners who are seeking to make their units
more accessible.
Other than when required by Federal or State eligibility standards,
NeighborWorks organizations respect the privacy of customers
and do not require applicants to disclose physical disability as a
condition of service. Because of this sensitivity,
NeighborWorks organizations may be underreporting their
involvement with disabled populations and the elderly. Nonetheless, we
know that in 2000, more than 30 NeighborWorks organizations
provided housing for non-elderly persons with disabilities, assisting
more than 1,000 families. More than 30 organizations provided housing
services for the elderly, benefiting nearly 2,800 households.
Neighborhood Reinvestment provides financial resources, leadership,
research and information that benefit the aging and the disabled.
Expendable and capital grants help fund housing and support
NeighborWorks organizations' efforts to assist residents.
Neighborhood Reinvestment publishes information, such as a recent paper
written in conjunction with the Joint Center on Housing, Aging and
Health Care and ``Winning Strategies'', best practices from the
NeighborWorks network. The Corporation convenes forums for
discussion such as the upcoming Neighborhood Reinvestment Training
Institute that will include a symposium on ``Aging in Place''.
Neighborhood Reinvestment is also exploring opportunities for
collaboration with AARP.
The following is merely a sampling of the ways that
NeighborWorks organizations are assisting the elderly and
persons with disabilities to meet their particular housing needs.
Chattanooga, Tennessee
Chattanooga Neighborhood Enterprise in partnership with the Alexian
Village of Tennessee has begun construction on a $4.5 million
conversion of the St. Elmo Elementary school into an apartment complex
for the elderly to be known as the Alexian Court apartments. Financing
the conversion of the 95-year old building is one of the most complex
deals Chattanooga Neighborhood Enterprise ever put together, which
included eight sources of funds. Funding includes historic preservation
and low-income tax credits, partners' equity, grants and a mortgage.
Neighborhood Reinvestment's flexible $200,000 capital grant covering a
portion of the pre-development and development costs was critical to
making the deal work. The City of Chattanooga donated the school
property (vacant since 1989) for the project, but did not provide any
tax money to the effort.
Alexian Court, future home of residents age 62 and older, will
contain 47 units. Rents will range from $450 to $600. Resident income
will be limited to a maximum of 60 percent of median income. The
development was planned with input from neighborhood residents, who
wanted to preserve the structures and bring back the original look of
this Victorian neighborhood. The complex is composed of two school
buildings plus eight duplex bungalows. A third building, formerly the
cafeteria and gymnasium, will become a community center for residents
of the entire St. Elmo neighborhood.
New Haven, Connecticut
The Mutual Housing Association of South Central Connecticut (MHA)
is committed to developing economically, ethically and culturally
diverse communities that are accessible and affordable. This commitment
adheres to the principles of equal-opportunity housing, which ensures
access and inclusion for people with disabilities. MHA strives to
comply with and exceed regulations set forth by the Americans with
Disabilities Act to accommodate people with disabilities at Mutual
Housing properties. This is reinforced through organizational policies
that include an affirmative fair housing marketing plan and fair
housing policy, an affirmative-action policy, and an ADA notice and
grievance policy that provides prompt and equitable solutions to
complaints. In addition, MHA's resident-selection process was approved
by the Connecticut Department of Housing in 1994.
MHA staff, board members and residents participate in ongoing
training to keep apprised of fair housing developments, and planning,
monitoring and evaluation to insure accessibility for people with
disabilities at Mutual Housing properties. Current activities include
evaluation and audit of structural design and compliance with housing
code, marketing to people with disabilities, and supporting disabled
residents in securing rental assistance through Section 8. Because of
coordination with social service, church and community agencies such as
the Center for Disability Rights, and Shoreline Association for
Retarded and Handicapped Citizens, MHA receives guidance in ensuring
properties are accessible, marketing to people with disabilities and
providing support for disabled residents.
Chicago, Illinois
Roseland Ridge Apartments is a $6.4-million, affordable-housing
development in Roseland, a neighborhood on the far South side of
Chicago. Roseland Ridge provides 40 units of high-quality housing for
people making less than 60 percent of the area median ($40,750 for a
family of four). The development contains one- and two-bedroom, garden-
style units and two- and three-bedroom duplexes. Each unit features
such amenities as central air conditioning, washers and dryers, off-
street parking, security systems, and patios or balconies. Rents range
from $525 to $665.
The development was a collaborative effort of Neighborhood Housing
Services of Chicago, government agencies, other nonprofits and business
partners. The city Department of Housing provided more than $2 million
in low-interest loans and $445,270 in Federal low-income housing tax
credits, which generated nearly $3 million in equity. The project
received additional financing and support from Bank of America, the
Illinois Department of Commerce and Community Affairs, State Farm
Insurance, and others.
Rutland, Vermont
Rutland West Neighborhood Housing Services won a Housing
Preservation Grant from Rural Development in 2000 to rehabilitate 20
homes belonging to very low-income residents in a tri-county region.
The grant proposal featured a partnership between Rutland West
Neighborhood Housing Services and the Vermont Center for Independent
Living and gives immediate priority to very low-income individuals/
households with special needs. Examples of typical projects include
access modifications for individuals discharged from the regional
medical center and for mentally retarded/mentally ill individuals
attempting to live independently.
section 8 homeownership option
Question. The Administration's 2003 request funds the Section 8 to
Homeownership program at nearly 10 percent of Neighborhood Reinvestment
Corporation's budget. Is it working? What will be achieved with the new
funds?
Answer. Overall, we consider the initiative to be going very well
and there continues to be great interest among the
NeighborWorks network as well as public housing authorities
and lender partners.
Nationally, through the end of December 2001, HUD's Section 8
Homeownership Option had assisted 135 Section 8 families to purchase a
home using the Section 8 homeownership option. Ninety-two of those
families--representing 68 percent of all of the Section 8 families
assisted nationally--were in sites where there was assistance from a
NeighborWorks organization. Nearly 1,600 Section 8 families
are in the homeownership pipeline of the 21 NeighborWorks
sites, and 560 of these families have already completed a pre-purchase
counseling course. The 21 funded NeighborWorks organizations
have partnered with 27 public housing authorities in providing this
option to Section 8 families, with an additional 15
NeighborWorks/public housing authority partnerships currently
under development. Certainly, the 2003 request would enable us to cast
our net even further to more communities, more public housing
authorities and more Section 8 families.
We are meeting our established production goals for this
initiative. We are also collecting data on the families assisted by
NeighborWorks organizations and developing best practices.
Our most important work is reaching out to public housing authorities,
to inform their decisions on this option and to encourage partnerships
among local public housing authorities, community-based nonprofit
organizations and lenders in implementing the homeownership option. Our
experience has demonstrated that to be successful at creating
sustainable homeowners through this option, such partnerships are
critical.
There have been a number of challenges that we would like to share
with you.
There are limited opportunities for our NeighborWorks
organizations to recapture the higher administrative and counseling
costs associated with this initiative. High-quality pre- and post-
purchase counseling is important to creating successful and sustainable
homeowners. This is particularly true for families of modest means.
NeighborWorks organizations have invested substantial
resources thus far in preparing a pipeline of mortgage-ready Section 8
buyers. In some markets it is taking up to three times longer in
preparing a Section 8 buyer than what we find with a typical
NeighborWorks first-time homebuyer.
Lenders have responded positively to providing the first mortgages,
which are accompanied by a second mortgage provided by another source,
such as a NeighborWorks organization, and paid down by the
Section 8 voucher. However, few national lenders are positioned to
manage multiple payments for mortgage--e.g., one from the public
housing authority and one from the family. Loan servicing is more
complicated--and therefore more costly--with two payments for one
mortgage, which poses a challenge for most conventional lenders.
Knowing the growing expertise among selected
NeighborWorks organizations, public housing authorities have
approached NeighborWorks organizations for assistance in
developing and implementing a Section 8 homeownership option.
Neighborhood Reinvestment is challenged to help NeighborWorks
organizations address these exciting opportunities and expand where
appropriate.
We feel it is important that we share the learning of the funded
sites with other interested NeighborWorks organizations and
the broader community development field. We developed a course offered
at the Neighborhood Reinvestment Training Institute on the
homeownership option. Further, we distribute best practices on this
option.
______
Questions Submitted by Senator Christopher S. Bond
multifamily housing
Question. What kind of experience has your organization had in
producing rental housing for extremely low-income families while
maintaining the property's long-term viability? Is it possible to
structure properties with only up-front capital so that on-going
subsidy needs are not necessary? Lastly, how much money is Neighborhood
Reinvestment Corporation dedicating to its multifamily activities and
what other resources it is using?
In 1999, Neighborhood Reinvestment and the NeighborWorks
network launched the NeighborWorks Multifamily Initiative in
order to bring high standards in asset management and peer learning to
those NeighborWorks organizations that own or manage
multifamily rental properties. The members of the Multifamily
Initiative own nearly 30,000 units and make it their mission to provide
multifamily homes, which are marked over the long-term by:
--Affordability;
--Well-maintained and attractive physical condition;
--Access to learning centers for the technological and social
infrastructure of educational success; and
--Ongoing economic viability.
Guided by these principles, NeighborWorks organizations
attempt to make units affordable without sacrificing the long-term
economic viability of the property. In support of these principles,
Neighborhood Reinvestment grants are provided, which help increase the
equity position of the NeighborWorks organizations in the
properties, thereby reducing the need for debt. Lower debt is key to
these goals, freeing the operating budget to support higher levels of
replacement reserves, asset management fees, and much needed services.
The following are some observations NeighborWorks
organizations and Neighborhood Reinvestment have found in serving
extremely low-income families.
Forty percent of area median income is the ``breaking point''.--In
most markets, the fundamental economics of serving families with
incomes under 40 percent of area median income is infeasible without
subsidy. A housing burden of 30 percent of household income yields a
rent payment that is less than operating expenses--those costs
necessary to maintain the unit and keep it on-line--leaving no cash to
repay loans.
Market areas vary widely.--The communities served--rural, low-
income urban, and higher-income suburban, for example--vary in
character and social dynamic, which therefore affect the property's
market appeal and market rent. Development and operating costs vary
greatly across markets. Designing a Federal program that fits the
varied markets of this country and the varied needs of families is
exceptionally difficult.
Mixed income strategies can be used.--To house families in this
income range some form of subsidy is essential. Theoretically, a
property with a 100 percent capital grant for development enables
internal cross subsidization--having units with higher rents cover the
operating costs and debt service for those units rented to extremely
low-income families--to some degree. This may be one solution for
smaller properties in lower income markets, which is often the case for
revitalization areas. Larger properties in higher income markets may
need a smaller grant, since it can support perhaps up to 50 percent of
the development cost of the property.
Rental subsidy approaches serve as a solution as well.--Section 8
vouchers and rental assistance from USDA Rural Development enable
properties to house extremely low-income households in all markets.
This operating subsidy over the long term also enables use of debt,
instead of grants.
Feasibility of older, smaller properties demands realistic
maintenance, replacement and utility budgeting.--
NeighborWorks properties represent all types of rental
housing--1 to 3 unit houses, small apartments, and large. They tend to
be older (over 20 years old), and many of the properties are smaller,
30-60 units in size. As with all existing, older stock, they carry
higher expenses in the areas of maintenance, replacements, and
utilities. Property--and therefore neighborhood--success depends upon
realism in budgeting for these critical cost areas.
When housing extremely low-income families, a modest operating
investment in an amenity package targeting personal asset building
supports the long-term viability of the properties.--Most extremely
low-income families have access barriers to the ``economic ladder''.
These barriers include night jobs, which require older children to step
into oversight roles for younger children after school; language
barriers; transportation; and lack of post-secondary or even complete
high school education at the parental level. As the percentage of
extremely low-income residents increases in a property, access to
resident-directed, personal asset-building services becomes critical.
In addition to advancing resident goals, these services have been shown
to enhance the long-term viability of the property, in terms of
improved occupancy and collections; reduced turnover; and lowered
security and maintenance costs. These costs are built into the budgets
of a number of the ``live properties'' in amounts which may exceed the
``minimum levels'' allotted for in the ``model properties''. The
experience of our NeighborWorks organizations shows that an
additional operating expense of approximately $25 per unit per month,
while inadequate to support an intensive welfare-to-work package, is
adequate to maintain services important to a viable apartment community
serving extremely low-income households.
Short-term acquisition loans are needed.--Because the vast majority
of NeighborWorks properties are existing,
NeighborWorks organizations are often purchasing them to
either prevent the loss of affordability or to reverse years of
neglectful ownership. In either event, the seller oftentimes requires a
90 to 120 day acquisition timeframe. In such cases, the acquisition may
need to occur prior to all subsidy layers being in place. Short-term
acquisition funding has been historically missing from the marketplace,
and therefore properties that could be preserved have been lost. To
fill this historic gap in funding, Neighborhood Reinvestment and the
NeighborWorks network formed the Neighborhood Capital
Corporation, which provides subordinate loans for up to 25 percent of
the purchase price. These loans will leverage up to nine times the
capital from the conventional lenders in the first mortgage position.
Because of this Subcommittee's leadership on multifamily rental
issues, we were able to nearly double our planned budget for
multifamily activities in fiscal year 2002. Combined with the $5
million set-aside, Neighborhood Reinvestment allocated nearly $10.4
million to multifamily activities, 85 percent of which were distributed
in the form of equity grants.
assistance for native americans
Question. Please describe Neighborhood Reinvestment Corporation's
activities on Indian Lands. Also, please describe the major impediments
to homeownership you have found.
Answer. When Neighborhood Reinvestment was created by Congress in
1978, we primarily focused on urban areas. However, the Corporation's
commitment to serving underserved markets and populations led us into
Indian Country. Although the environments are different, the inability
of low- and moderate-income individuals to gain access to homeownership
lines of credit is similar.
Individual NeighborWorks organizations have developed
programs to meet the needs of local Native American populations. These
programs are varied according to the geographic region served by an
organization, the needs of each community, and the organization's
capacity. At least ten NeighborWorks organizations have
developed specific programs to assist Native Americans, though many
more work with Native Americans on a case-by-case basis.
The Neighborhood Reinvestment Training Institute has offered
training opportunities for Native Americans and those working in Indian
Country. One course, ``Developing a Homeownership Program in Indian
Country,'' was offered at the Minneapolis Institute in October 2001.
Numerous scholarships have also been offered for Native Americans
attending other institute classes.
Neighborhood Reinvestment was a catalyst behind the One Stop
Mortgage Center Initiative in Indian Country, a 2-year study sponsored
by HUD and Department of the Treasury that paired Federal agencies,
financial institutions, and Tribal representatives to jointly identify
the barriers to mortgage products and solutions to lending in Indian
Country.
Focusing exclusively within tribal land, the Navajo Partnership for
Housing, in Window Rock, Arizona, was created by Neighborhood
Reinvestment at the request of the Navajo Nation in 1996 to increase
homeownership opportunities throughout the Navajo Nation, working in
partnership with a variety of lending institutions and government
agencies.
Most NeighborWorks organizations that serve native
communities also work with non-natives. For example, over 53 percent of
Fairbanks Neighborhood Housing Services' clients are Alaskan native, to
whom they provide important and culturally-relevant homebuyer education
and housing counseling services in partnership with the local Indian
Housing Authority. Partnerships are critical to these programs.
Neighborhood Housing Services of Santa Fe is working with four Pueblos
in northern New Mexico--Santa Ana, San Juan, Santo Domingo and Jemez--
to build the capacity of the tribes to offer high quality homeownership
opportunities. In Montana, the newly formed statewide Montana
Homeownership Network, an initiative started by Great Falls
Neighborhood Housing Services, has included the Assiniboine and Sioux
Tribal Enterprise Community.
Neighborhood Reinvestment has provided financial support to Sicangu
Enterprise Center, an affordable housing and loan provider, for the
past 13 years. Sicangu Enterprise Center provides services to the
Rosebud Reservation in southern South Dakota. The Rosebud Reservation
experiences a 74 percent unemployment rate, and the average income is
just over $10,000 per year. Housing is at such short supply that the
Housing Authority on the Reservation maintains a waiting list of 1,000
families.
Native American housing and economic development issues are
fundamentally different than affordable housing needs of other
populations. Most native communities suffer from very weak economies,
with few job opportunities and critically low incomes. When these
market challenges are coupled with unfamiliarity or incompatibility
with conventional mortgage models and lands held in trust by the Bureau
of Indian Affairs, the housing needs and issues grow severe and
complicated.
Our NeighborWorks organizations also report the impact of
non-streamlined mortgage lending process across various Federal
agencies and Government Sponsored Enterprises. The lack of standard
lease and loan documents presents confusion and breeds distrust and
reluctance among uninformed buyers.
NeighborWorks organizations are currently enhancing the
readiness of Native Americans to become homeowners through financial
literacy, culturally sensitive homebuyer education, credit repair and
savings programs. However, other private and public entities need to
contribute to these efforts in order to significantly improve the
prospects for homeownership among Native Americans. For example, the
home-buying process would be eased through the increased availability
of title insurance and appraisals for Native American buyers, and
through reducing lender transaction costs, largely a function of the
time it takes to process loans. Finally, NeighborWorks
organizations have witnessed the need for local municipalities to
encourage land use planning and infrastructure development, and for
more training and support of private non-profits and Indian Housing
Authorities to deliver mortgage based homeownership programs.
section 8 homeownership
Question. Neighborhood Reinvestment has received $15 million over
the past 2 years to expand partnerships between NeighborWorks
organizations and PHAs in implementing the Section 8 homeownership
option. For fiscal year 2003, you are requesting another $10 million
set-aside.
Answer. Why are the NeighborWorks organizations
participating in the Section 8 option and what value do they add? Do
you have any suggestions, based on your early experience, to improve
the program? Lastly, do you anticipate that after you have established
a track record for the program that conventional lenders may provide
financing?
We believe that NeighborWorks organizations bring three
competencies to this option that will help make it a long term
success--the deep expertise in preparing families of modest means for
the responsibilities to be homeowners, the experience of bridging the
gap between the private market and public funding, and the dedication
to the long term success of neighborhood revitalization and individual
family stabilization.
Neighborhood Reinvestment Corporation and the
NeighborWorks network bring years of experience in helping
families of modest means become successful long-term homeowners. For
the past 10 years, many NeighborWorks organizations have
consciously focused on homeownership as a strategy to further
neighborhood revitalization. And we have done so with remarkable
results--since 1992, the NeighborWorks network has created
more than 53,000 homebuyers of modest means.
Since 1998, the median income of the typical buyer through a
NeighborWorks organization is $29,472, while the median
income of the typical U.S. buyer is $51,642. Ninety-five percent of the
NeighborWorks buyers are first-time buyers, over 52 percent
are ethnic minority--compared to 19 percent by the conventional
mortgage market--and 43 percent are female buyers.
As a result of assisting so many underserved families, the
NeighborWorks system brings with it a unique set of tools
that are targeted to families similar to those found in the Section 8
homeownership program. The Section 8 homeownership option allows the
NeighborWorks system to apply its deep experience to lower
income population.
The foundation of NeighborWorks organizations'
significant experience and success in creating homeownership
opportunities for those of modest means is their expertise in Full-
Cycle LendingSM, which emphasizes pre- and post- purchase
counseling. Neighborhood Reinvestment has set rigorous standards in
terms of curriculum content and hours. NeighborWorks
organizations also have experience with nontraditional mortgage
products, such as USDA Rural Development and State housing finance
agency products, and second mortgages--all of which have proven to be
critical pieces in building successful Section 8 homeownership programs
across the country.
Many NeighborWorks organizations have as their mission to
provide homeownership opportunities for low- and moderate-income
families--often acting as a bridge between the public and private
sector in order to meet their mission. This long-standing partnership
approach is critical in the success of Section 8 homeownership
programs.
The under-girth of neighborhood revitalization and employing
homeownership as a strategy is that of long-term stability.
Neighborhood Reinvestment and the NeighborWorks organization
network believe that homeownership is a successful revitalization
strategy only if it is sustainable. As such, intensive and, at times,
lengthy homebuyer education and counseling are necessary. We have
developed partnerships to begin a financial literacy pilot to further
ready potential homebuyers and strengthen the existing asset base of
existing homeowners. We believe the Section 8 homeownership option will
be as successful as the individual homebuyers themselves.
A key to making successful homeowners is intensive preparation and
counseling. In some markets NeighborWorks organizations have
had to triple their pre-purchase education and counseling efforts, in
comparison to the time a typical first time homebuyer requires. To the
extent that more resources could be dedicated to sustaining counseling
services, we believe that the need for aggressive post-purchase
counseling will be necessary. Certainly assisting new Section 8
homeowners maintain the asset of their new home and avoid any predatory
lending risk is as critical as the time and effort put into the pre-
purchase efforts.
Already the private market has been a strong and essential partner
in this effort. In some cases, the private market is providing the
entire mortgage and accepting the Section 8 voucher as income. In many
cases, we have seen smaller, regional banks becomes the first lending
institutions to participate, as they seem to be more nimble in
responding to the unconventional mortgage structures. We hope that the
activity from these banks will spur bigger financial institutions to
become active partners in this program. Although the single mortgage
model is fairly rare in our experience, it is an important step toward
higher privatization of the financing for the Section 8 clients. Fannie
Mae has been particularly accommodating with its guidelines,
particularly in considering the voucher income in progressive ways.
Freddie Mac has also been responsive to this program in looking for new
ways for Section 8 mortgages to be originated.
overlapping federal programs
Question. I am concerned about overlapping Federal programs. It is
clear that Neighborhood Reinvestment Corporation works with the same
communities and institutions that HUD and other Federal agencies work
with.
Answer. Please tell me about any informal and formal efforts to
coordinate Federal activities in assisting distressed communities. How
do your organizations ensure that its activities are not duplicative of
other Federal activities?
Neighborhood Reinvestment has worked to establish and maintain
strong working relationships and communication with senior staff at
HUD, Department of Agriculture, various offices within the Treasury
Department, and other appropriate Federal agencies. Neighborhood
Reinvestment staff also serve on various work groups, task forces and
committees established by Federal agencies around specific issues.
Through these communications, we are able to keep representatives of
the appropriate Federal agencies informed of corporate directions and
initiatives, and abreast of successes and challenges being encountered
by its local affiliates at the community level. The Corporation also
disseminates information to its affiliates regarding proposed statutory
and regulatory changes that might significantly affect their work and/
or the communities they serve. The Corporation submits, as appropriate,
written comments to various Federal agencies regarding the impact that
proposed statutory or regulatory changes may have on our affiliated
NeighborWorks organizations or the communities they serve.
Other Federal activities provide important complementary support to
the work of Neighborhood Reinvestment and its local affiliates, but the
NeighborWorks system is the only coordinated effort of its
type in the country.
While it is true that like HUD, Neighborhood Reinvestment focuses
on expanding affordable housing opportunities for low- and moderate-
income households and on community revitalization, there is in fact a
tremendous level of difference between the mission and programmatic
approaches of Neighborhood Reinvestment and HUD--and other Federal
programs. Most Federal programs, particularly those available to
nonprofit organizations, essentially fund projects or specific
programmatic initiatives.
Neighborhood Reinvestment does not fund freestanding projects. We
support a national network of community-based nonprofit organizations
through a tapestry of services. Other Federal entities may provide some
of these services, but Neighborhood Reinvestment is the only entity
that provides, in a systematic way:
--A formal chartering process that requires adherence to an
established set of vigorous requirements regarding things as
diverse as board make-up, financial management and internal
controls, programmatic delivery and production standards,
quarterly reports and annual audits;
--Comprehensive training, through the nationally recognized
Neighborhood Reinvestment Training Institutes and other
vehicles;
--On-site technical assistance to staff and boards of local
NeighborWorks organizations;
--Quality control of all NeighborWorks organizations,
through on-site program reviews, risk management approaches and
review of annual audits;
--Connectivity among NeighborWorks organizations through
actualized peer-to-peer initiatives--such as the
NeighborWorks Campaign for Home Ownership; the Rural
NeighborWorks Alliance; the NeighborWorks
National Insurance Task Force; the NeighborWorks
Multifamily Initiative; the NeighborWorks Resident
Leadership Initiative--and through publications, a members-only
Web site, computer-based listserves, and other vehicles; and
--Access to a specialized secondary market that enables
NeighborWorks organizations to sell loans that they
have made from their own revolving loan funds.
Woven throughout the various organizational and programmatic
tactics supported by Neighborhood Reinvestment is a steadfast belief
that approaches that dictate to communities, or decide what is in the
best interest of communities, or attempt to ``parachute'' help into
communities, are inevitably doomed to failure. The Corporation firmly
believes that community residents, armed with appropriate information
and tools, are the only ones who truly have the ability to change their
neighborhoods.
By statute, our Board of Directors includes representatives from
the five Federal banking regulators--Board of Governors of the Federal
Reserve System, Comptroller of the Currency, National Credit Union
Administration, Federal Deposit Insurance Corporation, and Office of
Thrift Supervision--and HUD. This relationship uniquely situates
Neighborhood Reinvestment to act as a bridge between the all-too-
separate worlds of housing and the financial services industry, as well
as between government, the for-profit and nonprofit environments. For
example, a recent partnership with the Federal Deposit Insurance
Corporation resulted in the NeighborWorks network using the
FDIC's Money Smart financial literacy program. This curriculum will
help train adult educators and teach money management skills to
thousands of people. In addition, our work with HUD on the Section 8
homeownership option allowed for coordination of efforts, and created a
delivery system for advancing the homeownership option.
As a result of these and other efforts, no organization can match
the demonstrated track record of Neighborhood Reinvestment and its
affiliates when it comes to leveraging Federal resources--and
attracting private capital in support of distressed urban, suburban and
rural communities across America.
After more than two decades of experience, the
NeighborWorks network now serves approximately 2,100 urban,
suburban and rural communities across America--and is uniquely
positioned to not only continue to serve as a laboratory, but also
serve as a fast track implementation testing ground for new approaches.
Further, the Corporation has always believed its public
responsibility goes far beyond the direct services we provide to the
NeighborWorks network--and as such, we have always attempted
to share our learnings and experiences to support and strengthen the
broader housing and community development field.
oversight
Question. Ms. Lazar, could you tell us how Neighborhood
Reinvestment Corporation is able to provide adequate oversight and
ensure accountability within the NeighborWorks system?
Could you also discuss what sort of risk-management system you have
in place to monitor your affiliates?
Answer. We are strongly committed to promoting and maintaining a
network of productive, well-managed, nonprofit community development
corporations that deliver high quality services responsive to local
needs and have a measurable impact on communities. One of the tools
employed in doing this is a uniform program review and assessment
system. The purposes of this system are to assist in:
--Enhancing the performance and productivity of network
organizations;
--Assessing the health and risk-taking capacity of individual network
organizations and the network as a whole;
--Determining organizational compliance with Neighborhood
Reinvestment Corporation, Neighborhood Housing Services of
America and related contract and network standards;
--Evaluating whether organizations are using Federal funding from
Neighborhood Reinvestment appropriately; and
--Assessing newly developed or potential affiliate organizations to
ensure their capacity to meet NeighborWorks network
membership standards and performance objectives.
The heart of the system is a set of performance standards used to
assess a NeighborWorks organization's health and how well it
manages risk. Recognized by the PROMPTSM acronym,
organizations are evaluated using performance standards in eight areas:
P--PLANNING
How well does the organization's mission accord with Neighborhood
Reinvestment's and to what degree does strategic and business planning
support this mission?
R--RESOURCE DEVELOPMENT
Does the organization have sufficient operating and capital
resources to support organizational needs and an active oversight
process to monitor fund-raising progress and the status of the budget?
O--ORGANIZATIONAL OVERSIGHT
How well is the Board meeting its fiduciary responsibility in
overseeing an organization's operations, its finances, its production
and contract management, and its planning? How well is resident
participation enabled through the Board?
M--MANAGEMENT
Financial Management.--How well does the accounting and financial
management system provide current and accurate records of the
organization? Does the Board receive timely financial reports that are
understandable?
Contract Management.--Is the organization meeting its contractual
obligations with funders including production and reporting and how
satisfied are funders with the organization's performance?
Personnel Management.--Are there legally sound and updated
personnel policies in place that are followed? What is the status of
the performance appraisal system and is the executive director
regularly appraised?
P--PRODUCTION/PROGRAM SERVICES
How congruent is production and provision of services with the
wants of the community and is the level of production consistent with
the resources available to the organization?
T--TECHNICAL OPERATING SYSTEMS
Are standard operating procedures and practices consistent with
legal and funding source requirements and do they promote an effective
and efficient delivery of services?
Through a system of continuous monitoring, each
NeighborWorks organization is subject to an annual risk
assessment through either off-site or on-site program reviews.
Off-site reviews involve the collection and analysis of all data
available about the organization from within Neighborhood Reinvestment
and from Neighborhood Housing Services of America. Data for each
organization is analyzed quarterly in terms of eight risk areas. If a
risk alert is identified, we determine whether the organization has the
capacity to manage the risk. In cases where more information is needed
or where the risk is deemed to be serious, an on-site review is
scheduled.
On-site reviews of organizations are conducted in addition to off-
site reviews for approximately two-fifths of the
NeighborWorks organizations each year. There are several
conditions that would lead to an on-site review. An on-site review may
be an outcome of an off-site review where serious risk was discovered.
All new applicants for membership are evaluated on-site before being
offered a charter as a NeighborWorks member. An on-site
membership review is conducted for new network members within 2 years
of chartering.
A typical on-site review involves three phases: preparing for a
review, conducting the review, and reporting review results. In
preparation for a review, the review team evaluates documents that have
been requested from the organization, analyzes all available data
within Neighborhood Reinvestment about the organization, and reviews
outcomes from the previous on-site review. The actual site-visit
involves typically one to three reviewers depending on the size and
complexity of the organization. Most visits last three days and the
review team employs interview, documentation, and observation
techniques in assessing capacity and risk management in the
organization. Finally, the review team prepares a site-visit profile
that will be used by Neighborhood Reinvestment's Risk Management Unit
in its continuous risk monitoring system until the next on-site review.
Question. When you identify an organization as ``troubled,'' what
actions do you take?
Answer. For a complete response to how we address troubled
organizations, please see our response to the Chairman on page 8.
Question. I understand that you revoked the NHS of St. Joseph,
Missouri. What happened to them?
Answer. Neighborhood Housing Services of St. Joseph has recorded
many accomplishments over its 10-year history. It has done much to
revitalize neighborhoods and offer homeownership opportunities to an
under-served segment of the community. It can be proud of what it has
created.
However, the last few years have been extremely difficult for this
organization. The City of St. Joseph withdrew its financial support of
the Neighborhood Housing Services in early 1999. Loss of a major
funding partner can be a devastating blow to an organization working in
a relatively small community. Along with this loss of funding came a
continuing decrease in support from the insurance and lending
institutions.
The organization had a number of directors who had served on the
Board for many years. Their dedication allowed Neighborhood Housing
Services of St. Joseph to significantly improve neighborhoods over the
years. In spite of their fervor, the Board was unable to pull together
and successfully compete for additional resources to fill the void left
by the City's withdrawal of support.
Faced with seemingly overwhelming issues, the Board numbers
continued to decrease to its present seven directors. Reduced revenues
resulted in elimination of staff positions and, with them, significant
reduction in programs and services. Neighborhood Housing Services of
St. Joseph no longer provides lending services, nor does it have the
capacity to offer post-purchase counseling or foreclosure prevention.
Further, with a soft real estate market, the organization found
itself in a situation in which it can no longer be assured of
recapturing its investment in properties it purchased with the intent
of rehabbing for resale. These uninhabitable properties are generating
no income, but are a continuing drain on the organization's limited
resources because of required maintenance and security.
Our last program review concluded the following:
--Neighborhood Housing Services of St. Joseph incurred a major budget
deficit last year and lacks the capacity to provide adequate
systems to monitor, control and resolve the impact on the
organization.
--The Board's financial oversight and decision-making practices do
not ensure compliance with their fiduciary responsibility to
safeguard the organization's assets.
--The organization can no longer pay staff salaries, and medical
benefits were withdrawn 2 months ago.
--Neighborhood Housing Services of St. Joseph no longer has the staff
capacity or funds to ensure quality delivery of program
services. There is no capacity/procedures to adequately mange
rental/lease purchase programs.
Based on the findings of the review, it is our recommendation that
the Board work quickly to dissolve Neighborhood Housing Services of St.
Joseph. It is not an easy decision to make, but the Board can be
assured that Neighborhood Reinvestment will work closely with them in
this process. To continue to operate this agency with full awareness of
its severe funding deficit only increases the continuing liability to
the organization. The Board can no longer assure the quality of
programs and services that the organization is providing. The Board
also can no longer assure accurate and proper reporting or tracking of
the organization's assets.
george knight scholarship program
Question. Two years ago, we provided $2.5 million to endow a
``George Knight Scholarship Fund,'' named after our good friend and
former Executive Director, George Knight. This fund was established to
allow local leaders, community developers, and residents to receive
training from your training institute.
Can you give us an update on this program? Is there a large demand
for this program?
Answer. The George Knight Endowment Fund has begun to fill a deep
need within the community development field--that of providing
financial support to worthy community development professionals who
might otherwise not be able to attend the Neighborhood Reinvestment
Training Institute. Since Congress' initial investment of $2.5 million
is used as an endowment, the George Knight Endowment Fund will be able
to provide access to high-quality training for years to come.
To date, George Knight scholarships have been awarded to 242
Neighborhood Reinvestment Training Institute participants for a total
$134,612. As indicated in the chart below, the number of awards granted
decreased for the Minneapolis and San Francisco Training Institutes
when interest earnings on the endowment declined.
GEORGE KNIGHT ENDOWMENT FUND ACTIVITY SUMMARY--APRIL 2001-APRIL 2002
----------------------------------------------------------------------------------------------------------------
Scholarship
Neighborhood Reinvestment Training Institute Dates Recipients Awards
----------------------------------------------------------------------------------------------------------------
Chicago 2001.................................. April 15-20..................... 44 $22,534
Washington, DC 2001........................... August 19-24.................... 54 32,925
Minneapolis 2001.............................. October 14-19................... 23 14,770
San Francisco 2001............................ December 9-14................... 21 11,293
Atlanta 2002.................................. February 17-22.................. 38 17,540
Chicago 2002.................................. April 2-6....................... 62 35,10
-------------------------------
Total................................... ................................ 242 134,162
----------------------------------------------------------------------------------------------------------------
As a result of Congress' investment, we have secured $1 million
from Washington Mutual to capitalize a similar scholarship endowment.
elderly needs
Question. Ms. Lazar, there are tremendous housing needs for the
elderly and disabled populations in this country. In St. Louis, for
example, there is a significant shortage of affordable housing that
meets ADA requirements.
What are Neighborhood Reinvestment Corporation and its network
doing to address these needs?
Answer. For a complete response, please see our answer to the
Chairman on page 13.
cdc mergers
Question. I am excited about the merger of the St. Louis NHS and
Beyond Housing. Not only will this merger combine the talents and
skills of these successful organizations, it will enable them to take
on larger scale projects.
What are your views about mergers? Why are mergers important?
Answer. We have encouraged and assisted an increasing number of
mergers in our network over the last 5 years. There is no question that
the proliferation of nonprofit community-based development
organizations has led, in some instances, to potential duplication of
effort and stretched resources. There are also instances, like St.
Louis, where two strong organizations discover new opportunities by
joining hands. Neighborhood Reinvestment is committed to supporting
local solutions and local governance. However, we are also committed to
deploying our precious resources as effectively and efficiently as
possible. We will continue to respond very positively to inquiries
about merger partners and we will continue to provide technical
assistance, evaluation and support for member organizations who seek to
create additional strength, health or efficiency through mergers. I
should note that the amount of time, politics and negotiations involved
in merger activities can never be underestimated.
land trusts
Question. Ms. Lazar, one impediment to developing affordable
housing is the cost of acquiring land. I am interested in the use of
land trusts.
Do you see this as a viable tool for developing and maintaining
affordable housing? To what extent is Neighborhood Reinvestment
Corporation promoting the creation of land trusts?
Answer. While Neighborhood Reinvestment has not promoted the
creation of land trusts as an affordable housing tool, we have actively
supported applications from non-profit land trusts seeking to become
network members. Land trusts appear to be most abundant on the east and
west coasts. Several of the members of our network in the State of
Vermont are land trusts, including one of our premiere Section 8 to
Homeownership pilot sites, the Burlington Community Land Trust.
Ultimately, the land trust concept appears to be suitable in some
geographic locations and less appealing in others.
The Neighborhood Reinvestment Training Institute offers a course on
``Community Land Trusts: A Tool for Neighborhood Revitalization.'' The
course describes how community land trusts combine affordable private
home ownership with community ownership of land to help turn
deteriorating neighborhoods into neighborhoods of choice and help
prevent displacement of low-income residents due to gentrification. It
educates participants on the creation of a land trust, how land trusts
can be used as part of a comprehensive neighborhood revitalization
strategy, and how a land trust seeks to balance the seemingly competing
goals of providing homeowners with a fair return on their housing
investment while ensuring that housing is kept permanently affordable
for future occupants.
resident involvement
Question. Neighborhood Reinvestment has always had a focus on
developing resident leaders as a strategy that leads to neighborhood
revitalization.
Can you tell us how you engage residents and develop leaders? Why
is this an important component for your work?
Answer. Most community development efforts in this country grew out
of problem-solving efforts by neighborhood residents at the local
level. Early in this movement, resident leaders were regularly in the
driver's seat in determining priorities and strategies for revitalizing
their neighborhoods. As time passed and community development
activities became more sophisticated, things began to change. Resident
leaders on community Boards began to disappear to be replaced by
professionals with finance, housing development and legal backgrounds.
Staff recruitment that had once emphasized leadership development
skills and neighborhood organizing experience, now focused on
practitioners with the same finance and development skill sought for
Boards of Directors. And as funders have increasingly emphasized unit
production as a primary measure of organizational effectiveness,
technical skill and expertise at the Board and staff level has been in
even greater demand. The debate about the dwindling number of resident-
led organizations has been fueled by the increased complexity and
attendant risks that characterize community development activity and
the honest questions that have been raised about the kind of skill and
oversight needed at the Board level to manage these sophisticated
institutions.
Resident leaders are developed through a variety of strategies:
--Many NeighborWorks organizations incorporate resident
leadership development directly into their staffing and
business plans.
--Our Community Leadership Institutes provide training for resident
leaders. Residents return prepared for deeper leadership roles
in local NeighborWorks organizations.
--Our Resident Leadership Initiative is building resources to support
community leadership development at the wider neighborhood
level, bringing both homeowners and renters into community
leadership forums.
--The Multifamily Initiative provides specialized resident leadership
development resources, to ensure that rental residents are
trained in asset management, so that they can be knowledgeable
participants in Boards, committees, and resident councils.
Neighborhood Reinvestment grew out of a resident-led effort--one
that started with residents, and grew to include public and private
partnerships. This three pronged partnership ensures that the products
and outcomes remain firmly grounded in and accountable to a legitimate
customer base. The credibility of our work rests on our commitment to
insuring that resident leaders are at the heart of the work of our
network.
______
Questions Submitted to the Community Development Financial Institutions
Fund
Questions Submitted by Senator Barbara A. Mikulski
Question. What criteria do you use for certifying new CDFIs?
Answer. The CDFI certification criteria are prescribed in the
Fund's regulations and application materials. There are six criteria:
(1) having a primary mission of community development; (2) serving an
eligible Target Market; \1\ (3) being a financing entity; (4) being
accountable to the Target Market; \2\ (5) providing development
services (training or technical assistance) to borrowers and potential
borrowers; (6) and being a non-governmental entity. CDFI certification
does not entail a competitive process, applicants for certification are
deemed to either meet the criteria or not.
---------------------------------------------------------------------------
\1\ Target Market is defined as an Investment Area(s) and/or a
Targeted Population(s).
\2\ Market Accountability is defined as having area and/or
population representation on its governing board or otherwise.
---------------------------------------------------------------------------
Question. What is the process for certification?
Answer. An entity may apply for CDFI certification to the Fund at
any time or it may do so in conjunction to applying for funding under
the CDFI Program. Once a certification application is received, it is
first reviewed for completeness. When deemed to be complete, a staff
reviewer determines whether the applicant meets the six tests described
above. The reviewer makes a certification recommendation, which is then
reviewed for approval by a Program Manager. If the applicant is
certified, it receives a letter that describes its Target Market and
the end of the term of the certification (3 years from date of
approval). If not certified, the applicant is sent a letter describing
which of the tests it did not pass. CDFIs must be re-certified every 3
years. As of February 15, 2002, the Fund has certified 553 CDFIs in all
50 states, DC, USVI, and PR.
Question. How do you monitor the performance of CDFIs? Has the Fund
ever revoked the certification of a CDFI?
Answer. Annual Reporting.--The Fund requires awardees to submit
performance and financial reports on a semi-annual and annual basis.
Performance reports indicates how well an Awardee is achieving the
goals and measures that it negotiated with the Fund, as incorporated in
its assistance agreement. Financial reports demonstrate the fiscal
health of the overall operation of the Awardee organization and/or its
affiliates. The Compliance Monitoring and Evaluation (CME) staff of the
Fund reviews these reports.
Reports are reviewed and awardees rated as compliant, on
``compliant watch'', non-compliant but not resulting in an event of
default, or non-compliant. Awardees are automatically deemed
noncompliant if they fail to submit required reports by the deadlines
stated in their Assistance Agreements.
If an Awardee is noncompliant under the terms and conditions of its
Assistance Agreement, CME staff will contact it to discuss the
noncompliance and its plans for improvement; CME staff then prepares
and presents its recommendations to the Fund's Portfolio Committee.
Corrective actions approved by the Portfolio Committee can range from
an amendment of the assistance agreement so as to adjust for unforeseen
conditions, to de-obligation of undisbursed funds, to (in the most
serious cases) a demand that award funds be returned to the Federal
Government.
On-site Reviews.--In the very near future, the CME unit will begin
conducting on-site visits to examine certain organizations' operations
more closely, and to ensure their compliance with the CDFI Fund's
requirements. Organizations will be selected for on-site visits through
a risk assessment process, with those deemed at higher risk being
examined first. Some on-site visits are planned to organizations that
are not considered at higher risk in order to balance the portfolio of
on-site visits and to establish baseline procedures.
Program Suspensions.--In certain cases, the Fund has revoked the
certification of CDFIs. A CDFI certification can be revoked when the
Fund is notified of material changes in an organization, meaning that
the entity no longer satisfies all six CDFI certification criteria. The
manner in which the Fund learns of such changes occurs in several ways,
including notification by a CDFI's regulator, notification by the CDFI
itself, notification by an unrelated third party, or upon the Fund's
review of reports submitted annually by the CDFI.
Performance Measures.--The Fund is reviewing its current
methodology for developing performance goals and measures to
incorporate a more quantitative analysis of the Awardee's community
development impact, solvency, asset quality and management capacity
(PLUM \3\). Analysis is being conducted to identify peer groups and
benchmark data. Based on this information, acceptable levels of
achievement will be determined and applied to awardees to achieve the
following: identify CDFI Fund portfolio risk and to identify CDFIs that
have achieved higher success in fulfilling its community development
mission. Based on this information, the Fund can conduct targeted
analysis of its portfolio, highlight best practices that can be shared
with the CDFI field, and better assess CDFIs' abilities to expand or
stabilize underserved market areas.
---------------------------------------------------------------------------
\3\ PLUM is defined to include P (performance effectiveness/
community impact), L (leverage, liquidity, solvency), U (underwriting),
and M (management).
---------------------------------------------------------------------------
Yes, the Fund has revoked certification status of a CDFI. As the
Fund is notified of material changes in a certified CDFI's
organization, material enough so that the entity no longer satisfies
all six certification criteria, certification statuses are revoked.
Question. What strategies have CDFIs used in preventing predatory
lending?
Answer. CDFIs have been among the leaders in bringing attention to
harm caused by predatory lending. For example, Self-Help, a CDFI
serving North Carolina, was instrumental in documenting the results of
predatory practices in that state. It measured the ``equity-stripping''
effect of predatory lending. An outcome of its efforts was the
pioneering legislation passed by the state legislature in 1999. That
legislation decreased the attractiveness of several predatory
practices.
Other CDFIs have promoted public policies to reduce the corrosive
effects of predatory lending on individuals and on neighborhood
revitalization efforts. The Reinvestment Fund, a Philadelphia-based
CDFI, launched a predatory lending strategy in that city in 2000; a
year later the city council passed an anti-predatory lending ordinance.
CDFIs also provide needed financial counseling to lower income
households (which is one of the six requirements to be a certified
CDFI). Knowledge gained from such counseling arms lower-income
borrowers so that they are not victimized by predatory lending
practices.
Question. What strategies have CDFIs used to help victims of
predatory lending?
Answer. CDFIs, by definition, engage in consumer-friendly lending.
They help provide low cost alternatives for financial services. The
activities of a successful CDFI demonstrate that it is possible to lend
in a manner that is not abusive. Those CDFIs that lend to individuals
(rather than solely to businesses) are able to design loan products or
financial services that either help correct for the damage done by a
predatory lender or can demonstrate alternatives to abusive lending in
low-income markets. For example, though ``payday loans'' can service a
short-term financial need of some customers, Northside Federal Credit
Union in Chicago developed an alternative to the ``payday loan.'' It
provides short term, small signature loans to its members that allow
ready access to needed cash but with interest rates and terms that are
manageable.
The Fund's awards have been used by CDFIs to capitalize anti-
predatory loan products designed to help victims of abusive practices.
NHS of New York is an example of a Fund Awardee whose loan product will
wrap in a single re-financing first and subordinated mortgage debt, as
well as consumer debt. This is considered a risky loan in that it
generally requires providing a loan well in excess of the value of the
underlying collateral (the house). Without an investment source like
the CDFI Fund, this entity may not have had sufficient resources to
launch the product or meet demand without extensive long-term fund-
raising at the local level.
The Reinvestment Fund, a Philadelphia-based CDFI, and the
Neighborhood Lending Services, a Chicago CDFI, also have developed
similar products to assist predatory loan victims. Such loans refinance
predatory loans and are coupled with intensive counseling.
Additionally, the work of Self Help (noted above) is creating a large-
scale alternative to predatory loans. It has developed a secondary
market for non-conforming mortgage loans, thus allowing low-wealth
households to buy homes with conventional financial institutions
providing financing, as opposed to meeting interest in ownership
through the services of sub-prime lenders. Self-Help used the Fund's
award to capitalize this effort and included a requirement that banks
from which Self-Help purchased loans had to use the proceeds from these
loan sales to continue making similar loans serving the low-income,
first-time homebuyers.
Through the BEA Program the conventional financial institutions are
encouraged to provide products and services that would create
constructive alternates to predatory lenders. For example the BEA
Program encourages banks to start First Account programs and adding
ATMs or branches in underserved neighborhoods. Increased access to such
services foster competition and provides low-cost alternatives to
compete effectively with check-cashers or payday lenders. Additionally
banks are rewarded for increased mortgage lending in lower income
areas, another alternative to non-regulated predatory lenders.
Question. Do CDFIs ever work with FHA's inventory? Is there a role
for CDFIs in property disposition?
Answer. CDFIs are lenders; many CDFIs lend to developers of housing
that is affordable to lower-income households. Many CDFIs have lent to
non-profit developers of housing that work with FHA inventory, either
single family or multi-family. CDFIs can make logical partners for such
housing developers. Many CDFIs understand working with troubled
properties and in risky markets. Developers of FHA inventory often need
such lenders. Further, CDFIs can provide debt with flexible terms,
allowing for lease-up or marketing periods that may be longer than
would typically be available for housing targeted to a more affluent
market or terms more flexible than can be provided by a traditional
lender.
Question. Do CDFIs help in restructuring bad loans? If so, what
percentage of these was FHA insured?
Answer. CDFIs often serve the most difficult to underwrite
customers. The provision of development services (credit counseling),
required in order to be certified as a CDFI, helps to keep these loans
from going bad. On occasion, a CDFI may need to re-structure its own
loans, depending on the borrower and its overall portfolio policies and
procedures. There are only a handful of CDFIs that are FHA-insured
lenders. Most CDFI mortgage lending is in the form of second, or
subordinated, mortgages. The first mortgage is typically the one with
mortgage insurance. The number of CDFI-financed deals that have had
some FHA lending is not known. The Fund anticipates collecting loan
level data in the near future. However, until that form of data
collection is attained, such information is anecdotal. More
importantly, a CDFI is often the type of lender that would be turned to
in order to help re-finance a property if the original financing was
inappropriate or the borrower faced potential foreclosure.
Question. Explain the timing of the New Markets Tax Credits--when
will they hit the street?
Answer. To date, the NMTC Program has achieved a series of critical
milestones. We successfully launched the allocation application process
that introduces the New Markets Tax Credit (NMTC) Program on June 7,
2002. The Fund anticipates that selection of applicants and the making
of allocations will occur in early winter 2002, possibly allowing
Allocatees time to secure investor funding and/or make investments in
2002 with the proceeds of investment in CDEs.
On April 20, 2001, the Fund issued guidance (which was published in
the Federal Register on May 1, 2001 at 66 FR 21846) that provided
general programmatic information, as required by the NMTC Program
statute. On December 20, 2001, the Fund issued additional guidance in
the Federal Register (at 66 FR 65806), which provided specific guidance
on how an entity may apply to be certified as a ``community development
entity'' (CDE). On December 26, 2001, the Internal Revenue Service
(IRS) published temporary regulations in the Federal Register (at 66 FR
66307) that provide guidance to taxpayers claiming New Markets Tax
Credits (NMTCs). Also, on December 26, 2001, the Fund made CDE
Certification Applications available through its website,
www.cdfifund.gov.
Question. What activities will the New Markets Tax Credits finance?
How are those activities different from what the CDFI Fund supports?
Answer. The NMTC Program permits taxpayers to claim a credit
against Federal income taxes for Qualified Equity Investments (QEIs)
made to acquire stock or a capital interest in designated Community
Development Entities (CDEs). Designated CDEs must use substantially all
of the proceeds from the QEIs to make Qualified Low Income Community
Investments (QLICIs). The tax credit provided to the investor (either
the original holder or a subsequent purchaser) is claimed over a 7-year
credit allowance period. In each of the first 3 years, the investor
receives a tax credit equal to 5 percent of the total amount paid for
the stock or capital interest at the time of purchase. For the final 4
years, the value of the tax credit is 6 percent annually. The Fund
certifies CDEs on an ongoing basis, and will allocate NMTCs annually to
CDEs through a competitive application process.
The CDFI Program, in contrast, helps to capitalize community
development lenders (CDFIs) through direct investments from the Fund.
These investments, which take the form of grants, loans, equity
investments and deposits, are made to qualified institutions that
provide access to credit and capital in economically distressed and
underserved markets. We believe that by providing financial investments
and technical assistance support to CDFIs, they in turn will better
serve their communities. Providing financial and other services in
these communities helps low-income families to build wealth (through
savings and use of financial services less costly than provided by non-
regulated entities), increase economic self-sufficiency, and reduce
dependence on transfer payments.
Question. What effect will this multi-billion dollar program have
on the CDFI fund office? Do you have enough staff to adequately oversee
this program in addition to the fund?
Answer. The cost to administer the New Markets Tax Credit Program
is currently 24 percent of the Fund's administrative budget. It is
anticipated that with full implementation of this program, from
application review to NMTC allocation to compliance monitoring, the
Fund's administrative costs to support NMTC Program will increase. The
new FTEs requested in the fiscal year 2003 budget request are earmarked
for the NMTC Program and additional administrative support staff. We
believe that we have adequate resources to administer both the NMTC
Program and our award programs through fiscal year 2003.
Question. Will your management of the Tax Credits take away from
your focus on managing the CDFI core programs?
Answer. No. The Fund envisions that the NMTC Program will
complement the Fund's existing programs that provide direct funds to
community development financial institutions.
Question. What steps is the CDFI Fund taking to improve its outcome
measures and data collection?
Answer. Our objective is to show how the investments we make in
CDFIs, and the loans they make in turn, fill gaps in financial services
for distressed areas and populations. Our program performance measures
will show the impact CDFIs' loans made to stabilize or improve our
Nation's underserved communities and target populations through
community development financing activities.
The Fund is reviewing its current methodology for developing
performance goals and measures to incorporate a more quantitative
analysis of the Awardee's community development impact (improvement in
community conditions), and it's financial capacity to sustain its
lending activities--solvency, asset quality and management capacity.
Question. Do the grants and loans provided by the CDFI fund serve a
unique purpose? How are they different from what is available through
the Small Business Administration? Through Community Development Block
Grants?
Answer. Yes, the awards administered by the Fund serve a unique
purpose. Investments by the Fund serve a special purpose in that they
help to capitalize specialized loan funds that fill voids in the
conventional capital markets. Such loan funds must serve economically
distressed places or underserved populations. CDFIs serve a wide array
of such communities through a wide array of financial services. SBA's
products generally are for a range of small business loan services with
limited risk profiles for borrowers than a small business loan fund may
provide.
CDFIs may lend in ways that banks, thrifts and other conventional
lenders find too risky or unprofitable. They may lend in order to make
major projects happen, such as by providing development loans to non-
profit organizations; they may take subordinate (2nd or 3rd) loan
positions to convince a bank to lend to bring a major grocery store or
medical center into a distressed area. These institutions may take the
first credit risk to ensure that a bank's loan meets safe and sound
underwriting. CDFIs are distinct from other financial institutions in
that CDFIs may provide training and technical assistance (development
services) to borrowers and potential borrowers. This is one way that
CDFIs build markets where conventional lenders do not see opportunity.
Support from the Fund may allow a CDFI to absorb the cost of
development services delivery and innovation that it could not fully
recover through its lending operations.
The CDBG Program provides local governments with grants, which they
design, localized programs to meet needs of their low-income
populations. It appears that the majority of HUD's CDBG funds are used
for infrastructure redevelopment (such as installation of water and
sewer lines and/or road and street improvements). Grants to low-income
residents may be provided for housing development and rehabilitation.
These grants sometimes are used in conjunction with loans from CDFIs
and may be used to reduce the costs of meeting standard zoning
requirements so as to make homeownership affordable to low-income
people. A CDFI may make a loan to a non-profit affordable housing
developer to help meet the project feasibility requirements for a CDBG
grant or qualify for conventional financing from a traditional lending
institution. CDFIs can help communities underwrite small-scale or
scattered site affordable housing units, thus helping to improve and
increase the Nation's stock of affordable and decent housing.
Therefore, the capital provided by the Fund to CDFIs, which may in turn
be used to make loans to non-profit housing developers, and the CDBG
grants that developers may receive from HUD are in fact two
complementary efforts that in many cases result in an increase of the
Nation's stock of decent and affordable housing. CDFIs democratize the
availability of credit and capital to scores of underserved communities
and populations.
Question. What community development activities does the CDFI Fund
most often fund or underwrite? Please break out the activities by type,
and grant/loan amount.
Answer. As the following table shows, in terms of both number and
dollar amount of awards, the Fund supports CDFIs that engage in
housing/community facilities most frequently, followed by those engaged
in business lending and consumer lending/financial services (the latter
includes credit unions and banks). CDFI Intermediaries, the fourth
category, support all types of CDFIs. Venture Capital CDFIs provide
equity to businesses. Multi-bank CDCs are primarily business lenders,
though some are housing lenders.
CDFI FUND AWARDS BY TYPE OF AWARDEE--1996-2001 CORE, INTERMEDIARY, & SECA/TA AWARDS
----------------------------------------------------------------------------------------------------------------
Award Amounts Number of Awards
------------------------------------------------
Type of Awardee by Primary Business Activity Percent Percent
Dollars of Total Numbers of Total
----------------------------------------------------------------------------------------------------------------
Housing/Facilities............................................. $152,294,696 42 210 32
Business....................................................... 76,237,083 21 177 27
Consumer Lending and Financial Services........................ 49,800,801 14 130 20
CDFI Intermediary.............................................. 25,027,201 7 20 3
Venture Capital................................................ 20,664,301 6 23 3
Microenterprise................................................ 18,748,642 5 67 10
Multi-Bank CDC................................................. 16,490,987 5 22 3
------------------------------------------------
Total.................................................... 359,263,711 100 649 100
----------------------------------------------------------------------------------------------------------------
Question. What percentage of the loans that originate from the CDFI
Fund go into default?
Answer. To date, no CDFIs have defaulted on loans from the Fund. A
couple of CDFI borrowers have been late on interest payments but all
have otherwise met the terms and conditions of their debt instruments
with the Fund.
Question. Do private banks get CRA credit for investments in low-
income communities that are also incentivized by Bank Enterprise
Awards? Please document some cases in which this could happen.
Answer. The BEA Program is intended to encourage FDIC-insured
depository institutions to go beyond just serving the ``convenience and
needs of the communities in which they operate'' (as called for by the
CRA). The BEA Program provides an incentive to banks and thrifts to
serve areas or people that the institution may not necessarily have to
serve in order to receive a Satisfactory CRA rating. The BEA Program
award should therefore be seen as a complement to the CRA activities of
an institution.
Generally, the types of activities that would qualify for a BEA
Program award would also be viewed favorably by the regulatory agency
in developing the CRA rating for the institution--provided the
activities occurred within the bank's CRA Assessment Area.
For example, take a bank whose CRA Assessment Area is the
Washington DC metropolitan area. This bank could apply for a BEA
Program award for increasing its lending within the Anacostia area
(which qualifies as a BEA Distressed Community). In the current funding
environment, the bank would have to increase its activities
significantly to increase the probability of receiving an award. (When
the Fund lacks sufficient resources to fund all qualified activities
for which BEA applications are submitted, it must follow statutorily
prescribed priorities, which include ranking applicants by the ratio of
activity level to asset size. Thus, the greater the activity level, the
greater the probability of an award.)
These activities--because they are within a low-income community--
would likely also receive positive CRA consideration. The regulator, in
developing a CRA rating for the bank, would view these activities in
the context of the bank's overall operations. Because the regulator is
looking for a reasonable level of activity within the low-income areas
of the Assessment Area, there is no incentive to maximize or exceed a
certain the level of investment activity. The BEA Program regulations,
on the other hand, encourage the institution to provide more lending in
the Distressed Community than required for ``Satisfactory'' ratings
under CRA. Moreover, areas must pass a more stringent level of distress
to qualify for the BEA Program (which considers poverty rate and
unemployment rate of the area) than under the CRA regulations (which
just consider income level of the census tract). Financial institutions
participating in the BEA Program manage some of the Nation's best CRA
programs, as nearly one-third of BEA Program participants have received
``Outstanding'' ratings under CRA. According to bank regulators, only
10 percent of regulated institutions receive ``Outstanding'' CRA
ratings.
______
Questions Submitted by Senator Tim Johnson
rural communities and the bea program
Question. The CDFI Fund has identified several options that may
increase the flow of CDFI Program and BEA Program funding to rural
areas. Your testimony notes that within the BEA program authorizing
language would be needed to alter the definition of ``distressed
areas'' which currently only applies to communities with a population
of 4,000 or greater.
Could you provide me with a breakdown of obstacles you've
determined would need to be address in authorizing legislation? Second:
Could you provide us with any examples of administrative and regulatory
modifications you intend to implement to better serve rural
communities?
Answer. The statutorily prescribed definition of ``Distressed
Community'' under the BEA Program is an obstacle and disadvantages
rural communities. First, rural areas have difficulty meeting the
program's 30 percent poverty requirement because populations in rural
areas are often scattered, with Low-Income households mixed with
households with higher incomes, and have fewer concentrations of
poverty than is often found in urban areas. Second, over 40 percent of
the Nation's rural population resides in communities with fewer than
2,500 people. These communities are too small to meet the BEA Program's
statutorily required population of 4,000 people in metropolitan areas.
Further, in non-metropolitan counties there is a minimum population
requirement of 1,000 people in a qualifying census tract. This figure
also precludes otherwise qualifying economically distressed rural areas
from BEA Program eligibility. To best address the issue, statutory
modifications would be necessary.
Background
According to the statute that created the BEA Program, a Distressed
Community consists of contiguous Geographic Units (e.g., census tracts)
located within the boundaries of one Unit of General Local Government
(e.g., town, city, or country) that meet certain minimum population,
poverty, and unemployment requirements, as follows:
Minimum Population Requirements.--Metropolitan Statistical Areas:
The population of a Distressed Community must be at least 4,000 people
if any portion of the area is located within a Metropolitan Statistical
Area. Non-Metropolitan Statistical Areas: The population of a
Distressed Community must be at least 1,000 people if no portion of the
area is located within a Metropolitan Statistical Area. Indian
Reservations: If a Distressed Community is located entirely within an
Indian Reservation, it is not required to meet the minimum population
requirements.
Minimum Poverty Requirements.--At least 30 percent of the Residents
of the Distressed Community must have incomes that are less than the
national poverty level, as determined by the latest decennial census.
Minimum Unemployment Requirements.--A Distressed Community must
have an unemployment rate that is at least 1.5 times greater than the
national average, as determined by the Bureau of Labor Statistics' most
recent statistics.
In addition, the BEA Program regulations allow that a Distressed
Community may consist of Geographic Units that (1) individually meet
the minimum population, poverty, and unemployment requirements
discussed below, or (2) in the aggregate meet the poverty and
unemployment requirements, provided that no designated Geographic Unit
within the Distressed Community has a poverty rate of less than 20
percent.
native american cdfi technical assistance program
Question. Forty seven organizations have applied for awards in the
first round of funding in that Native American CDFI Technical
Assistance (NACTA) program, demonstrating very strong interest on the
part of tribes and other organizations serving Native Americans in
expanding the work of CDFIs in Indian country. Fiscal year 2002 will be
the first year that monies will be awarded through the NACTA program.
What kind of priority will the NACTA program have to the Fund, if
resources are limited to the President's budget request of $68 million?
Answer. It is the intent of the Fund to have a second round of the
NACTA Component in fiscal year 2003.
performance measures for rural and reservation communities
Question. With regard to performance measures. I am concerned that
seemingly straightforward standards may in fact work to the detriment
of some communities. Particularly where they may aggravate the barriers
rural and Native American areas already face in securing CDFI
investments.
For example, it is very straightforward to measure the success of
an investment in terms of the number of jobs created and wages paid.
However, it's equally important to consider the services provided
and the impact that a business may have on the quality of life in the
community. This is particularly important in rural and isolated areas.
How do we measure the impact on a rural or reservation community by
establishing a welding shop, a cafe, a grocery store, or a gas station?
The business my only create 3 or 4 jobs, but area families no longer
must drive 20, 30, 40 miles or more to utilize that service.
In developing the ``performance measures'' required by Secretary
O'Neill, how can we make sure rural and Native American CDFIs are not
penalized for investing in small main-street business that may only
create a handful of jobs, but significantly enhance the community?
Answer. Performance measures will not disadvantage rural
communities. The Fund's measure of impact will not focus on volume but
will attempt to assess the local community improvement impact of each
award made by the CDFI Fund. The Fund's Small and Emerging CDFI
Assistance (SECA) Component, in particular, seeks to assist small
lending operations that demonstrate that they are likely to achieve
impact in the communities they serve.
______
Questions Submitted by Senator Christopher S. Bond
performance measures
Question. I am pleased that Secretary O'Neill has recognized the
importance of performance outcomes because it is still unclear to me if
CDFI's programs make a significant difference in helping distressed
communities and if its programs are more cost-effective and efficient
than other similar Federal efforts.
For example, I would like to know to what extent the Bank
Enterprise Award program motivate financial institutions provide
capital in distressed communities, especially when they are required to
perform these activities under the Community Reinvestment Act.
Answer. Congress, in passing the BEA Program legislation, intended
the BEA Program to encourage FDIC-insured depository institutions to go
beyond just serving the ``convenience and needs of the communities in
which they are chartered.'' Congress wanted to provide an incentive to
banks and thrifts to do business in highly distressed communities that
may not necessarily be part of their Community Reinvestment Act (CRA)
assessment areas or to serve as partners with local CDFIs that serve
populations that the institutions may not necessarily have to serve in
order to receive Satisfactory CRA ratings. A BEA Program award should
therefore be seen as a complement to the CRA activities of an
institution.
Question. In response to Secretary O'Neill's initiative, when do
you expect to be able to provide this committee with data on program
performance? Do you expect to collect and analyze data that will
compare the performance of CDFI's programs to other Federal activities?
Answer. The Fund is able to provide program performance data now.
Our objective is to show how the investments we make in CDFIs, and the
loans they make in turn, fill gaps in financial services for distressed
areas and populations. Our program performance measures will show these
investments improve our Nation's underserved communities and target
populations through community development financing activities.
The Fund is reviewing its current methodology for developing
performance goals and measures to incorporate a more quantitative
analysis of the awardee's community development impact, solvency, asset
quality and management capacity (PLUM \1\). Analysis is being conducted
to identify peer groups and benchmark data. Based on this information,
acceptable levels of achievement will be determined and applied to
awardees to achieve the following: identify CDFI Fund portfolio risk
and to identify CDFIs that have had achieved higher success in
fulfilling its community development mission. Based on this
information, the Fund can conduct targeted analysis of its portfolio,
highlight best practices that can be shared with the CDFI field, and
better assess CDFIs' abilities to expand or stabilize underserved
market areas.
---------------------------------------------------------------------------
\1\ PLUM is defined to include P (performance effectiveness/
community impact), L (leverage, liquidity, solvency), U (underwriting),
and M (management).
---------------------------------------------------------------------------
The awards administered by the Fund serve a unique purpose.
Investments by the Fund serve a special purpose in that they help to
capitalize specialized loan funds that fill voids in the conventional
capital markets. Such loan funds must serve economically distressed
places or underserved populations. CDFIs serve a wide array of such
communities through a wide array of loan products and financial
services. The Fund differs from many other Federal activities in that
the Fund invests in institutions not projects. CDFIs are local market-
based institutions that respond to market demand in their communities.
Support from the Fund may allow a CDFI to absorb the cost of
development services delivery and innovation that it could not fully
recover through its lending operations.
overlapping federal programs
Question. I am concerned about overlapping Federal programs. It is
clear that CDFI works with the same communities and institutions that
HUD and other Federal Agencies work with.
Please tell me about any informal and formal efforts to coordinate
Federal activities in assisting distressed communities. How do your
organizations ensure that its activities are not duplicative of other
Federal activities?
Answer. The Fund has a structured means of coordination with other
agencies through the Community Development Advisory Board, which
includes representatives from six Federal Agencies (USDA, Commerce,
HUD, Interior, Treasury, and the SBA). The statute that created the
CDFI Fund requires the Advisory Board. In addition, the Fund, by law,
coordinates with the banking and credit union regulatory agencies while
in the process of considering Fund investments in regulated entities.
Programmatically, the Fund regularly engages in discussion with
other agencies. For example, there is current strategizing with HUD as
to how to increase the level of resources available to the colonias in
the U.S.-Mexico border region. The Fund has shared with HUD information
about CDFIs serving these distressed areas in which the Fund has
invested and described how CDFIs can help provide a permanent flow of
capital in otherwise underserved areas. HUD in turn has shared its
information regarding the concentrations of colonias. Both entities are
interested in improving data-gathering to document the level of
financial services activities in these areas. The Fund is also engaged
in a dialog with Federal Reserve Board of Governors and the Federal
Reserve Bank of Richmond as to the development of measurements that
will serve to allow comparative classification of levels of financial
services. Achieving this will help the Fund to improve its ability to
target dollars to areas of market dysfunction.
native american cdfi technical assistance program
Question. The Treasury Department's November 2001 ``Native American
Lending Study'' clearly indicates a need for capital access and
financial lending on Indian lands. Further, the study recommends,
``creating more financial institutions, including CDFIs, on Indian
Lands'' and ``encouraging existing financial institutions that are not
located on Indian Lands to open branches on Indian Lands.'' However,
the Administration has not requested any new funds for fiscal year 2003
for the Native American Technical Assistance program.
Can you explain this disconnect? By not funding this initiative,
does this mean that you disagree with the study's recommendations?
Answer. The Fund supports the recommendations set forth in the
Native American Lending Study report. The reason we have not included a
request for Native American CDFI Technical Assistance (NACTA) funding
in our fiscal year 2003 budget is because we believe that the carryover
(unused funds) from fiscal year 2002 will be sufficient to meet the
fiscal year 2003 need.
monitoring awardees
Question. How does the CDFI monitor the management of grantees? Has
the Fund ever revoked the certification of a CDFI?
Answer. The Fund uses several methods to monitor its awardees. They
include the following:
Annual Reporting
The Fund requires awardees to submit performance and financial
reports on a semi-annual and annual basis. Performance reports tell how
well an awardee is achieving the goals and measures that it negotiated
with the Fund, as incorporated in its assistance agreement. Financial
reports demonstrate the fiscal health of the overall operation of the
awardee organization and/or its affiliates. The Compliance Monitoring
and Evaluation (CME) staff of the Fund reviews these reports.
Reports are reviewed and awardees are rated as compliant, on
``compliant watch'', non-compliant but not resulting in an event of
default, or non-compliant. Awardees are automatically deemed
noncompliant if they fail to submit required reports by the deadlines
stated in their Assistance Agreements.
If an awardee is noncompliant under the terms and conditions of its
Assistance Agreement, CME staff will contact it to discuss the
noncompliance and its plans for improvement; CME staff then prepares
and presents its recommendations to the Fund's Portfolio Committee.
Corrective actions approved by the Portfolio Committee can range from
an amendment of the assistance agreement so as to adjust for unforeseen
market conditions, to de-obligation of undisbursed funds, to (in the
most serious cases) a demand that award funds be returned to the
Federal Government.
On-site Reviews
In the very near future, the CME unit will begin conducting on-site
visits to examine certain organizations' operations more closely, and
to ensure their compliance with the CDFI Fund's requirements.
Organizations will be selected for on-site visits through a risk
assessment process, with those deemed at higher risk being examined
first. Some on-site visits are planned to organizations that are not
considered at higher risk in order to balance the portfolio of on-site
visits and to establish baseline procedures.
Program Suspensions
In certain cases, the Fund has revoked the certification of CDFIs.
A CDFI certification can be revoked when the Fund is notified of
material changes in an organization, meaning that the entity no longer
satisfies all six CDFI certification criteria. The manner in which the
Fund learns of such changes occurs in several ways, including
notification by a CDFI's regulator, notification by the CDFI itself,
notification by an unrelated third party, or upon the Fund's review of
reports submitted annually by the CDFI.
Performance Measures
The Fund is reviewing its current methodology for developing
performance goals and measures to incorporate a more quantitative
analysis of the awardee's community development impact, solvency, asset
quality and management capacity (PLUM). Analysis is being conducted to
identify peer groups and benchmark data. Based on this information,
acceptable levels of achievement will be determined and applied to
awardees to achieve the following: identify CDFI Fund portfolio risk
and to identify CDFIs that have had achieved higher success in
fulfilling its community development mission. Based on this
information, the Fund can conduct targeted analysis of its portfolio,
highlight best practices that can be shared with the CDFI field, and
better assess CDFIs' abilities to expand or stabilize underserved
market areas.
SUBCOMMITTEE RECESS
Senator Mikulski. This subcommittee stands in recess until
next Wednesday, May 1, in which we will be taking testimony
from NASA.
So thank you very much.
Ms. Lazar. Thank you both.
Senator Mikulski. And we are in recess.
[Whereupon, at 10:55 a.m., Wednesday, April 24, the
subcommittee was recessed, to reconvene at 9:47 a.m.,
Wednesday, May 1.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MAY 1, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:47 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Bond, Shelby, Craig, DeWine,
and Stevens.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
STATEMENT OF SEAN O'KEEFE, ADMINISTRATOR
ACCOMPANIED BY:
DR. JOHN GRUNSFELD, ASTRONAUT
STEVE ISAKOWITZ, COMPTROLLER
DR. EDWARD J. WEILER, ASSOCIATE ADMINISTRATOR FOR SPACE SCIENCE
DR. GHASSEM ASRAR, ASSOCIATE ADMINISTRATOR FOR EARTH SCIENCE
ROBERT W. COBB, INSPECTOR GENERAL
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. I want to convene the Subcommittee
hearing on VA-HUD appropriations to take the testimony of Mr.
Sean O'Keefe, our NASA administrator, to review the NASA
appropriations request.
Mr. O'Keefe, this is the first time that we are welcoming
you before this Appropriations Committee, and we look forward
to listening to you and working with you.
You come with a great deal of--you come with many
credentials and we know that you come also with the confidence
of the White House. I know that before this, before you took
over NASA, you were deputy director of OMB. So you are used to
being in orbit. That is a joke, but we will just let it go.
Senator Mikulski. You come with a great deal of management
experience and won all kinds of awards, and I believe your
expertise in management is just what NASA needs right now. We
are hoping that if anyone can get NASA back on track, it is
really going to have to be you.
We look forward to working with you and I am going to go
through some of the challenges I believe that NASA is facing
that we would like to hear your views on today and, of course,
we hope to have other conversations with you as we prepare for
markup.
The President has proposed a flat budget for NASA this year
at $15 billion. I must say I am disappointed that we continue
to see the flat budgets for NASA, especially considering the
enormous needs that NASA has.
We have issues related to shuttle upgrades, additional
scientific commissions, and an aging infrastructure that is
troubling. These are just a few of the needs that need to be
addressed. Along with that is the significant issue of the
ongoing issue of the cost overruns of the space station.
NASA has to have a balanced program in terms of human space
flight, scientific research and aeronautics. In a speech you
gave at Syracuse last month, you said that NASA's mission and
vision was to improve life here on earth and find life beyond.
I think that is an excellent vision. And to me, that is earth
science, space science, and biological and physical science.
But we are very troubled about the space station. The space
station continues to be NASA's number one problem. With the $5
billion in cost overruns, the station continues to be a dark
cloud over NASA's horizon rather than a bright opportunity for
research.
NASA must implement the management reforms and creditable
cost estimating this year. Otherwise, I am concerned that
Congress will have no faith in NASA's cost estimates until the
management reforms are firmly in place and NASA starts
delivering results.
Second, NASA must reaffirm that scientific research is the
primary purpose of the space station. I am concerned that if we
only have three astronauts in the station, all they are doing
is housekeeping, rather than the scientific discovery, some of
which I know we are going to see today.
Third, NASA needs to present Congress with a scientific
research plan that then lays out what it is going to do. The
cuts to scientific research aboard the space station have
really cost support for the program.
Another important issue is the future of the space shuttle.
The shuttle now costs $3 billion per year to operate, almost 20
percent of the NASA budget. I know you are starting to look at
privatizing of the shuttle program as a solution. I believe
that NASA must proceed very, very, very carefully before making
any decisions related to privatizing. And I know you will share
with us what you think is the best way.
I know that you are absolutely as committed as this
committee is to the safety of our astronauts. And we need to
look at what is the best way to get them into space safely and
to return them to safety safely and to be able to sustain them
when they are. So we look forward to the ideas and the money to
do this.
I know we cannot fly the shuttle forever, and that is why
we look at other initiatives like the space launch.
Moving on to science, aeronautics, and technology, I am
glad to see that the administration has proposed a 10 percent
increase in the funding. I know that you want to start an in-
space nuclear power program, and I think NASA is--I think we
need to discuss this.
I am concerned that you have zeroed out Pluto. We could be
missing an opportunity if it does not launch. We only get every
200 years to do this.
Earth science, I am beginning to think we are beginning to
see the benefits of that investment, record numbers of users on
earth science, improving their understanding of how the earth
works, and even other Federal agencies making use of this
information.
I know that we will always get double value from what we do
at NASA, that science, technology, discovery always leads to
the new ideas that either save lives, save communities, or
generate jobs.
We really look forward to hearing what you want to do with
$15 billion, how we can keep NASA flying, and I turn now to my
very able colleague, Senator Bond, for his comments.
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you very much, Madam Chair. I join with
you in welcoming the new NASA Administrator Sean O'Keefe, the
first appearance before this subcommittee. It is usually not
too painful and we hope we can be constructive on all sides,
but we do have some very serious questions as we have discussed
previously.
Mr. O'Keefe has some big boots to fill in replacing Dan
Goldin, who spent almost a decade at the helm of the agency. It
is a big job to fill not only because of the imprint that Mr.
Goldin left, but also because the agency continues to face a
number of management and budget concerns, many associated, as
the Chair has said, with the International Space Station and
the space shuttle program, two of NASA's best known and visible
programs.
I have a great deal of confidence that Sean will be a great
NASA administrator. And while he does not have an aerospace
background, I think what is clearly needed at this agency are
the critical management skills and budgetary expertise that I
believe he brings to address the previous inability of NASA to
provide an adequate budget for its programs and to solve the
management problems.
Mr. O'Keefe has been the staff director for the Senate DOD
Appropriations Subcommittee, a comptroller of DOD, Secretary of
the Navy, most recently deputy director at OMB, and frankly he
has survived the blood and the water mentality at OMB, which
should auger well for his ability to succeed in another agency
with a little blood around it.
I also believe every new agency head must be provided an
opportunity to demonstrate leadership and management abilities.
We will do all we can to support Mr. O'Keefe in meeting the
many challenges facing him at NASA.
In particular, the International Space Station, which is
been touted as the new crown jewel of NASA, now appears to be a
rather expensive bit of costume jewelry. And since 1993 when
the ISS redesign work began, the program has gone through
continuing fits and starts, delays, additional costs resulting
from Russia's failure to meet certain commitments, as well as
other costs and delays resulting from problems caused by NASA
and its contractors.
It would not surprise me if the Harvard Business School
decided to use the ISS decision-making and funding process for
a whole year's worth of courses on government and business
mismanagement. It has been that bad. That could keep a whole
raft of students busy and professors for many, many months.
The problems all came to a head, at least most recently, in
February 2001 when the key management personnel of the ISS
identified just another little $5 billion in cost overruns for
the space station to meet the assembly fact--those facts, and
the crew has--this has been a major problem. They have let the
assembly and completion requirements, set that time--the
administration and NASA decided to reduce station funding
requirements by cancelling or indefinitely deferring
construction of ISS hardware, and by cutting funding for space
station research.
As currently formulated, NASA plans to reach what it calls
``core complete'' by launching and completing assembly of the
existing ISS elements and then adding lab modules being built
by Europe and Japan.
I think the decision is correct, because of other funding
priorities, both within NASA and within the VA-HUD
Subcommittee. I am disturbed that we will not realize fully the
potential of ISS as a world-class research facility for science
conducted in a micro-gravity environment.
This failure is further highlighted by the fact that the
crew size of the ISS is limited to a crew of three, while it
requires two and a half crew to operate and maintain the
station. Despite arguments to the contrary by some NASA staff,
I do not believe that we are serving our scientific mission
well when we have one half time of one crew member devoted to
science.
At a minimum, without additional investment for a crew
return vehicle or the addition of more Soyuzes from Russia,
most of the complex science research that was anticipated to be
conducted on the station is not going to be accomplished.
Equally troubling is NASA's attempt to control the costs
and pay for cost overruns by slashing $1 billion from space
station research budget projections from fiscal year 2002
through 2006. In the current year, there are $140 million in
terminations within the ISS research account. Now, that is very
troubling to us for a program that costs as much as $100
billion after completion and operation.
On top of this and contrary to concerns raised last year in
the NASA budget hearing, NASA has allowed policies to be put in
place that will further reduce the stature of ISS from a
research facility to a guest hotel for the super rich.
Last year, Dan Goldin promised the international agreements
on visitors and crew standards would ensure that all visitors
to the space station would be trained comprehensively and
qualified before permission would be granted to visit the
station.
Instead I believe that the proposed policies on station
visitors are weak, insubstantial and could pose a deadly risk
to every crew member on the station. To me that is
unacceptable, especially during the assembly of the station,
which is a period of heightened risk in an already extremely
hazardous environment.
Well, I have a number of other issues I want to raise today
for the record. I am concerned about NASA meeting all the
funding needs associated with the space station program. The
Aerospace Safety Advisory Panel recently concluded its March
2002 annual report by saying, ``current and proposed budgets
are not sufficient to improve or even maintain the safety risks
of operating the space station or the ISS.''
I think that raises additional issues as to the future of
the shuttle, how safety concerns are prioritized, what is the
relationship between the space station program, the development
of a crew return vehicle and the SLI, designed to develop
second and possibly third generation reusable launch vehicles.
Each of these programs has substantial costs. I am not
convinced that the NASA budget can sustain even the shuttle
program and the SLI without a clearer vision of the goals and
relationships.
Finally, on a positive note, I am gratified NASA is working
with the University of Missouri's Center for General Physiology
in the area of gender-related issues in space flights.
As we look to explore the universe, commit men and women to
long periods of time in space, we need to understand the risks
and stresses on the human body of living in space. In
particular, it is critical to know the sex-specific factors
that influence our ability to adapt to the challenges posed by
living in the harsh environments encountered in the exploration
of space.
Thank you, Madam Chair.
Senator Mikulski. Thank you.
[The statement follows:]
Prepared Statement of Senator Christopher S. Bond
Thank you, Madam Chair. I welcome the new NASA Administrator, Mr.
Sean O'Keefe, to his first appearance before the Senate VA/HUD
Appropriations Subcommittee. Mr. O'Keefe has some big boots to fill in
replacing Dan Goldin who spent almost a decade at the helm of this
agency. This is a big job to fill, not only because of the imprint that
Dan left on the agency, but also because the agency continues to face a
number of management and budget concerns, many of which are associated
with the International Space Station and the Space Shuttle Program, two
of NASA's best known and visible programs.
However, I have a great deal of confidence that Mr. O'Keefe will be
a great NASA Administrator. And while Mr. O'Keefe does not have an
aerospace background, he does have the critical management skills that
I believe are needed to address NASA's inability to budget adequately
for its programs, and that once we solve these management problems NASA
will be on a smooth flight plan. In particular, Mr. O'Keefe has been
the staff director for the Senate DOD Appropriations Subcommittee, the
Comptroller of DOD, Secretary of the Navy, and most recently the Deputy
Director at OMB. Just to survive the ``blood in the water'' mentality
at OMB augurs well for his success at NASA.
I also believe every new agency head must be provided an
opportunity to demonstrate their leadership and management abilities
and I intend to provide whatever support I can to Mr. O'Keefe in
meeting the many challenges facing him at NASA.
In particular, the International Space Station which has often been
touted as the new crown jewel of NASA now appears to be little more
than very expensive costume jewelry. Since 1993, when the ISS redesign
work was begun, the program has gone through many fits and starts,
including delays and additional costs resulting from Russia's failure
to meet certain commitments as well other costs and delays resulting
from problems caused by NASA and its contractors. It would not surprise
me if the Harvard Business School decided to use the ISS decisionmaking
and funding process for a whole year's worth of courses on government
and business mismanagement. It has been that bad.
These problems all came to a head in February 2001 when the key
management personnel of the ISS identified another $5 billion in cost
overruns for the Space Station to meet assembly and completion
requirements.
Since that time, the Administration and NASA decided to reduce
station funding requirements by canceling or indefinitely deferring
construction of some ISS hardware and by cutting funding for space
station research. As currently formulated, NASA plans to reach what it
calls ``core complete'' by launching and completing assembly of the
existing ISS elements and then adding laboratory modules that are being
built by Europe and Japan.
While I believe the decision is correct because of other funding
priorities, both within NASA and within the VA/HUD Appropriations
Subcommittee, I am disturbed that we will not realize fully the promise
of the International Space Station as a world class research facility
for science conducted in a microgravity environment. This failure is
further highlighted by the fact that the crew size of the ISS is
limited to a crew of three while it requires 2\1/2\ crew to operate and
maintain the station. Despite arguments to the contrary by some NASA
staff, I do not believe much compelling science can be accomplished by
only one-half a crew member. At a minimum, without additional
investment for a crew return vehicle or the addition of more Soyuzes
from Russia, most of the complex science research that was anticipated
to be conducted on the Station will never be accomplished. Equally
troubling is NASA's attempts to control costs and pay for cost overruns
by slashing some $1 billion from space station research budget
projections from fiscal year 2002 through fiscal year 2006. In fiscal
year 2002 alone, there are $140 million in terminations within the ISS
research account.
This is not acceptable for a program that could cost as much as
$100 billion after completion and operation. On top of this and
contrary to concerns raised last year in the NASA budget hearing, NASA
has allowed policies to be put in place that will further reduce the
stature of the ISS from a research facility to a guest hotel for the
super rich. Last year, Dan Goldin promised that international
agreements on visitors and crew standards would ensure that all
visitors to the Space Station, would be trained comprehensively and
qualified before permission would be granted to visit the Station.
Instead, I believe that the proposed policies on Station visitors are
weak, unsubstantial and could pose a deadly risk to every crew member
on the Station. Again, this is unacceptable, especially during the
assembly of the Station which is a period of heightened risk in an
already extremely hazardous environment.
I have a number of other issues and concerns that I intend to raise
today or as questions for the record. In particular, I am concerned
about whether NASA is meeting all the funding needs associated with the
Space Shuttle program. The Aerospace Safety Advisory Panel recently
concluded in its March 2002 annual report that ``current and proposed
budgets are not sufficient to improve or even maintain the safety risks
of operating the Space Shuttle or the ISS.'' This raises additional
issues as to what is the future of the Shuttle, how safety concerns are
prioritized and what is the relationship between the Space Shuttle
program, the development of a crew return vehicle and the Space Launch
Initiative (SLI) which is designed to develop second and possibly third
generation reusable launch vehicles. Each of these programs have
substantial costs and I am not convinced the NASA budget can sustain
even the Shuttle program and the SLI without a clearer vision of the
goals and relationship of these programs.
Finally, I am very gratified that NASA is working with the
University of Missouri's Center for Gender Physiology in the area of
gender-related issues in space flight crews. As we look to explore the
universe and commit men and women to long periods of time in space, we
need to understand the risks and stresses on the human body of living
in space. In particular, it is critical to know the sex-specific
factors that influence our ability to adapt to the challenges posed by
living in the harsh environments encountered in the exploration of
space.
Thank you, Madam Chair.
Senator Mikulski. I note that Senator Ted Stevens is here,
the ranking member.
Sir, I know that you have many demands on you. Would you
like to make a statement?
STATEMENT OF SENATOR TED STEVENS
Senator Stevens. Madam Chair, you are very kind. Senator
Inouye is opening our defense hearing, well, in just 2 minutes.
I came to pay my respects to Administrator O'Keefe and to just
put one little item in the budget, which--in the record, which
I will bring to Mr. O'Keefe.
I am a little worried about the fact that Gilmore Creek, I
hear, is maybe subject to being closed. That is the last
tracking station on American soil. I would urge that you put
down that rumor if it is not true and review it if it is.
Thank you very much.
Senator Mikulski. Thank you, Mr. Chairman.
In order of arrival, it was Senator Craig, Senator Shelby,
and Senator DeWine. I wonder if you want to make any statements
now or if you would prefer to do that as you move into your
questions or concerns you might have--Senator Craig or----
Senator Shelby. Madam Chairman, I just want to associate my
remarks with those of Senator Bond. I think he laid out some
very serious and important questions that I hope Mr. O'Keefe
will address.
Senator Mikulski. Thank you, sir.
Senator Craig.
STATEMENT OF SENATOR LARRY E. CRAIG
Senator Craig. Madam Chairman, thank you.
Director O'Keefe, we welcome you to the committee. I also
am frustrated by the very concerns that Senator Bond has spoken
to. We Americans have a love affair with space, and it is still
there. There is no question about it. And so we here who
appropriate for your activities have a similar excitement about
it.
But you are there and I think you have been put there to
bring some sense of balance and fiscal responsibility to this
agency and also to chart new directions for it. And that is
extremely important for all of us, because in reference to
science and what can be gained, this morning once again we are
seeing those phenomenal new images coming out of Hubble and
going, ``Whoa, that is exciting.'' And if it were not for the
space program, we would not have been able to make that step.
I have been associating myself with it for some time as
Senator Bond mentioned, university programs that are extremely
valuable. Many of the researchers and educators from Idaho who
take part in those programs see phenomenal benefit from them.
We, in Idaho, have grown increasingly excited about the
Educator in Space Program. As many know, mission specialist
Barbara Morgan is from McCall, Idaho, and she is slated to go
up sometime in 2004 in a mission.
That excites us all. But it is an opportunity to extend
once again to our young people a tremendous challenge towards
space, space exploration and as my colleague from Missouri
mentioned, as the chairman mentioned, science. We have invested
a great deal in the biological sciences for the last decade and
this Congress has been committed to them as the physical
sciences in part have languished.
And I would hope that we can reinstate our purpose there,
and NASA plays an extremely important role in that. Your new
nuclear system initiative is exciting for me to see where you
want to go. And I say that, and your jointly working with the
Department of Energy is an opportunity.
It is not only an opportunity for us to be able to build
long-term energy supplies or energy capability, but also to
extend greater research into the area of nuclear reactors and
energy from that type of thing.
We in Idaho are very proud of the fact that in our
laboratory over 52 nuclear reactors have been built over the
last five decades of all shapes and sizes. Working with Argonne
and other laboratories around the Nation, we can lead the
world, and this is an initiative that I am pleased that you are
looking at. I think it is important for all of us in the long-
term efforts in space and the long-term efforts of producing
viable energy for our country.
Madam Chairman, let me put the balance of my comments in
the record.
We are pleased to have you before us, sir, Mr.
Administrator. And I trust that next year you will be able to
tell us about all of the corrective measures made and the great
new direction and course that NASA is taking.
Thank you.
Mr. O'Keefe. Thank you, sir.
Senator Mikulski. Without objection, sir, your statements
are in the record.
[The statement follows:]
Prepared Statement of Senator Larry E. Craig
Today we are hearing from the Administrator of NASA about the
important programs conducted by this leading science agency. Over the
last several months, I have met with many researchers and educators
from Idaho who take part in and benefit from NASA's programs.
Administrator O'Keefe, I commend you and the people of NASA for the
excellent work you do in getting young people excited about science.
I know your testimony makes reference to the sobering statistics
regarding the workforce challenges faced by--not only NASA but all of
the Federal Government--in terms of the aging of our Federal scientists
and engineers. We must do all we can to reinvigorate our science and
engineering base in this country--to arrest this decline, and starting
turning those statistics around.
One of the ways that students really become engaged is through the
``Educator in Space'' program. I am obviously very excited that you
recently announced--and personally conducted a joint press conference
with--NASA's first ever ``Educator in Space''--Mission Specialist
Barbara Morgan from McCall, Idaho. You can bet that school children all
over Idaho and all over the world will be following Barbara's story as
she prepares to take part in her space mission in 2004.
In your testimony we will also hear about a new NASA initiative
that has really peaked my interest. This new initiative is the Nuclear
Systems Initiative. This new program would cost about $800 million over
5 years. What excites me about this new program is that it acknowledges
something I have long believed. If this country intends to explore the
far reaches of the universe, it will not be possible to power these
craft without nuclear power.
Working jointly with the Department of Energy, NASA has used
nuclear power systems in space for over 35 years. These nuclear
generators use the heat of the decay of nuclear materials to generate
electricity. These systems are safe, proven, reliable, maintenance
free, and capable of producing heat or electricity for decades under
remote, harsh environments such as deep space.
NASA's new Nuclear Systems Initiative will improve upon these
existing nuclear generators. Additionally, this new program will seek
to develop a uranium-fueled nuclear reactor that will power an advanced
electric propulsion system. I think this development is critical to the
future of deep space exploration.
The Department of Energy's Office of Nuclear Energy has been a
partner with NASA in all of its nuclear space initiatives. The same
will be true of this new initiative. When it comes to the development
of new, nuclear reactor technology, the Idaho National Engineering and
Environmental Laboratory along with Argonne West--in Idaho--are DOE's
lead laboratories.
Over the course of the last five decades, 52 nuclear reactors have
been built at the INEEL. I encourage you to visit these facilities in
Idaho and see for yourself what we can do. Working jointly with NASA
and DOE, I look forward to the contributions that Idaho can make to
this new Nuclear Systems Initiative
Senator Mikulski. Senator DeWine.
STATEMENT OF SENATOR MIKE DEWINE
Senator DeWine. Madam Chair, thank you very much.
Administrator O'Keefe, good to see you again.
Let me express my support for your efforts in getting the
Nuclear Systems Initiative started. I have confidence that this
will provide the agency and the country with the technologies
that we need to support future space missions, and I applaud
you for that.
Let me also say that the NASA Glenn Center in Ohio is a
NASA Center that is really, I think, able to contribute to this
initiative through its electric propulsion technology
capabilities and flight developmental heritage. And you and I
have talked about that extensively in the past.
So, again, we welcome you here and look forward to your
testimony.
And, Madam Chair, I would just ask unanimous consent that
the balance of my statement be made a part of the record.
Senator Mikulski. Thank you, Senator DeWine.
[The statement follows:]
Prepared Statement of Senator Mike DeWine
I would like to recognize the NASA Glenn Center in Ohio as an
outstanding NASA Center that is able to contribute to this initiative
through its electric propulsion technology capabilities and flight
development heritage. NASA Glenn provides a significant contribution to
the economy of Ohio. The Glenn Research Center has a total employment
impact of more than 12,000 Ohio jobs and an economic output of
approximately $1.1 billion for the entire State. Glenn is particularly
well suited to have a major leadership role as part of this initiative.
I will also point out that NASA Glenn is uniquely qualified to lead
systems analysis and engineering efforts in the development of many
non-nuclear technologies including: (a) high performance ion thrusters,
(b) high voltage power management and distribution systems, and (c)
power systems including high temperature lightweight radiators.
HUBBLE SPACE TELESCOPE
Senator Mikulski. Mr. O'Keefe, we now turn to you for your
testimony on the appropriations request and the management
guidance that you want to provide the agency. But we also know
that Hubble--as the new retrofitted Hubble with its new eye in
the sky has sent back some really wonderful pictures and
pictures that tell us even more about the universe.
You know, we are very proud of Hubble, because of Hubble
itself out there looking to the edges of the universe, but the
fact that Goddard is the catcher's mitt of the information
coming in and then it tosses it to the Johns Hopkins Space
Telescope Institute for its marvelous analysis and so on.
So we in Maryland view the Hubble kind of--right now, it
has been up there so long, it is kind of like the Cal Ripken of
space telescopes.
And so we are--but unlike Cal, we had a very expensive
contact lens that we had to retrofit, which also says something
about the fact that even with the station, we know it has got
problems, but when we get it on track, like we got Hubble on
track, the results can be stunning.
So why do you not go ahead and tell us about your request
and, of course, bring to the table whoever you wish?
STATEMENT OF SEAN O'KEEFE
Mr. O'Keefe. Thank you, Madam Chair, Senator Bond, members
of the committee. Thank you all very much for your hospitality
and willingness to consider our requests on a variety of fronts
and, your very important, I think, opening statements have
touched on the very challenges that I have seen in the course
of my vast tenure of 4 months now at NASA. These are exactly
the kinds of issues that I am wrestling with every day, and I
think you put your finger to them.
First and foremost, I want to tell you how pleased I am to
be here at this committee, being an alumni of the Senate
Appropriations Committee staff longer ago than I care to admit,
but nonetheless a very proud member of that alumni team and
very grateful for the opportunity to be here.
I would like to submit a statement for the record, if you
would permit, and quickly summarize a couple of points, and
then touch on the Hubble images, Madam Chair, that you referred
to up front.
Senator Mikulski. Without objection, it will be.
Mr. O'Keefe. First and foremost, the issues I think that
best characterize the approach that we are taking for the
fiscal year 2003 budget before you and the request that the
President has advanced, is characterized first by an approach
to try to emphasize enabling technologies to overcome technical
limitations that have been structural for some time.
That is a mission objective of trying to deal with some of
the enduring kinds of challenges that sort of limit our ability
to explore and discover anywhere. Most characteristic of that
and touched on in the statements of several members here this
morning, is our objective of trying to look at propulsion
systems and power generation capacities that get us past what
our current limits that, quite frankly, in the speed that we
travel once we do the amazing effort of getting into low-earth
orbit in 8 and half minutes, we are basically traveling----
Senator Mikulski. Mr. O'Keefe, I appreciate you giving oral
testimony----
Mr. O'Keefe. Yes, ma'am.
Senator Mikulski [continuing]. But could you follow your
written one in some order as you summarize it? It is hard for
us to follow you in a very complex technical testimony.
Mr. O'Keefe. Oh, I apologize.
Senator Mikulski. Okay.
Mr. O'Keefe. I am sorry. I have got to get the statement
then.
Senator Mikulski. Yes, because we have got a statement. We
cannot read the statement and listen to you.
Mr. O'Keefe. I understand.
Senator Mikulski. But if you could just follow some order
with your priorities.
Mr. O'Keefe. I apologize.
Senator Mikulski. Please--and I am prepared to listen to
the oral, but I have got to have a framework.
Mr. O'Keefe. My apologies. All right.
I am sorry. I attempted to just cut through two issues as a
means to just summarize this statement and then move to the
Hubble issues to quickly work through that.
First and foremost, our mission objectives and the
statement that we have prepared here for the vision and mission
of where we would like to take the agency is best summarized by
a concern that we focus on and establish a priority for
enabling technologies. And that is essentially what the first
initial couple of pages here has attempted to touch on.
And so our attempt is to emphasize what have been
structural deficiencies and difficulties that we have
encountered as part of our challenge to explore and discover.
And so in that nature, the objective here is to look at very
specific technologies that would overcome propulsion system and
power generation capacity limits that would otherwise exist.
And in that regard, our primary effort for the most mature
technology we seek to emphasize is for nuclear systems
initiative, which is a maturing technology that gives us an
opportunity to travel at speeds that exceed what we are
currently restricted to, which right now are precisely or
within the same realm or framework of what we did on Friendship
Seven 40 years ago when Senator Glenn took his first trip.
So as a consequence, we are in that same set of limitations
there. And part of what we attempt to describe here in the
opening statement as that objective is to look at the enabling
technologies to achieve that vision and mission statement
objective.
A second area I want to touch on very briefly that is
summarized towards the end of the statement as well, and then
we will move from there again, with your indulgence, Madam
Chair, to a discussion of the Hubble imaging that has just come
back as of yesterday, is to touch quickly on the International
Space Station and the approach that we are taking in this
regard. And this is summarized later on page six and
thereafter, in which our attempt is to look at five very
specific dimensions of International Space Station to infuse a
sense of management discipline to this particular process that
we believe will correct some of the deficiencies and I think
that Senator Bond touched on very, very clearly in his opening
commentary as what we see as the nature of our problem.
First and foremost is to emphasize the science priorities.
This must be driven by science requirements. The purpose of
having an International Space Station is multi-fold, but its
first primary objective should be to achieve the science and
research objectives that have been outlined.
And in that regard there is a wide array of scientific
community assessment and judgment that has been rendered over
the course of the years, which unfortunately does not have any
specific priority order attached to it.
In that regard, what we have done is asked a team of
external scientists who represent all of the disciplines within
the scientific community to look at this range of approaches
that have been advocated for what the scientific and research
objectives will be on station and rank order prioritize what
should be accomplished using this astonishing capability and
infrastructure that we have managed to deploy at this juncture.
That is the first objective, to reach a prioritization
effort, which gives us a very clear understanding of what we
can use to maximize the research potential for those research
objectives that uniquely require the kind of capability and
micro-gravity condition that exists on the International Space
Station; and then as a follow-on matter, also to emphasize
those research opportunities which would give us a breakthrough
potential in those particular fields or disciplines.
A second area of concern that is, again among the five
focus areas that we are looking at for station, I think address
the issues that were summarized well in the opening statement,
is to focus very specifically on the engineering challenge of
what we are dealing with here.
Over the course of the next 2 years to achieve the core
configuration--this is not so much limited by resources as it
is by just the dynamics of large scale systems integration
challenge.
And, again, summarized as item two is the engineering
objectives on page seven, which very specifically we looked to
the course of the next 2 years through early fiscal year--I am
sorry--through early calendar year 2004.
There are ten successive shuttle flights with payloads that
will build out the International Space Station in the graphic--
both here on the chart as well as before you--that need to be
achieved in succession. And every one of those missions must be
successful. Everyone has to be building on the success of the
previous mission.
That is not so much limited by resources as it is by just
the engineering challenge of that many flights, that much of a
payload and the succession of that kind of a payload
integration challenge.
So as a consequence, our approach is to focus very directly
on the program management challenges of what it will take to
achieve that particular objective, that milestone, which then
could permit and facilitate the opportunity to consider the
larger international partner assembly complete configuration
that was envisioned so many years ago.
But as an engineering matter between now and, you know, 2
years from this stage in early 2004, if we do not achieve that
milestone, we cannot look at expanding the scope of the
International Space Station beyond what it is today. So it must
be achieved and it must be done successfully in each of those
successive ten missions to build out the entire station to
facilitate that opportunity.
The third quick item, again, touched on in your opening
statements that is a matter of extreme interest and concern to
me is the cost estimation and analysis problem. There is no
question that exactly the history that Senator Bond recounted
is the manner in which it was revealed.
In early 2001, the determination was that we were $5
billion at present over the estimate. And at this juncture, we
have asked for and commissioned, as the statement describes, is
an internal cost estimating procedure to validate what it will
take to achieve core configuration and then to look at what the
additional excursions would be for the international partner
complete configuration that would follow thereafter.
Secondary, we have also asked for an independent cost
assessment, part of the recommendations of the Young Commission
that reviewed this matter last fall and made recommendations to
NASA on that point. We have commissioned that particular
independent cost assessment, all of which we expect to converge
this summer.
So I can give you an estimate of what we believe to be the
cost engaged in this particular activity. At this juncture, it
is our best estimate, but it is one that I think needs to be
validated further with a more disciplined cost estimating
approach.
The fourth area is the international partnership dimension
that you referred to as well. The international agreements call
for a build out of International Space Station beyond what is
referred to as node two, which is that particular milestone
that occurs in the early part of 2004. And to reach those
agreements and to make sure that we have accomplished that task
is what we attempt to touch on in that last point.
And, finally, on the fifth objective of where we are on the
International Space Station is to look at what the flight rate
requirements are for shuttle and payload missions for Soyuzes,
for progress flights from our Russian partners engaged in the
activity, to assure that we have supported this particular 2-
year endeavor at this juncture to assure we reach that core
configuration and then can discuss beyond that.
As it stands now, the flight rate that is built into the
budget is the maximum achievable flight rate to support this
particular engineering dynamic. So as a consequence, there is
no more aggressive deployment of that particular build-out
procedure according to the project management and engineering
team that manages the International Space Station and what we
have built into the program. And it is designed purposely in
order to achieve that systems integration success.
With that, Madam Chair, if you would permit me, those two
issues are the primary topics I wanted to at least touch on
briefly, and then to defer quickly to a discussion of the
Hubble imaging effort that just occurred. And, again, I think
your characterization of it is precisely right.
And I would simply add one footnote to the history of it.
Ten years ago, this was an asset that was roundly criticized as
an absolute failure, and as you correctly described, a
corrective lens was installed by a remarkable astronaut by the
name of Story Musgrave, who performed a series of space walks
that were just positively over the top in terms of what anybody
thought was achievable to bring this into a serviceable
condition.
But what we are getting back today as a consequence of the
Hubble servicing missions that have occurred since that time,
since his success in 1993, have really been beyond what we ever
could have expected. And a gent that I have asked to join us
here today is a veteran astronaut of four different missions,
two of which were Hubble servicing missions to include the most
recent one, STS 109, which was launched on March the 1st and
returned in mid-March after the very successful upgrade of the
power units aboard as well as the infrared imaging systems, all
of which exceeded our expectations.
Our fondest hope was that we would get a ten-fold increase
of what we would see coming back as imaging from Hubble, which
has already, even before the servicing mission, rewritten the
astronomy books.
But as a consequence of this latest mission, I think we
have not seen anything yet in terms of the caliber of materials
that has come back.
John Grunsfeld is, again, a veteran astronaut, a fellow who
was aboard the last mission, and in the history and in the
legend of a guy like Story Musgrave, he too is becoming
legendary, given the fact that he has done two of these
servicing missions. And among all of his extraordinary
characteristics as an astrophysicist and just a remarkably
talented fellow, it turned out that his greatest attribute on
this mission, on the several EVA space walks that he did to
service the Hubble mission over the course of several hours, to
include almost 7 and a half to 8 hours each mission--his
greatest attribute is because all the control panels on Hubble
are on the left-hand side, he is a left-hander, and so it made
it an awful lot easier to service. So around NASA he is
referred to as the ``southpaw savant.''
So I would like to introduce Dr. John Grunsfeld, who will
walk us through a few of the images that have just returned
from Hubble and released just yesterday.
Senator Mikulski. Thank you.
[The statement follows:]
Prepared Statement of Sean O'Keefe
I appreciate the opportunity to appear before the Subcommittee
today in my new capacity as NASA Administrator. My objective throughout
my stewardship of this storied Agency is to ensure that the Congress
and the public are fully aware of our accomplishments, our current
efforts and our plans for the future. My job as Administrator is to
remind everyone of what NASA does and what we are capable of doing.
It's a responsibility I take very seriously. I believe we are at a
crossroads in NASA's history. We have an opportunity here and now to
reinvigorate the Agency's agenda and renew the entrepreneurial spirit
present at NASA's beginning--a continued characteristic of American
culture.
The President's fiscal year 2003 budget proposal for NASA of $15.1
billion reflects the Administration's commitment to NASA's core
research efforts and its fundamental mandate to advance aeronautics and
aerospace science and technology. This budget initiates exciting new
efforts in the realms of space transportation and propulsion. It builds
upon our abilities to measure and understand our home planet and the
natural--and unnatural--forces that shape our environment. I believe it
is a well-balanced and progressive budget that allows us to set the
stage for the future. Enclosure 1 displays NASA's fiscal year 2003
budget request.
In the 4 months since my confirmation, I have traveled across the
country to visit each of our 10 Centers to meet NASA's dynamic
workforce and have seen firsthand the remarkable science and technology
efforts that are the underpinning of our endeavors. In this relatively
short period of time, the Agency has taken a fresh look at the long-
term management, resource, and technical challenges while continuing to
expertly carry out highly complex day-to-day operations. Together we
have charted a vision and mission that I look forward to sharing with
you this morning.
My testimony today will focus on the talent and technology that is
embedded in the NASA organization, the challenges we face, and, more
importantly, the steps we will take as an Agency to chart a clear
course for the future. We are intent on continuing the gains made over
44 years while pushing the edge of the envelope of what appears today
to be impossible. NASA today is working together, as one Agency,
committed to a clear vision and refined mission that will serve as the
blueprint for service to America.
What NASA needs now is a roadmap to continue our work in a more
efficient, collaborative manner. I first outlined this roadmap for NASA
on April 12 at the Maxwell School of Citizenship and Public Affairs,
Syracuse University. NASA's imperative is not only for the sake of
knowledge--it is for our future and our security. I have introduced a
new strategic framework and vision for NASA. It is a blueprint for the
future of exploration. It is a roadmap for achievement that we hope
will improve the lives of everyone in this country and everyone on this
planet.
That is a bold statement, I know. But, I am confident in saying
this because the unique work that NASA does truly touches all of our
lives.
This is NASA's vision for the future. Our mandate is:
--To improve life here;
--To extend life to there; and,
--To find life beyond.
This vision is much more than carefully arranged words; it frames
all that we do and how we do it.
So, how do we get to that impressive picture of the future? The
answer is by executing NASA's mission:
--To understand and protect our home planet;
--To explore the Universe and search for life; and,
--To inspire the next generation of explorers as only NASA can.
To understand and protect our home planet, NASA develops and
employs the technology to make our nation and society a better place.
We forecast the impact of storms on one continent upon crop production
on another continent, track and predict the patterns of mosquito-borne
diseases, and study climate, geography and the environment.
NASA's contribution to security comes from increased cooperation
and the sharing of imagery and unique technology with the Federal
agencies charged with the defense of our homeland. Aerospace
innovations developed at our centers prevent civilian aircraft from
being used as weapons. Improved air traffic control safety systems and
engineering that will make future airplanes more efficient and
environmentally sound are clear examples of our role in the changing
nature of transportation and our Nation's security. Hypersonics and
quiet aircraft are efforts to speed transport and, in doing so, bolster
the economy.
Our mission's second theme is to explore the Universe and search
for life. NASA will exploit advanced technology, robotics, and will
eventually use humans to explore and seek the answers and the science
behind our most fundamental inquiries: How did we get here? Where are
we going? Are we alone? If we are to achieve our ambitious objective of
exploring the universe and the searching for life beyond our Earth, be
it through flights to Mars or observing faraway planets, we must
continue to learn about and overcome the technical hurdles that remain
in our quest to answer our most probing questions.
NASA's recent achievements are only the beginning of the Agency's
role in rewriting tomorrow's textbooks for America's children, as well
as for today's astronomers and astrophysicists alike. Just yesterday,
NASA released the first images received from the newest science
instrument on the Hubble Space Telescope, the Advanced Camera for
Surveys (ACS). The new ACS was part of the recent and highly successful
STS-109 servicing mission, during which astronauts helped take Hubble
to the next level of excellence. This new and improved camera now
offers us 10 times the discovery power than the camera it replaced.
With the ACS, our view into the depths of our Universe has been taken
to a new level. I would like to share with you today a set of the
stunning new images from the Hubble Space Telescope, including an image
of a spiral galaxy dubbed ``Tadpole,'' residing in a constellation
about 420 million light years away; an image of the center of the Omega
Nebula, a hotbed of newly born stars, 5,500 light years away; and, an
image of a pair of colliding galaxies nicknamed ``The Mice,'' more than
300 million light years away.
Later this month, we will launch the GALEX, Galaxy Evolution
Explorer, which will use ultraviolet light to conduct an all-sky
ultraviolet survey and detect millions of galaxies located billions of
light years from our earth. Next year, we will travel further into our
own solar system with the launch of the Mars Exploration Rovers and
Mars Express missions. The Mars Rovers will take us beyond the success
of the Mars Pathfinder mission in 1997 and allow us to analyze rock and
soil samples on the Martian surface at a microscopic level. Mars
Express, a mission planned by the European and Italian space agencies,
will be the result of international collaborative efforts with NASA.
This mission will take us another step closer to our search for
evidence of past or present life on Mars. In January 2003, we will
launch the last of NASA's great observatories, the Space InfraRed
Telescope Facility, destined to be a cornerstone in our Astronomical
Search for Origins Program and allowing us to peer into regions of
space currently hidden from our view.
If we are to achieve the mission of exploring the universe and
searching for life, there is much we must still learn and many
technical challenges that must be conquered. Today's chemical energy
rockets that have been the engine of exploration since the inception of
space travel are today at the limit of what they can deliver. Using
current technology, if we were to embark to explore Pluto in 2006, the
earliest we could arrive there is 2014-2016; and then, upon our
arrival, we would only be able to obtain meaningful research for 4-6
weeks. That is an 8-10 year travel period for 4-6 weeks of science.
NASA's fiscal year 2003 budget includes nearly $1 billion for a nuclear
systems initiative as a first step in addressing this challenge.
Nuclear propulsion is a mature technology that has been used safely by
the U.S. Navy since 1955. Since that time, the Navy has sailed over 120
million miles encompassing 5,000 reactor years without incident. This
technology may hold the key to overcoming the time/distance challenge,
and its application to space travel has great potential.
Propulsion is only one of the challenges facing further human
exploration of space. Still unknown are the long-term effects of
radiation and exposure to a microgravity environment on humans. The
fiscal year 2003 budget includes funding for a new initiative for space
radiation research.
Our third mission objective is to inspire the next generation of
explorers. America looks to NASA to build an unequalled scientific base
of knowledge and motivate our youth to embrace math, science and
engineering. While opportunities in the technology sector are expected
to quadruple this decade, the pool of college students enrolled in
science and engineering courses continues to decline. NASA has an
obligation to the nation and its own workforce to reverse this trend.
NASA faces similar challenges with its scientific and engineering
workforce. During one of my recent Center visits, I found that only 62
engineers out of a 3,000-person workforce were less than 30 years old.
In fact, as an Agency, our over-60 population is three times larger
than the under-30 workforce. Inspiring the next generation of explorers
to enter fields of science and engineering is integral to NASA's
success in reconstituting our workforce for the 21st Century
challenges.
Students are only part of the education equation at NASA. Our
Nation's educators are also a critical component of NASA's revitalized
education focus. Teachers at all levels already possess the skills to
inspire and plant the seeds necessary for this Nation to grow the next
generation of science and technology leaders. NASA can best introduce
itself and the science that it represents into the classroom by teaming
up with educators, especially at the younger grade levels.
Inspiring future generations works in synergy with NASA's mission
to protect our home planet. The U.S. Commission on National Security
for the 21st Century (the Hart-Rudman Commission) concluded that
advances in technology and changing economies mandate an increase in
the level of technology literacy across society. It is clear that
technological human capital is an essential component of our national
security equation.
Our mission concludes with the statement, ``as only NASA can.'' Our
Agency is one of the Nation's leading research and technology Federal
agencies with unique tools, capabilities and expertise that represent a
National asset. The Agency contributes to America in a broad spectrum
of areas. Medical technologies, aerospace innovations, spin-offs, nano-
technologies, and countless commercial applications are rooted in NASA
discovery. Our commitment to the American taxpayer is to continue
providing a direct and very tangible means of improving life on our
planet. Extending life beyond the reaches of our earth is not a process
driven by any particular destination, but by science that will
contribute to the social, economic, and intellectual growth of our
society.
NASA provides a constant return on taxpayer dollars with each new
discovery, telescope picture, launch, patent, and newly inspired child
or adult. That being said, none of the ambitious plans that I have
detailed for the Agency will take root if we fail to improve the
management of our resources, commit to fiscal responsibility, and
establish a clear set of priorities. A clear vision and integrated
mission are important foundations for NASA's future success, but
success requires that we embrace a wide variety of tools to move us
forward.
At NASA, and at other departments and agencies across the Federal
Government, we are vigorously implementing the President's Management
Agenda as a powerful management initiative. Each of the five items
included in the Agenda applies directly to NASA.
First on the Agenda is the strategic management of human capital.
As I mentioned previously, we face challenging times as we reconstitute
and reshape our workforce for the 21st century. Today we have an
extremely experienced workforce in terms of overall capability. The
downside, however, is that almost one-third of the workforce will be
eligible to retire within the next 3-5 years. We must aggressively deal
with this leadership and workforce challenge. I have recently forwarded
a series of legislative provisions to the Office of Management and
Budget, which address this challenge head-on. These provisions will
complement the Administration's Managerial Flexibility Act, and I look
forward to working with the Congress to ensure that these essential
tools are enacted into law.
The second element of the Agenda is competitive sourcing. We are
thoroughly examining the best ways to motivate a competitive sense in
all we do. By focusing on results and outcomes, we will find the most
efficient means to accomplish our goals.
The third element of the Agenda is expanded electronic government.
We must pay specific attention to information technology and ensure
that the information technology process is integrated into Agency
decision-making.
The fourth element of the Agenda is improved financial management.
I am pleased to report that we are aggressively implementing our
integrated financial improvement program, which is now in the third
year of its implementation schedule. I have tasked the staff to explore
all options to determine whether we can accelerate implementation
throughout the Agency.
The fifth element of the Agenda involves budget and performance
integration. We must become results-oriented and link our budgets to
performance. We will breathe new life into the Government Performance
and Results Act. We in NASA are spending a great deal of effort into
developing metrics to measure performance.
I would now like to provide a status of two of our major programs.
International Space Station
The International Space Station (ISS) is without precedent in the
history of the U.S. space program. The ISS Program has had a year of
spectacular technical achievements, which include ground preparation
and checkout, launch integration, and on-orbit assembly and operations.
To date, the ISS program has achieved remarkable technical successes;
however, it has not been equally successful in controlling cost growth.
Last year, NASA projected an overrun in the amount it needed to
complete the space station, as then planned, of up to $4.8 billion.
While some of that growth may be attributable to such factors as
inadequate initial requirements definition, added content, late
delivery, and development problems leading to cost variance, there are
clearly areas of fiscal management and program control that need
improvement.
The President's Budget Blueprint for fiscal year 2002 laid the
groundwork for attaining cost control and regaining credibility for the
program to reach its full potential. As a result, a course of action
was prescribed to get cost growth under control and restore confidence
in NASA's cost management, and to achieve the science priorities for
which the Nation has made a large investment. We are continuing with
the reassessment and review activities that we began last year that
followed the Blueprint, but did not eliminate the cost challenge. The
President's fiscal year 2003 budget projections include about $600
million of savings that NASA will realize through the implementation of
identified program initiatives, and a process that continues to seek
additional savings while containing the threats to further ISS cost
growth. While steps taken last year were designed to contain cost
growth and to gain better understanding of its source and nature, this
year will be one of corrective action--putting in place the right
processes, tools, management controls, and measures to improve and
evaluate the ISS program.
Thanks to the efforts of the ISS Management and Cost Evaluation
(IMCE) Task Force, led by Mr. Thomas Young, we are well along in
effecting proper controls and regaining credibility. I have reviewed
the Young team's recommendations and have endorsed them as a roadmap to
improve the ISS Program management. As a result, the ISS management has
already taken actions to develop implementation strategies.
The following five points are guiding our efforts at reform and
revitalization of the ISS program:
Research Priorities.--Establishing an integrated portfolio of
science and technology priorities that maximize the benefits of space-
based research within available resources. In addition to addressing
the cost challenges of the ISS, we must make a renewed determination of
the research goals and on-orbit capabilities that we want the ISS to
achieve. Our priority should not be to simply build an ISS to a
specific hardware complement and then seek research and experiments to
make use of the hardware. The ISS Program should be driven by high-
priority research objectives. NASA has recently established a Research
Maximization and Prioritization (ReMaP) Task Force to assess how high-
priority research objectives can be best met by ISS within available
resources, and how the resulting research strategy might evolve, given
the possibility of research-driven enhancement to the ISS beyond U.S.
Core Complete.
Engineering Development/Deployment.--Development of a program road
map that focuses on successfully achieving a ``core complete''
configuration within budget. This will not be easy, but we are
dedicated to making it happen. Therefore, it is imperative that
Congress provide us with the requested funds so that we can meet our
commitment to achieving a core Station. Should NASA demonstrate that
reforms are implemented and cost credibility is regained, this will
enable future decisions towards a requirements-driven ``end state''
that will, defined in terms of science priorities, allow an expanded
research potential for us and our international partners.
Cost Estimation and Analysis.--The ISS is the largest and most
complex engineering development program ever pursued by the United
States. Implementation of improved methodologies, tools and controls
are underway and will allow us to regain credibility and improve our
ability in financial forecasting and strategic planning capabilities.
An independent cost review is underway to better understand our costs.
These projects will also be beneficial to the Agency at large.
International Partnerships.--An important challenge is maintaining
the ISS international partnerships. Our partners have expressed their
concerns stemming from NASA working to get the fundamentals right to
achieve U.S. core complete; and then to identify options beyond U.S.
core complete to realize the full potential of the ISS. Although the
configuration of the ISS has been modified to meet the cost challenges
we face, the fundamental purposes remain--research and international
cooperation. To reaffirm NASA's strong commitment to its international
partnerships, I have formed a team to meet with representatives of all
our partners to understand their concerns and to work with them in the
spirit of cooperation.
Mission and Science Operations.--Advanced planning for Space
Shuttle and ISS operations to maximize the productivity of on-orbit
research and ensure the safety of real time operations.
Space Shuttle
NASA is proud of its historic record of 106 Shuttle missions and,
in particular, the accomplishments of the last year in support of the
ISS. Last year, seven Shuttle missions were flown with five of those
missions launched during a 6-month period.
This budget continues to invest in safety and supportability
improvements for the Space Shuttle and increases the investment in
repairing aging Shuttle infrastructure. These investments, totaling
$1.35 billion over the next five years, will ensure that the Space
Shuttle can meet NASA's space transportation needs for at least the
next decade. NASA seeks to implement these upgrades as quickly as
possible, and is working to accelerate the availability of planned
upgrades. These investments are an integral part of NASA's Integrated
Space Transportation Plan (ISTP), which also includes investments in
the Space Launch Initiative (SLI) for NASA's next-generation reusable
space transportation system.
As recommended by the IMCE Task Force, reducing the Space Shuttle
flights to four per year appears to be sufficient to meet ISS needs.
However, we are reviewing this decision to determine whether any
additional flights are necessary.
The President's budget also provides for the continued pursuit of
Shuttle competitive sourcing. The anticipated benefits of competitive
sourcing include: (1) greater flexibility to recruit and retain the
skilled personnel necessary to safely operate the Shuttle; (2) avoiding
potential continued cost growth for Shuttle operations by moving to a
private organization that has greater flexibility to make business
decisions that increase efficiency; and, (3) significant culture change
in Human Space Flight at NASA by making it a purchaser of services
rather than an operator of infrastructure.
Mr. Chairman, I believe the vision, mission, programs, initiatives
and budget I have described represent a strong commitment to a healthy
and forward-moving NASA. I believe it is deserving of the
Subcommittee's strong support and I look forward to working with the
Subcommittee to achieve an appropriation that supports the President's
budget request.
I have mentioned the opportunity I have had to meet the men and
women of NASA, working in our installations across this land. We have a
diverse and resilient workforce, and they are proud and excited about
the work they are doing. They are our greatest assets and I believe our
greatest hope for the future of this Agency. They have shown me their
desire to be a part of the work contributing to even greater meaning in
the larger dreams represented by this Agency. Their eagerness and
dedication and the strength of their resolve tell me that, together
with the support of Congress and this Subcommittee, we can achieve what
we have set out in this budget to accomplish--and more.
Thank you.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION FISCAL YEAR 2003 ESTIMATES
[In Millions of Real Year Dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------
2001 Op plan 2002 Initial 2003 Pres
revised \1\ Op plan budget
----------------------------------------------------------------------------------------------------------------
Human Space Flight.............................................. 7,153.5 6,830.1 6,130.9
International Space Station..................................... 2,127.8 1,721.7 1,492.1
Space Shuttle................................................... 3,118.8 3,272.8 3,208.0
Payload & Elv Support........................................... 90.0 91.3 87.5
Heds Investments and Support.................................... 1,247.8 1,214.5 1,178.2
Space Communications & Data Systems............................. 521.7 482.2 117.5
Safety, Mission Assurance & Engineering......................... 47.4 47.6 47.6
Science, Aeronautics & Technology............................... 7,076.5 8,047.8 8,844.5
Space Science................................................... 2,606.6 2,867.1 3,414.3
Biological & Physical Research.................................. 362.2 820.0 842.3
Earth Science................................................... 1,762.2 1,625.7 1,628.4
Aerospace Technology............................................ 2,212.8 2,507.7 2,815.8
Academic Programs............................................... 132.7 227.3 143.7
Inspector General............................................... 22.9 23.7 24.6
-----------------------------------------------
Total Agency.............................................. 14,253.2 14,901.7 15,000.0
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2001 restructured to reflect two-appropriation structure
HUBBLE SPACE TELESCOPE IMAGES
Senator Mikulski. Good morning, Doctor. Come on up.
We are looking forward to hearing you. You know, they often
say about this agency and these appropriations for it really is
rocket science. But we are glad to really meet a rocket
scientist, so----
Dr. Grunsfeld. Do you have a baseball analogy for a lefty?
Senator Mikulski. No. I am going to just----
Dr. Grunsfeld. All right.
Senator Mikulski. I am going to just sit in the dugout here
and look at the pictures.
Dr. Grunsfeld. Well, it is truly a pleasure to be here. And
I thank you very much for allowing my participation.
First, let me say that I was on the Hubble Space Telescope
a month and a half ago, and the Hubble Space Telescope is a
national treasure. I would just like to report to you that the
telescope is in fantastic shape.
We spent about 35 hours space walking on the Hubble Space
Telescope. While the outside may look a little tattered, inside
it is a brand new telescope. And even more so now that we have
made the upgrades, as Mr. O'Keefe told you, the telescope is
now ten times better and has a new power system, so I think
effectively we can consider it a brand-new telescope.
It is very exciting for me to be involved in the Hubble
project as an astronomer simply because it is kind of a Mecca
for astronomers in that it is the most productive scientific
instrument ever created by people. I think that is just
incredible, we are all alive at this time in history to be
participants. So I would like to bring all of you as
participants into that a little closer by showing a short video
with some of the early results. And I really want to just
remind you that the best is yet to come. This is just a sneak
preview.
So we are going to start with the first images. These were
released yesterday. They are from work that occurred in April
from the advanced camera for surveys, a digital camera. It
actually has three cameras inside of it, but it is the digital
camera.
We are going to show you four pictures today. The first
picture is called the cone nebula. And this is a very large
turbulent pillar of gas very much like the Eagle nebula
pictures from the wide field camera. But this is unprecedented
detail of this nebula. And this nebula is a star forming
region.
We are seeing where baby stars are born and start to grow.
There is another star off field that is illuminating this and
giving us just beautiful views of this.
The next picture is zooming in from an earth-based optical
picture, which is now low resolution compared to the new Hubble
images. You can see it getting blurry until you get to the
Hubble image. And as we zoom in, you can see the very, very
small detail. This picture is only about 3,500 times as big as
our solar system.
The next is the Mice. And this is a zoomed-in view of the
tail, and the detail is unbelievable. This is a 16 million
pixel camera, and we are seeing a galaxy that has collided with
a much smaller galaxy and thrown out a pillar of gas. The two
galaxies are interacting and the tails--but in the background,
you see all these other objects. And it comes out more in this
picture, which has been named the Tadpole. And, again, it is
interacting galaxies that have thrown out a tail. Star
formation is occurring in that tail, spawning off new galaxies.
The incredible thing about this picture is in the
background--the main thing to take was the picture of the
Tadpole galaxy, but in the background, it is virtually another
Hubble deep field. This picture was taken over the course of
about 1 day of observation compared to the 12 days of the deep
field.
When we take pictures like this, I think we are going to
get a deep field in every picture, and it is just incredible.
There is a total of about 6,000 galaxies in the background of
this picture, twice----
Senator Mikulski. 6,000 galaxies?
Dr. Grunsfeld [continuing]. The number that we saw in the
two deep fields that were dedicated precious Hubble time.
We saw pictures of bright young stars in those pictures. I
had the opportunity last week to talk to third-graders in my
hometown, which is the south side of Chicago. That is the age
at which I kind of became inspired to do science. It was when I
had to do a biography of Enrico Fermi, a famous American
physicist.
I had the opportunity to talk to a third-grade class about
the Hubble mission. There was one little girl in that class who
raised her hand and asked me a question, and it was more of a
statement than a question. She said, ``Did you know that 3
billion years or 4 billion years from now, our sun is going to
explode and create a planetary nebula like the ones you showed
in the pictures?''
Senator Mikulski. She said that to you from the third
grade?
Dr. Grunsfeld. She said that to me. I thought this is
incredible that a third-grader knows enough about stellar
evolution and the course of stars like our own, that there is
hope for all of us yet. And I think those are the bright young
stars that these Hubble images really talk to is our young
people, getting them interested in that age in technology and
science. I thank you very much.
HUBBLE MISSION
Senator Mikulski. Well, thank you very much, Doctor.
First of all, I think in behalf of the Committee and the
Congress and the country, we really want to thank you and we
want to thank the astronauts who went on this mission. It was
not an easy mission. It was a white-knuckled mission in terms
of the complexity of the retrofitting.
All the hard work and the training that you all did in
order to be efficient and safe in space, first of all, we want
to thank you for the successful completion of the retrofitting
that adds not only new life to the Hubble, but a whole new
incredible capacity, bringing it far beyond what we wish we had
even thought of for Hubble.
And so we would like to thank you and, of course, everyone
connected with Hubble in terms of what they are doing. And some
day that little third grader is going to be--I have a feeling,
is going to be up in space.
And so, again, do you not think we ought to just give them
a round of applause here?
MANAGEMENT REFORMS OF THE STATION
And after that, it seems kind of nickel and dime to be
talking about the budget, but we must. So thanks again and we
look forward to this.
Thank you. I am going to move now to my questions and let
us go to the issues related to--I know that Senator--let us go
to the questions related to the space station.
In your written testimony on pages six and seven, you
really go into what you want to be the management reforms of
the station. $4 billion in overruns; $4 billion in overruns.
You give these excellent five points and you had them in your
testimony, the research priorities, engineering developments,
cost estimates, holding steady our international partners,
which is getting tattered and worn, and then, of course,
mission.
What can we expect over the next year in terms of the
bringing this into some form of discipline and some form of
really true cost estimates in terms of what the station will be
able to do?
Mr. O'Keefe. Well, first of all, if you would permit me,
Madam Chair, I want to thank you again for the recognition of
John Grunsfeld, Scott Altman and his extraordinary crew that
performed this mission. It was really remarkable, and I thank
you for the opportunity to present that today.
As it pertains to the International Space Station, I think
you put your finger right to it. What we are focused on and
clearly dedicated to is to focus on program management and
fiscal discipline principles to achieve the core configuration
so we can then have a meaningful discussion and debate of how
to best utilize the scientific requirements or to employ the
scientific requirements that will emerge from that.
My strongest hope and frankly confidence is that this
summer as we complete the internal, as well as, independent
cost estimates, that we are going to find ourselves within the
range of what we presented as the budget for this particular
endeavor and assure that we stick to that as a means to
accomplish this particular task.
Again, the pacing milestone that is most critical, for
which everything needs to be discussed from that point is the
accomplishment of node two, which is part of the international
partner deployment of that module, which then facilitates a
larger configuration potential. But between now and then, what
you see in the budget for 2003 as well as the projections for
2004 is the amount required to achieve the core configuration,
and based on the map out here of each of the fiscal years laid
out, or each of the calendar years; and to achieve that task
then makes open the possibility for a larger discussion of what
assembly complete would look like with all the international
partner components that would go to that.
If we do not meet that milestone, that objective, there is
not a discussion beyond that. As an engineering matter, the end
state, not because it is resource constrained, not because
anyone wants it to be that way, but because that becomes the
reality of what we are faced with if we cannot achieve the core
configuration by that stage.
So our focus is very much on the knitting of getting from
here to that big milestone, and then assuring that each of the
international agreements that we have entered into can then
follow on from there to achieve what could be the assembly
complete configuration.
But until that point, our focus has to be primarily on the
core configuration between the elements, and the budget
includes----
SPACE STATION COST OVERRUNS
Senator Mikulski. We appreciate the focus on the core
configuration. And here is my question: based on what you're
bringing to bear on the space station through your executive
ability and management methodologies, can we have your
assurance that the cost overruns are over?
Mr. O'Keefe. This summer, when the internal, as well as
independent cost estimate is complete, I will be able to give
you a definitive answer on that.
Senator Mikulski. Oh, we take you for your word. We believe
you are a man of integrity and that is why we need candor here.
Mr. O'Keefe. Sure. I appreciate that. Yes. At this
juncture, I cannot give you an assurance that this is the end
of it. I do not know, until that independent cost estimate and
the internal estimate is complete.
I think we are heading in that direction. There is nothing
so far, that I have seen in the last 4 months that has been a
surprise or anything even approaching what we saw emerge as a
consequence of the early January 2001 revelations of what the
cost configurations were here.
So there is nothing along that run, or line. But I think by
this summer, I will be able to give you a definitive answer to
that. Until then I am withholding judgment myself. We are
trying to exert as much of a discipline in that process to make
what we have sent and the President has proposed for 2003 as
well as projections for 2004 for the International Space
Station, the resources we think at this juncture are necessary
to achieve that task.
CORE COMPLETION--CREW SIZE
Senator Mikulski. Well, first of all, I want to salute you,
because I think that you are ending this culture associated
with the station that it did not matter if there were cost
overruns, that we would make it up in other programs. And all
of us feel that other programs have suffered because of it.
But one last question and then we will be turning to
Senator Bond. I understand that the core completion means that
the station would be able to house three crew astronauts, am I
correct in that?
Mr. O'Keefe. Yes.
Senator Mikulski. And that anything to go to the seven,
which we had already envisioned, would be beyond core. So this
is really the basics, not even the basics. This is the bare
minimum to even justify the station. Am I correct?
Mr. O'Keefe. Well, the----
Senator Mikulski. And then the question is: Can you really
do research with three astronauts?
Mr. O'Keefe. Yes. This is definitely a chicken and egg
problem. I think you put your finger right to it, Madam Chair.
But let us recall, again, as a systems integration, an
engineering reality, we are through 2004--under any
configuration whether we agreed to a ten-astronaut
configuration, or twenty, or whatever other number you would
like. The reality is in the next 2 years, the engineering
principles driving the direction, and the systems integration
challenges driving the direction of an International Space
Station, between now and 2004, that will accommodate three.
There is no way to accommodate larger than that between now
and then, and never was part of the plan. Even before the cost
estimates were revealed to have increased, there was not a
point where we would have achieved more than three crew
members, up until 2004.
It was beyond that that was the original agreement and
understanding, because, again, the buildout time it takes to do
this is such that we are about halfway there right now, maybe a
little more than that. And so as a consequence, the reality is
we are going to be at a three-crew-member configuration. We
were going to be at that a year ago. We were going to be at it
yesterday. We will be at it tomorrow.
The plan, the objective, the clear intention is to get to
the point by early 2004 where we can look at the deployment of
modules and components that would make this a larger
configuration for a crew size driven by the science
requirements, not by some number we all make up. Instead, it
ought to be driven by what those requirements are and how many
crew it takes in order to conduct that set of priorities that
are there.
So part of the discussion we need to engage in here over
the course of the next year, as we reach that configuration
that facilitates this meaningful discussion, is to talk about
what those priorities are and how far we want to go, how deep
down that priority list we want to achieve this and, therefore,
how many crew members it will take to accomplish that task.
That is a more, I think, appropriate way to look at the
nature of the objective, the mission of what is required and
the requirements for this extraordinary capability, rather than
backing into it by some crew configuration number that is
different.
Again, the total crew size that exists today was the crew
size that was envisioned at the time of the international
agreements at this time. And all the way through 2004, that was
going to be the crew size configuration. My fondest hope is
that we not stop there. Nonetheless, we need to exert the
discipline to assure that we can at least get there before we
can even entertain a discussion beyond that.
Senator Mikulski. Senator Bond, I know you have questions
on this.
PRIORITIZING SCIENCE RESEARCH
Senator Bond. This is an area we have discussed before and
one of great concern to me. The core complete, obviously you
have got to take the first step before you can start to jog or
run, and one of my questions was going to be how you prioritize
the science research.
And you have indicated briefly that you are going to move
to the science side first and use the science requirements to
drive the configuration needs for manning the space station. Is
that a fair assessment?
Mr. O'Keefe. Yes, sir. I think the science and research
objectives are the primary, not the only, but the primary
reason why we have engaged in this remarkable challenge of
building something this big, 250 miles straight up that is
moving at 18,000 miles an hour while we are trying to build it.
It is a challenge, yes.
Senator Bond. And in prioritizing the science--we talked
about it yesterday--tell us about how you are prioritizing the
science for the station. What kind of tests are you doing? Are
they laying out in each project the time, the crew man hours or
time hours, the costs? How are you prioritizing the science?
Mr. O'Keefe. Thank you, Senator. The approach is to pull
together, and what we have assembled now is a group of
scientists who represent all of the respective disciplines, to
include a plant scientist, to include Dr. Vitchi, as well, who
is one of the members of that particular group, that is
prioritizing the full range of all the scientific objectives
that has been expressed by each of those communities, chemists,
biologists, plant scientists, across the board, everyone who
has articulated what they think are the purposes or the
utilization of capability that is continuous microgravity
condition----
Senator Bond. Yes.
Mr. O'Keefe [continuing]. And for which there would be
extraordinary breakthrough research opportunities, if conducted
in that atmosphere. So in other words, what we have asked them
to do in representing all of those disciplines is, give us your
highest priorities that meet those two criteria, then use this
capability uniquely.
Senator Bond. When is that due? When are you going to get--
--
Mr. O'Keefe. That would be finished by early June. Within
the next 6 weeks, we will have that in hand. Yes, they have
committed to that. They are on track for that too.
Senator Bond. Yes. Do you get it prioritized? Do they say,
This is going to take--this project, we estimate will take so
many crew hours, so many crew days, so many crew years``? How
do you--if you are going to meld that in, you need to know the
cost of it.
Mr. O'Keefe. Sure, yes, sir.
Senator Bond. You need to know the extent of the equipment.
And I gather from what you are saying, although you have not
said it explicitly, the crew size you are going to shoot for
ultimately is going to depend upon the human needs associated
with each experiment.
Are they going to give you an estimate of the crew time? Is
that going to drive the habitation needs?
Mr. O'Keefe. Yes, sir. Well said. That is exactly the
objective, to look at that as the driving requirement. While
this particular group is not making an assessment of how many
people to take or how much does it cost, we already have that
in the can by virtue of the fact that most of the efforts that
are underway in each of these research communities are
identified. What they are doing is prioritizing them, so
therefore you can draw from each----
Senator Bond. So you have the crew--each project has a crew
time, cost and all that.
Mr. O'Keefe. Can be derived.
Senator Bond. They are just prioritizing their--okay.
Mr. O'Keefe. It can be derived, yes.
BEYOND CORE COMPLETE CONFIGURATION
Senator Bond. And at what point, assuming they come up with
some things that require, say, for example, that you go up to
the seven-man crew. Under what proposal, when would you be able
to provide for and fund a habitation module and the crew return
vehicle necessary? What are you doing in that area to--I know
you have some options. Tell us about those if you would,
please.
Mr. O'Keefe. Yes, sir. Thank you. As it stands, several of
the decisions that are necessary to look at beyond core
complete configuration can be made in 2003 and the early part
of 2004. There are a few that really need to be considered and
thought about as early as this fall, or certainly by the time
the 2004 budget is presented to the Congress for your
consideration.
So there are a few issues that are pacing items that need
to be considered on that point. The most critical of them is
the successful development and production of the node two
module, which the Italians are very ably conducting right now.
We have been working with them extensively to assure delivery
of that module that then opens up the opportunity for the
habitation module you described.
Senator Bond. Yes.
Mr. O'Keefe. So the decisions are about a year off, and we
need to assess that to see where we are on the deployment of
that particular configuration by that time.
On the crew return vehicle that you have discussed, we are
looking at several alternatives that will be platforms to
accomplish multiple objectives, not single purpose objectives.
And as it stands now, the X38 crew return vehicle, which is
a single purpose mission craft which was designed and
developed, there has been a test article of it. We know how far
that is going to go and we got a pretty good idea of how to
make it, and instead of going ahead and producing or investing
the $1 billion plus that it takes for a single purpose craft,
we are setting that aside and looking at other alternatives
that would give us multiple mission objectives for
transportation, for resupply, for logistics, for payload
requirements, and crew return capacity.
So there are a number of options we are looking at right
now that are developed, that are flight tested as well, that if
we can deploy in the same time frame coincident with any change
that would necessitate a crew size larger than three, then we
have got an opportunity, I think, to look at those options
right now, this year and develop them during the course of the
next two, in order to achieve that set of objectives.
So we are on track to do that. I think we have got the
options ready to go to consider it and if need be, if we have
to go to a single purpose craft like an X38, we have got that
ready to re-energize, if necessary, or reactivate in order to
achieve that task.
But at this juncture, investing in a single-purpose craft
that meets a crew-size objective greater than what we currently
have and investing what we know is going to be a substantial
amount for a single-purpose objective, we are looking to buy
that extra time in order to achieve the multiple mission
objectives and to leverage that investment for those multiple
purposes.
Senator Bond. It sounds like it makes a lot of sense to me.
I hope it works. And we will be watching that.
Thank you, Madam Chairwoman.
Mr. O'Keefe. Thank you, sir. I appreciate your support.
Senator Mikulski. Those were excellent questions, Senator
Bond. They parallel my thinking.
Again, I think you can see you have got really bipartisan
support and you have bipartisan questions.
Senator Shelby.
PRIORITIZING RESEARCH FOR THE ISS
Senator Shelby. Thank you. Thank you, Madam Chairman.
I just want to briefly associate myself with Senator Bond's
questions regarding the prioritizing of the research for the
International Space Station.
Mr. O'Keefe. Sure.
Senator Shelby. I think we have to, Mr. O'Keefe, recognize
the importance of material science research, as a key enabler
to our future success in space. And I hope that NASA will
remain committed to working with industry to develop materials,
devices and processes that we are going to need tomorrow.
Mr. O'Keefe. Yes, sir.
Senator Shelby [continuing]. I think that there is so much
out there, if we will not ignore it. And I hope you remain
committed to this.
Mr. O'Keefe. Yes, sir. No, very much so. I think that you
put your finger to a very important element of the research
agenda that must be emphasized that gives us the unique
capability to utilize the space station for what it was
envisioned to be used for, and can give us some breakthrough
opportunities. I think you are exactly right.
NUCLEAR SYSTEMS INITIATIVE
Senator Shelby. There is no telling where it will carry us
in the future with our industrial products and everything that
goes with it.
Mr. O'Keefe, the nuclear systems initiative, my colleague
from Ohio touched on earlier. I know you mentioned it in your
written testimony.
Compared to current technology, what specific capabilities
is the nuclear initiative designed to produce for our
spacecraft? And how will this initiative's success impact
future missions, particularly NASA's ability to conduct space
science? I think it has a lot of promise, as Senator DeWine
said, but I thought you might want to touch on it here in the
open hearing.
Mr. O'Keefe. No, I appreciate it. Thank you, Senator. First
and foremost, this is the best example of what I think we can
find and what we see in the manifest and the budget for
enabling technologies to get past what had been structural
limitations for exploration and discovery for 40 years.
And the fact of the matter is, again boldly stated, that we
travel beyond lower earth orbit at speeds that roughly
approximate that which John Glenn flew at in Friendship Seven
40 years ago. We are stuck in that laws of physics paradigm.
And we have not found a successful method of----
Senator Shelby. We have got to break out of it.
Mr. O'Keefe. I am sorry, sir?
Senator Shelby. We have to break out of that.
Mr. O'Keefe. I mean, we have got to find a leap ahead
technology. We have got to find an enabling capability to get
past that structural limitation of speed or on orbit time, one
of two.
And what we see generated, I think, by a power generation
or propulsion system, and the specific objectives we have in
mind is to decrease the time to traverse distances or increase
on-orbit time, one or the other or both in that task.
Senator Shelby. Yes.
Mr. O'Keefe. And we are setting as a near term, I think,
conservative objective improving that speed to achieve distance
by a factor of three or improving on-orbit time by much more
than that, than what we achieve today. And the most mature
technology that is out there right now that has a means to be
developed is nuclear fission, and a means to either upscale
what has been a very strong experience that NASA has had with
power generation units, RTGs that we used on Cassini and a
number of other missions over the course of the past 20 years,
but that only is a power generation capacity.
What we are looking for is a propulsion capability that can
then beat those longer distances because right now we are
limited by solar electric capacity, which the further away from
the sun we get, the more dependent we are on gravitational pull
as a means to deep space exploration.
As a consequence, the further away you get, even a non-
engineer, non-physicist, non-scientist like me understands, the
lights go out. As a result, you cannot depend on solar electric
for long. It is very----
Senator Shelby. This could keep the lights on, could it
not?
Mr. O'Keefe. Yes, sir. Keep the lights on and move faster.
Senator Shelby. Sure.
Mr. O'Keefe. And stay on orbit for a greater period of
time.
Senator Shelby. It has got a lot of promise.
Mr. O'Keefe. That is the objective behind the nuclear----
Senator Shelby. A lot of promise. And we are closer to it
than many think, are we not?
Mr. O'Keefe. I think so. I think we can get there.
SPACE LAUNCH INITIATIVE (SLI)
Senator Shelby. Briefly, I want us to touch on the Space
Launch initiative. In this budget, NASA has requested $759
million to execute the SLI program. This technology program is
of critical importance, I believe, to the future of NASA.
And I assume, Mr. Administrator, that you would oppose any
effort to reduce funding by SLI in 2003.
Mr. O'Keefe. Yes, sir. I think it is a critical initiative,
one that is the future of reusable launch vehicles, space
flight----
Senator Shelby. Yes.
Mr. O'Keefe [continuing]. And the objectives for launch to
achieve ultimately shuttle replacement. All those ride in the
balance. It is a very important issue. Yes, sir.
Senator Shelby. Okay.
Thank you, Madam Chair.
Senator Mikulski. Thank you, Mr. Shelby.
Mr. DeWine.
NUCLEAR SYSTEMS INITIATIVES PROGRAM/ENERGY DEPARTMENT
Senator DeWine. Thank you very much.
Mr. O'Keefe, we talk about the nuclear power. This nuclear
power program, what will be the role of the Department of
Energy in this?
Mr. O'Keefe. The----
Senator DeWine. What is the big picture?
Mr. O'Keefe. Yes, sir. We are beginning to sort that out. I
have had several discussions with the Naval Reactor side of the
Department of Energy through Admiral Skip Bowman to discuss how
we could take the mature technology they have developed to
generate power for substantially larger platforms than what we
need frankly. But they have had a long experience of producing
advanced reactor capabilities that now power every nuclear
powered vessel in the United States Navy safely without
incident for 45 years, have had a stellar record of doing just
that. In the process, they have managed to design and produce
nuclear reactors that are substantially smaller, as in more
compartmented, that they take up a lot less space. On a
submarine that is a big deal, kind of like it is on space
shuttle or any kind of space launch vehicle. And they have
increased the capacity.
When H. G. Rickover first designed the reactors that went
aboard Enterprise and earlier than that for Sea Wolf, they
celebrated the fact they lasted 18 months before refueling.
Today, every reactor lasts the full life of a 40-year-old ship.
So as a consequence, the operational experience that they
have achieved is something we seek to tap in dealing with this
as well as the design experience they have achieved, which is
to reduce the size, mass, and compartmentalization of that
reactor capability, which, again, far exceeds what we need and
then to upscale what it is we have been doing on RTG's for the
last 25 years.
Senator DeWine. So when you talk about ``X'' number of
dollars, a long-term vision, obviously the Department of Energy
is involved in that significantly?
Mr. O'Keefe. I think there is certainly a very close
collaboration we are seeking to develop. We are kind of in the
initial phases right now. We are setting up the project team.
Again, this is a fiscal year 2003 initiative that we are going
to have to step up in a big way here in the month's ahead. So
putting together a project management team, as well as how to
develop that close professional inter-rogatory-agency
cooperation with all the elements of the Department of Energy,
which includes the Naval Reactor side, will be critical, as
well as the nuclear energy piece.
There is a civilian commercial component within DOE.
Certainly many of the DOE labs have been involved in this
activity. We have got to parse through how we maximize and
leverage that technology experience best.
RE-EXAMINING HEAD CENTERS
Senator DeWine. Mr. Director, you have stated that you
intend to recentralize programmatic authority at NASA
headquarters, rather than the centers. How is that process
coming?
Mr. O'Keefe. Well, I think that may be----
Senator DeWine. Is that too strong a statement?
Mr. O'Keefe [continuing]. Too definitive a statement.
Senator DeWine. Where are we? What are you going to do
then?
Mr. O'Keefe. I basically looked at a request through the
agency to reexamine the proposition of lead centers. The notion
that everything is delegatable for program management,
oversight, and all other purposes to individual elements of
what is conducted throughout the agency.
Indeed, I think what we have an opportunity to do, like on
the nuclear initiative, is to collaborate very extensively on
extant capabilities within NASA that is not individually
center-centric, if you will.
On the nuclear initiative, clearly the prowess demonstrated
by NASA Glenn, by the Marshall Space Flight Center, by the Jet
Propulsion Lab in Pasadena, California, all of them are going
to be contributors in how we develop this initiative.
So rather than designating any individual center as the
dominant or only, instead we are looking at it more as a case
of ``How do you maximize core competencies that exist at each
of those centers and then collaborate for the purpose of trying
to develop end products, end purposes that are greater for the
advantage, I think, of the agency overall?''
Senator DeWine. All right.
Mr. O'Keefe. So that is a bit of a difference there, and
that does not necessarily mean we are going to drag everything
into headquarters. Indeed, not an awful lot really, you know,
visionary comes from headquarters any time of any agency.
So as a consequence, we are seeking to keep the delegated
program management authority within the centers, but to
establish a firm policy and oversight function within
headquarters.
Senator DeWine. Good. Thank you very much.
Mr. O'Keefe. Thank you, Senator. I appreciate your
question.
ENVIRONMENTAL COMMUNITY--NUCLEAR POWER
Senator Mikulski. Let me go to the questions related to the
space shuttle.
I think we have covered a lot of the information related to
the station as well as these new innovations on nuclear
propulsion. And we can understand the merits of that.
I believe that there will be a lot of concern from the
environmental community about nuclear power in space. And I
would just hope that we would acknowledge that, number one,
there will be concerns, and that we address them----
Mr. O'Keefe. Absolutely.
Senator Mikulski [continuing]. Rather than the--often the
usual way is--and I am not saying this about you, Mr. O'Keefe,
but usually when the environmental community raises an issue,
everybody says it is not an issue. They are ignored. And it
becomes a very prickly issue within this institution. So let us
just deal with it.
Mr. O'Keefe. Absolutely.
Senator Mikulski. And let us just deal with the groups who
want to raise those flags, because often they have very good
insights that help us provide the opportunity to do bold things
but ensure the safety for those who are traveling on the
mission as well as for the planet. So now speaking----
Mr. O'Keefe. Madam Chair, would you permit me to just
comment real quick?
Senator Mikulski. Yes. Please go right ahead.
Mr. O'Keefe. I think you have hit the nail exactly on the
head. This is something not to be avoided. We really need to
engage on this question.
And there is a couple of facts that I think really are
persuasive in my mind. Pioneer 10 was launched in 1972. We are
still getting information back from it. It still has a nuclear
capability that is generating power to keep that communication
coming back to us that is 7.5 billion miles away. I mean, this
has been done safely in the past and it has a success rate on
this and a track record that is clear.
The second one is, again, the nuclear reactor performance
record of the United States Navy over the course of the last 50
years is very, very reassuring. It says we know how to design
capabilities and we know how to operate them.
So you are exactly right. We need to engage this debate
with the environmental interests to be sure that we are doing
this right and doing it in a way that assures public safety.
And I appreciate your point and associate myself completely
with the sentiments you have expressed.
RELIABILITY OF THE SHUTTLE
Senator Mikulski. Well, then this takes me, since we are
talking about safety, this then takes us to the issue of the
space shuttle. We are very concerned about the shuttle. The
shuttle is wearing out. The shuttle has a limited shelf life.
And my question is: What can we do now in terms of the
resources to ensure the reliability of the shuttle in terms of
its transportation mission, but also the reliability of the
shuttle in terms of the safety of the astronauts?
I know they are entwined, but we need to be sure, one, that
it is the mule train that was supposed to go into space, So its
reliability to take off and get the missions up, but once we
are going, to make sure that our astronauts can go and come
back.
Mr. O'Keefe. Yes. Indeed, I think the----
Senator Mikulski. Do you think you have the right
resources? Do you think you have the right management?
Mr. O'Keefe. There is, I mean, more important than any
other factor, the right culture exists at NASA to focus on
safety. I think it is up there with a theological calling. I
mean it is unbelievable to see the, I think, the real
commitment to safety objectives.
On the Hubble mission that we talked about a little bit
earlier, for the STS 109 flight, I attended a flight readiness
review at Kennedy Space Center 2 weeks before the mission took
off. They worked through second, third and fourth-level
indenture issues over the course of a day and a half that I
found to be absolutely unbelievable. They leave absolutely
nothing unturned.
And as a consequence, all the way up until the final moment
of launch, there is an obsession that if there is anything,
even the slightest deviation from what should be acceptable,
the launch is postponed. As a consequence of that, that is
reassuring. I have seen that now every step of the way through
this process and am impressed with the manner in which they do
that. And, again, it is easily a rival of what I saw in the
nuclear Navy. It is an absolute obsession of how that is
conducted.
So what we have included as part of the fiscal year 2003
budget, I think, is a responsible allowance for continuing
safety upgrades and operational upgrades. The issue that I find
disconcerting, though, is our safety panel of outside experts
who have come in, who report annually to us--I just got the
outbrief of that about a month and a half ago--have determined
that the safety upgrade requirements as well as potential
modifications and service life extension requirements, if we
extend the orbiters past 2012, are insufficient the way we are
looking at it right now.
So what I have asked them to do as their next order of
priority here over the course of the next 6 months leading up
to the 2004 considerations, is to give us a very specific
understanding of what they advise--and again this is an outside
group of experts who represent every discipline on the
engineering and safety regime that I have--the quality
assurance business that I have ever seen, to give us a very
clear understanding of what upgrades they think would be most
significant, which ones we missed, what we should be doing
differently.
We are concurrently doing an internal review of that as
well as the Office of Space Flight has conducted, to see what
it would take, if we extend it past 2012, what would that take.
So there is a whole revision, I think, of the safety upgrades,
as well as major modifications and capabilities enhancements
that we need to look at and consider what those options will
call for.
In 2003, I think we put in a safety upgrade modifications
portfolio that is appropriate to get us from here to that
consideration.
SHUTTLE PRIVATIZATION
Senator Mikulski. Well, where does privatization come in,
and what are your thoughts on privatization?
You know, the word ``privatizing'' sounds like----
Mr. O'Keefe. Yes. Yes.
Senator Mikulski [continuing]. You know, is there a space
Greyhound that is going to take over and----
Mr. O'Keefe. Right, exactly. I have, you know----
Senator Mikulski. And that, you know----
Mr. O'Keefe. The reason I was pausing here is I get the
same reaction. Another step beyond that is that when you say
privatization that means you made up your mind what the outcome
is going to be.
In my judgment, and more importantly in the President's
management agenda, the focus on competitive sourcing is the
approach we are after at this stage, so rather than
preordaining what the result will be, what we are after right
now is developing a business case of what it would take, what
would be involved to take all the range of shuttle operations
and consider an alternative means of delivery than what we are
doing today. That may mean more public servants, less public
servants, more private company, more non-governmental
organizations, whatever it calls for. We are just starting with
an approach that says do not preordain what you think the right
answer is. Let us ask the question of what needs to be
accomplished and then what is the alternative means to go about
accomplishing those tasks?
Senator Mikulski. I did not understand that. What would be
like examples? Are you saying who does the mechanics? Who does
what? I don't understand what you are----
Mr. O'Keefe. You are exactly right, the functions that
would be involved are ``What does it take for maintenance
modifications, for, safety and mission assurance?''
Senator Mikulski. And I appreciate that then, but is your
objective to save money or to save the shuttle when you do
this?
Mr. O'Keefe. Yes, the primary objective is to enhance
safety. Whatever that takes in order to achieve that task, we
need to figure out what the best way is to deliver that
activity. The fondest hope would be we find an efficient way to
do that. And certainly in the risk management arena and
community, there is a very strong school of thought that says
it does not necessarily cost more. It means you do it
differently, in order to assure a higher grade of quality
assurance.
So looking at those kinds of challenges in that way may
result in a different cost model, maybe more, maybe less. I do
not know. But the primary objective in looking at the business
case is: Let us first look at the functions. How do we do this
safer than what we are doing today? How do we do it more
efficiently than what we are doing today? And achieve the
operational readiness rates that we want.
Senator Mikulski. Well, I think there needs to be far more
extensive conversation about this. First of all, I want to just
say we are so glad that you are as safety-obsessed as the
members of the committee.
Mr. O'Keefe. Indeed.
Senator Mikulski. So that is number one. Number two, I
mean, we are going to turn to Senator Bond--we do need to look
at ``What does integrated transportation mean? What would be
some other vehicles to get other things, say, up to the
station?'' and the space launch initiative--I know that it has
been raised by colleagues.
Of course, you know, I am interested in the whole
possibility that perhaps out of something like a Wallops, that
an unmanned vehicle could go up and act like a cargo shuttle,
and use the astronauts for only what the astronauts need to do.
But they do not need to be delivering cargo. Okay? They
need to be delivering other astronauts. And so there is a lot
for us to talk about.
But let me turn to Senator Bond.
SPACE LAUNCH INITIATIVE/NUCLEAR PROPULSION PROGRAM
Senator Bond. Well, the Chair has raised a whole
interesting area. You certainly have a broad field to resolve
some very sticky questions. We are most interested in them.
I just want to pick out a couple while we still have time
and I am going to submit a lot more for the record and look
forward to continuing the discussion, but there are significant
costs associated with both the Space Launch Initiative, the
Nuclear Propulsion Program.
What do you see the out year costs, and how do we balance
these programs to ensure that they complement each other, they
do not--we are always worried about robbing from one program to
deal with another. What are your projections on those?
Mr. O'Keefe. Well, certainly over the course of the next 5
years, we are looking at about a $4.5 to $5 billion initiative
for Space Launch Initiative alone. That is the current
projection where we are to down select from about a half-a-
dozen-plus options of where we are today, to think about what
the most likely vehicle prospects would be to achieve not only
shuttle replacement, but a range of others, mission objectives
as Senator Mikulski identified very clearly.
Coincident with that, though, I think is an opportunity
that we are at right now in this unique period of history in
which there is a convergence between requirements NASA has in
terms of longer term exploration platform discovery objectives,
as well as that which we see on the Air Force side of the
equation for reusable launch vehicles.
They are probably a little bit further behind in terms of
their requirements definition than we are at this juncture for
our requirements, but not so substantially that it would not be
possible to consider those requirements on both sides of the
equation and think about how we leverage the technology best in
order to meet multiple objectives.
So while we may not end up with the same vehicle or same
end item, it has the opportunity to draw on comparable
technologies for propulsion, aerodynamics, a range of different
disciplines and technology breakthrough opportunities that we
really need to converge this a little more closely.
As a result, we are spending a lot more time now getting
closer to understanding each other's requirements as they are
emerging to see as we move through this as a program management
and contractual matter how we can best utilize those
technologies for multiple means.
INTEGRATED FINANCIAL MANAGEMENT PROGRAM
Senator Bond. Well, let me move from the exciting
projections to some really mundane management questions. Over
the last 5 years, NASA has been judged by its auditor, Arthur
Andersen, to meet all of the Federal financial reporting
requirements. This was at a time GAO was saying NASA
procurement was high risk, and the new auditor,
PriceWaterhouseCoopers disclaimed an opinion on NASA's fiscal
year 2001 financial statements because of internal control
weaknesses.
What are you doing--they said that the financial management
systems do not substantially comply with the requirements of
FFMIA. What are you doing to address these concerns, and what
are you doing to address the GAO identified contracting
management risks specifically?
Mr. O'Keefe. Senator, thank you for the question. I regret
to advise that management mundanery for financial management
systems apparently is proclaimed as a forte of mine by many
of----
Senator Bond. I am afraid we may lose half of the crowd
here, but these are unfortunately very important issues.
Mr. O'Keefe. No, they are ones I think are critically
important. I have just taken a fair amount of commentary of why
that is a forte as opposed to some other areas that some would
prefer. But I frankly agree with you. I think this is the
number one structural management issue across the agency that
we have got to arrest and bring to absolute discipline control.
We are implementing an integrated financial management
program now that is intended to look at accounting, finance,
human resource management, contract management, logistics,
inventory control, all that in a method that is full management
information system exposed.
And we have brought in the best experts I know how to
recruit in the information technology (IT) arena, and in the
financial management arena, from in the private communities for
financial management and IT to come to NASA to deal with this
particular set of problems as a Kaizon team to arrest it and to
make it work.
So it is the number one priority that every center
director, every enterprise manager knows is the first order of
priority we have got to do. It is the idea of coming up with a
disclaimed opinion from the independent auditors, because they
could not get the data is unacceptable.
So in my judgment this will not be a topic of discussion
next year in this vein. It will be more that, yes, we have
beaten that problem to death and we have implemented a
integrated financial management system that satisfies not only
your, but all of our questions on what it costs to do anything.
That is first.
Senator Bond. That is an easy promise to remember. We will
keep that one in mind.
Mr. O'Keefe. Yes, sir. I intend to keep----
Senator Bond. Okay. We will look for it.
Mr. O'Keefe [continuing]. That, if it is the last thing I
do.
HUMAN CAPITAL
Senator Bond. Let me just ask you one very quick question.
Senator Mikulski. I am not even going to go there. You go.
Senator Bond. One very quick question, that something that
concerns us on this committee a great deal. Your specific
problem, the Aerospace Advisory Panel said that their hiring
freeze on planned departures has produced critical skill
deficits, and we know that NASA is beginning to--in the serious
shortfall of younger scientists and engineers, you are
beginning to address it.
Is this one of your top priority attention areas? Do we
need a national policy to ensure that we have an adequate
number of scientists, engineers and researchers? First, is this
a high priority concern, and is this one of your major
concerns?
We would like to work with you, because we see this in NSF
and so many other areas. And we will look forward to seeing
your action steps in this area.
Mr. O'Keefe. Yes, sir. Well, thank you for the question,
Senator. I guess beyond my priorities, this is the number one
priority the President has articulated for the strategic
management of human capital as part of the President's
management agenda.
There is no question, the most polite way to say this is we
have a very mature workforce. No doubt about it. The experience
rate and the level of talent we have in the agency has never
been higher. The catch is we have got roughly a third of that
workforce that is eligible to retire in the next 5 years.
Senator Bond. Yes.
Mr. O'Keefe. So we are looking at some real serious
challenges on this front in the technology and engineering
fields, particularly math, science, technology and engineering,
those are the kinds of disciplines that we are seeing a real
departure of not only talent and experience, but not a lot
behind it in terms of cohort capability, numbers of people to
fill those capacities. That is true not just at NASA, I think
across the entire frame. And you are exactly right.
The President submitted back in October the Manager
Flexibilities Act that has now manifested itself in the form
of, I want to say it is a Senate bill that was introduced by
Senator Voinovich that has been modified since that time that
we are very, very enthusiastic about in the administration, and
we will love to see enacted because it provides the tools on
the personnel, human resource front to start to arrest this
problem and to deal with the issue of recruitment, retention
and how to really deal with the technology, engineering, math,
science kinds of disciplines that are necessary to continue to
recruit for.
Senator Bond. Thank you. That is very, very interesting to
us.
Senator Mikulski. Very, very good.
Senator Bond. Thank you, Madam Chair.
Mr. O'Keefe. Well, thank you, Senator. I appreciate the
question.
CIVIL SERVICE REFORM
Senator Mikulski. You were talking about the Voinovich
civil service reform.
Mr. O'Keefe. Indeed, exactly.
Senator Mikulski. Yes. We are interested in that too.
Mr. O'Keefe. He has done a superb job of really pulling
together some great tools to help manage the human resource
challenge we are all facing at every agency.
Senator Mikulski. Senator Shelby.
Mr. O'Keefe. Thank you.
AIR FORCE/SPACE LAUNCH INITIATIVE
Senator Shelby. Could you elaborate a little bit about the
involvement of the U.S. Air Force in the SLI program and what
does the Air Force bring to the table and how cooperative is
the effort thus far?
Mr. O'Keefe. Very cooperatively, if I can take the last
part of this first, because we are really very much in the
formative discussion phase. I think the idea of how much and
what type and so forth is yet to be determined.
Senator Shelby. Yes.
Mr. O'Keefe. Again, the sum and substance of where I think
we are right now is just this interesting historic convergence
in which the Air Force has a set of demands for reusable launch
vehicles and a concern about long-term reliability of
expendable launch vehicles.
Senator Shelby. Yes.
Mr. O'Keefe. We, in turn, have, a set of structural
challenges, that many members here this morning have identified
when the retirement rates of assets will occur, shuttle
orbiters to be specific about it. As a consequence, that
convergence gives us a unique opportunity to look at how we can
leverage technologies to meet different purposes, but to derive
from similar technological basis.
So it is very much in the formative phase. It is very much
cooperative. Just 2 weeks ago, I met at an extended series of
meetings over a course of a couple of days with the Commander
in Chief of the U.S. Space Command, with the Under Secretary of
the Air Force, Under Secretary Teets, and General Eberhart, and
respective staffs from the Office of Secretary of Defense, and
their research and engineering teams, as well as within the
aerospace community, to think about what is laying on the
table, what are all those requirements and how can we choose
the technologies that best leverage and maximize the efficiency
of what we select to meet multiple objectives. We conducted a
study that lasted about 4 months with the Air Force in an
attempt to converge these. We still have to go back and look at
it again, because I think we are a little bit behind step. But
in terms of collaboration and cooperation, it is real close. We
are at least identifying what we see are mutual problems or
mutual challenges, mutual opportunities, and we are now just
about the business of trying to identify them.
Senator Shelby. Thank you very much.
Mr. O'Keefe. Thank you, Senator. I appreciate the question.
Senator Shelby. Thank you.
Senator Mikulski. Yield?
Senator Shelby. Yes.
Senator Mikulski. Senator DeWine?
Senator DeWine. Nothing further, Madam Chair.
NATIONAL SECURITY ISSUES
Senator Mikulski. Well, I want to raise some questions
about the Russians and knowing both of your interests in
national security, it might be of interest to you.
My colleagues--by way of background, when the Cold War
ended or was about to end, we looked forward to how to
cooperate with the Russians in a very different way. And one of
the things that we were concerned about is the issue of
proliferation, and I know my two colleagues here have been very
keenly interested in that.
And we engaged the Russian scientists in being involved
with us on the International Space Station, so that the Russian
scientists rather than selling rocket launch capability to
people that we did not want to have rocket launch capability
would be involved with us in the new world order and democratic
Nations who have been involved as our international partners on
the space station.
We have been very unhappy about this. And I would like to
know, Mr. O'Keefe, exactly where are we in terms of, one,
insisting with the Russians that they are not engaging in
proliferation and, number two, we have been very much involved
in the Iran non-proliferation act. That requires the President
to certify that Russia is not assisting Iran with ballistic
missile technology or other assistance in the development of
mass destruction, meaning launch capacity or whatever. Without
the Presidential certification, you are to be prohibited from
sending funding to Russia under certain circumstances.
Now, let us step back here. First of all, we know we are
engaged with the Russians in our fight against terrorism, that
Mr. Putin has been very cooperative, but yet at the same time
we see Iran poses great threats to allies and to the strategic
interest of the Mid-East. Could you tell us, one, where are we
with the Russians, where are we in what you believe their
cooperation is in the Iran non-proliferation or selling their
technology, and do you believe that they are really stepping up
and that their scientists have been truly engaged with us?
I pass no judgment on the technical competency of the
scientists, but I really wonder if our money to the Russians is
going to the Russian scientists or is going to the Russian, you
know--so we are interested in this, we are very much interested
in how, through the use of engaging the Russians in civilian
space like the space station, we help them make sure that their
scientists or other mechanisms out of Russia are fostering the
proliferation of weapons of mass destruction.
Mr. O'Keefe. Thank you for a very timely question. I just
last week spent 2 days with Deputy Secretary Armitage in
Moscow. He, in discussing, the bilateral discussions leading up
to the President's summit meeting later this month, early June,
and I spent most of my time with RosaviaKosmos, and the general
director of that space agency as well.
And we reconverged towards the end of our meetings with
Foreign Minister Primakov as well as Foreign Minister Ivanov,
who then discussed this with Koptev who is the general director
of RosaviaKosmos on very, very similar lines as your discussion
has just gone down.
It is a challenge in the sense that we have a very strong
close working relationship with RosaviaKosmos, and the
operations and the activities of the International Space
Station are heavily dependent on our meeting the build out
requirements. For example, as I discussed at length, and their
objectives as well as commitments to help the support and
logistics requirements for progress and Soyuzes flights. As a
consequence, their continuing efforts on that front are
critical to achieving the milestones I have talked about. I
think we are there. It is a very close collaborative
relationship. The issue that clearly is always going to be on
the table in the foreign policy discussion that Secretary
Armitage had, as well as the closer intergovernmental
discussion I had with Director General Koptev is over the
matter of the Iran non-proliferation treaty or agreements act.
And it means that we really need to be conscious of how
that is implemented and we are continuing to work at every
opportunity to try to reach agreement on how that can be, not
only adhered to, but verified. There is a very strong interest,
I sensed in the couple of days I spent there in wrestling with
that question successfully. There is a very strong view in that
direction.
Senator Mikulski. Well, Mr. O'Keefe, this is a subject of
great interest I know to the members of this subcommittee, and
I would like to suggest that I coordinate a meeting with you
and welcome any members of this subcommittee who wish to have a
more in-depth conversation with you about that.
Mr. O'Keefe. Terrific.
Senator Mikulski. I do know that members of the
subcommittee are actively engaged. And Senator Lugar, really
our outstanding Senator----
Mr. O'Keefe. You bet.
NON-PROLIFERATION
Senator Mikulski [continuing]. On non-proliferation has
invited us to join with him in a group to Russia on the issues
of non-proliferation. So I think it is timely that we perhaps
talk with you on how we can make wise use of our time there,
enhance this and also get a more in-depth view that I know you
and your team could share with us.
So would you just presume that we are going to coordinate a
meeting and we will make the arrangements and we will invite
the appropriate people and look forward to working with Senator
Lugar who has been a real champion on this, and then how we can
really keep the Russians engaged in civilian science.
Mr. O'Keefe. Absolutely. No, I would be delighted, Madam
Chair. That would be terrific.
Senator Mikulski. And so let us talk some more about that.
Mr. O'Keefe. If you would permit me, my intent would be to
be in touch with Secretary Armitage, as well, and see if we can
coordinate an effort that meets your schedule and timing as
well. I think that would be terrific.
Senator Mikulski. I think that would be great. We have
worked with Secretary Armitage on a number of issues and I have
great admiration for him.
Mr. O'Keefe. Great. I appreciate it.
Senator Mikulski. Senator Shelby, did you wish to comment
on this?
Senator Shelby. Yes, I do.
Senator Mikulski. I know you have been----
Senator Shelby. I want to follow up and I appreciate you
bringing it up.
Senator Mikulski [continuing]. An expert on this, as
Senator DeWine.
Senator Shelby. I do not know about that. But all three of
us, plus Senator Lugar that you mentioned, Mr. O'Keefe, serve
on the Intelligence Committee, and we are very interested in
this subject matter, not just for this committee but for what
we do in our government and the security of our Nation.
So I appreciate, Madam Chairman, you bringing this up. And
I think a meeting with Mr. O'Keefe at the right time would be
well attended and be very important.
Senator Mikulski. Very good.
Mr. O'Keefe. Thank you, Senator. I appreciate that.
Senator Mikulski. Senator DeWine, did you want to comment
or----
Senator DeWine. I am fine.
PLUTO MISSION
Senator Mikulski. Okay. There are many other areas that we
could pursue. We thank our colleague, Senator Bond, for raising
the work force issue.
Let me go to some issues with space science and then I
think we will be ready to conclude our hearing.
I was concerned that OMB cancelled Pluto in space science
or I guess that the administration's fiscal 2003 cancels the
Pluto mission.
The opportunity to go to Pluto will not come again for
another 200 years and we understand from the applied physics
lab that would do the Pluto mission that they have estimated
their costs at $450 million, much less than what NASA
originally thought.
Could you tell us where we are on the Pluto mission? What
is the rationale for cancelling it? Was it financially driven?
Was it science-driven? And is there any way that we can get
this back on track----
Mr. O'Keefe. Thank you for the question, Senator.
Senator Mikulski [continuing]. Working with the
subcommittee?
Mr. O'Keefe. Well, first and foremost, the requirement, or
at least the mission objectives, the research that could be
gained by a mission to the outer edge of this solar system is
something that clearly has captured the attention of the
scientific community and they view it as an important
objective, to the point where the National Academy of Sciences
this summer, we are hopeful they are going to conclude by this
summer, is rank ordering the priorities of where they see
exploration objectives. This clearly is among the missions they
are considering very seriously in terms of what its standing
and prioritization should to be. So we will be driven and
guided by that determination as well from the National Academy.
But nonetheless it is one that, I think as you are well aware,
Madam Chair, they view as an important set of objectives, so I
think that is not in dispute, the criticality of it.
The second issue that we have really run across is the how
to get there, how to accomplish it. The stark reality is much
in the vein of the earlier discussions we have had or at least
touched on, this is a quintessential example. But then, again,
any destination in the solar system and indeed in this universe
would be an example too, of how long it takes to get anywhere.
A very responsive proposal that was advanced, as I
understand it, would call for a launch as soon as 2006, or a
vehicle probe by that time, and achievement of the objectives
by about the 2015, 2016 time frame. So in that rough parameter,
maybe as early as 2014, maybe as late as 2017, we are still
talking about a period of time that is approaching 15 years
from now, roughly within that parameter, which therefore
suggests, two problems.
The second issue that really is dominant there as well is
given the existing capability we have for propulsion and power
generation, once we pass or get to Jupiter, we basically run
out of the option, not completely, but for all practical
purposes of solar electric capability.
We, therefore have to depend on the gravitational slingshot
effect, if you will, off Jupiter to meet the timelines you are
talking about. That is the most aggressive approach we could
possibly employ in order to be on station about 15 years from
now to achieve that task, and through the Kuiper Belt beyond.
What would amount to a few months worth of imagery that would
be of higher caliber than what we can do today.
So not a challenge at all, not a problem at all about what
the mission objective, the requirement, the scientific research
opportunity would be. We will be, again, guided by the National
Academy of Sciences in terms of where they think that
prioritization fits.
Our greatest obsession at this juncture is how to get there
and stay on station for a long enough period of time in order
to truly inform the research and scientific objectives.
There are options that we are clearly looking at if the
National Academy comes up with findings that say this is a very
high priority, that may be we will be able to do that.
Senator Mikulski. Mr. O'Keefe, when is the National Academy
going to complete its work?
Mr. O'Keefe. We are told this summer, but----
Senator Mikulski. But what does ``this summer'' mean? The
committee is going to be marking up in June.
Mr. O'Keefe. I know. This has been a question on my mind as
well. I would really appreciate your assistance in this regard
too.
Senator Mikulski. What can we do to help you out here,
because first of all, we welcome the National Academy's advice.
They have been such an excellent resource to we policymakers.
Mr. O'Keefe. They are indeed.
Senator Mikulski. But their timeline and ours do not--and
we do not mean--we really want to welcome their priority
commentary. But would you let my staff know how we can help you
be a booster rocket here?
Mr. O'Keefe. I appreciate that. I would welcome that
opportunity.
Senator Mikulski. Because we would really like their
advice, if we could, really sometime in June.
Mr. O'Keefe. Yes, ma'am.
Senator Mikulski. At least certainly perhaps into the top
tier of what they are recommending.
We would also like their specific commentary on Pluto. It
is something that I have very keen interest in and also the
fact that it will only come in 200 years. So we are either
going to do it, we should do it right. We should do it
prudently. So let us work together on this.
Mr. O'Keefe. I would enjoy that very much. Thank you.
NEXT GENERATION OF SPACE TELESCOPES
Senator Mikulski. We cannot conclude this hearing without
asking about Hubble.
NASA's current plans for Hubble is to receive one more
servicing mission and then have it operating until 2010. Then
the next generation space telescope will be launched to replace
the Hubble. Well, I understand that schedule has slipped.
As we look at the next generation of space telescope, which
I am a supporter of, should we develop a contingency plan that
will enable Hubble to operate beyond 2010? And we are seeing
now, here it is, 2002, and I was really taken aback by these
photographs. I mean, even--this is better than Spielberg and he
makes it up, you know----
Mr. O'Keefe. It is the real thing.
Senator Mikulski [continuing]. And in some ways has a
bigger budget than the Hubble has.
Maybe you ought to trade places here.
But truly even to the untrained scientific eye that you
could look at it and not only were they dazzling, but you know
that a gifted and talented scientific analytical group of
people are going to glean so much about the universe and so
tell me what you think. First of all, I know that eventually we
will need a next generation. We want to prepare for it and it
has got to be reliable and sustainable, all the management
words you would use.
But tell us what you think about Hubble and should we have
a contingency plan?
Mr. O'Keefe. Sure. Thank you, Madam Chair.
Senator Mikulski. Should we have two space telescopes?
Mr. O'Keefe. Thank you, Madam Chair. I think the logic that
you are employing here has a lot of merit. It is something that
I have begun to inquire about as well internally.
Given the stunning results we have seen thus far exceeded
our expectations. And this is not just because the great
unwashed type like me is looking at this, because what I know
about this you can summarize in a matter of moments, but more
importantly the astronomers who are looking at this, the
astrophysicists who are examining this, the scientific
community is stunned by the value of what they are getting out
of this.
It is not just the new imagery. It is the archival imagery.
It is the things that we have downloaded as imagery from prior
transmissions that was archived and viewed as available and
indeed some of the most stunning discoveries were made 2 and 3
years after the images were transmitted, because someone, a
scientist, a researcher, a principal investigator, thought to
go look at some particular aspect, dig it out of the archives,
see what it may reveal, and then drew a series of conclusions
from that.
So the data that is being gathered is not just a one-trick
pony opportunity. It is something that is a longstanding set of
requirements or information bits that in turn then are
revealing things over a period of time that we did not expect,
even though they were gathered 2, 3, 4, 5 years ago.
So that alone tells that the logic that you have employed
is precisely the way we have got to look at this. We ought to
be thinking about, given the results we are achieving here,
what is it going to take in order to operate that?
Certainly the next mission in 2004 is planned. We are going
to press on ahead with that. But we then have to trade that off
relative to what we would gain thereafter. And that is
precisely the kind of analysis we have got to conduct, more
rigid analysis, I think, than we have employed so far to see
exactly what that would take. And now, again, seeing the
advantages that come from this that exceeded our expectations,
it clearly is something that merits that kind of attention.
EARTH SCIENCE MISSIONS
Senator Mikulski. Well, know that I do believe we do need a
next generation of space telescope and I think we can really
plan and get the highest use of it by making use of both
telescopes that we have, those space telescopes.
Earth science, we understand that the NASA budget indicates
that the future for earth science mission is kind of in limbo,
until the administration completes an interagency review on
global warming. I am concerned about that because as you know,
you are an old hand at these things, interagency reviews can
take forever. And we have an excellent earth science program
and I believe you know how there are multiple agencies that are
making use of this.
Could you tell us: When do you expect the administration to
release the details of this review, and what does it mean for
the EOS follow-on projects that will be re-proved or where are
we on earth science?
Mr. O'Keefe. And I think your characterization of the
interagency process is polite, diplomatic.
Senator Mikulski. That is me.
Mr. O'Keefe. Well, in that case, uncharacteristically
understated in terms of the challenges of the interagency
process. You are exactly right.
Nonetheless, what I have been really struck with, as
Secretary Evans has taken this challenge, he and Secretary
Abraham, but Secretary Evans is leading it at this juncture, to
pull together all the agencies necessary. We meet pretty
regularly. I have been surprised at the intensity, frequency
and deliberation that has gone into this particular task, so
the President's challenges we have accepted as an
administration and we are moving ahead smartly on it.
Exactly when the deliverable will be, let me give you a
more comprehensive answer after a little more research, because
I am wrestling to remember the dates of when various elements
are to be delivered back to the White House. But it is not
necessarily holding up or driving what we are doing at NASA as
well though. It is a very important consideration, but it is
not one that I would say is limiting.
The Aqua launch occurs 7 o'clock today?
Staff. On the 4th.
Mr. O'Keefe. Oh, on the 4th. Excuse me. I am sorry. On the
4th of May. So we are proceeding apace with a series of earth
science activities and as a result, we are continuing to use
EO1, which has, proven to be an extraordinary source of imagery
and information on weather and geological phenomenon.
TDRSS continues to be deployed. We have got another launch
of that due in October, I guess. So we are pursuing a series of
earth science objectives that I think are as aggressive as we
think are necessary for this coming year. I do not see it
constrained by that particular review at all. If anything, I
see a very aggressive effort underway to try to beat that
interagency challenge that I think you very accurately
described.
Senator Mikulski. Well, we want to, of course, talk more
about that.
Mr. O'Keefe. Sure.
SENATOR MIKULSKI'S CLOSING REMARKS
Senator Mikulski. We are not sure when we are going to get
our allocation, but we believe that there is a variety of views
looking at how we are going to be proceeding on the budget
resolution, et cetera. But it is our estimate that we will be
marking up sometime in June, of course, working with the House,
but at least a preliminary framework.
So we look forward to further conversations with you as we
prepare for markup, Mr. O'Keefe, because you have got studies
and all online that are going to be relevant to our decision
making process. So we really need to continue our very close
collaboration. We want to thank you and your entire team for
what they do every day for the NASA mission, but also their
very collegial and cooperative spirit in working with the
committee.
ADDITIONAL COMMITTEE QUESTIONS
So we want to say thank you and God bless you and God bless
everyone who is trying to do so much in our space program.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Barbara A. Milkulski
space launch initiatives
Question. What is your approach with regard to SLI flight tests to
evaluate key technologies?
Answer. SLI continues to emphasize the importance of testing
advanced enabling technologies in their relevant environment. In some
cases, flight-testing can provide validation of key technologies that
cannot be adequately tested on the ground. SLI evaluates each
individual technology test and evaluation effort based upon the benefit
for the program relative to its cost. Some of the technologies being
evaluated for testing in a flight environment include airframe and
mechanical systems, thermal protection system, operations, avionics,
power, crew escape systems, and integrated vehicle health management
systems. SLI's flight test programs complement its integrated ground
testing and simulation tasks. There are currently three companies under
contract to provide flight demonstrations for the SLI-Kistler
Aerospace, Orbital Sciences Corporation, and the Boeing Company. In
addition, one of the primary objectives of the ongoing NRA 8-30 Cycle
II procurement is to identify cost-effective candidates for flight-
testing.
Question. What is your strategic plan for Wallops Flight Facility
and does it include SLI flight-testing?
Answer. Currently, there are no current plans to perform SLI
flight-testing at WFF. The SLI program is evaluating industry proposals
for flight demonstration of key technologies for a 2nd Generation
Reusable Launch Vehicle. These proposals include the identification of
flight test launch site operations of which WFF is eligible for
consideration. In addition, the SLI Program is actively engaged in
discussions with WFF to determine other areas where WFF flight-testing
and operations expertise can be utilized. Decisions to use WFF or other
flight test facilities will be made competitively based on these
proposals and discussions.
aeronautics blueprint
Question. Mr. O'Keefe, during your testimony before the House VA/
HUD Subcommittee 2 weeks ago, you answered ``I think so'' in response
to a question asking if the current aeronautics budget is sufficient to
realize the vision in the Aeronautics Blueprint.
Could you please expand on that answer and explain how a major new
undertaking in aeronautics is to be funded in a budget that is cut
under your request? When can we expect a budget estimate of what will
be required to implement the Blueprint?
Answer. The Aeronautics Blueprint addresses how new technology can
be brought to bear on the issues facing aviation in the United States.
These technologies, still in their infancy, have the potential to
create a new level of performance and revolutionize aviation by
addressing key public good issues (aviation safety, air system
congestion, and aircraft noise and emissions) that could constrain
future air system growth. NASA aeronautics programs have been realigned
and investments have been reprioritized toward the vision articulated
in the Blueprint. The NASA funding request for aeronautics research and
technology is sufficient to formulate the development of the necessary
fundamental understanding of these technologies. As progress is made on
this long-term technology development, planning will be updated and
technology investments revised.
Question. Given the opportunity presented by the slow-down in air
traffic after 9/11, what is NASA doing to move ahead as soon as
possible with improvements to the national air system?
Answer. In cooperation with the Federal Aviation Administration,
NASA is developing technology for air traffic decision support tools in
support of the FAA's Operational Evolution Plan. Additionally, NASA is
investigating potential future air traffic management concepts of
operation and the technologies that support them.
Question. Can NASA truly take advantage of the current slow down
and aggressively work to meet the 4 Airspace System goals of the
Blueprint (reduced throughput in bad weather, en route congestion/poor
traffic flow, better manage aircraft movements at HUB airports, develop
precision navigation systems) when you propose cutting the Airspace
Systems Program?
Answer. As the events of September 11 slowed air traffic in the
skies and transformed the current-world aviation situation to increase
emphasis on the aviation security, there has been no change in the
(already increased) momentum in which NASA strives to resolve the
current Airspace Systems goals. The $8.8 million reduction in Airspace
Systems was a planned reduction. The NASA request for the projects in
this program supporting the airspace systems goals (Advanced Air
Transportation System and Virtual Airspace Modeling and Simulation) is
at the same level as the fiscal year 2002 appropriation.
Question. Are you concerned with the position taken by the
Europeans in their ``Vision 2020'' plan to be the world's undisputed
leader in aviation 2 decades from now?
Answer. NASA has been focused for several years now on the key
public good issues (aviation safety, air system congestion, and
aircraft noise and emissions) that Europe is beginning to address in an
integrated fashion through the ``Vision 2020'' document. These public
good issues pose the largest constraints on continued air system and
aviation market growth.
Question. Is your ``Aeronautics Blueprint'' in response to the
Europeans ``Vision 2020''? If so, why is there no discussion of the
funding that should be committed to this effort?
Answer. The Aeronautics Blueprint is not in response to the
Europeans' ``Vision 2020.'' The Blueprint was prepared to provide more
details to NASA strategic plan for aeronautics developed in 1997, well
in advance of the European vision. It is interesting to note that the
targets established in the Europeans' vision are consistent with NASA's
goals of 1997. Furthermore, NASA believes it has sufficient funding to
pursue the vision articulated in the Blueprint.
Question. Does NASA anticipate that we will need a comparable level
of funding to what the ``Vision 2020'' calls for--roughly a billion per
year for the next 20 years to help our aviation industry remain
competitive in the face of their increased investment?
Answer. NASA believes that the five-year funding plan for
aeronautics accompanying its fiscal year 2003 budget request will
enable the agency to pursue revolutionary technologies over the next
five years that will provide this country's aviation system with
unparalleled capability.
Question. Do you believe that the cuts to NASA's aeronautics
research and development enterprise over the last 5 years have played a
major role in the government's backpedaling on what were once
priorities for improved air service in this country?
Answer. NASA's aeronautics research and technology funding peaked
at an all time high of $920 million in fiscal year 1998. This peak
funding was largely due to the budget ramp-up associated with the High
Speed Research program, a program to develop an environmentally
compatible, commercially viable supersonic passenger jet in partnership
with industry. This program was cancelled when technology and market
projections led industry to defer funding commitments to the
development of a supersonic passenger jet into the future. Prior to
this peak, NASA aeronautics research and technology has been funded at
about $500-$600 million per year, adjusted for inflation, as far back
as the early 1970s. NASA's fiscal year 2003 budget request and five-
year budget projection for aeronautics research and technology is
consistent with these levels and provides adequate funding to pursue
key technology goals over the next five years that could improve
aviation safety and capacity and reduce aircraft noise and emissions.
Question. Why was it so important for NASA in the past to enumerate
such goals when the Aeronautics Blueprint fails to mention any time
frame for accomplishing similar goals regarding safety, emissions,
noise and cost of air travel?
Answer. The Aeronautics Blueprint is consistent with NASA's
strategic plan for aeronautics, which lays out technology goals that
could enable the nation to realize improvements in aviation safety,
capacity and mobility and mitigate the impact due to noise and
emissions by 2022.
Question. Do you anticipate incorporating time frames for the goals
enumerated in the Aeronautics Blueprint? If not, why?
Answer. The Blueprint states general objectives. NASA's strategic
plan for aeronautics, which has specific time frames, has targeted 2022
for the development of technology to enable revolutionary improvements
in aviation safety, capacity and mobility and mitigate the impact due
to noise and emissions.
Question. Is the problem of drawing students to aeronautical
engineering degrees at U.S. universities so great, and the problem of
bringing on new talent to replenish the depth of expertise that has
been lost at the NASA Aeronautics Centers so critical, that NASA
undergraduate and graduate research opportunities need to be larger by
an order of magnitude?
Answer. We believe that we can refocus our programs in such a way
to expand the university community's participation in the full range of
aerospace technology research and education programs. Examples of such
activity are reflected in our recent selection for further negotiations
of seven leading American academic institutions for research and
education program development in emerging technology areas. We believe
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international space station
Question. A principal justification for undertaking the
International Space Station program was to conduct world class,
groundbreaking research across multiple scientific disciplines over a
10 to 15 year period. Achieving that goal will be difficult. In the
past, GAO has pointed out that funding the research program has been a
challenge for NASA, given the need to fund other important development
activities. Today, NASA's ``core complete'' concept limits permanent
presence on the station to 3 people, one of whom must be a Russian
pilot to operate the Soyuz crew return vehicle. This scenario obviously
places additional limits on the amount of research that can be
performed.
What is your vision as to the purpose of the research component of
station operations and what is the scope of the research that can be
completed under the ``core complete'' concept?
Answer. NASA's Biological and Physical Research (BPR) Enterprise
seeks to use the unique space environment to conduct research and to
develop commercial opportunities that could not otherwise be pursued on
Earth, while building the vital knowledge base needed to enable
efficient and effective systems for protecting and sustaining humans
during extended space flights. BPR addresses the two fundamental
challenges associated with human space flight: (1) understanding
nature's forces in space; and (2) understanding the human experience in
space.
Established in fiscal year 2001, BPR closed its first year with a
significant record of accomplishment. ISS outfitting for research began
with the delivery of the Human Research Facility in March 2001. After
more than a year of continuous human occupation, the ISS now has 5
research racks. There are 26 investigations currently underway aboard
ISS, representing research from government, industry and academia; 54
investigations have been carried out since ISS construction in orbit
began. The Agency is on-track to deliver an additional five research
equipment racks by the end of 2002. Expeditions 5 and 6 will also fly
during fiscal year 2002, and 41 experiments will be conducted in the
areas of biomedical research, biotechnology, microgravity fluid physics
research, materials science, agriculture, and Earth observations.
In spite of a significant unscheduled ISS upkeep and
troubleshooting activities during Expeditions 1 and 2, the ISS team was
able to meet the minimum research objectives of the first four research
increments. NASA continues to prepare for ISS on-orbit research through
the preparation and testing of five additional research racks and
ongoing payload crew training. In addition, NASA looks forward to
launching STS-107 in the late summer, a Space Shuttle mission dedicated
to biomedical and biological research. .
Throughout the ISS construction phase, NASA is continuing to
achieve a balanced program of scientific exploration that will
contribute, along with ground-based research, to the fields of biology,
physics, chemistry, and the long-term effects of space flight on
humans.
In response to the second part of your question concerning the
scope of the research that can be completed under ``core complete,''
the U.S. core complete will be achieved in February/March 2004, at the
conclusion of Increment 9, which is planned as Mission 10-A, by which
there will be an average of 15 continuing experiments and 7 new
experiments (delivered by Shuttle resupply missions) onboard. U.S. core
complete will include 5 EXPRESS racks, featuring Physical Sciences
research and Space Product Development; 2 Human Research Facility
racks, hosting Bioastronautics experiments; one Microgravity Sciences
Glovebox, hosting Physical Sciences and Commercial experiments, and the
Window Observational Research Facility (WORF), collecting observational
data for Earth Sciences and the Office of Space Flight. Enclosure 1,
which includes graphs (a), (b), and (c), shows ISS experiments by
discipline or category and by increment, comparing the growth in number
of experiments for each discipline as the increments continue.
Although NASA did not plan to expand the crew size beyond three
members until 2006, a permanent crew of three could preclude certain
experiments that are very crew time-intensive or complex and which do
not lend themselves to automation. Examples include experiments that
involve crew manipulation such as time-course sampling of plants.
In addition, BPR is stressing the maximization of research return
from the ISS by actively seeking options for broadening its access to
flight platforms in pursuit of the answers to its driving scientific
questions. NASA is working with the White House Office of Science and
Technology Policy (OSTP) and the Office of Management and Budget (OMB)
to engage the scientific community and reestablish clear high-priority,
affordable science objectives with near-term focus on improving
scientific productivity. The results of this review, which was
conducted by the Research Maximization and Prioritization (ReMaP) Task
Force, became available in early July. The ReMaP results will help set
the BPR science agenda that will, in turn, drive how the ISS is used.
We expect the ReMaP recommendations to increase the efficiency and
output of ISS research and realign NASA's ISS research portfolio to
reflect current scientific priorities.
Question. What opportunities do you see for increasing the amount
of research time on the station?
Answer. NASA is currently evaluating several options for increasing
research time on the ISS, including the recommendations of the ReMaP,
which will play a role in determining the cost/benefit of adopting one
or more of these approaches to enhancing crew time for research. NASA
plans to discuss a set of option paths in the fall of 2002 and
determine the optimal ISS configuration to maximize research in 2003.
Prior to the program restructuring, the crew size was not planned
for expansion beyond three until 2006. Research plans through that time
remain largely unchanged. Experiments until 2006 are specially designed
and chosen through peer review to not require significant crew
involvement. The ReMaP results will provide guidance on research
priorities that will allow informed decisions to be made on the areas
of research on which to focus.
During Fall 2001, the International Space Station (ISS) Management
and Cost Evaluation (IMCE) Task Force recommended that extended Soyuz
sortie missions coupled with Space Shuttle Extended Duration Orbiter
(EDO) missions be considered to provide additional crew time for
scientific research to supplement a crew size of 3.
The IMCE also recommended a Space Shuttle flight rate of no more
than 4 per year. This results in significant constraints to research
due to limited ability to launch and resupply research equipment. The
addition of Shuttle missions in the 2006+ timeframe will supplement
research crew time by freeing the ISS crew from some of their EVA
requirements and thereby increasing the crew time available for
research; and by allowing the visiting shuttle crew to perform short
duration experiments during the docked mission, or initiate long
duration experiments which would then be completed by the ISS crew
Use of overlapping Soyuz for gaining additional crew time is of
limited attractiveness. Overlapping Soyuz opportunities could
potentially provide 300-400 hours of additional research, presuming the
docking time is extended. However, it would add significant logistical
burdens to the existing Shuttle flights; since it would be necessary to
accommodate for the additional life support and crew provisions.
Further, there is a significant learning curve for visiting Soyuz crews
that would limit the productivity during the first several weeks of the
mission. Additional study is required to assess cost verses benefit of
this particular option. The use of an Extended Duration Orbiter for
existing or new missions appears promising and is under consideration.
Question. What are the obligations of both the U.S. and Russia
regarding the long-term operations of the space station?
Answer. The specific responsibilities of NASA and the Russian
Aviation and Space Agency (Rosaviakosmos) are listed in Article 6
(enclosed) of the Memorandum of Understanding (MOU) on the
International Space Station (ISS) signed in January 1998. This detailed
list of responsibilities includes separate sections for the design and
development phase and for the assembly, operation and utilization
(long-term) phase. These responsibilities cover a wide range of issues
from management mechanisms, to logistics arrangements, to training
facilities and simulators. NASA provides the basic infrastructure of
ISS, including four solar arrays that generate the majority of power to
ISS and two significant research modules. In addition, other NASA key
obligations regarding operations include: (1) logistics support for
delivery of supplies to ISS on the Shuttle; (2) Mission Control from
Houston; (3) crew rotation on the Shuttle; (4) crew return after
assembly complete; and (5) life support systems. Many of Rosaviakosmos'
key obligations regarding operations are similar to those of NASA,
including: (1) logistics support for delivery of supplies and
propellant; (2) Mission Control from Moscow; (3) crew rotation; (4)
crew return during assembly; and (5) life support systems for the
Russian segment.
Question. How can NASA effectively manage its work on the station
given its dependence on its international partners?
Answer. The deployment, operation and utilization of the
significant capabilities already attained with the ISS demonstrate what
international partnering can achieve. While the failure of some
partners to deliver certain elements according to schedule has been a
past issue, the issues addressed in the recent ISS Independent
Management and Cost Evaluation (IMCE) task force did not raise concern
in this regard.
Partnerships, by definition, ascribe certain rights and
responsibilities to each of the parties, and the ISS international
partnership is no exception. As such, NASA, like each of the ISS
partners, expects the others to fulfill their obligations and fully
intends to continue meeting its own. Meanwhile, NASA is effectively
managing its own domestic team of civil servants and contractors,
continuing to integrate U.S. elements of the ISS, and, in concert with
the international partners, accomplishing program objectives including
the integrated operation of the overall ISS vehicle and the execution
of an internationally-coordinated research agenda.
Question. Under the terms of the NASA/OMB agreement, will the final
space station configuration conform to the expectations set out when
the program began, that is, 7-person capability? If not, what are the
differences?
Answer. The final configuration of the ISS has not been determined.
The NASA/OMB agreement takes the ISS through the core complete
configuration that accommodates deployment of the International
Partners elements. The launch and assembly of this configuration is our
first and foremost priority. We are currently defining research
requirements, after which we will perform an analysis of resource
capacity to meet those requirements. We recently completed two separate
independent life cycle ISS cost estimates. When all of this requisite
knowledge is in hand, we can begin considering potential option paths
to address delta requirements.
Question. How can NASA meet its commitments to the international
partners if the station does not progress beyond a 3-person crew
capability?
Answer. NASA is committed to meeting its obligations to the
International Partners under the ISS international agreements and has
made no decision to reduce the crew size from that specified in the ISS
international agreements. NASA has initiated a five-point assessment to
reform and revitalize the ISS Program and ensure the construction of a
viable ISS that fulfills its potential as a world-class research
facility. The five areas of this assessment are: science priorities,
engineering development and deployment, cost estimating and analysis,
mission and science operations, and international partner coordination.
The resources required to meet the science priorities of ISS will
determine the ultimate crew size. NASA is working closely with the
International Partners throughout this process to ensure that the
United States meets its commitments in a manner consistent with the ISS
Agreements. The International Partners have demonstrated a willingness
to work with NASA as we assess the ISS Program and develop an end state
acceptable to the partnership. If, as a result of this process, it is
determined that specific provisions under the ISS international
agreements require renegotiation, NASA will work with relevant
International Partners to seek consensus on the changes.
Question. How will the loss of the habitation module and the crew
return vehicle and the U.S. resulting dependence on the Russians impact
U.S. leadership on the station/in space?
Answer. NASA's leadership role in the International Space Station
(ISS) is a fundamental principle in the Intergovernmental Agreement
among the ISS Partners and in the Memoranda of Understanding between
NASA and each of the cooperating space agencies. NASA's contribution to
the ISS Partnership outweighs that of any other partner many fold, but
the Partnership is still dependent on each of its members to provide
certain goods and services. Over the course of the design and
development of the ISS there have been a number of changes in the
planned contributions of the various Partners. NASA, executing its
responsibility for overall management and coordination, has led the
Partnership through the requisite changes and adjustments. As the ISS
has evolved, changes have occurred on a number of smaller scale items
and, most notably, on a larger scale when the Russian Federation joined
the Partnership in 1993. The ISS is a partnership, with all Partners
dependent on the performance of the others. NASA has embarked on a
five-point effort to reform and revitalize the NASA ISS Program. This
plan is premised on research requirements driving the ISS vehicle
configuration. We have, with the Heads of the ISS Cooperating Agencies,
agreed to a Program Action Plan for the remainder of calendar year 2002
that will allow for multilateral endorsement of an option path to meet
utilization and research requirements. This option path will address
NASA's demonstration that it has regained programmatic cost control,
the timing of research requirements on orbit, as well as budgetary
requirements and constraints, while recognizing NASA's prerequisite
coordination with the Administration and Congress.
space shuttle
Question. What are NASA's current plans for and cost of upgrading
the shuttle?
Answer. Current plans include the following for upgrading the space
shuttle:
Safety upgrades
The Cockpit Avionics Upgrade Increment 1 (CAU) will enhance crew
situational awareness and reduce crew workload by providing automated
control of complex procedures. The fiscal year 2003 President's budget
estimate of total funding is $442 million. The Preliminary Design
Review for CAU Increment 1 was held the week of April 22, 2002.
The Advanced Health Management System Phase I (AHMS) upgrade to the
Space Shuttle Main Engines (SSME) will provide improved real-time
vibration monitoring of the SSME and will provide improved engine
anomaly response capabilities. The fiscal year 2003 President's Budget
estimate of total funding is $55 million. The first flight of AHMS
Phase I is scheduled for 2004
Friction Stir Welding (FSW) increases External Tank (ET)
reliability by improving weld joint strength, weld margins, and
fracture toughness, FSW also enhances process control. In addition,
this project decreases ET production time and cost and is an
operational demonstration of large-scale use of FSW technology. The
total funding is $21 million. The first production use on an ET will be
in April 2003.
Main Landing Gear (MLG) Upgrade improves tire designs that could
allow for higher landing speeds and increases in cross winds and
landing load limits. It will also mitigate obsolescence issues and
improve margins for pressure leakage and colder temperature
environments. The tire improvement project received the authority to
proceed in May 2002. The fiscal year 2003 President's Budget estimate
of total funding is $11 million.
Industrial Engineering For Safety (IES) Upgrades identify and
reduce risks to ground operations personnel and flight hardware by
optimizing human-system interfaces. The IES project will also enhance
maintainability and improve overall processing operations of flight
hardware and vehicle systems. Total funding is estimated at $90 million
Supportability Upgrades
Long Life Alkaline Fuel Cell (LLAFC) upgrade modifies cells of the
Shuttle's existing stack to lengthen corrosion path, reduce reactant
temperatures, upgrade external seals and insulator plate, and modify
regulator housing to eliminate aluminum corrosion. The total cost for
this upgrade is $28 million. The new hardware will be available for
installation into the fleet on an attrition basis starting in 2005.
Solid Rocket Booster (SRB) Range Safety Command Receiver--Decoder
(CRD) upgrade eliminates a criticality 1 failure mode, decreases
destruct reaction time, mitigates obsolescence of key components, and
enhances maintainability. The total cost for this upgrade is $5
million. New hardware will be available for installation into the
booster fleet in early 2003, with first flight expected in 2004.
SRB Altitude Switch Assembly (ASA) upgrade is a pressure-sensing
device to initiate SRB recovery sequence (one unit per SRB). The ASA
upgrade eliminates an escalating failure rate and a poor repair record
and improves fault tolerance and reliability. The total cost for this
upgrade is $4 million. New hardware will be available for installation
into the booster fleet in early 2003, with first flight expected in
2004.
Reusable Solid Rocket Motor Nozzle/Case Joint J-Leg upgrade
eliminates potential for hot gas intrusion into the joint and
eliminates significant time and effort expended evaluating hot gas
pass-throughs. The total cost for this upgrade is $9 million. First
flight for the improved joint insulation design is targeted for 2004.
NASA is currently assessing the Space Shuttle supportability and
upgrade candidates, ground support equipment supportability and upgrade
candidates, and infrastructure supportability and upgrade candidates.
The primary objective of this activity is to understand options to
maintain safe space shuttle operations through 2020, should NASA need
to fly the Shuttle until that time. No decisions have been made to fly
the Shuttle beyond 2012.
Question. What is the impact on these plans since the shuttle will
only be flown four times a year in support of the International Space
Station?
Answer. The limit of four Shuttle flights a year applies only to
ISS missions. NASA retains the flexibility to fly additional missions
if the benefiting party (NASA enterprises/DOD/Commercial) provides
funding. Currently, there are no impacts to the existing Shuttle
upgrades.
Question. What is the status of NASA's efforts to solve the
agency's space shuttle-related human capital challenges?
Answer. NASA is making key investments in recruiting, training, and
retaining a dedicated and skilled workforce. At the end of fiscal year
1999, OSF undertook an assessment of its staffing requirements at the
field centers. Our internal assessment of core civil service workforce
requirements at the four Space Flight Centers revealed that full-time
equivalent (FTE) targets would have to be adjusted upwards. In late
December 1999, each Center was directed to address critical Space
Shuttle Program (SSP) workforce shortfalls. The objective was to hire
employees to support flight safety and the Space Shuttle Upgrades
program, including addressing critical skill shortages. Since January
2000, we have seen our Space Shuttle Full Time Equivalents (FTE) levels
grow from a fiscal year 1999 base of 1819 to a planned fiscal year 2002
level of 1986. The SSP has made significant progress in addressing the
skills imbalance identified in 1999; however, like other programs it
has been impacted by normal attrition. Having completed two consecutive
years of hiring, our fiscal year 2003 hiring efforts will target
critical skills.
Question. NASA has convened an independent business review team to
evaluate market potential, financing and indemnification issues
associated with transitioning the Shuttle to private industry. With the
uncertainty associated with how long the Shuttle will operate under a
competitive sourcing scenario, how can this team develop a reasonable
financial assessment?
Answer. NASA commissioned RAND to assemble a business review team
consisting of representatives from across the private sector (business
management, marketing, finance, insurance, safety, and academia) to
evaluate the various business models that could be considered to
competitively source Space Shuttle operations. For each proposed
business model, RAND defined the conditions and requirements necessary
for the business model to be financially viable. This will enable NASA
and the Administration to fully understand the level of commitment
(including required policy and regulatory changes) necessary if they
choose one of these business models or a variant option. To ensure the
financial viability for each business model, the President's fiscal
year 2003 Budget lays out key criteria for Space Shuttle competitive
sourcing proposals, including financial viability within the Shuttle's
planned retirement in 2012.
Question. Is the review team considering the possibility of private
industry accepting the Shuttle fleet only if maintainability upgrades
have been made at NASA's expense?
Answer. The issue of who pays for maintainability upgrades is tied
to the years of contractor commitment needed and will be considered in
NASA's competitive sourcing analysis.
Question. At one time, NASA was considering privatizing one of the
Orbiters. What was the reason why this was not pursued?
Answer. In 1996, United Space Alliance (USA) was given the
opportunity to ``sell'' one Shuttle flight to commercial customers. USA
pursued this offer, but, was unable to find sufficient commercial
market demand to underwrite the flight. If a market does not exist for
one flight, then the concept of privatizing an entire Orbiter for
commercial purposes is unrealistic. It is important to note that
privatization is a mechanism distinct from competitive sourcing, which
could or could not include privatization of some portion of the Space
Shuttle fleet or infrastructure.
Question. NASA recently announced a decision to move space shuttle
maintenance from California and consolidate space shuttle operations at
Kennedy Space Center facilities. Reportedly, the decision was made
after ``years of study'', and will save ``millions of dollars''. What
is the estimated cost saving? What is the analytical basis for the
estimated cost savings? Will the facilities used to house the
maintenance activities be renovated existing facilities or new
construction? To what extent has the cost of providing the facilities
been included in any analysis justifying the move? To what extent have
all the costs to terminate maintenance activities in California been
included in any analysis justifying the move?
Answer. The estimated cost savings is $30 million. The JSC Systems
Management Office independent cost/risk assessment is attached as
Enclosure 2. Additional independent cost assessments were performed
(see Enclosure 3). All three assessments indicated that cost savings
would be realized in moving OMM from Palmdale to KSC.
The Orbiter modifications in Florida will use existing facilities
and there are no plans for renovation or construction of new
facilities. OMM at Palmdale is conducted in a government owned facility
and the government will retain it. USA and Boeing are conducting
studies to determine the best location to complete the Space Shuttle
work that currently remains at Palmdale, CA.
space launch initiative
Question. NASA and the Space Launch Initiative Program Office did
not conduct a cost estimate prior to initial contract awards in May
2001. At this time an independent cost estimate for total program costs
has not yet been conducted. What is the timeframe for completing an
independent cost estimate for the Space Launch Initiative program?
Answer. An independent group, the Space Launch Initiative Cost
Credibility Team, formed in February 2002, has been chartered to review
the current state of cost effectiveness for development, production,
and operations in the aerospace industry and to formulate
recommendations for applying the findings to the life cycle cost
estimates for the next generation of RLVs. The team includes members of
the MSFC SLI program office, MSFC Systems Management Office (SMO), NASA
IPAO, Department of Defense, Aerospace Corporation, Rand Corporation,
Institute for Defense Analysis, and the COTRs for each Integrated
Architecture team
The team is collecting the data from each industry-led architecture
development team to serve as the basis for the initial estimates. The
preliminary estimates will be available to support a Non-Advocate
Review (NAR). The estimates for full-scale development cost will be
directly dependent upon the results of the systems requirements review
process and the awards from the RFP currently scheduled for late next
calendar year.
Concurrent with the SLI Independent Cost Team, the Systems
Engineering and Integration Office is developing a ``bottoms-up'' cost
and schedule estimate on the basis of the system design fidelity. The
systems engineering review process factors in comprehensive budget
estimates, detailed project schedules, and business and performance
plans, against the goals of safety, reliability, and cost, in addition
to overall technical feasibility. This approach forms the basis for the
investment decisions in the 2nd Generation RLV program's risk reduction
activities.
Question. How are you measuring progress toward achieving full-
scale development decision in fiscal year 2006?
Answer. We added the word ``decision'' in the text of the question
because SLI has never planned to have Full-Scale Development (FSD) of
the 2nd Generation RLV by fiscal year 2006, but rather an FSD decision
by fiscal year 2006--the critical milestone facing the Agency. SLI is
on track to provide the necessary scientific and technological data
required to design, evaluate, and formulate realistic plans leading to
a FSD decision in 2006. NASA is pursuing priority investments for
designing the 2nd generation system, maturing critical subsystems to
technology readiness levels, and developing credible cost and
performance estimates.
Question. In light of NASA's problems in controlling costs on
previous programs, what will you do to ensure that the agency
adequately defines requirements and adequately manages the program
within established cost guidelines?
Answer. As outlined in the strategic plans for SLI, the program
continues to refine the Level I requirements and design reference
missions in order to maintain focus on the Full Scale Decision by
fiscal year 2006. Comprehensive top-to-bottom systems engineering and
the cost-control process ensure that the Government gets what it pays
for by measuring technical progress against the schedule at regular
intervals. The cost-to-benefit ratio must prove a wise investment;
gated procurements provide built in ``off ramps'' to discontinue
efforts after a period of performance, as well as ``starting gates'' to
add new tasks to fill technology gaps and spur competition. The
research funded must be directly relevant to SLI goals to reduce the
technical and business risk of developing a new RLV system. In addition
to the multiple internal reviews and analysis teams, the requirements
are also reviewed by an external group. The External Requirements
Assessment Team (ERAT) was chartered to provide senior-level advice and
recommendations to MSFC on this program. Specifically the ERAT will
provide an independent assessment of NASA's requirements development
processes and resulting documented requirements. The ERAT is further
chartered to recommend specific refinement (if necessary) of the
program's goals and objectives.
The 2nd Generation RLV External Requirements Assessment team
reports to the Manager of the 2nd Generation RLV program office at the
NASA, Marshall Space Flight Center. The team is supporting all relevant
reviews and requirements development activities required to provide a
detailed assessment of the processes and resulting documented
requirements.
The process of narrowing architectures completed a major
milestone--the Interim Architecture and Technology Review--in the
second quarter of fiscal year 2002. The next phase will continue to
focus space transportation system designs from many concepts to several
of the most promising candidates to go forward into more detailed
development. As technology trade studies are focused and validated
through a rigorous systems engineering process, the two merge again in
the Systems Requirements Review milestone, anticipated in the first
quarter of fiscal year 2003. This further narrows the field to a select
few designs and defines which technologies require further investment
to enable the eventual winner to be built and become operational. In
this way, the Space Launch Initiative is reducing the risks inherent in
an advanced research and development program of this magnitude, while
fostering a fair business environment for industry and ensuring the
wise use of valuable resources.
In conjunction with the numerous technical requirements reviews,
SLI has implemented a disciplined Earned Value Management (EVM) process
across all projects. EVM is implemented on the SLI contracts consistent
with NPD (NASA Program Directive) 9501.3, ``Earned Value Performance
Management''. The EVM reports are specified within each contract and
are reported to the Program Manager on a monthly basis.
Question. The X-37 is to serve as a platform for integrated flight
demonstration of reusable space system technologies thus advancing
technologies to reduce risk to the overall Space Launch Initiative
program. Is NASA providing adequate funding to support the X-37 program
through the aerodynamic drop tests in fiscal years 2004 and 2005?
Answer. The X-37 continues to serve as a one of multiple platforms
for integrated flight demonstrations of reusable space system
technologies thus advancing technologies to reduce risk to the overall
Space Launch Initiative program. The X-37 program is currently planned
through an atmospheric drop test, scheduled to begin in 2004, to
demonstrate approximately 18 imbedded technologies. Funding for the X-
37 in fiscal year 2004 timeframe will be contingent upon the final
evaluations of the current NRA 8-30 Cycle II.
space launch initiative reserves
Question. In fiscal year 2002, each Space Launch Initiative project
included five percent in reserves. By 2nd quarter fiscal year 2002, the
reserves have been significantly depleted.
What was the basis for determining the adequacy of a 5 percent
allowance for SLI reserves? What are the plans for replenishing the
reserves and what impact will this have on program risks?
Answer. The program allocated an initial 5 percent reserve to each
project based upon the contracts awarded from NRA 8-30 Cycle I. In
addition to the project reserve allocation, the program carries
approximately 15 percent reserve each fiscal year. Each project can
request funds from the program reserves through the Risk Management
Board, chaired by the Program Manager, as required. The program level
reserves are allocated by the Program Manager consistent with program
priorities and assessment of each task's associated risk to achieving
the overall program goals and objectives.
contract management/integrated financial management program
Question. GAO has reported that NASA's contract management is a
continuing area of high risk, because the agency lacks effective
systems and processes for overseeing contractor activities. For
example, in a recently issued report on International Space Station
cost limits, GAO found that NASA was unable to provide auditors with
detailed, transaction-based data to support the dollars obligated for
the space station, and did not have support for the actual cost of
completed space station components--either in total or by subsystem or
elements. As a result NASA is not able to re-examine its cost estimates
for validity once costs have been realized. A key effort to address
these weaknesses is the implementation of a new integrated financial
management system. Implementation of the system and its integration
with full cost accounting have been delayed for several years, however,
because of significant development and implementation problems. NASA
has started its third attempt at developing such a system, after having
spent $180 million over 12 years on two failed efforts. Until the new
system is operational, performance assessments relying on cost data may
be incomplete.
After two failed attempts, what is your expectation for fully
implementing the Integrated Financial Management System (IFMS)?
Answer. We are currently on schedule for implementing all eight (8)
modules comprising the IFMS. To date, the Travel Manager, Resume
Manager and Position Description modules are in various stages of
Agency-wide deployment and the rollout of our Core Financials module
pilot (at Marshall Space Flight Center) is on schedule with a ``go
live'' date of October 2002. The remaining four (4) modules, Budget
Formulation, HR, Integrated Asset Management (IAM), and Contract
Administration (CA) are also on schedule for rollout over the next
thirty six (36) months.
Question. What lessons learned from the previous attempts do you
plan to apply to increase the probability of success on the current
effort?
Answer.
--Use COTS software
--Use a phased approach for module rollout
--Involve the end-users early into the deployment process
--Drive the change management process as an integral part of the
transformation
Question. What type of management attention are you providing to
this effort?
Answer. After Safety, the Administrator has made the successful and
accurate implementation of the Integrated Financial Management System
the primary goal. In addition, he has hired a Special Assistant who is
the Program Executive Officer of IFM and reports directly to him. He
has also directed a re-focus of the field centers to include financial
analysis to be complete with the implementation of the IFM program.
Question. What is the estimated completion date for fully
implementing the IFMS?
Answer. December 2005 for all eight modules. Resume Management was
implemented in January 2002, Position Description in August 2002, Core
Financials will be fully implemented in June 2003, Budget Formulation
in February 2004, Human Resources, Integrated Asset Management and
Contract Administration are currently scheduled for December 2005.
Question. What are the total estimated costs to develop and
implement the IFMS?
Answer. The PCC number is $644.8 million (fiscal year 2001 through
fiscal year 10). Details are:
[Dollars in millions]
Amount
Fiscal year:
2001.......................................................... $76.7
2002.......................................................... 73.3
2003.......................................................... 85.1
2004.......................................................... 91.2
2005.......................................................... 90.8
2006.......................................................... 48.2
2007.......................................................... 67.0
2008.......................................................... 37.5
2009.......................................................... 37.5
2010.......................................................... 37.5
Question. What are the advantages and risks for NASA to accelerate
progress on developing the IFMS?
Answer. The IFM will give the tools to NASA necessary to manage in
a timely and efficient its finances. So far, the IFM implementation is
on schedule and any additional acceleration analysis will include a
detailed risk identification and mitigation strategy comparable to the
one adopted for the Core Financials module.
Question. Do the centers have the resources and knowledge to
implement the IFMS?
Answer. Yes. They are working in very close coordination and
concert with the IFM program office.
Question. How will NASA's new financial management system change
the way NASA tracks and uses cost information for activities such as
estimating and controlling costs, performance measurement and making
economic trade-off decisions?
Answer. IFM will provide NASA with timely, accurate and highly
detailed and correlated financial information capable of supporting
both full-cost accounting requirements and program and project level
performance analysis. It will help shift the financial management focus
of the Agency from ``spending to budget'' to ``managing to cost'' by
providing the necessary information for effective decision support in a
timely, user-friendly and reliable environment.
Question. Given the fundamental changes in NASA's financial
management, how will NASA manage the cultural and workforce changes
needed for the project to succeed?
Answer. NASA is keenly aware that one of the major success factors
related to implementing a new Agency-wide system like IFM resides in
transferring as quickly as possible the ``ownership'' of the new system
and its related processes from the Project Office to its ultimate
constituencies. In parallel to the software technical implementation,
the Agency is scheduling the related change management activities
following a timetable closely coupled with individual user/constituency
feedback.
Question. What other steps will you take to enhance oversight of
contract management activities?
Answer. The appointment of a Program PEO and the competitive
sourcing of future module, such as Payroll, focusing on ``best of
Breed'' and e-government guidelines will enhance contract management
oversight.
workforce issues
Question. Between fiscal year 1993 and fiscal year 2000, NASA
experienced a 26 percent civil servant reduction. The downsizing skewed
the age distribution of NASA's workforce and contributed to critical
skill shortages. More people in the workforce are over 60 than are
under 30, and there is concern about the prospect of large numbers of
future retirements. Since the completion of downsizing in fiscal year
2000, NASA has shifted its focus to workforce revitalization and
restructuring.
What progress has NASA made toward mitigating critical skill
imbalances and reversing adverse workforce demographic trends?
Answer. NASA has taken, and continues to pursue, efforts to address
Agency workforce issues, including skill imbalances and adverse
workforce demographic trends.
To help us better manage the existing workforce and enable better
strategic decisions about future workforce needs, the Agency has
undertaken an initiative to develop and implement an Agency-wide
integrated workforce planning and analysis capability that will permit
us to track the distribution of NASA's workforce across programs,
capture critical competencies and skills, and allow an analysis of gaps
between current and desired states.
The Agency is very focused on addressing the adverse workforce
demographic trends it faces, including the shrinking S&E pipeline, lack
of diversity within that pipeline, and NASA's aging workforce. In order
to reshape and reconstitute the workforce for the future, NASA Centers
are re-establishing recruitment networks and rebuilding the once
extensive Co-operative Education Program. The Agency will continue to
use these programs, as well as the Presidential Management Intern
Program, the Federal Career Intern Program, and other student
employment programs as tools for entry-level hires.
NASA uses available financial incentives to attract and retain a
workforce that has the right skills for the future and is
representative of the Nation's diversity. For example, NASA Centers
will offer starting salaries above the minimum rate of a grade and when
appropriate offer recruitment bonuses to attract, and retention
allowances to retain, needed talent. Use of these incentives has
increased in the recent past--a trend the Agency expects to continue
because of an increasingly competitive job market and high cost of
living surrounding some NASA Centers. The Centers are now also able to
repay student loans as a way to attract or retain employees.
The National Recruitment Initiative study, completed in January
2002, was created to develop Agency-wide hiring strategies and tools
for NASA's current and future science and engineering recruitment
needs. Information gathered was used to develop recruitment
enhancements that focus on the candidate instead of the hiring process;
leverage partnerships and alliances with universities; and coordinate
Agency-wide recruitment opportunities and outcomes. In addition, the
Agency's automated resume submission process enables applicants to
apply for jobs using an on-line service called NASA Staffing and
Recruitment System (NASA STARS). We recently added an on-line
notification system that allows individuals to be automatically
notified of new vacancies that may be of interest to them.
Given current workforce demographics, particular attention must be
focused on assuring the Agency captures and makes available the wealth
of expertise and experience the current workforce possesses--as well as
that which resides outside the Agency in similar organizations--to aid
in developing the next generation of project/business managers and
leaders. Accordingly, NASA has identified an ``improvement initiative''
to ensure training and development programs build needed competencies,
including more effective incorporation of knowledge sharing and
mentoring in the development of employees.
To help ensure a continuing pipeline of future talent, NASA has a
number of programs, K-12 through post-graduate, to encourage students
to pursue science, math, engineering, and technology studies. The
Agency has made education a core mission and is pursuing a more
coordinated management approach that will further enhance our reach and
improve our performance in the education area. In addition to those
efforts, NASA is working to improve the linkage between these
``feeder'' programs and projected workforce requirements.
We face challenging times as we reconstitute and reshape our
workforce for the 21st century. While we continue to use our existing
flexibilities, they are not entirely adequate. To help us address the
challenge head-on, in May 2002, we recently forwarded to Congress a
series of legislative provisions dealing with human capital. These
provisions will complement the Administration's Managerial Flexibility
Act, and we look forward to working with the Committee and Congress to
ensure that these essential tools are enacted into law this year.
Question. What barriers impeded NASA from achieving proper staffing
levels?
Answer. The rigidity of Federal workforce restructuring,
recruitment and compensation laws and rules impede NASA's ability to
respond in an agile and efficient manner to mission or program changes
and workforce trends. NASA needs additional flexibilities and
authorities to address its human capital challenges.
NASA must reshape and reconstitute its current workforce to address
its skills imbalances and lack of depth in critical competencies. The
buyout and early retirement authorities are very useful tools to
facilitate downsizing, but management must be able to use them for
restructuring and reshaping (not just downsizing) and be able to target
them on the basis of skills and occupations.
Financial incentives are needed to attract and retain a world-class
workforce and avoid a sudden drain of talent and corporate knowledge
that could result from the departure of too many key employees at
critical points. More competitive and flexible recruitment, relocation,
and retention bonuses would address this need. Other incentives, such
as the authority to offer new employees the same travel and
transportation benefits available to permanent employees who transfer
to other duty locations would make a difference when recruiting new
employees for positions in high cost areas.
Federal recruitment and placement processes are overly cumbersome
and time consuming. As a result, NASA loses highly qualified candidates
to the private sector, which can extend more lucrative offers much more
quickly. Streamlining these processes will enable NASA to respond more
quickly and effectively to workforce changes and compete more
successfully with the private sector for talent. Among some of the
suggested changes include:
A streamlined hiring authority for severe shortage and critical
needs positions.
A more flexible term (time-limited) appointment authority. Term
appointments, which currently are limited to 4 years, often are used to
support scientific and technical projects and programs. The completion
of such projects often is dependent on the technology, so their
duration may extend beyond the original anticipated date--and beyond 4
years. NASA needs the authority to make/extend a term appointment for
up to 6 years. In addition, the process of converting term employees to
permanent must be simplified. Doing so is likely to make term
appointments more attractive to potential applicants and thereby
provide a more robust labor pool from which to draw.
Question. What is the status of the agency-wide workforce planning
system NASA is developing, and what is its relationship to the
Integrated Financial Management Project? How will the new system assist
the agency in making strategic decisions about future workforce needs,
including the size of the workforce and the knowledge, skills, and
abilities needed to carry out agency operations?
Answer. As mentioned previously, we are implementing a three-phase
plan for developing an improved workforce planning capability at the
Agency level. This effort began in fiscal year 2002 and is scheduled
for completion in fiscal year 2005. The plan focuses on the
competencies required and those possessed within the NASA workforce.
Ultimately, we plan to use the Human Resources (HR) capabilities of the
IFM enterprise software to integrate workforce planning with other
planning processes in the Agency.
Initially, we have had the Centers update an inventory of
competencies in their civil service and contractor workforces. We are
refining that data and improving our competency definitions. We will go
back to the Centers later this year to get input identifying specific
competency gaps related to NASA program needs. Simultaneously, we are
working on standardizing and extending the use of a competency
management system model devised at the Kennedy Space Center. A team has
begun work on this model, which will provide the common framework
needed across all the Centers to identify competencies and workforce
needs. This framework will be used to configure the HR module in the
IFM system. The new IFM HR software will give us the capability, for
the first time at the Agency level, to associate skills and
competencies with positions and with employees. It will further enable
us to associate employees with the programs and projects on which they
work. This will give us the information needed to plan and target
hiring and training to the needs of the programs and agency operations.
next generation space telescope
Question. NASA's current plans are for the Hubble Space Telescope
to receive one more servicing mission and then to operate it until 2010
or until subsystem failures render the Observatory inoperable. The
schedule for the Next Generation Space Telescope (NGST)--an observatory
that will enable NASA to estimate the total mass in galaxies even in
non-luminous regions due to sensitive infrared capability--has been
extended. NASA has acknowledged that delays are due to a number of
factors, including foreign partner concurrence and the performance of
an improved instrument cost estimate. Down select to a single prime
contractor is currently scheduled for this fiscal year.
Uncertainty in the details regarding the transition from the Hubble
to the NGST is not unlike that associated with the transition from the
Shuttle to a replacement Reusable Launch Vehicle. Indeed, in both the
case of the Hubble and Shuttle, we are a long ways away from an
operational replacement system, costs for the replacement are
uncertain, and decisions need to be made in short order if additional
upgrades to extend the life of the current system are to be cost-
effective.
As the NGST schedule is extended, is it prudent to develop a
contingency plan that will enable Hubble to operate beyond 2010? Has
NASA developed such a plan? If so, what is the range of costs
associated with possible contingencies? Are skill shortages a concern
among HST staff in light of possible operations beyond 2010? Is
sufficient time being allotted for testing to ensure that NGST's needed
technologies--such as lightweight optical structures, new generations
of infrared detectors, and energy-efficient cooling techniques--will
operate successfully when launched?
Answer. We currently plan to launch NGST in 2010. It is important
to note that NGST and HST look at different portions of the
electromagnetic spectrum, so even in the event that NGST slips, trying
to keep HST going past 2010 wouldn't ``make up'' for the delayed
science. This is not to say that astronomers interested in HST visible/
ultraviolet data would not be interested in NGST infrared data, but it
is worth noting the difference. Therefore, because there is no pending
``data gap'' to mitigate, we have not developed a contingency plan to
extend Hubble's operational life.
It is also important to point out that the amount of archival data
from Hubble is immense and could easily keep the scientific community
occupied for years. In fact, one of our most important discoveries from
Hubble over the past year--the existence of ``dark energy'' that pushes
galaxies apart--resulted from archival data, not from a recent
observation. Even if there is a delay in NGST development or if HST's
planned operational life is unexpectedly shortened, NASA plans to
continue to provide grants to researchers to make use of archival data
from Hubble.
aeronautics research
Question. NASA's fiscal year 2003 Budget Estimates says that:
``U.S. competitors are targeting aviation leadership as a stated
strategic goal. Without careful planning and investment in new
technologies, near-term gridlock, constrained mobility, unrealized
economic growth, and the continued erosion of U.S. aviation leadership
could result''.
Mr. Administrator, I too am concerned about the apparent loss of
U.S. aviation leadership. While NASA expresses concern, its budget
request seems to say otherwise. How else could you interpret the
decreasing funding trends in aeronautics research? Take ``Breakthrough
Vehicle Technologies'' for example, a component of the Vehicle Systems
Program. Fiscal year 2001 and fiscal year 2002 appropriations were
$84.4 million and $83.2 million respectively. The fiscal year 2003
request is for $61.9 million. Does this trend mean that the continued
erosion of U.S. leadership has stopped?
Answer. During fiscal year 2001 and fiscal year 2002, the budget
for the Breakthrough Vehicle Technology project included a task
associated with 3rd generation reusable launch vehicles unrelated to
aeronautics technology. During the fiscal year 2003 program
restructuring to provide more focus on aeronautics, this work ($20.5
million) was appropriately consolidated with the Space Transfer and
Launch Technology program. The fiscal year 2003 NASA request for
aeronautics work within the Breakthrough Vehicle Technology project has
increased over the fiscal year 2002 request.
Question. The Aerospace Technology Enterprise Plan issued in April
2001 is NASA's blueprint for a new era in Aerospace for the United
States. Focusing on the goal of pioneering technology innovation, I am
struck by the apparent absence of key markers that would demonstrate
NASA's resolve. Is this indicative of a void in the Nation's strategic
approach to aeronautics research?
Answer. NASA is in the process of defining metrics for its
pioneering technology innovation goal. NASA's Office of Aerospace
Technology is working with its partners and customers in the NASA
Enterprises to establish definitive objectives and metrics for this
goal. The absence of the metrics is not an indication of a void in the
Nation's approach to aeronautics research. For example, NASA's
strategic plan has established quantitative metrics for aviation safety
as follows: technology development to enable an 80 percent reduction in
fatal accident rates by 2007, and a 90 percent reduction by 2022.
Similar quantitative metrics have been established for aviation noise
and emissions reduction, and capacity and mobility improvements.
space shuttle safety/astronauts
Question. Richard Blomberg, who recently completed his term as
chairman of an independent panel that oversees human space flight
safety at NASA, told the House Science Committee: ``In all the years of
my involvement, I have never been as concerned for Space Shuttle safety
as I am right now.'' Is this country on the verge of another Challenger
tragedy? What is NASA doing to allay Mr. Blomberg's concerns?
Answer. The Space Shuttle is safe to fly. The recent discovery of
the flow liner cracks exemplifies the risk adverse nature of the
Shuttle team. For the future, NASA is currently assessing Space Shuttle
supportability and upgrade candidates for hardware, infrastructure and
obsolescence, and reviewing human capital investment required to
operate the shuttle beyond 2012. The primary objective of this activity
is to understand options to maintain safe Space Shuttle operations
through 2020 should Agency planning for a transition to a second-
generation vehicle by 2012 change. No decisions have been made to
extend Shuttle operations beyond 2012.
Question. Last year, your predecessor was quite concerned about the
prospect of ``tourists'' on the space station. But now NASA and the
other space station partners have agreed to allow Russia to send
``spaceflight participants'' to visit the space station regularly.
Another one--a millionaire from South Africa--is up there now, and
several more candidates are waiting in the wings. Do you consider this
an appropriate use for the world-class research facility that we're
building? Is this what NASA means by ``space station
commercialization''? What are NASA's plans for flying non-professional
astronauts either on the space shuttle or the space station?
Answer. The International Space Station (ISS) is a partnership
venture, where each partner has rights associated with activities
utilizing the resources and capabilities that they contribute to the
venture. As such, the Russian partner has the right to utilize their
portion of the ISS to accommodate ``spaceflight participants'' whom
they choose to sponsor and transport to the ISS. In general, each
partner selects candidates for its own ISS crewmembers based on its own
criteria and procedures. The ISS partnership has agreed on a set of
criteria and processes to be used by all ISS partners when assigning
their professional astronauts/cosmonauts or spaceflight participants as
ISS (Expedition and Visiting) crewmembers. This document addresses the
requirements for candidate crewmembers in the following areas: general
suitability, medical requirements, behavioral suitability, linguistic
ability, crew code of conduct, and training requirements.
NASA has no plans for flying non-professional astronauts
(``spaceflight participants''), either on the Space Shuttle or the ISS,
and does not envision any consideration of such individuals until
assembly of the ISS is completed (``US Core Complete''). Any future
consideration to fly spaceflight participants on the Space Shuttle or
the ISS would only be considered if it were deemed to be in the
``national interest.''
Question. Do women astronauts have the same opportunities as their
male counterparts? We have heard that NASA's decision to curtail
funding of a ``small torso'' spacesuit severely limits the number of
women who can be assigned to space station crews. Is that correct? What
percentage of the women in the astronaut corps currently cannot be
assigned to space station crews because of the spacesuit issue? If
women are not part of the long duration crews on space station, how
will data be acquired on women's adaptation to the space environment to
ensure they can be included on trips to Mars, for example? How much
money will NASA save by not building that version of the spacesuit?
What scientific research objectives will not be achieved--particularly
in understanding human adaptation to the space environment--because
there are so few women on space station crews?
Answer. NASA's anthropometric criteria for astronaut candidates are
intentionally broad to allow us to select from the nation's best and
brightest, regardless of gender. Naturally, all astronauts are not
going to be qualified for all the possible roles on a mission, with
respect to their size or other characteristics.
It is important to note that only EVA suits, which are only used
for space walks, are in any way limiting which astronauts can fly on
Shuttle missions. The Shuttle spacesuits for launches and landings
accommodate all astronauts. While the small EVA suit could affect 31
women astronauts in the current astronaut corps, only three are
currently impacted for future missions. These three women have yet to
be assigned to a mission, but they will likely be assigned within the
next year. Given a recent change in policy that allows astronauts to be
assigned to ISS Expedition crews even if they are not EVA qualified, it
is now possible for these three women astronauts to qualify for an ISS
Expedition mission.
As far as the other 28 women astronauts potentially affected,
fifteen can be accommodated in the medium EVA suit. One recent graduate
of Astronaut Candidate training has yet to be evaluated for EVA suit
sizing requirements. Seven female astronauts are not eligible for EVAs
regardless of suit size. Four of these seven women are on inactive
status and have already completed multiple space flights as mission
specialists or pilots. The other three have been assigned mission-
critical roles as Shuttle pilots or as a mission commander. Of the
remaining women astronauts, five have already had multiple flight
assignments in mission-critical roles, such as Robotic Manipulator
System operators, and have been instrumental in International Space
Station (ISS) assembly operations. Deferral of the development of the
small EVA suit will not eliminate opportunities for assignment to ISS
flights since all long-duration crewmembers do not require EVA
qualification. The length of the EVA suit shoulder determines who can
wear the existing suits. Some male astronauts are too big for the extra
large suit just as some women are too small for the medium EVA suit.
Thus far, many women and men have trained and qualified in the medium,
large, and extra large EVA suits. Women astronauts have performed
significant EVAs in support of the ISS assembly within the past year
most recently, Dr. Linda Godwin and Col. Susan Helms.
NASA recognizes that the current EVA suit has limitations,
including size constraints and interchangeability, which we hope to
improve through further evolution in suit design and configuration. The
next generation of EVA suits that we develop will improve functionality
for all users and will also accommodate a broader range on both
extremes of the anthropometric spectrum, small and large.
We must emphasize that NASA has not terminated the small EVA suit,
although its certification and production have been deferred in favor
of higher funding priorities. Even if the development of the small suit
resumed immediately, it could not be ready for use during the assembly
phase of the ISS, when the demand for EVA is at its peak. In addition,
operational problems would still exist since the small EVA suit parts
are not compatible with the other suits.
mergers in the aerospace industry
Question. Has there been any impact on competition in NASA
contracting because of mergers in the aerospace industry?
Answer. Mergers in the aerospace industry have reduced the number
of competitors for NASA contracts. Despite these changes, however, NASA
has experienced an increase in the percentage of competitive contract
actions from 75 percent in fiscal year 1997 to 81 percent in fiscal
year 2001. In spite of a relatively flat budget over the last several
years, the percentage of dollars awarded competitively has also
increased from 61.9 percent in fiscal year 1997 to 64.1 percent in
fiscal year 2001.
Question. Is competition less fierce today than, say five years
ago?
Answer. There is no indication that competition among contractors
vying for work with NASA is any less fierce today than it was five
years ago.
Question. If so, is NASA paying more for products and services?
Answer. To the extent that we obtain competition for NASA business
as noted above, we believe that the prices are reasonable and
reflective of the marketplace.
Question. Should additional mergers such as Northrop Grumman's
proposed merger with TRW be discouraged?
Answer. In general, NASA defers to the Departments of Commerce and
Justice to evaluate potential mergers. We believe each proposed merger
should be reviewed on a case-by-case basis in cooperation with those
Departments. NASA does not anticipate any adverse impact from the
pending Northrup Grumman/TRW merger.
nuclear propulsion
Question. When do you expect nuclear propulsion for planetary
probes to be ready to fly? You have said that we should wait until
nuclear propulsion is available to send a probe to Pluto because it can
get there without a gravity assist from Jupiter, and will be able to
conduct longer term studies of Pluto once it arrives. Assuming your
nuclear systems initiative is funded as planned for the next 5 years,
when will that nuclear-propelled Pluto probe be launched? Will it
arrive at Pluto by 2020, when scientists say the atmosphere is likely
to collapse?
Answer. The proposed Nuclear Systems Initiative research and
development program could enable the flight of a nuclear fission-
powered spacecraft early in the next decade. A mission to orbit Pluto
would take approximately 10 years to reach and orbit Pluto. There is
currently no consensus among the scientific community as to when or
even if Pluto's atmosphere will freeze out. Nuclear electric propulsion
reduces or eliminates the need for planetary gravity assists, and would
therefore not have launch date constraints.
The abundant on-board power and propulsion enabled by the nuclear
fission system (more power than approximately 250 watts electric from a
radioisotope power system) would permit the spacecraft to orbit the
Pluto/Charon system, rather than simply fly-by, allowing significantly
more time for detailed survey of Pluto/Charon through the use of remote
sensing instruments. Additionally, the abundant energy would enable a
much greater scientific data-return communications link to Earth
compared to what could be achieved with a radioisotope power system.
status of russian commitments
Question. What is the status of Russia fulfilling its commitments
to the space station program? The cost overruns on NASA's part of the
program have overshadowed concerns about Russia's ability to fund
construction and launch of Progress and Soyuz spacecraft. Are you
confident that Russia will meet those commitments? If not, what remedy
do you propose?
Answer. Russia continues to meet flight commitments including the
provision of Service Module life support systems and launch of Progress
and Soyuz spacecraft for re-supply, reboost, and crew escape functions.
It is our expectation that Russia will continue to meet these
commitments.
Question. Of the space station segments Russia promised to build--
such as the Science Power Platform, docking units, and Research
Modules--which do you still anticipate will be constructed? If Russia
does not provide the Science Power Platform, will we have to provide
electrical power for their segment of the space station? If so, will
they be charged for that resource?
Answer. The Science Power Platform (SPP) as originally envisioned
has not been completed due to budget shortfalls and design
uncertainties. Although some hardware has been built, it became clear
that the original design would be too heavy for launch on the Space
Shuttle. Most work on the project was halted, in order to allow time to
re-design the SPP. The primary consequence of not building the SPP as
planned is to reduce the amount of power available to the Russian
Segment of the ISS.
Relative to additional assembly hardware to be delivered, progress
on these elements has also been limited due to funding issues. However,
like the SPP, the primary consequence of not building out the full
Russian segment is an impact to the Russian segment utilization.
NASA has received alternative Russian design options for technical
consideration. However, NASA is not in a position to discern whether
Russia will be able to address the financial issues that continue to
delay progress on their plans to build out the Russian segment nor the
specific elements that will ultimately be deployed to orbit.
Question. What is the status of discussions with Russia about
providing additional Soyuz spacecraft to enable the space station crew
size to grow to six? How much do you think Russia will charge the ISS
partnership for two additional Soyuzes per year?
Answer. NASA is currently not engaged in discussions with the
Russian Aviation and Space Agency (Rosaviakosmos) on the subject of
additional Soyuz vehicles to increase the size of the International
Space Station (ISS) crew from three to six. A decision on the most
effective crew size and associated crew return requirements is not
expected until NASA completes its five-point assessment to reform and
revitalize the ISS Program. The five areas of this assessment are:
science priorities, engineering development and deployment, cost
estimating and analysis, mission and science operations, and
international partner coordination.
Moreover, NASA is legally prohibited from purchasing ISS-related
goods and services from any entity or element of the Government of the
Russian Federation under Section 6 of the Iran Nonproliferation Act of
2000 (INA) (Public Law 106-178) unless the President determines that
Russia meets specific nonproliferation conditions. NASA has made it
clear to Rosaviakosmos that any potential future purchase of crew
return services would have to be within U.S. non-proliferation
regulations, including INA.
With USG interagency approval, NASA did discuss the feasibility of
extending/expanding the use of Soyuz crew return vehicles with
Rosaviakosmos in February 2002. Rosaviakosmos indicated willingness and
ability to supply additional Soyuz spacecraft if NASA is able to
provide lead funding at least 2 years prior to delivery. NASA did not
enter into negotiation regarding the price of Soyuz crew return
vehicles. The price would depend on the number of vehicles required and
delivery schedule. Any requirement for additional crew return
capability will come from the ongoing five-point NASA assessment of the
ISS Program. This plan is premised on research requirements driving the
ISS vehicle configuration. We have, with the Heads of the ISS
Cooperating Agencies, agreed to a Program Action Plan for the remainder
of calendar year 2002 that will allow for multilateral endorsement of
an option path to meet utilization and research requirements. This
option path will address NASA's demonstration that it has regained
programmatic cost control, the timing of research requirements on
orbit, as well as budgetary requirements and constraints, while
recognizing NASA's prerequisite coordination with the Administration
and Congress.
orbiter major modifications
Question. Your decision to move Shuttle ``Orbiter Major
Modifications'' (OMM) work to Florida from California has stimulated
some controversy.
Kennedy Space Center's press release announcing the transfer stated
that performing all the OMM work in Florida ``would also minimize
risk.'' What risks are minimized by moving this work to Florida? What
risks are increased? For example, it would seem that there are
increased risks in having the entire shuttle fleet in the same
geographical location. Wouldn't it be prudent to keep at least one
orbiter in a different location in case terrorists or natural disasters
strike Kennedy Space Center?
Answer. Several risk factors are lessened by the transfer of OMM to
KSC: reduced risk of transporting orbiters cross-country from Palmdale
to KSC; reduced Shuttle manifest impact planning risk; reduced Shuttle
ground operations risk, reduced overall costs per year ($30 million);
reduced risk of ``redoing'' OMM work. KSC is constantly improving its
security procedures to protect the nation's Space Shuttle and ground
facility assets, with an accelerated improvement effort in light of the
events of September 11. While we must remain vigilant for future
missions, past experience has shown that the orbiters are very well
protected at KSC. Placing a single orbiter at a different location in
order to protect it from a natural disaster or terrorist attack will
only increase the strain on NASA security forces to protect more than
one location.
Question. How many people in California will lose their jobs? How
many people in Florida will be hired? Are you or your contractors
trying to motivate workers to move to Florida so their experience is
not lost?
Answer. Due to the periodic nature of the OMM's in Palmdale, the
workforce is hired/terminated based on need. Utilizing synergies of a
common workforce, United Space Alliance's plan uses 235 workers. This
workforce is a combination of current and new hires. In addition, 30
Boeing engineers for design-engineering support will be used.
Management has been drawn from the existing Orbiter Element and Ground
Operations Element teams.
In September 2001, and March 2002, United Space Alliance held an
``Open House'' in Palmdale for the purpose of interviewing and
extending offers to Palmdale employees to relocate to KSC in Florida.
Approximately 300 attended the September event, and 90 attended the
March event. USA has extended 25 relocation offers, of which 15 have
been accepted. Currently there are no other offers pending to
California workers to relocate to Florida. It should be made clear that
the Palmdale workforce was laid off after the completion of the last
OMM, not as a result of the transfer to KSC. This is a cyclical process
that occurs after each OMM at Palmdale. Many of the laid-off Palmdale
workers have secured other positions at area aerospace firms.
Question. What is your current estimate of how much money will be
saved by this transfer on an annual basis for the next 5 years? What is
your current estimate of the costs (including costs to the Federal
Government, State government, local government, and contractors)?
Please specify any facilities that must be built, renovated, or
upgraded and the associated costs.
Answer. The proposal to conduct OMM at KSC was based on a plan to
use existing facilities, in their current configuration. The current
savings per year due to the relocation is $30 million. NASA and United
Space Alliance will perform OMM's in existing Orbiter Processing
Facilities (OPF). Since OMMs are a labor-intensive effort and we are
using existing facilities at KSC, there are no costs associated with
this transfer. A declining flight rate has alleviated processing
dependencies on facilities.
Question. When will the transfer be completed and the Palmdale, CA
facilities closed?
Answer. The transfer has already begun and closure is dependent
upon the USA & Boeing evaluation of remaining work at Palmdale.
Question. How has your approach to shuttle security changed since
the September 11 terrorist attacks? Much attention has been given to
your decision not to announce shuttle launch times until 24 hours in
advance. Since all shuttle flights, with one exception, are to the
space station, and launch times can be calculated easily based on the
space station's orbit, is it correct that the reason behind your
decision was related to that one exception--this summer's launch of
STS-107, which includes an Israeli astronaut? If so, will you return to
your prior practice of announcing launch times well in advance of a
launch after STS-107 is completed?
Answer. Subsequent to the events of September 11, KSC received
approximately $45 million to enhance security. While this work is in
progress, a variety of security efforts have already been instituted.
No, the decision not to announce shuttle launch times until 24 hours in
advance is not related to STS-107--this decision was initiated
immediately following the events of 9/11 and will remain in effect
until NASA's security policy changes.
radiation exposure
Question. In addition to the spacesuit issue, another factor that
may limit women's participation in space station crews is radiation
exposure limits. For example, your guidelines are that women who make
their first long duration 6-month space flight at age 45 cannot make
another long duration flight, but a male of the same age can make two
such spaceflights. You note that the data on which you base your
guidelines is quite dated, and new research could change those
guidelines. Do you anticipate that your Space Radiation Initiative will
demonstrate that women can participate in space missions to the same
extent as men? If not, what are the implications for women
participating in trips to the Moon or Mars? In general, your radiation
exposure guidelines limit most men and women to either one or two 6-
month spaceflights over their lifetime. Is that a ``showstopper'' for
human trips to Mars?
Answer. The safety of flight crews is NASA's highest priority. As
such, we strive to ensure that our astronauts are protected from undue
hazards, including excessive exposure to radiation. NASA's standards
for radiation safety are based on recommendations from the National
Council on Radiation Protection and Measurements (NCRP) and approved by
the Occupational Safety and Health Administration (OSHA). Several
radiation limits are used to deal with specific exposure types. The
current NASA radiation limits are based on NCRP guidelines issued in
1989. New guidelines were published in 2000 and recommended for
adoption by the NASA Aerospace Medical Advisory Board; procedures for
implementation of that recommendation are being developed.
The most restrictive radiation limit is the career radiation
exposure limit. This limit has been set to ensure that the probability
of fatal cancer during the individual astronaut lifetime is not
increased by more than 3 percent above the average lifetime risk for
the U.S. population (which is approximately 20 percent). This risk
limit is imposed equally for both male and female astronauts of all
ages. The radiation exposure of astronauts is controlled to ensure that
this risk level is not exceeded. However, the risk associated with a
given radiation dose is different for men and women, mainly due to
radiation-sensitive organs in women. The risk is also dependent on age.
For this reason, the cumulative career radiation dose allowed for women
is less than that for men, and the cumulative career radiation dose
allowed for younger astronauts is less than that allowed for older
astronauts of either gender.
The probability of fatal cancer is calculated using measured
radiation doses. Current knowledge is not sufficient to establish this
relation accurately, and therefore there are large uncertainties in the
risk prediction for a given radiation dose. For this reason, large
margins of safety are required to ensure that the risk is not exceeded.
At a given radiation dose, the risk may be as much as three times
greater than the average estimate. Therefore, in order to have
reasonable confidence that the risk limit is not exceeded, further
radiation exposure needs to be restricted after a radiation dose
corresponding to only a third of the dose corresponding to a 3 percent
risk limit.
The Space Radiation Initiative will contribute in several ways to
demonstrate that women can participate in space missions to the same
extent as men. The increased knowledge gained from the research will
reduce the uncertainty in risk prediction, allowing narrower safety
margins to be applied. This means that higher dose and, therefore,
longer duration missions for both men and women astronauts can be
accepted with the same confidence that risk limits will not be
exceeded. The Space Radiation Initiative will also provide
significantly better data in physics and biology. This data will lead
to improved utilization of spacecraft components for radiation
shielding. Finally, development of a significant radiobiology research
community will allow NASA to participate in, and benefit from the
breakthroughs in biology. Even minor advances could lead to significant
benefits for NASA, as well as society at large. For example,
improvements in biochemical diagnostic techniques that lead to earlier
diagnosis and lower fatality rates for breast cancer would
significantly reduce the risk attributable to radiation in a given
mission. Even further along the horizon, biological intervention to
mitigate risks of all fatal disease is a realistic hope. A science
community attuned to NASA mission requirements will be able to
translate its benefits into meeting NASA requirements.
The current limitations on astronauts are applicable to the Space
Station. A Mars mission would have greater uncertainties, and require
greater margins of safety. The Space Radiation Initiative is necessary
for Space Station and is intended to be sufficient to assure three 180-
day missions for men and women astronauts within adequate safety
margins. The advances of the Initiative are necessary for a Mars
mission, but are not sufficient. Better prediction of biological health
effects, including effects other than fatal cancer, is required for a
Mars mission than for a stay on Space Station. In addition to
optimization of spacecraft design for radiation shielding properties it
will be necessary to design shielding for a planetary surface; a new
concept of radiation shielding may also be developed for a long
interplanetary transit. A Mars mission with only our present knowledge
is likely to result in radiation exposures that exceed current NASA
limits. However, it is reasonable to assume that, on the time scale
needed for the execution of a Mars mission, adequate progress could be
made to enable a Mars mission to proceed without exceeding safe risk
limits.
earth science enterprise
Question. How has your strategy changed regarding commercial remote
sensing applications?
Answer. With the advent of successful deployments of commercial
remote sensing satellite systems starting in 1999, NASA assessed that
it was appropriate to expand its role in the area of Earth science
applications. In January of this year, NASA released the ``Applications
Strategy: 2002-2012'' for the Earth Science Enterprise (ESE). The focus
of this strategy is on national applications that extend and accelerate
the operational use of the results of NASA research and development in
Earth science and technologies. A copy of the Strategy is available at:
http://www.earth.nasa.gov/visions.
The Applications Strategy indicates a role for commercial remote
sensing in serving NASA research purposes in understanding the Earth
system. The Applications Program undertakes the functions of evaluating
potential sources of commercial data, verifying and validating the data
and information technologies, and then benchmarking their use for
scientific research and applications development and demonstration.
NASA proactively develops opportunities for using commercial data;
e.g., partnerships with industry and leveraging investments in new
products and services to serve the research agenda. The Landsat Data
Continuity Mission (LDCM) is a public/private partnership enabling the
private sector to provide data to meet a government specification for
the Earth science community. This multi-year development effort sets a
precedent for government requirements that may be served by the private
sector on a sustained basis into the future.
Question. For example, what is the significance of your decision to
change the Commercial Remote Sensing Program (CRSP) at Stennis Space
Center to the Earth Science Applications Directorate?
Answer. The title was changed to reflect the broader role of the
Earth Science Applications Directorate (ESAD) at Stennis in support of
the ESE. The ESAD contributes to the systems engineering functions of
evaluation, verification and validation, and benchmarking associated
with the use of commercial remote sensing data, and for the use of NASA
results in the national applications. ESAD serves in leading many of
the crosscutting solutions associated with the systems engineering to
enable the effective use of Earth science predictions and observations
to be assimilated into decision support tools, including assessments
and decision support systems. This approach is consistent with the
approach of the Climate Change Research Initiative (CCRI) and other
Federal agencies in addressing national needs for Earth science results
to be deployed effectively to serve our citizens.
Question. Your fiscal year 2002 budget estimate states that the
goal of the CRSP program was to ``accelerate the development of a
preeminent U.S. remote sensing industry,'' but your fiscal year 2003
budget documents state that, as of fiscal year 2002, that no longer is
a strategic objective. What has changed, and why?
Answer. The U.S. remote sensing industry has grown in capacity
recently, as manifested by the successful launches of commercial remote
sensing satellites and successful operations of a number of airborne
commercial remote sensing systems.
The ESE recognizes the importance of systematically enabling the
results from NASA's research and development of aerospace science and
technology for increasing the understanding of the Earth system to
enable decision support systems to serve our Nation. In January of this
year, NASA released an Applications Strategy to accomplish the purpose
of serving national applications (including energy forecasting, public
health, agricultural competitiveness, homeland security, coastal
management, etc.). The strategy directly addresses the NASA mission
objective of ``understanding and protecting our home planet''.
The National Academy of Sciences (NAS) is currently reviewing the
Strategy, and their report is due to be released this fall. The NAS,
the Earth Systems Science and Applications Advisory Committee (ESSAAC),
the CCRI and the U. S. Global Change Research Program) (USGCRP) have
all documented the importance of effectively enhancing and expanding
the benefits of our increased understanding of the Earth system (in
general) and NASA ESE results (specifically) to beyond the traditional
scientific community. The ESE Applications Program's focus is to
accomplish this purpose.
Question. When do you expect the Administration to release its
Climate Change Research Initiative and make decisions about the future
of the EOS program?
Answer. The Climate Change Science Program Office (CCSPO), led by
Dr. James R. Mahoney, the Assistant Secretary of Commerce for Oceans
and Atmospheres, and the National Climate Change Technology Initiative
(NCCTI) group is coordinating the review of multi-agency climate
research activities called for by the Administration in its fiscal year
2003 budget submission. The inventory began in early 2002 and was
completed in July 2002. The CCSPO integrated the information submitted
into a single document shared among the Federal agencies. Draft
criteria for the evaluation of the research programs have been iterated
among the agencies and CCSPO. The other affected agencies are currently
presenting their climate change activities to the CCSPO, and it is
expected that all presentations and the overall synthesis of this
information should be completed in time to affect the fiscal year 2004
President's budget submission to Congress.
The CCSPO's interagency review process of agency activities is
expected to produce recommendations about plans for individual agencies
from CCSPO to both the agencies and those components of the Executive
Office of the President that oversee the overall budget process and
content. However, any CCSPO recommendations will occur only after all
agencies have made their presentations, and subsequent deliberations
are carried out, which should be completed in August. NASA strongly
believes that our EOS follow-on plans are critical to the success of
the CCRI and the USGCRP, especially meeting the goal identified in the
draft memo on criteria for program review to ``Enhance observation and
monitoring systems to support scientific and trend analyses and to
improve decision support tools.''
Question. Have you received any indication so far as to what EOS-
Follow On projects will be approved? If so, what are they?
Answer. The fiscal year 2003 budget continues funding for three
Follow-On missions and one study for a mission:
National Polar-orbiting Operational Environmental Satellite System
(NPOESS) Preparatory Project (NPP) ($153 million)
Landsat Data Continuity Mission (LDCM), which is being planned as a
data purchase ($45 million)
Ocean Topography ($32 million)
Study of a potential Global Precipitation Mission (GPM) ($8
million)
All other EOS follow-on missions are on hold until the CCRI review
is complete.
orbital debris
Question. There have been conflicting accounts of NASA's plans
regarding continuation of the office at Johnson Space Center that
analyzes orbital debris. As space becomes more littered with debris, it
would seem that more attention, not less, needs to be given to this
type of analysis. Are you planning to close that office? If so, why?
Answer. The NASA Orbital Debris Program Office, based at the
Johnson Space Center, is not being closed nor does NASA plan to
eliminate capabilities in this area. Customers that benefit from the
expertise of the Orbital Debris Program Office are being identified to
assure that requisite funding is maintained to meet those customers'
requirements.
dreamtime
Question. Press reports indicate that the space station
commercialization agreement you signed with DREAMTiME has not been
successful. What is the status of that agreement? What difficulties
were encountered? What does the failure of DREAMTiME imply for other
space station commercialization concepts?
Answer. Dreamtime's funding to support its performance of the
Agreement was largely based upon obtaining venture capital and
anticipated revenues from Internet business ventures. With the general
downturn in interested businesses beginning shortly after the Agreement
was signed, Dreamtime was unable to raise the funds necessary to
perform a number of its principal obligations under the Agreement.
Because this was a collaborative agreement, rather than a normal
procurement agreement, and NASA did not have significant resources at
risk, NASA chose to give Dreamtime every opportunity to perform.
However, by early this year it became obvious that Dreamtime's
situation was unlikely to improve, and NASA elected to proceed to
terminate under the terms of the Agreement. The termination became
effective on June 1, 2002. The failure of Dreamtime was due to
circumstances specific to the nature of its proposed business
operations, and does not suggest that other types of space station
commercialization initiatives would suffer a similar fate.
reusable launch vehicle
Question. You are developing technologies both for a ``2nd
generation'' reusable launch vehicle (RLV), and a ``3rd generation''
RLV. According to your briefings, you expect a 2nd generation RLV to be
operational by 2012, and a 3rd generation RLV by 2025. Why develop a
2nd generation RLV that would be obsolete in such a short period of
time? Would it be more cost effective to invest in the 3rd generation
technologies, and continue to rely on the shuttle until they are
available? What cost-benefit studies have you conducted of the trade-
offs between doing 2nd and 3rd generation programs versus focusing on
the 3rd generation technologies while continuing to rely on the
shuttle? Please provide those studies to the committee.
Answer. The 2nd Generation RLV program is pursuing the development
of key technologies that are essential for future generations of RLVs.
Specifically, the 2nd Generation RLV program is maturing technologies
such as thermal protection systems, avionics, operations, long-life
engines, and integrated vehicle health management systems. The 3rd
Generation RLV program relies on these advancements as a foundation in
its pursuit of breakthrough technologies required to help America
maintain leadership in space far into the foreseeable future. NASA
believes the risk associated with achieving 3rd Generation RLV
technology breakthroughs is currently too high to justify maintaining
the decades old Shuttle fleet until these breakthroughs occur. NASA's
ISTP (Integrated Space Transportation Plan) lays out the agency's space
transportation strategy for improving mission affordability and safety
over multiple generations of launch vehicles.
Over the past few months, NASA has conducted a number of reviews to
assess the Integrated Space Transportation Plan (ISTP), which includes
the Space Launch Initiative (SLI), the Space Shuttle hardware and
infrastructure upgrades, and the longer-term 3'd Generation Reusable
Launch Vehicle Program. The ISTP update has incorporated the ongoing
reviews of the Space Shuttle Program, and has included an assessment of
the timetable for a multipurpose vehicle to serve crew transfer and
crew return functions. The ISTP review will conclude shortly. The
outcome of the ISTP update will be a roadmap for future investment
decisions including phasing decisions concerning Shuttle, 2nd
Generation and 3rd Generation systems.
______
Questions Submitted by Senator Larry E. Craig
nuclear systems initiative
Question. NASA has proposed a new program, the Nuclear Systems
Initiative, that will spend about $800 million over 5 years to develop
new space nuclear power systems.
The funding level in fiscal year 2003 would be about $125 million.
How would this initial increment of funding be used?
Answer. This initial increment will fund initiation of the Stirling
Radioisotope Generator and Multi-Mission Radioisotope Thermoelectric
Generator development projects; both technologies are under
consideration for the 2009 Mars Smart Lander/Mobile Laboratory mission.
In addition, technology research and development for next-generation
power conversion for radioisotope power systems will be started via
competitive solicitations.
In the area of fission electric power and propulsion research and
development, fiscal year 2003 funding would be used to support four
principle areas: (1) electric propulsion research and development (via
competitive selection of several proposed approaches) for electric
thrusters that are about 10 times more powerful than those that have
been flown before (e.g. the Deep Space-1 ion electric thruster); (2)
power conversion research and development (via competitive selection of
several proposed approaches) for power conversion about 25 times more
powerful than what has been flown before (e.g. the SNAP-10A power
conversion system); (3) reactor research to investigate design options
for a fission reactor capable of supporting a nuclear electric
propulsion system (which could ultimately be used for expanded
exploration of the solar system); and (4) mission and spacecraft system
design studies to enable the selection of the optimal fission power and
propulsion technologies for expanded solar system exploration.
Question What will be the division of responsibilities between NASA
and DOE for this nuclear program?
Answer. The DOE is responsible for developing all civilian
technologies directly involving nuclear materials. Therefore, the DOE
is responsible for Stirling Radioisotope Generator and Multi-Mission
Radioisotope Thermoelectric Generator development, and for fission
reactor development.
NASA is responsible for power conversion and electric propulsion
research and development, overall spacecraft design and integration,
mission planning and design, and expanded scientific exploration of the
solar system using radioisotope and fission power and propulsion
systems.
Your testimony makes reference to the Naval Nuclear Propulsion
program, which has a proud history in the State of Idaho. The Naval
Reactors Facility in Idaho continues to receive all expended Navy fuel
cores for examination and storage.
Question. The Naval Reactors program operates under strict secrecy
requirements because of national security implications. Will that
environment of secrecy be a complicating factor in collaboration?
Answer. Any potential area of coordination or collaboration
involving the Naval Reactors program must and will attend to national
security requirements.
Because the NASA Nuclear Systems Initiative is in the early stage
of research, NASA and DOE are exploring available technical options to
assess their applicability to, and utility for, expanding the
exploration of the solar system using fission power and propulsion. At
present, it is too early to determine the optimal combination of
technologies for this task, and therefore too early to determine
whether Naval Reactors program technologies might be appropriate.
Question. NASA has traditionally worked with DOE's Office of
Nuclear Energy on space nuclear applications. Is NASA collaborating
with DOE-NE on the Nuclear Systems Initiative?
Answer. DOE has supported NASA for over 30 years to enable solar
system exploration, including exploration of the outer planets, using
radioisotope power systems (e.g., radioisotope thermoelectric
generators, or RTGs). This work has been accomplished by DOE through
its Office of Nuclear Energy (NE) or its predecessor organizations. DOE
has identified NE (specifically NE-50) as the lead for radioisotope
power system development (at present, this includes the Multi-Mission
Radioisotope Thermoelectric Generator, and Stirling Radioisotope
Generator). DOE has also identified NE (specifically NE-50) as the lead
for reactor system development planning.
We anticipate that our close relationship, built over several
decades of cooperation, will be a critical factor in the success of the
Nuclear Systems Initiative.
______
Question Submitted by Senator Ted Stevens
gilmore creek tracking station
Question. With the potential of the Gilmore Creek Tracking Station,
coupled with the other two facilities, cannot more be done to maintain
or upgrade our domestic satellite tracking capabilities and not ship
our Nation's meteorological satellite systems of the Department of
Defense, Department of Commerce (DOC) and NASA to a foreign country?
Answer. The Fairbanks, Alaska area hosts many satellite tracking
stations, including the National Oceanic and Atmospheric Administration
(NOAA) Tracking Station at Gilmore Creek and the NASA Tracking Station
hosted on the University of Alaska's Poker Flat research launch range.
There are commercial Datalynx and Universal Space Net stations, as well
as a station associated with the Alaska Synthetic Aperture Radar
Facility on the University campus.
NASA's Ground Network (GN) is composed of a mix of assets owned by
NASA and commercial service providers. The capabilities of NASA's and
associated commercial tracking stations are focused on supporting
science research missions rather than operational meteorological
satellites. The locations of NASA's tracking stations are driven by
mission needs related to on-board satellite data storage capacity, data
delivery latency, and orbit geometry.
Concerning the NOAA Fairbanks Command and Data Acquisition station
(FCDAS) at Gilmore Creek, Alaska, the station is now and will remain an
important capability to support multi-agency satellite programs.
Indeed, significant resources have been expended and additional
investments are planned in the future to maintain and upgrade NOAA's
FCDAS. A recent upgrade added the NASA Ground System Interface
Processing facility at Gilmore Creek, which makes the FCDAS a
telecommunications hub. The new capability sends data collected from
NASA's Earth Observing System (EOS) satellites to Goddard Space Flight
Center in Greenbelt, MD. This connects the NASA Poker Flats operations
to the FCDAS for initial processing of EOS mission data through local
fiber optic telecom links.
More broadly, the communications infrastructure in Alaska has
benefited from approximately $29.5 million in investments in the last 3
years alone. These include three new 13-meter antenna systems, signal
and data processing equipment upgrades and control software upgrades.
The upgrades added new commercial satellite communications systems to
receive and disseminate mission data to Department of Defense and
Department of Commerce operational weather users within the continental
United States.
______
Questions Submitted by Senator Pete V. Domenici
nuclear propulsion
Question. One of the highlighted programs in this year's submitted
budget, as well as in your testimony today, concerns research with
nuclear propulsion. The research necessary to conduct this research may
be able to be done through collaborative work with other Federal
agencies. As an example, the DOE labs in New Mexico have extensive
expertise in fission electric power systems.
How does NASA intend to ensure that expertise of the national
laboratories will be strongly incorporated into development of the
fission electric power systems that will be required by NASA?
Answer. The majority of this program will be competitively sourced,
and NASA fully expects that the national laboratories will propose to
lead or to team with industry for nuclear fission reactor research and
development.
Question. Can you explain further where the nearly $1 billion in
funding comes from and how NASA intends to proceed with research on the
feasibility and safety of nuclear propulsion in space?
Answer. The budget for the Nuclear Power and Nuclear Electric
Propulsion programs represents mostly new funding for NASA. There was
some rebalancing within the overall Space Science program to cover a
portion of this initiative; however, no Space Science missions were
cancelled to pay for this initiative. The nuclear electric propulsion
portion of this initiative will likely be a research program for the
near future, leading to engineering test components that could then be
developed for flight. During this stage, NASA will have the lead for
non-nuclear portions of the initiative, and will work closely with the
Department of Energy (who will have the lead for nuclear fission
reactor research) to research and develop the safe and effective
propulsion systems we will need to continue our exploration of the
solar system.
management effectiveness
Question. The Administration in its submitted budget has taken to
reviewing programs, throughout the Federal Government to see what is
being done effectively, and what is not. Two of NASA's highest profile
endeavors, the International Space Station and the Space Shuttle, for
safety upgrades, were assessed as being ineffective. The Mars
exploration was given only a moderately effective assessment, with a
comment that ``recovery from failures successful so far.''
What will NASA be doing under your leadership to make all of NASA's
programs more effective, and are these reforms addressed in your
proposed 2003 budget?
Answer. The President's Management Agenda is at the center of
NASA's efforts to make its programs more effective. In pursuit of this
Agenda, NASA has completed a pilot of its first agency-wide human
resources tracking system, increased the number of positions that could
be open to competition by 70 percent over its fiscal year 2000 FAIR Act
inventory; and developed an interim plan for competing up to 40 percent
of the positions identified as potentially commercial on its 2000
inventory. We have aligned our budget structure with program outputs
and prepared for full cost and performance budgeting in fiscal year
2004. We will be working this fall with the Office of Management and
Budget to review four major programs as part of the President's
Management Agenda in Budget and Performance Integration. Those four
programs will be the Space Shuttle, Space Station, Space Launch
Initiative, and the Mars Exploration Program.
As a major effort at removing internal barriers to program
effectiveness, NASA has devoted considerable effort to its Freedom to
Manage tiger teams. At the initiative of NASA staff and leadership,
numerous personnel authorities previously held at Headquarters have
been delegated to Center Directors; the number of overlapping Councils
and Boards has been reduced, and on-going efforts are aimed at
combining responses to numerous internal and external reviews.
The major management reforms being undertaken at NASA, such as
greater use of human resources flexibilities, competitive sourcing, e-
government initiatives, full cost accounting, and integrated financial
management, are designed to create a more efficient and productive
agency. This is accomplished by creating greater cost transparency
across the agency, lowering the transaction costs involved in
maintaining a competitive, diverse work force, and improving
productivity in creating more scientific and technological results and
research opportunities in line with NASA's Vision and Mission.
attracting and retaining scientists
Question. Many agencies within the Federal Government are going to
see large amounts of employees retiring from Federal service in the
next decade. There has also been difficulty within the Federal
Government to keep and attract scientists and employees with high
technical skills.
The National Space Grant College and Fellowship program is one of
the tools at NASA's disposal to help promote research at the
undergraduate and graduate education levels. This program is funded in
the President's request at $19.1 million. (The New Mexico Consortium is
ranked 8th in funding out of the 52 consortia nationwide.)
How is NASA working to keep its scientists at NASA, as well as
working to attract new scientific talent to come work for NASA?
Answer. NASA reduced its civil servant workforce during the 1990's.
This reduction along with little turnover in the scientist occupations
has significantly compounded the phenomenon of the ``aging'' NASA S&E
workforce. As these men and women choose to draw their successful and
productive careers to an end, NASA may experience a serious loss in
scientific competencies in addition to existing skills imbalances.
While NASA does, and will continue to, take advantage of existing human
resource flexibilities to recruit and retain needed talent, the current
retention incentives are not always adequate to retain employees with
critical skills. NASA is emphasizing strategic recruitment initiatives
and creating long-term ``pipeline'' interest in scientific and
engineering occupations to address skills imbalances.
Our recruitment strategy to increase interest in NASA jobs includes
personal networking and extensive networking with professional
associations and universities to increase awareness in interested
individuals of our NASA employment opportunities. As you mention, we do
have access to some of the leading scientists through our promotion of
research at the undergraduate and graduate education levels. We plan to
aggressively leverage our alliances by networking with principal
investigators at these colleges and universities to ensure that we have
access to the students who are working on projects through our research
and grant programs.
We have identified scientific professional associations and
established internet links on these associations' and universities'
website to our NASAJobs web site (http://www.nasajobs.nasa.gov/).
Adding instant access to NASAJobs from these websites will increase the
level of awareness of NASA employment opportunities in the scientific
community and will also serve as a catalyst to increase the number of
highly qualified scientists who apply for our vacancies.
NASA uses all available and appropriate financial incentives to
make competitive job offers, including recruitment bonuses, salaries
above the minimum rate of the grade, and repayment of federally insured
student loans. In offering jobs, we emphasize the entire Federal
package since our retirement, health, leave, and life insurance
programs are competitive with those offered by many private sector
companies. We also emphasize the other benefits we can offer, such as
flexible work schedules, family friendly programs, professional
development opportunities, and tuition support.
But the currently available tools are no longer enough. We are
faced with the convergence of several trends: a decrease in the number
of students entering the scientific and engineering fields, an increase
in competition for the S&E graduates from both the traditional
aeronautics private sector and new, non-aeronautics business sectors
(e.g., banking, entertainment) and the upcoming retirement wave
mentioned earlier. NASA is finding it increasingly difficult to attract
and retain the best and brightest S&E talent.
NASA needs more tools to enhance our current efforts and
initiatives to reshape and reconfigure our workforce. For example, we
need streamlined and flexible recruitment and employment processes,
recruitment and retention incentives that are flexible and meaningful
to ``fresh out'' and mid-level employees, and a position classification
and compensation system that is market sensitive and rewards
performance. We also need voluntary separation and early retirement
incentives not tied to a reduction in the workforce, but to reshape the
workforce; that is, to reallocate the slots to areas where they are
needed.
These tools are critical for NASA to compete successfully for
scientific talent in this increasingly competitive marketplace, and
they require legislation. For these reasons NASA earlier this year
submitted a series of legislative proposals to Congress and is working
with its oversight committees to secure their enactment.
SUBCOMMITTEE RECESS
Senator Mikulski. The subcommittee stands in recess until
next Wednesday, May 8, on which we will be taking testimony
from FEMA.
Mr. O'Keefe. Thank you, Madam Chair. I appreciate your
courtesy.
Senator Mikulski. Thank you.
[Whereupon, at 11:38 a.m., Wednesday, May 1, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MAY 8, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:35 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Kohl, Johnson, Bond, Shelby,
Craig, Domenici, and Stevens.
FEDERAL EMERGENCY MANAGEMENT AGENCY
STATEMENT OF JOE M. ALLBAUGH, DIRECTOR
ACCOMPANIED BY GEORGE OPFER, INSPECTOR GENERAL
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. Good morning, everybody. The subcommittee
of VA-HUD will come to order. This morning we are going to take
the testimony of Mr. Joe Allbaugh, the very able director of
FEMA, and we have many issues to talk about. First of all, we
want to acknowledge the tremendous role that FEMA has done in
the last fiscal year. Who knew what was going to happen to our
communities and to the United States of America. We know that
FEMA has responded to over 50 disaster declarations that have
ranged from the aerial terrorist attack on the United States of
America to a tornado in my own State.
We want to hear from the director of FEMA on what we can do
to be able to help FEMA continue to be first responders,
through prevention, readiness, response and recovery, we can
save lives, save jobs, and save our community.
Speaking as the Senator from Maryland, last week we were
once again reminded how important FEMA is to our country. An F4
tornado swept through three counties, Calvert, Charles and
Dorchester hitting a number of our communities now called La
Plata. I visited La Plata with my senior Senator and I will
never forget what I saw, destruction and devastation. As I
walked down St. Mary's Avenue, we saw the courthouse and across
from that we saw Delegate Van Mitchell's Value City business
just absolutely destroyed. Residential areas and parks
devastated, local banks destroyed. The Catholic church and
Catholic school and other churches, other schools and as the
Senator from Maryland I am going to do everything I can to help
those communities rebuild and recover.
The people of Charles, Calvert and Dorchester County should
know I am on their side as the Senator for Maryland. I am
making sure the Federal Government is an active part in the
rebuilding efforts. I talked to the county officials and all of
the counties to hear directly from them about their needs.
Today I want to thank President Bush for his very swift
response to this tragedy. He signed a disaster declaration
within 24 hours. We want to thank the President. Mr. Allbaugh,
we want to thank you and the very able FEMA team that rushed to
the aid of our State and local government. FEMA's role really
shows that they can count on FEMA.
This morning I want to go over some of the issues involved
with that and I am going to hear from him what the people are
doing, how the families need to connect to FEMA to get help.
What actions they can expect in short term and long term and
what can we do to start looking at recovery. As I visited La
Plata, I was once again struck by the heroism of our first
responders. Throughout southern Maryland, police, fire and
emergency workers risked their lives to save others. It is so
clear that we need to continue to support our first responders.
That is why I am going to do everything I can to provide the
$900 million for the program to give our firefighters the best
equipment and training. We have to look at how we are going to
spend the money.
We also, I think, need to be really committed to make sure
our first responders are all hazards, again whether it is a
terrorist attack or tornado, whether chemical incident, our
responders need to be ready. I am concerned that as we provide
more resources to fight the war on terror, we make sure that we
reinforce FEMA's role also in natural disasters.
Fifty disasters, not including September 11. It is amazing.
We want to hear what you do, what we need for your team and for
those at the local levels so that we are getting double value
for our taxpayers' dollars by being ready for all hazards, both
natural disasters and other attacks. We want to hear about
State preparedness as well. We also want to hear about your new
thinking on hazard mitigation. Of course, there is the issue of
flood modernization because so many Americans are hit by
floods. Just over this weekend in West Virginia and once again
FEMA had to respond, and I know you are very interested in
flood insurance. Issues we need to talk about in the beginning
of the year and that, of course, FEMA has been a partner in the
emergency food and shelter program which gives FEMA really high
marks for this program. So Mr. Allbaugh, we really want to
thank you for the job that you have been doing in keeping up
the spirit of reform that was started many years ago in both
reform and at the same time response. So we look forward to
hearing what you need and how we can show that by helping you
we are helping the American people. Senator Bond, do you wish
to have an opening statement?
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. I certainly do, madam chair. Thank you very
much and my welcome to Director Allbaugh as well. We have had
the pleasure of hearing the director testify on several
occasions this year regarding the President's proposal on
homeland security, and making FEMA the primary Federal domestic
agency. That is an important area, one that we are going to
have to address, but this is an important opportunity to focus
on the needs for FEMA in carrying out its more traditional and
primary responsibility in responding to natural disasters.
As we all know, since its founding in 1979, FEMA has been
the backbone of the Federal response to all types of hazards
through a comprehensive emergency management program of
mitigation, preparedness, response, and recovery. An area of
responsibility for FEMA that has not been discussed this year
as it has been overshadowed by the tragedy and horrific
terrorist events of September 11 and FEMA's new efforts in
developing a comprehensive homeland security strategy.
I believe generally that FEMA has been doing a very good
job in responding to the needs of States and localities, as
well as our citizens in harm's way. I know Senator Mikulski has
been very much involved and concerned as we all have been about
the swath of damage and death left by tornados in La Plata and
others. Those of us who see those tornados frequently know the
extent and the scope of the damage they can cause. Missouri
also has not had a good spring, ice storms in Kansas City late
January and February and more recently, severe storms and
tornados that struck Bollinger, Butler, Carter, Howell and
Madison Counties in late April.
We lost a 12-year-old boy from Marble Hill in those storms,
but the tragedy simply reinforced FEMA's ability to respond
quickly to national disasters. I have just been handed an
article in today's Cape Gerardo Southeast Missourian saying
Tornado Victims Have Trouble with Federal Aid. While others are
speaking, I am going to see what the problems are in Southeast
Missouri and I will share that with you later. But we do
appreciate the response of FEMA.
Nevertheless, a lot needs to be done as the chair has
already mentioned and that includes improving accountability
for disaster relief expenditures, revamping the flood insurance
program, streamlining disaster field operations and improving
the management of mitigation programs. FEMA is also proposing a
number of controversial reforms to the flood insurance program,
as well as a controversial new program for funding disaster
mitigation efforts that would replace several current
successful mitigation funding approaches. I guess you thought
we weren't paying attention. We are.
But I look forward to working with the chair, members of
the subcommittee and FEMA on these important issues, but
effective implementation, accountability with respect to the
disaster relief program and the flood insurance program are my
key priorities. They become even more important as we begin to
face a series of natural tornados throughout the Nation that we
have already discussed, and FEMA is already responding to major
disasters in 11 States. The year is still young. We want to
make sure that you have adequate resources to respond to what
nature does to us as well as the other problems we may have.
I would also ask that FEMA work closely with your FEMA
Inspector General. As I noted the appropriate expenditure of
FEMA funds accountability is key to FEMA's credibility and
effectiveness. And in particular, the Federal Government and
FEMA are dealing with really huge sums of money as we try to
rebuild the New York City portions destroyed on September 11.
There is great pressure to get FEMA money funds out quickly,
however, we have seen in the past that quick sometimes means
sloppy, and can result in excessive expenditures of tax
dollars. They say we need to do it right, and I think FEMA can
help make sure it is done right and I think the same is true as
FEMA winds down to Cerro Grande office in New Mexico. A lot of
it has gone up as the system, an appropriate system, has been
in place to make sure that the people who need it got it and
others did not.
I also want to make sure that FEMA is not strapped with so
many responsibilities that it cannot meet its primary mission
in responding to disasters. There has been so much focus on
homeland security and more recently on related new proposals
such as the CitizenCorps that I am concerned that FEMA's
disaster relief responsibilities may be forced to a back seat
to homeland security issues.
We need to ensure that FEMA is capable and committed to
meeting all of its responsibilities. FEMA needs to be balanced
in how it meets them. I know we on this subcommittee will want
to ensure that you, your staff had the funding and the
capabilities to meet whatever responsibilities are placed in
your portfolio. Thank you, madam chair.
Senator Mikulski. Senator Stevens? As a courtesy?
Senator Stevens. Thank you very much. I have no statement.
Senator Mikulski. Senator Shelby?
STATEMENT OF SENATOR RICHARD C. SHELBY
Senator Shelby. Madam Chairman, Thank you, I would like to
welcome Mr. Allbaugh to the committee. We had a nice
conversation about a lot of issues that I will bring up with
him in a few minutes publicly. We welcome you and look forward
to your testimony.
Senator Mikulski. Mr. Allbaugh, why don't you proceed to
address the committee.
Mr. Allbaugh. Thank you Madam Chairwoman, Senators Bond,
Shelby, Stevens. It is an honor to be before this committee
primarily because you have been strong supporters of our agency
over the years. I am pleased to come here today to talk about
three particular priorities. I have submitted for the record a
written statement and I will just take a few minutes, Madam
Chairman.
Senator Mikulski. Without objection.
Mr. Allbaugh. I will talk about three priorities in our
budget that deal first with FEMA and homeland security and part
of that is driven by our new responsibilities, visibility and
scope that has grown since 9-11. Two primary areas in homeland
security. The first responder initiative that the President has
talked so much about as well as myself and our new
responsibility for our Office of National Preparedness.
Management in the First Responder initiative will capitalize on
FEMA's great ability to expedite grant money out the door to
those who actually need it.
FIRST RESPONDER INITIATIVE
First, let me speak about the First Responder initiative.
$3.5 billion for planning, training, equipment and exercising
will focus on two particular areas within that.
Interoperability, both of individuals and communities. I
witnessed as you may have heard me say before individuals in
New York City passing notes back and forth, communications was
a disaster in and of itself. When it comes to personnel,
oftentimes individuals show up at a disaster who are not
properly trained, and put into harm's way, and thus putting
additional lives in jeopardy.
Second to that, is planning. We do not provide enough
assistance, in my opinion, for States and the local level in
the area of planning and exercise. We want to improve our intra
and interstate mutual aid agreements, which means that we need
to do a certain amount of resource typing. When one county
across the State calls for assistance from another county 100
miles away, we need to ensure that the assets that they are
calling for are exactly what they need and everyone understands
that.
I hope that the $3.5 billion will be a down payment for
years to come. There is no way, in one budgetary year, that we
can address all of the needs. And I know you all feel the same
way, quite frankly. This is a problem nationwide trying to
improve our infrastructure. $175 million in the supplemental,
which I will talk about in a minute, will be 100 percent money
to the States this year. From the $3.5 billion, we want to give
all States $5 million and distribute the remainder based on a
population formula.
Our supplemental funding request is critical, so that
States and communities can start to develop their plans now. We
will distribute the money down to the local level, but at the
same time, our Office of National Preparedness will be charged
with developing national standards to use that money. We
desperately need national standards. The central role of the
Office of National Preparedness is to be the focal point for
coordination for all Federal response activities.
In addition to developing those standards, will deal again
with equipment standards, interoperability, training standards.
We want to make sure that everyone knows the capabilities of
their neighboring responders and again to re-emphasize the
importance of mutual aid agreements.
ODP TRANSFER
Let me speak for a minute about the transfer that the
President has proposed from ODP to Justice to FEMA. It makes
sense. One, as I said earlier FEMA has a great history of grant
management. Last year alone we did $3.5 billion in grants. We
are on our way to $8 billion currently. We also want to
eliminate the redundancy in our Federal training programs. The
recipients of these training programs across the country are
the State and local individuals who are the first responders. I
want to make sure that there is uniformity in our training.
And lastly, I want to build upon the positive relationship
with our first responder community. Let me say, as a couple of
members have already addressed, that our new responsibilities,
our enhanced responsibilities, will not compromise our
responsibilities in natural disaster response management. That
is one of our core responsibilities. I know everyone is focused
on weapons of mass destruction, terrorism preparation, training
since 9-11, but at the same time, we have responded just since
Sunday evening, five disasters. Our core responsibility will
not fall away, which brings me to point number two of our
priorities.
PRE-DISASTER MITIGATION
It is the hazard mitigation grant program. The President
wisely has suggested in his 2003 budget for FEMA a new program
which will amount to $300 million in the first year, a
predisaster grant process. We want to be able to help
communities who have identified their risk before a disaster
hits. Right now, communities identify their risk and they sit
on the shelf at city hall until the disaster happens and we can
come in with post disaster mitigation. I want to make sure, as
the President does, that we can address these risks up front
prior to a disaster and at the same time keep our post disaster
mitigation intact. And this will require us, which we are in
the process of developing a competitive grant process as I said
to take effect before, any disaster that takes place. The third
component and third priority of our budget this year is another
mitigation program that the President requests.
FLOOD MAP MODERNIZATION
It is our flood map modernization project. Everywhere I go,
everyone, members in both houses, members from State
legislatures across the country, mayors, city council members,
all are asking about flood mapping. And quite frankly to solve
the problem it is a matter of money. We have historically been
given $5 to $15 million annually to address a billion dollar
problem. I think the President has wisely stepped forward,
stepped up to the plate, and asked the Congress for $300
million to update and digitize our current flood mapping
problem.
We can address this in a 3-year program to improve these
maps, and they are absolutely essential for better planning for
these communities and again identifying those risks up front.
The 3-year program at $300 million a year will essentially wipe
out our current backlog of flood mapping.
SUPPLEMENTAL APPROPRIATION REQUEST
Finally, let me take a moment to highlight FEMA's portion
of the supplemental appropriation request. The request totals
were $3.07 billion, $2.75 billion of which is requested for
further World Trade Center relief efforts, focusing on public
infrastructure. The other $326 million for planning and
assistance are broken down in the following ways. $175 million
for planning to first responders, $56 million for State and
local planning for emergency operations centers, $50 million
for Citizen Corps and $32.4 million for weapons of mass
destruction training, for the balance of our urban search and
rescue teams. As you know we only have six of our 28 USAR teams
that are WMD trained. I think it is inexcusable for our agency
not to go forward and fund the rest of the teams, the other 22
teams, to make sure that they are WMD trained and qualified. We
need to be prepared. We never know when an incident is going to
be taking place, and it is important that all 28 teams are
trained to the same standard.
THE FEMA TEAM
Those basically complete my, conclude my oral remarks. I
want the members to know that it is an extreme honor and
privilege for me to serve our President, to serve our country,
to be a part of a great FEMA team.
I am not the one that makes this thing work. It is the long
hours, the sweat, the toil, the sacrifices that FEMA employees
make, not only the full-time employees, but the disaster
assistance employees who are at each one of our open disasters
right now across the Nation and they number about 5,000 that we
have the ability to draw from. This is a tremendous
responsibility. It is our core mission and I am honored to be
in this position for a short period of time and I thank you for
the opportunity to be here today.
[The statement follows:]
Prepared Statement of Joe M. Allbaugh
introduction and background
Good morning Madam Chair, Senator Bond, and members of the
subcommittee. I am Joe Allbaugh, Director of the Federal Emergency
Management Agency (FEMA). Thank you for the opportunity to brief you
today on FEMA's budget proposal for fiscal year 2003.
FEMA is the Federal Agency responsible for coordinating our
nation's efforts to mitigate against, prepare for, respond to and
recover from all hazards. Our success depends on our ability to
organize and lead a community of local, State, and Federal agencies,
volunteer organizations, private sector entities and the first
responder community. We know whom to bring to the table when preparing
for a disaster and when a disaster strikes in order to ensure the most
effective management of the response and recovery effort. We provide
management expertise and financial resources to help State and local
governments when they are overwhelmed by disasters.
When I say ``we'' do that I'm talking, of course, of FEMA. FEMA has
a lot of Cal Ripkens; the folks that come to work each day and do their
job with skill and grace. I depend on those staff for their counsel and
advice due to the experience and perspective they possess.
But I am also referring to this Committee that has provided us so
much support, and the resources we need to do our job. You have a great
amount of experience--you have seen FEMA through the rough times and
the good times. In fact, a lot of those good times were partly a result
of your efforts, so I want to acknowledge that help and express the
thanks of our staff for that steady support.
As I explained, we don't profess expertise in every subject area,
but we do know whom to bring to the table. The best example of this
convening process is the Federal Response Plan (FRP). The FRP forms the
heart of our management framework and lays out the process by which
interagency groups work together to respond as a cohesive team to all
types of disasters. This team is made up of 26 Federal departments and
agencies, and the American Red Cross, and is organized into 12
emergency support functions based on the authorities and expertise of
the members and the needs of our counterparts at the State and local
level.
Since 1992, in all manner of horrific natural disasters like the
Northridge Earthquake and Hurricane Floyd and also in response to the
Oklahoma City bombing and the terrorist attacks of September 11, 2001,
the FRP has proven to be an effective and efficient framework for
managing all phases of disasters and emergencies. The FRP is successful
because it builds upon existing professional disciplines, expertise,
delivery systems, and relationships among the participating agencies.
FEMA has strong ties to the emergency management organizations--fire
service, law enforcement and emergency medical communities--and we
routinely plan, train, exercise, and operate together to remain
prepared to respond and recover from all types of disasters.
fiscal year 2003 request
First, I will outline our 2003 request. Then, after I've completed
that review, I will explain our recent request for emergency
supplemental funding for this fiscal year.
As you are aware, FEMA's budget request is for appropriations
totaling $6.44 billion. A significant increase from the 2002 budget,
the bulk of this funding is requested to dramatically enhance the
homeland security preparedness capabilities of our nation's first
responders. In addition, this budget will fully fund FEMA's core
operations for responding to disasters and continues to emphasize
empowerment and personal responsibility as they pertain to disaster
preparedness and mitigation.
national preparedness--homeland security responsibilities
The President has requested that FEMA receive $3.5 billion to
administer a major component of the Homeland Security efforts--the
First Responder Initiative. Grants based on this initiative will give
the first responder community--firefighters, police officers, and
emergency medical personnel--critically needed funds to purchase
equipment, train their personnel and prepare for a Weapons of Mass
Destruction (WMD)/terrorist incident. The Office of National
Preparedness (ONP) within FEMA will be responsible for administering
these First Responder grants.
Following the events of September 11, and in light of the funding
this Committee approved as part of the December 2001 Emergency
Supplemental, FEMA has staffed up and refined the mission and functions
of the ONP to fully support the budget initiatives of the President.
Some of the goals established by ONP for the First Responder
Initiative are as follows:
--Giving the first responder community critically needed funds to
purchase equipment, train their personnel and plan;
--Provide states and localities with the proper balance of guidance
and flexibility so that the funds are used in the local areas
where they are needed most;
--Establish a consolidated, simple, and quick method for disbursing
federal assistance to states and localities;
--Foster mutual aid across the nation so that the entire local,
state, federal and volunteer network can operate together
seamlessly;
--Create an evaluation process to make sure that all programs are
producing results and to direct the allocation of future
resources, and;
--Involve all Americans in programs to make their homes, communities,
states and nation safer and stronger.
ONP will first concentrate on developing a streamlined mechanism
designed to speed the flow of resources to the States and localities.
The $3.5 billion will be used to sustain the first responder activities
with a special focus on the following areas:
--Planning.--Support state and local governments in developing
comprehensive plans to prepare for and respond to a terrorist
attack;
--Equipment.--Allow State and local first responder agencies to
purchase a wide range of equipment needed to respond
effectively to a terrorist attack, including personal
protective equipment, chemical and biological detection
systems, and interoperable communications gear;
--Training.--Train firefighters, police officers, and emergency
medical technicians to respond and operate in a chemical or
biological environment;
--Exercises.--Support a coordinated, regular exercise program to
improve response capabilities, practice mutual aid, and assess
operational improvements and deficiencies.
We fully intend to keep the focus of this program at the State and
local level. The program will be run through and coordinated by the
States. States will be allowed to use up to 25 percent of the funds,
with at least 75 percent of the funds distributed to local
jurisdictions.
But we will also insist on the funds being based on comprehensive
planning. As a condition of receiving these grants, States will receive
plans from local jurisdictions, submit their own plans, and allocate
funding based on locally driven needs identified through various
assessments. The funding will have a matching requirement, and in-kind
matches will be allowable. This match can be part of the money that
States have spent to secure a facility for training, or the costs that
have been incurred paying overtime to employees who are providing
coverage for other employees participating in exercises or training.
The final component we will insist on at all levels--from FEMA to
the State to the local governments--is full accountability. We must
maintain the confidence of our citizens that the funds are being used
swiftly but wisely to provide increased protection for our nation.
transfer of the office for domestic preparedness to fema
Of the $3.5 billion funding request, $235 million represents the
President's request that the Office for Domestic Preparedness (ODP) be
transferred from the Department of Justice to FEMA. With this proposal
the President has shown true leadership in his willingness to address a
long-standing problem--the need for central coordination among the
myriad Federal programs dealing with terrorism preparedness.
Some forty Federal Departments and Agencies have been involved in
the overall effort to build the national capability for preparedness
and response to the consequences of terrorist incidents. Many of these
activities have been primarily focused on the development or
enhancement of Federal capabilities to deal with terrorist incidents,
including plans, personnel and physical security upgrades, and
specialized resources such as protection and detection technology and
response teams. Other Federal programs and activities are focused on
building the local and State first responder and emergency management
capabilities, to include the provision of resources and funding to
support planning, training, exercises and equipment acquisition.
Various independent studies and commissions have recognized the
problems inherent in this uncoordinated approach. Recommendations by
the Gilmore Commission, for example, stress the importance of giving
states and first responders a single point of contact for Federal
assistance for training, exercises and equipment.
At the request of the Appropriations Committees we recently
completed an ``Assessment of Federal Terrorism Preparedness Training''
report that we transmitted to the Committees last month. The study
found that Federal training is generally effective, but that it is also
fragmented and, in some instances, redundant. State and local officials
continue to be frustrated by the lack of a single coordinating point
through which they can obtain the needed training.
In the post-9/11 environment, we can ill afford to wage turf
battles that in effect protect the inefficiencies of the status quo. We
must instead focus on the merits of a proposal that seeks to address
duplication, shore up gaps, eliminate confusion and reduce
complication. As the attacks of September 11 have drawn much comparison
to the attacks of December 7, 1941, there is a forward to a book about
Pearl Harbor that has been brought to my attention that speaks of the
worst-case scenario in a government's preparation and response:
``Surprise, when it happens to a government, is likely to be a
complicated, diffuse, bureaucratic thing. It includes neglect of
responsibility but also responsibility so poorly defined or so
ambiguously delegated that action gets lost . . .
``. . . It includes the contingencies that occur to no one, but
also those that everyone assumes somebody else is taking care of. It
includes straightforward procrastination, but also decisions protracted
by internal disagreement. It includes, in addition, the inability of
individual human beings to rise to the occasion until they are sure it
is the occasion--which is usually too late,'' (Thomas Schelling,
forward to Roberta Wohlstetter's Pearl Harbor: Warning and Decision).
FEMA's core responsibilities are its all-hazard emergency
management activities involving preparedness, response, recovery and
mitigation. FEMA's involvement in terrorism preparedness and response
is based on statutory authorities, executive orders, and Presidential
Decision Directives (PDDs). As the designated lead agency for
consequence management, FEMA coordinates Federal disaster and emergency
assistance programs and activities to support state and local
governments in their preparedness and response efforts.
FEMA's role in planning for the response to and the recovery from
any type of disaster or emergency, including WMD/terrorist incidents,
is clear under the authority granted by the Robert T. Stafford Disaster
Relief and Emergency Assistance Act. Also clear is the fact that FEMA
is the lead Federal entity empowered by statute and executive direction
to facilitate and oversee the implementation of the national
preparedness effort as it applies to consequence management. This
includes the responsibility for ensuring that a coordinated and
comprehensive emergency preparedness and response capability exists
among Federal, State, and local governments for dealing with all
hazards, natural and man-made.
Lest there be any question about FEMA's commitment to our
communities or our ability to live up to the mission of ONP, we have
available upon request a chart that documents FEMA's long and
successful record of distributing grant monies to States and local
jurisdictions. Indeed, that track record and the relationships our
people have made with local communities around the country have made
FEMA the first federal point-of-contact for local First Responders for
many years.
citizen corps
In order to help Americans strengthen their communities, President
Bush tasked FEMA with overseeing the Citizen Corps. This initiative is
part of the overall effort of Freedom Corps, whose mission is to assist
individuals and communities with implementing Homeland Security
Programs in their areas.
Since September 11, 2001, Americans are more aware than ever of the
threat of terrorist acts on home soil. In the days following the
attacks we saw immediate and selfless volunteering, generous monetary
gifts, blood donations, and an outpouring of support and patriotism
across America. The President has understood the need for people to be
involved, to feel that they are making a contribution toward the health
and safety of their communities. Citizen Corps taps into those civic
desires through the organization and coordination of a lot of ongoing
efforts across the nation. Sustaining that spirit of volunteerism and
unity is crucial to defending the homeland.
FEMA expects that $230 million will be needed to help with the
Citizen Corps initiative. This broad network of volunteer efforts will
harness the power of the American people by relying on their individual
skills and interests to prepare local communities to effectively
prevent and respond to the threats of terrorism, crime, or any kind of
disaster.
The Citizen Corps will build upon existing crime prevention,
natural disaster preparedness, and public health response networks. The
Citizen Corps will initially consist of participants in the following
five programs:
--the Volunteers in Police Service Program--this unique program
provides volunteer support for law enforcement by tapping
volunteers to perform administrative and non-intervention
policing activities to free up officers to be out in the
community;
--an expanded Neighborhood Watch Program--will incorporate terrorism
prevention and education into its existing crime prevention
mission;
--the Medical Reserve Corps--currently practicing and retired health
care professionals will augment emergency medical response
resources during large-scale emergencies. These volunteers can
also support non-emergency public health needs of the community
throughout the year;
--Community Emergency Response Teams (CERT)--the CERT program trains
individuals in emergency preparedness and basic response
techniques to enable them to take a more active role in
personal and public safety; and
--Operation TIPS--the Terrorist Information and Prevention System,
will tap millions of workers who, by the nature of their jobs,
are well-positioned to serve as eyes and ears for law
enforcement. Operation TIPS will provide them with a toll free
number to report suspicious activity to the nearest FBI field
office.
FEMA has the responsibility for approving additional programs to be
affiliated with Citizen Corps in the future. We will call upon our
communities to employ their creativity and inventiveness to develop
other programs that will encompass the needs of the community and
encourage more people to be involved.
Finally, the Citizen Corps will bring together local government,
law enforcement, educational institutions, the private sector, faith-
based groups and volunteers into a cohesive community resource. The
Federal role is to provide general information, to develop training
standards and materials, and to identify volunteer programs and
initiatives that support the goals of the Citizen Corps.
the u.s. fire administration
The U.S. Fire Administration (USFA) provides a unique focus on fire
programs within the Federal Government. These programs are included in
the Agency's mission-related preparedness and mitigation strategies.
The Assistance to Firefighters Grant Program remains an important
element in supporting the most pressing needs of at risk communities
and fire service providers in reducing the loss of life and property
from fire, including loss of life and injury to firefighters. As a
result of the last year's appropriations, the Grant Program has
received $150 million that must be obligated by September 30 of the
current fiscal year and an additional $210 million received in last
December's Emergency Supplemental that is expendable until September
30, 2003. We expect most of the supplemental appropriation will be
obligated in fiscal year 2002 with almost all of the remainder
obligated in the first quarter of fiscal year 2003.
I have confidence that we can do that, and that confidence is based
on our experience last year. In less than a year the USFA, with a lot
of dedicated work from other parts of FEMA, especially Financial
Management, was able to get out $100 million in grant funds to more
than 1,800 communities. This was a cooperative effort not only within
FEMA but also with the Fire Service organizations that volunteered
their expertise to make our peer review panels just that; the work of
true peers that understand fire fighting issues and needs. So I'm
pleased to take on this challenge again this year.
The fire fighters obviously were heroes on September 11, that's a
given. But we need to remember that they are heroes every day of the
year in towns large and small across the country. So we at FEMA are
particularly proud to administer programs that help them to carry out
their jobs.
Our nation's firefighters will continue to bear an increasing
portion of the burden for Homeland Defense, responding to a variety of
emergent issues including terrorism. I would like to again thank the
Subcommittee for all of the support they have given to the fire
community over the last few years.
While FEMA's role in Homeland Security is expanding, we will
continue to meet our core functions of natural disaster response and
mitigation. I would like to touch upon just a few of our major funding
requests in our other program areas.
flood map modernization fund
FEMA's 2003 request includes $300 million in new discretionary
appropriations for our Flood Map Modernization Fund and $51 million
from the federal policy fee for a total appropriation of $351 million.
Since the late 1960's, the Federal Government has produced flood
maps for over 19,000 communities. The maps and flood data are used an
estimated 20 million times a year by communities, lenders, insurance
agents, and many others to make critical decisions on where to build,
where insurance is required, and what is the appropriate premium to
pay. Two-thirds of these maps are over 10-years old, and many do not
reflect the change in risk that has occurred due to increased
development. Nearly all of the maps have out-dated streets that make it
difficult to accurately determine if a property is located in the most
risky flood zones. Furthermore, there are 2,700 flood-prone communities
that have never been mapped. This adversely affects the ability of
communities to guide new development away from flood risks, impacts the
ability of the National Flood Insurance Program to collect appropriate
premiums to pay flood claims, and the Federal government is forced to
pay more in disaster assistance. It is estimated that some $800 million
in new funding is needed to fully update and modernize the maps. It is
conservatively estimated that benefits exceed cost by a factor of two,
and over the next fifty years, the savings will amount to $26 billion.
FEMA has reengineered the way we make maps with increased focus on
technology, such as GIS, exciting new remote sensing techniques, and
the opportunities for Internet distribution that will reduce costs. In
addition, FEMA has established the Cooperating Technical Partner
initiative, a program that brings together other Federal, state, and
local governmental agencies into long-term partnerships to actively
participate in the re-mapping process, and to share in the cost. This
partnership is essential. These are not just FEMA maps, they need to
belong to the communities. Through this partnership communities will
take on ownership of these maps, both in their quality and in their
responsibility to reflect the risks outlined in the maps when they go
about their planning and policy-making at the local level.
In my 12 months as Director of FEMA, I have not come across many
who disagree with the map modernization initiative, and I have heard
from environmentalists, homebuilders, realtors, lenders, insurance
companies, engineers, planners, surveyors, and numerous organizations
representing state and local governments. Each year that implementation
is delayed, the cost of the plan, and the cost to the Nation,
increases.
The result of getting this funding will be greater reliability and
accessibility for State Emergency Managers, local planners, and
developers alike. It's a win-win investment situation, and again, I
thank you for your help on this issue.
new pre-disaster mitigation grant program
The fiscal year 2003 budget proposal includes $300 million in no-
year monies under the National Pre-Disaster Mitigation Fund to initiate
a shift from a post-disaster grant system to a pre-disaster,
competitive grant process. These changes will in no way limit FEMA's
basic Disaster Relief efforts--as always, when tragedy strikes, we will
be there. However, I also believe we must refocus our efforts to save
lives, protect property, and, over the long term, increase overall
Federal assistance for local communities.
The proposed program creates a separate funding source for pre-
disaster mitigation and continues to support the goals of the Disaster
Mitigation Act of 2000 (DMA2K). DMA 2000 provides a real incentive for
communities to assess their risks, evaluate their vulnerabilities, and
incorporate an action plan into the ongoing planning processes that
many jurisdictions undertake already. With the recognition of the
importance of mitigation planning, many communities are better
positioned to develop cost-effective proposals for mitigation projects
and activities.
An annual grant program that provides a consistent source of
funding would allow States and communities to develop more
comprehensive proposals and projects to reduce their overall risks.
Communities would no longer be dependent on a disaster declaration in
order to obtain a FEMA grant to help protect their constituents.
Specifically, the proposal calls for the grants to be awarded on a
competitive basis. This will help to ensure that the most worthwhile,
cost-beneficial projects receive funding. In addition, grants will be
made without reference to State allocations, quotas or other formula-
based allocation of funds.
The goal is to fund activities that will reduce the risks of future
damage in hazard prone areas, thereby reducing the need for future
disaster assistance. Eligible activities would include: vulnerability
assessments; State and local mitigation planning; the reinforcement of
structures against seismic, wind, and other hazards; elevation of
flood-prone structures; acquisition or relocation of structures at
risk; and minor flood control or drainage management projects.
As States currently play an essential role in the implementation of
all of FEMA mitigation grant programs, FEMA's strategy is to include
the States in the new program. States provide technical assistance to
communities, solicit and review applications, and coordinate statewide
mitigation activities. A project evaluation process will be established
to determine how well projects achieve mitigation goals. This
effectiveness evaluation would help to better link resources to
performance information for planning and reporting purposes. Results
will also be used in reviewing and adjusting the evaluation criteria
for future grant competition, as appropriate.
Mitigation should be a regular investment priority and should not
only track with the unpredictable level of disaster activity in a given
year. The new competitive process will make sure the best thought out
and cost-effective programs get funded every year, so that our
communities are prepared before disaster strikes.
national flood insurance program
The 2003 Budget proposes several reforms to the National Flood
Insurance Program to improve financial performance and transfer greater
financial liability to individuals building in flood-prone areas. Some
of the primary reforms are as follows:
(1) Phase out insurance policy rate subsidies for non-primary
residential structures, including second homes, vacation properties,
rental properties and non-residential properties. Rates for primary
residences, which represent the majority of the program's policies,
would not change under this proposal.
--The net savings in fiscal year 2003 would be $13 million;
--The estimated net savings grows to about $200 million annually in
the outyears;
--Approximately 350,000 policyholders would be affected by this
proposal;
--The average premiums for the policyholders impacted would increase
from $650 to an average between $1,600 and $1,800; and
--Assuming a 5-year phase-out, premium increases for these policies
would average about 20 percent a year during the phase-out.
(2) Require that mortgage borrowers insure the full replacement
value of their properties. Under current law, lenders must only ensure
that flood insurance covers the outstanding principal balance of a
loan.
--Changing the requirement for the amount of insurance to be the
value of the property brings the requirement in line with what
is the general practice in the insurance and lending industries
for about the last 25 years.
--By providing full coverage this reduces the need for disaster
assistance and tax write-offs for uninsured losses.
disaster relief fund
The 2003 Budget request fully funds the Disaster Relief Fund's
(DRF) 5-year average obligation level of $2.9 billion. The President's
Budget includes $1.8 billion in new funds for the Disaster Relief Fund.
An aggressive campaign is also promised during the remainder of 2002
and 2003 to recover unspent balances from previous disaster
declarations.
Once a Hazard Mitigation Grant Program (HMGP) project has been
approved and funding has been obligated, the performance period for
construction grants ranges from 1 to 5 years, depending on the
complexity of the project and length of the construction season. Given
the 5-year window for completing projects and liquidating funds, FEMA
is focusing its efforts to liquidate and/or recover funds on HMGP
grants obligated during and prior to fiscal year 1997.
disaster, response & recovery
In fiscal year 2003, the Readiness, Response and Recovery (RRR)
Directorate will continue to focus resources on carrying out its core
function of coordinating the activities of the interagency community to
prepare for, respond to, and recover from all significant disasters and
emergencies to minimize the suffering and disruption that they cause.
Emphasis will be placed on working with the interagency community to
incorporate disaster lessons learned into the Federal Response Plan to
continue its improvement and ensure that it can be effectively
implemented to manage the consequences of all types of disasters,
including acts of terrorism. By utilizing lessons learned from past
disasters, such as the World Trade Center, we can develop more
effective and efficient response and recovery capabilities. Related to
this, work will continue on enhancing existing plans and preparedness
measures to address special events, such as the Weapons of Mass
Destruction Contingency Plan that addresses terrorist attacks in the
National Capital Region.
The RRR Directorate programs will work toward improving disaster
response capabilities and the speed and effectiveness with which
disaster assistance can be provided to disaster victims, while reducing
costs and achieving greater accountability of disaster equipment and
assets. We are also examining a number of possible alternative
approaches for building a more nationally integrated and robust
operational capability to address more complex future Federal disaster
operations. We will continue to work with the States to maximize their
role in managing disasters and will begin producing incident-specific
response plans for truly catastrophic disasters, such as hurricanes,
earthquakes, and terrorist attacks. The importance of satisfying the
needs of disaster victims is paramount in our Individual Assistance and
Public Assistance disaster recovery programs. In this capacity we will
provide resources to ensure timely and efficient inspections of damages
to residences and provide the capability to respond to multiple
disasters requiring manufactured housing.
the emergency food & shelter program
The 2003 Budget proposes the transfer of the Emergency Food and
Shelter Program to the U.S. Department of Housing and Urban Development
(HUD). The purpose of this proposal is to permit better coordination of
services for the homeless under one agency.
Funds for this program are obligated to a National Board, which is
chaired by FEMA and whose non-profit partners (The Salvation Army,
American Red Cross, United Way of America, and others) provide
professional expertise to the board. The National Board then works
through similarly composed Local Boards to advertise the availability
of funds, assess community needs, and make allocation choices.
In fiscal year 2002, FEMA is allocating $140 million for this
program. Due to the proposed transfer, no resources are shown in the
FEMA Budget request for the Emergency Food and Shelter Program.
fiscal year 2001 independent auditor's report
I would also like to discuss briefly the fiscal year 2001
Independent Auditor's Report. We welcome this kind of review of
accounting practices government-wide. After 3 years of ``clean''
opinions, FEMA's 2001 financial statements were issued a ``qualified''
opinion.
There are two reasons for the qualifications: (1) adjustments to
unliquidated obligations and (2) property and equipment tracking and
accounting. First, FEMA reduced it unliquidated obligations by $77
million or 1.27 percent. This reduction was necessary because of errors
made when converting financial data to a new general ledger based
financial management system in 1996. It is FEMA's belief, however, that
the one time adjustment has improved the overall accuracy of the
financial statements and should satisfy any further audit requirements
on obligations.
Second, with regard to property and equipment tracking and
accounting, FEMA did not maintain customary records for its equipment
and related depreciation, therefore the auditors determined that it was
not practicable to extend their auditing procedures to sufficiently
satisfy themselves as to the accuracy of the equipment with a net book
value of $10.8 million.
Finally, the audit concluded that FEMA has long-standing internal
control/material weaknesses in several areas. We generally agree with
the overall findings of the audit and have in fact already taken many
steps to correct the identified shortcomings. For instance, a
remediation plan, developed in September 2001, will be refined and
updated to address needed improvements to assure compliance with the
ever-changing government-wide accounting standards and OMB and Treasury
reporting requirements. A JFMIP compliant version of our financial
management system is currently being implemented. This system upgrade
will greatly enhance FEMA's reporting capabilities and correct many of
the deficiencies cited in the report. Resources and expert personnel
are key to assuring changes and improvements. We are seeking additional
qualified staff and contractor support to help us improve FEMA's
financial management operations. FEMA will continue to address the
issues identified in the audit and work toward making improvements.
fiscal year 2002 supplemental request
The President's request for supplemental appropriations includes
just over $3 billion for FEMA. From that total, $2.75 billion is
devoted to the Disaster Relief Fund to assist in the ongoing recovery
efforts from September 11.
The remaining $326 million is requested to enable FEMA to
immediately begin getting our Urban Search and Rescue Teams WMD-
capable, to assist the States with comprehensive planning that includes
mutual aid and other important operational elements, and to begin the
Citizen Corps initiative.
This supplemental, if approved, will give FEMA the opportunity to
jump-start several critical preparedness-related initiatives that
shouldn't wait for the changing of the fiscal year.
The additional funds for the Disaster Relief Fund will ensure that
our commitment to New York and New Jersey and Virginia to assist in
their recovery from the events of September 11 will proceed without
interruption.
The start-up funding for the First Responder Grant Program is
vitally important. The funding will allow us to begin to construct an
infrastructure at the State level to support the larger grant program
next year. For example, this will include secure phone and fax lines
for the States to use.
Senator Mikulski, you have often mentioned the importance of having
strong offices at the State level that would be able to coordinate with
the Federal agencies. A good example is the funding in the Supplemental
to support security clearances at the State level. Getting these basic
administrative steps in place is going to make the program of real help
to the State and local first responder community from the moment the
funds are available. It can increase both their effectiveness and their
long- term accountability.
Another important element in the request will support improvements
and greater support to our Urban Search and Rescue (USAR) Teams.
Senator Bond, I know this is of great interest to you because you have
introduced legislation recently along these lines. I think you can see
from the details of the Supplemental that we are in synch on the
importance of these teams. We agree on the need to provide them with
increased support that will allow for updated equipment and additional
training. Believe me, my experience in New York with our USAR teams as
they searched, day after day, 24 hours per day, will always be etched
in my memory. And I intend to turn that experience into informed
support for those teams.
This Supplemental legislation also puts in motion our new Citizen
Corps program. These funds will assist communities in organizing their
volunteers and giving their citizens the opportunity to realize their
greatest wish since September 11; to be of service in protecting the
health and safety of their communities.
While this hearing is rightly devoted to the 2003 budget, I hope
you will be able to look favorably on this Supplemental request as a
logical and appropriate starting point to move us toward the direction
of the 2003 funding proposals.
conclusion
While there are more goals for FEMA in the coming year, these are
some of the major ones. I look forward to working with this committee
on these priorities. Again, I thank you for the opportunity to be here
this morning and will be happy to answer any questions you may have.
LA PLATA, MARYLAND DISASTER
Senator Mikulski. Thank you very much, Mr. Allbaugh. We
have a lot of ground to cover. I'd like to ask some questions
about southern Maryland. First of all, I understand that as of
yesterday, FEMA received close to 360 applicants from Charles,
Calvert and Dorchester County. The bulk of the applicants were
from Charles County and also Governor Glendening is also asking
for disaster declaration.
Could you tell us what is FEMA's current estimate of the
cost of the tornado that hit southern Maryland last week?
Mr. Allbaugh. I can't give you a hard number. We are in the
process of reviewing with our disaster assistance teams the
damage that has taken place. I believe we amended the disaster
declaration yesterday for two of these three counties, adding
those counties for public assistance. We will add the third
should the teams agree with the governor's request. But it will
take a while to recover from an F4 tornado, as you heard me
talk last week. Then-Governor Bush and I participated after the
fact in an F5 tornado in Jarrell, Texas. Lives were lost. That
community is still rebounding.
FEMA will be there as long as we need to be there. I think
my numbers show 87 homes were totally destroyed, 174 received
major damage, 368 received minor damage. We are there. We have
already processed I do not know how many hundreds of thousands
of dollars in assistance to those individuals, and the
businesses who have been affected.
DELIVERY OF ASSISTANCE
Senator Mikulski. That is exactly right. There were three
categories of injury. One, of course, was the homes. The others
were to people's livelihoods such as the hardware store,
florist shop, bank building; at the same time was the public
infrastructure aspect. How long do you think it will take to
provide assistance to everyone who is eligible and when do you
think that we can expect that the checks will start to arrive?
Mr. Allbaugh. The checks were electronically transferred or
in the mail within 24 hours of when the President declared this
disaster when we got his request. We have a fabulous system
that Larry Zezinger runs in our office for the agency. We have
that ability, normally within 2 to 5 days, to put money in the
hands of those individuals who are harmed, and we have already
done that.
Senator Mikulski. I know that our very able county
commissioners established something called People's Place. I
bet you like that because it put all of the agencies like FEMA,
SBA and some that were going to help families in one place
while they had an incident management operation center
someplace else. If you recall, our rescue squad even lost its
roof. From the people operating out of People Place, would you
describe for committee how it works, how someone comes in and
how they apply and what can they expect in terms of timeliness?
Mr. Allbaugh. Normally what takes place is we try to lean
as far forward out of the foxhole as we can when one of these
incidents takes place. That basically entails a disaster
response team that is flown to the site. They start searching
for an area where we can house all the Federal and State
agencies under one roof so we can offer in a disaster field
office setting a one-stop shopping for those individuals who
have been harmed. This happens in two ways: they can either
come to the disaster field office to register in person for
State and Federal assistance, and even local assistance, and
also charitable organizations are a part of that disaster field
office, or mainly the norm is to call our 800-621-FEMA, our
hotline, where we teleregister those individuals who have been
harmed or even think that they have been harmed.
Senator Mikulski. We think that is a terrific system. I
think part of preparedness has to do with where would you
operate an incident management situation which goes then to
your need for technology, interoperibility, and mutual aid. We
were gratified in southern Maryland the way others responded to
help our responders. Therefore we need to be looking at
interoperability incident management and then preparedness
which is where would the people go if they need to seek
shelter, where do the people who are going to help them get
benefits need to go and where would be the command and control
environment.
Is that part of what you see needs to be, therefore not
only helping, would help both as I said against tornados or
national disasters, as well as against terrorism?
CITIZENS CORPS
Mr. Allbaugh. The interesting thing about our agency is
that we believe we are an all hazards agency, whether it is
man-made or of natural design. We implement the same process.
We go through the same procedures. Our people are very well
trained in going in and quickly making assessments as to
individuals, businesses and a community's need. Nine times out
of 10, the individuals who respond to a disaster are those
innocent citizens who were right there if they have not been
harmed themselves. That is why I think one of our programs
which is a part of Citizen Corps is a great program. It is a
Community Emergency Response Training that we do. We certify
individuals with 18 hours of training. And we essentially have
a fabulous program in Pittsburgh where we train the trainers
trying to reach as many people as we possibly can to identify
when they are in a disaster situation and respond immediately
to before fire, police and utility individuals can show up at
the scene and clearly before the Federal assets are able to
arrive.
But our system works. We reach out with great regularity to
State and our local partners and communities to make them aware
of how our programs work, and again, it is the tireless effort
of the FEMA employees who actually make this work day in and
day out.
Senator Mikulski. Thank you. Just one final question. How
many offices do you have in southern Maryland, and how long
will they remain open?
Mr. Allbaugh. They will remain open as long as they need to
be open in assessing and assisting those individuals. We have
77 FEMA employees on the site right now. I think there is one
main disaster field office and two satellite offices. We may
even have a mobile office in the area. I do not know. But I
will find out exactly and respond back.
Senator Mikulski. Again, the next time you see the
President and the next time I do on behalf of all of southern
Maryland and all of Maryland, we just want to say thank you. I
think our colleagues know when they are hit by something,
nobody knows that lady with that flower shop or that man with
his business or that senior citizen with their home, nobody
knows if they are Republican or Democrat. They just know they
are Americans. And thank you very much for your response.
Mr. Allbaugh. Thank you, Senator.
Senator Mikulski. Senator Bond.
HAZARD MITIGATION GRANT PROGRAM
Senator Bond. Thank you, madam chair. You mentioned the
proposal to replace the hazard mitigation grant program which
now retroactively awards percentage of the disaster relief for
future mitigation. With a forward-looking approach. This is
something that I have asked about over the last several years.
I believe your IG is also supporting it. Now FEMA is proposing
to establish a new $300 million competitive mitigation program.
I'd like to ask you sort of a three-part question.
How--what benefits do you see accruing in this program,
rather than in the current HMGP program since we do not have
any authorizing language, how would the program be structured,
two. And three, what would be the priorities for funding?
Advantages. Structure. Priorities.
Mr. Allbaugh. Senator, the biggest benefit is that you
remove individuals from harm's way immediately by buying out
those businesses or homes that have been identified as being at
risk. I remember last year touring the Red River of the North
in the Grand Forks area. They identified many areas from the
flood of 1993 where the community had gone in, identified after
the fact and subsequently bought out those homes and businesses
that were in harm's way. This time around, last year when
flooding was severe, those homes and businesses were not at
risk. Basically that area had been turned into a green belt
area or park and--
Senator Bond. I fully support mitigation. I am just saying
with a, what would be, how do you see the advantages of the new
program, rather than the previous program which did provide
mitigation resources on a percentage basis to the disaster
relief?
Mr. Allbaugh. The biggest thing immediate would be that the
vast communities across the country already know where their
risk are. They have identified them. They are on the shelf.
They do not have the ability to buy those properties right now
and remove them from any type of threat. This allows them up
front a competitive basis to remove those properties from risk,
as opposed to waiting until a disaster takes place where we go
in after the fact and offer up mitigation money to buy
individuals out.
Senator Bond. How would the program be structured? What
would be the guidelines? What would be the priorities?
Mr. Allbaugh. Well, we are in the process of establishing
that. There would be eligible activities based upon
vulnerability assessments.
Senator Bond. Maybe we ought to ask you to submit that for
the record. Maybe part of the answer is in my second question.
According to FEMA's IG's 2001 report, as of April 2001, out of
more than $2.5 million for the HMGP program since 1989, 48
percent had not been disbursed. The bulk of the funds that make
the disasters have been sitting there 5 to 11 years. In
particular the HMGP funds generated by two disasters,
Northridge Earthquake and Hurricane Georges in Puerto Rico
account for more than one-third of the total amount of HMGP
funds awarded since the program's inception and nearly 75
percent of all undisbursed funds. It appears that only a couple
of areas backed the tank truck up to suck out of that wonderful
trough.
What is, what is happening? What is the problem with
everybody else?
Mr. Allbaugh. Well, we had a history of allowing
communities to not step up to the plate and take advantage of
those HMGP funds. I realize it is a problem. It is a priority
for me to close out those loans. They are given 4 or 5 years to
tap into HMGP and we need to reclaim that money. We have not
done a good job on that and the IG is absolutely on target.
TORNADO DAMAGE IN MISSOURI
Senator Bond. I mentioned the article. I just read the
article today's Southeast Missourian, tornado victims have
problem with Federal aid. 19 areas hit, 86 homes completely
destroyed. They had been denied individual assistance. My own
friend, the fire county chief, Chief Bollinger appropriately
enough said we got people here that are beyond welfare. One is
living out of a car. Other is living in a house with a tarp
over it and they say we do not qualify. If the tornado hit a
metropolitan area, the situation would have been handled
differently. People in rural areas are penalized and he is
aggravated. I guess the other thing that is aggravating is that
FEMA put in place a toll free number urging families to apply
for individual assistance and when they called the number they
found out that they were not eligible for individual
assistance, which kind of raised some expectations that were
destroyed.
If you followed----
Mr. Allbaugh. This is the first I have heard about it. I
will sure check in and respond back to you. There could be a
sizable portion of those individuals who are insured and that
may preclude them from being eligible.
Senator Bond. There is some that are insured. We have not
looked at it.
Mr. Allbaugh. I was just handed it as well.
Senator Bond. That brightens your day.
Senator Mikulski. Senator Shelby.
Senator Shelby. Thank you, Madam Chairman. We talked about
Maryland and Missouri. I thought I would get into my home State
of Alabama, Mr. Director.
Mr. Allbaugh. Good.
CHEMICAL STOCKPILE EMERGENCY PREPAREDNESS PROGRAM (CSEPP)
Senator Shelby. I have been working, as you know with
Senator Sessions, and Congressman Riley to facilitate the
discussions between the Army and FEMA and our State and local
officials in Alabama regarding critical CSEPP safety
requirements associated with chemical weapons. CSEPP, you are
familiar with that?
Mr. Allbaugh. Yes, sir.
Senator Shelby. Officials from your agency participated in
all the operational assessment team meetings which were
convened at the direction of Secretary Rumsfeld and overseen by
Under Secretary Pete Aldridge regarding funding for critical
CSEPP safety requirements. Two issues remain unresolved as of
today. While the Army has transferred the necessary funding to
FEMA and the State and county EMA have developed training to
make those plans, funding for level A suits and protective
hoods remains blocked. The OAT process provided numerous
opportunities for FEMA representatives to raise important
concerns. But none of the recent criteria produced by FEMA for
the level a suit and protective hoods were brought up during
the process.
Several questions. First, tell us why FEMA officials, your
officials, did not raise objections to these protective suits
and hoods during the OAT process and second, since DOD and the
Army have transferred the funding to you, this is not an
issue--it shouldn't be an issue of money. What are the reasons
FEMA continues to refuse to agree with DOD and the Army that
protective suits and hoods are a safety device?
Mr. Allbaugh. Senator, I have no idea why FEMA employees
who attended those meetings failed to speak up. They have known
our position from day one and there is no excuse for them not
making people's position well-known.
Senator Shelby. Will you look into this?
Mr. Allbaugh. Sure. I will report back to you.
Senator Shelby. And straighten that out.
Mr. Allbaugh. To the best of my ability. I sure will.
Senator Shelby. You are the director. I think you can
straighten it out. In FEMA. Maybe not elsewhere in the
government. In FEMA. I have confidence in you as the director
to run your agency, and if you run your agency as I believe you
have and will, you will straighten that out.
Mr. Allbaugh. Well, I have been about the business of
trying to straighten out the issue on Anniston since this has
come to my attention several months ago. What I am concerned
with first and foremost and if you want to blame someone for
the holdup, you can blame me and hold me responsible.
Senator Shelby. We are more interested in performance. We
have talked about this. I am not here to blame you. I am here
to get it straightened out.
Mr. Allbaugh. I understand. We are in the position right
now of trying to work with the community to make sure that they
have a certain amount of training. We have asked for a plan and
proposal from the city after they were not too interested in
what we had offered up and I expect that to take place in short
order, Senator, and we can resolve those issues. I do want to
make sure that individuals if we are going to be buying hoods
or masks are properly trained.
Senator Shelby. Absolutely. We are all interested. The
bottom line at Anniston dealing with chemical demilitarization
is nothing but safety. Safety at whatever because the people
there have no one to speak up.
Mr. Allbaugh. I agree.
Senator Shelby. If we do not speak up, if we up here do not
speak up, no one will. I want to commend again Senator Mikulski
for conducting the hearing regarding other issues in Anniston
several weeks ago.
Mr. Allbaugh. There is not anything more paramount to our
agency than safety. We are about the business of protecting
lives and saving properly property, and just as soon as it is
feasible, I have the ability to sit down with the Anniston
folks, I think we can resolve this issue. We have given them
everything that the Army has promised except for the issue on
the hoods and I see no reason why this cannot be solved in
short order.
FEMA'S ROLE IN CSEPP
Senator Shelby. Mr. Director, I only have a minute. Given
our recent conversation about your level of frustration with
the CSEPP program, I want to know what your thoughts are
regarding FEMA's continued involvement in the program. Second,
do you believe any statutory changes need to be made that would
improve FEMA's ability to execute the CSEPP program and third,
what discussions have you had with Dr. Fiori and Secretary
Aldridge regarding these unresolved OAT safety issues?
Mr. Allbaugh. I have not had any personal conversations
with Dr. Fiori. I know numerous members of our staff have. I
believe the CSEPP program is better served returning to the
Department of the Army. We have nine facilities nationwide. Our
only role in CSEPP programs needs to be continued and that is
one of planning, assisting those communities with their
evacuation routes, and their planning. But I believe the Army
runs a program that is a good program. I think they should have
the entire program, just not part of the program.
Senator Shelby. Thank you, Madam Chairman.
Senator Mikulski. Senator Johnson?
Senator Johnson. Thank you, Madam Chairman. Welcome.
Mr. Allbaugh. Good to see you, Senator Johnson.
PROJECT IMPACT
Senator Johnson. Thank you for your attendance. I observed
the Project Impact is not part of the initiative we are talking
about today. It has been a popular program in my State,
numerous communities have been able to secure the resources
they have needed to prepare in advance of disaster. How does
FEMA intend to support legal strategic disaster planning at the
local level outside of the project impact?
Mr. Allbaugh. The President's First Responder program
serves that purpose, to offer assistance, technical assistance
and planning, training, equipment purchases and exercises.
Standardization is probably one of our number one priorities
across the Nation. Many communities have plans that have not
been looked at in recent years. They need to be taken off the
shelf once again, dusted off and we can provide that assistance
through our State partners to improve those disaster response
plans.
Senator Johnson. Any sense of what kind of, you not only
have to work with communities that have no plans but update
communities that do have old plans which may not be up to date,
may not be appropriate to contemporary needs. How far down the
road are we going to get in assisting these communities?
Mr. Allbaugh. Well, the supplemental has $175 million to be
used totally for planning. We already asked States and
communities to start their planning process so if Congress acts
in the affirmative with the $175 million it will be 100 percent
grant money and we can expedite getting that money out the door
to further assist those communities.
Senator Johnson. Very good. Thank you.
Senator Mikulski. Mr. Allbaugh, I'd like to pick up on
that--excuse me. Senator Craig. Sorry.
Senator Craig. If you have got a follow through on that.
Senator Mikulski. You go right ahead. You have been waiting
very patiently. Please proceed, sir.
INTER-AGENCY FIRE CENTER
Senator Craig. Madam chair, welcome. Joe, welcome to
committee. One question--well a couple in relation to the fire
administrations and the National Fire Act. Do you see expanding
roles with the Interagency Fire Center in Boise? I know FEMA
has a presence there now on a concurrent basis with all of the
other agencies that interface as it relates not just to fire,
but they also deploy equipment materiel in national disasters?
Mr. Allbaugh. Actually, I'd like to have a more expanded
role there at the center. It is a fabulous facility. We only
have personnel there located during the seasonal hot spots.
Senator Craig. The peak of the season. That's right.
Mr. Allbaugh. Yes, sir. We have a great organization in the
United States Fire Administration led by chief Dave Paulison. I
would like to improve that relationship. I was there last year.
There is a willingness with the Ag department to do the same
thing. As you know we are about the business early on in the
fire season of administering our fire management grants which
used to be called fire suppression grants. We have done several
over the last several days, I think 5 in the last 3 days alone
where private property and public buildings have been
threatened. It is an area that we need to work closer with Ag
to improve our relationship, and I'd like to achieve that.
FIRE GRANT PROGRAM
Senator Craig. Fire management grants are different than
the kind of grants that are going to the local communities and
local fire departments?
Mr. Allbaugh. That is correct. Yes, sir, they are. Fire
management grants tend to be one of an emergency nature where
there is an immediate threat to property and individuals. The
fire grant program that Congress in my opinion wisely passed
last year, we had a 5-month period to get the first $100
million out. We were successful. That goes to basic
firefighting needs to local fire departments. This year
Congress has given us $150 million plus $210 million in the
supplemental for a total of $360 million, which I know will be
out the door by the end of this calendar year and I thank you
for that support. It is a strong program, and it makes a
difference in those local fire departments.
Senator Craig. That is a strong program. It is very popular
in my State. I have been visiting most of my fire departments.
They just do not want it lost inside the bigger issue today.
Mr. Allbaugh. I agree with that, Senator if you do not mind
me interrupting. I know OMB wants to combine the fire grant
program with First Responder program. I am dead set against
that. It is for two different purposes. And I think it is a
mistake to try and put those--I am going to get in trouble for
this, but it is a mistake quite frankly.
Senator Craig. You won't get in trouble with this Senator
and my guess is my colleagues will agree with that.
Senator Bond. Last time I agreed with somebody disagreeing
with OMB, he was canned 3 days later. We wish you well, Joe.
Senator Craig. I will leave you my phone number.
Senator Bond. Mike Parker.
Mr. Allbaugh. I consider myself not only working for the
American public, but directly for the President of the United
States and I think I still have a fairly good relationship. I
might survive this area.
Senator Craig. The program that you have talked about is
very popular amongst fire departments because it picks up some
of the pieces they cannot afford to pick up in training,
equipment and material. It remains very valuable. I met with
Idaho's fire chiefs a couple of weeks ago and that was their
first request. Do not lose this program. It is the best we have
seen to date. It is quick to respond to our needs. And it is an
opportunity. I am pleased also to hear you talk about the
potential of an expanded role at the Interagency Fire Center in
Boise because while we look at it as a fire center, it will
also buy caches of equipment and readiness, it does respond and
has responds to communities all over the country with the
deployment of communications equipment and all kinds of things.
It is a natural for the area, the region because it services
the whole western States that it literally is the whole
national center. I am glad that you see that in its provincial
and present management system.
Mr. Allbaugh. It is a tremendous facility. I look forward
to expanding our role there. Back on the fire grant program
just for a minute to refresh everyone's memory. Last year the
first year we had over 20,000 applications for $100 million.
Twenty thousand plus applications represented over $3 billion
in needs and requests. This year, we are right at 19,000 and
some applications and we are going to be moving quickly getting
that money out the door, so it is an extremely popular and
successful program.
Senator Mikulski. I just want to reiterate how supportive
we are of the fire grant program because it helps particularly
the volunteer fire departments where we are asking people on
their own time and in their own mind, to meet the bottom line.
This has been an excellent program. This then also takes me to
the whole issue of State and local, strengthening State and
local emergency management.
INTEROPERABILITY AND MUTUAL AID
First of all, we want to thank Governor Tom Ridge for
taking a look at our capital region in terms of the need for
disaster planning. That is the District of Columbia, my own
State of Maryland and Virginia. We are the capital region. I
must say, we are a high security issue but also as part of
that, is southern Maryland and La Plata, a little county run by
commissioners and a lot of great volunteer fire departments. So
let me get to the point. I'd like you to elaborate what is in
this year's budget to help with interoperability and mutual
aid. What I heard you talk about was in New York people wanted
to help but they couldn't because of the failure for
interoperability. When I walked the streets of La Plata, what I
saw was that county executive Doug Duncan from Montgomery
County rushed to be able to help La Plata. That the Ocean City
mayor had come because they had some experience with natural
disasters, and it showed why we need to have mutual aid and
also the need for interoperability in communications. Mr.
Duncan of Montgomery can talk to Mr. Curry of Prince George's,
but I am not sure both of them can talk to Charles County or be
able to even go across the river to get help from Northern
Virginia.
I note this is a high priority with you. Could you tell us
how we could put money in the Federal budget to ensure
interoperability and also this great approach of mutual aid
where I think is the key to a successful rescue and recovery
operation.
Mr. Allbaugh. Thank you Senator, for the question.
Interoperability comes in many forms, not only in
communications, but equipment, personnel. In our first year,
which would be this year I hope with the supplemental, $175
million we are requesting which is 100 percent money to go to
those local departments to start that planning process. It is
basically similar to playing a football game. You do not want
to go out and put your players on the field until you have a
game plan, and it is important that States and local
communities have that game plan and we need to assist those
communities in that game plan. Coupled with that, there are two
particular areas in mutual aid arena that we want to spend $5
million in assisting those communities in crafting the
requirements when it comes to mutual aid, and $7 million for
secure communications with State and local individuals
nationwide.
It is important for us, when there is an incident that is
ongoing, to have the ability to communicate in a secure
fashion, something that we do not have between the governors
and other State officials and the Federal Government. We do
among most Federal agencies, but not at the State level. So
there is $7 million we would like to spend in that arena. We
are asking for $50 million in the area of Citizen Corps. This
is probably one of the greatest programs that can help a
community be prepared. And the reason we are asking for that
money is to accentuate an already excellent program that
started in Los Angeles in 1985 and we picked it up in the later
1980s, which is the community emergency response team, the CERT
training. It's a fabulous opportunity to train the trainers,
get them out of the communities and train individuals on how to
respond to a disaster to assist their fire, police utility
departments, city council, hospitals, EMTs. Many people just do
not know what to do and what we will do by making this training
available is enhance the already well-established local
response capability. That is just some of the dollars we will
be spending this year, I hope.
Senator Mikulski. Mr. Allbaugh, I want to assure you that I
regard the whole issue of interoperability and mutual aid to be
one of our highest priorities to be able to serve our
communities and serve the Nation. I am going to work with you
through the appropriations process and any help that you need
with other Federal agencies on establishing national standards
for equipment and using other resources like the National
Institutes for Standards and Technology. The private sector is
developing excellent technology and improving it every day and
second, we want to have this interoperability and mutual aid. I
have seen it at the Pentagon when Maryland and Northern
Virginia responded with citizen soldiers helping our American
military and now I have seen it in my own disasters and you
have heard it from my colleagues. So we really want to work
with you because I think this is how we are going to get
maximum value for our dollar and maximum assistance for our
communities.
Mr. Allbaugh. If I could add two more points, Senator. At
the Federal level, there has been some confusion in the
interoperability arena. We have taken steps with Treasury to
head up a consortium of all Federal agencies called SAFCOM that
will solve this interoperability problem at the Federal level.
I believe first we have to get our own house in order before we
can help others.
Second to that, Bruce Baughman, who is heading up our
Office of National Preparedness, second from your left is doing
a fabulous job. One of his challenges is to set nationwide
standards in the area of communications and equipment
interoperability. I hate to be redundant but I remember so
vividly showing up at the Pentagon and people had their own
breathing apparatus with them and they couldn't use the freshly
charged bottles because the threads would not be
interchangeable.
In New York City we had pumper trucks that we desperately
needed from lower Manhattan and Yonkers and New Jersey, great
vehicles, great equipment, people with the drive and training
to use them and we couldn't use those pumper trucks when we
wanted to use them because the threads weren't uniform. We had
a variety of uniformity issues across the board in equipment
and personnel we are going to solve.
Chief Paulison and I are going to have all the
manufacturers in the next couple of weeks to use my 275 pounds
of intimidation and kind of beat them about the heads and say
we are putting lives at risk unnecessarily because we cannot
solve the interoperability problem and we are going to solve
it.
Senator Mikulski. Terrific. Senator Bond?
Senator Bond. Senator Domenici has come in.
CERRO GRANDE FIRE
Senator Domenici. I think my first round here I will talk
about a parochial issue, the fire in New Mexico that you are
wrapping up in terms of the management plans, the Cerro Grande
forest fire in the Los Alamos area. First, I want to thank you
personally for the attention that you have given to the
recovery of Los Alamos and the surrounding areas around the
Cerro Grande fire. Just about 2 years ago is when it occurred.
The fire consumed about 50,000 acres, 48,000 I think, destroyed
about 400 homes, caused damages and injuries to a thousand
families and countless businesses. The county of Los Alamos,
State of New Mexico, four Indian Pueblos and the Federal
laboratory. I want to remind my colleagues that this was
started by Federal Government when a monument burned out of
control.
For that reason Congress enacted the Cerro Grande fire
claim assistance act of 2000 and appropriated $455 million to
FEMA to establish a claims program to compensate victims of the
fire. Senator Bond, I remember vividly your cooperation after
you went through this issue and made sure that we understood
that FEMA had not, before that had not been doing this kind of
work but remember they had an emergency response and then
somebody else would do the kind of things that we had here,
Small Business Administration, HUD, etc.
But I want to suggest to you that from what I know, they
have done an excellent job. They are not quite finished, but I
think today you can wrap this up for us and perhaps you could,
we could start by saying as of the 28th of August the fire
claims under this act will expire. There will be no more time
to file their claim. They had a short time fuse if they wanted
to participate under this act this they to file claims. Perhaps
some will save their claims and file in Federal court.
Director, would you please give the subcommittee the latest
figures on the fire, the number and amount of the claims filed,
the number of claims approved, and the number of claims paid
and the pending number of claims and the number of claims
anticipated to be filed by August 28. Could you do that or
would you rather do it----
Mr. Allbaugh. I will take a stab at it, Senator, based on
what I recall. Principally to remind everyone, I was aware that
the program would not be extended. The clock is running. They
need to file their claims by August 28 of this year. Originally
the program officials on site only estimated they would be the
recipient of about 1,500 claims. We have handled over 20,000
claims to date thus far and we spent almost $300 million of the
original $455 million that was granted by the Congress. We
expect another 2,000 claims to be added to that prior to the
28th of August.
I have not paid any insurance company the subrogation of
claims because I wanted to make sure that 95 percent or so of
the claims of individuals would be paid prior to the insurance
companies and we are adhering to that and I am proud of all of
our agency folks for helping us achieve that goal.
I do believe that there, in my request for an additional
$80 million there is a need to have a safety net. I would
prefer to disclose and play all my cards on top of the table.
There is no reason to believe we are going to go beyond the
$455 million, but to protect ourselves and make sure everyone
is taken care of I think it is a prudent course and action to
take. If this committee gives us the $80 million extra, we
would turn back anything that is unused. I would be happy to do
that. We are well on track. We still have about a, 45
individuals at the Los Alamos office every day and I am pleased
with our progress of this program.
Senator Domenici. I am going to submit further questions to
you for the record.
Senator Mikulski. Absolutely, Mr. Chairman. We really look
forward to cooperating with you. We know that it is a most
devastating, devastating situation.
Senator Domenici. I have some other questions, but I will
wait.
Senator Mikulski. Senator Kohl.
FIRST RESPONDER GRANT PROCESS
Senator Kohl. Thank you, Mr. Allbaugh. There were a number
of concerns regarding FEMA grant process and I will address
just two of his and my concerns. First the emergency response
community in Wisconsin is pleased that FEMA is taking over the
Office of Domestic Preparedness programs in the Department of
Justice for First Responder assistance and I have heard several
complaints regarding the complex process that the Office of
Domestic Preparedness had used to provide equipment grants to
first responders. Many local people believe that these programs
were too cumbersome and took too long for the money to filter
down to the people who needed it. So will FEMA make a concerted
effort to make the process easier for local communities so that
the money can be spent more rapidly?
Mr. Allbaugh. That is our plan, Senator. I think our fire
grant programs our application is down to a page and a half,
maybe two pages maximum. We believe training for first
responders ought to be consolidated into one location
regardless of where it is as opposed to a fragmented system
that we currently have right now. The Office of Domestic
Preparedness of Justice has focused in my opinion on the small
part of the entire emergency response arena. It is something we
do. This is our core mission. This is why we exist, and I hope
that at some point we will be able to consolidate these
programs but I appreciate what you are saying.
Senator Kohl. Second, State and local emergency management
officials are concerned that all the additional funds provided
at the Federal level will not be well used if there is not a
strong foundation at the local level to absorb these funds.
They tell me they need money to hire full time staff,
coordinate local and regional efforts. This funding for
emergency management performance grants should be boosted so
States and localities can have the staff and infrastructure to
handle these new funds as widely as possible.
Mr. Allbaugh. I'd like to see that we improve our funding
to assist the States in those arenas. I know they cannot do it
with the resources they have right now. We need to assist them
with personnel and technical assistance to make sure the money
goes exactly where it is intended to go.
Senator Kohl. So we can hope maybe there will be some
additional funds for personnel?
Mr. Allbaugh. I hope so, too. For a number of years EMPG
funding has been level. I am not sure I understand the
rationale why we did not include an upgrade in our EMPG money
for the 2003 budget, except we were totally focused on events
after 9-11. It is my plan to increase that money. State
directors in NEMA know that. They understand that. If there is
any money that I can utilize in the interim, I would be happy
to do that.
Senator Kohl. I thank you so much. I thank you, madam
chair.
Senator Mikulski. Senator Bond.
CERRO GRANDE AUDITS
Senator Bond. Following up on my good friend from New
Mexico there asking questions about the Cerro Grande program, I
wonder if the FEMA IG Mr. George Opfer could come forward and
answer a couple of questions if you would please. We want to
find out how you think it is been going. Are there adequate
accountability requirements to assure that payments were
consistent with losses? Was the office providing
accountability, were they cooperative and were the payments
consistent with the types of models used by insurance company
for losses?
Mr. Opfer. Senator, there was a learning curve for both for
the FEMA and OIG personnel who were assigned there. We had some
coordination problems in the initial stages of operations, that
is, making sure program officials understood the role of the
Inspector General both in terms of our audits and
investigations. That relationship has worked out very well
recently and, we are seeing a number of improvements. We have
full time audit personnel assigned there who are now working
closely with FEMA management. Once our work is done, we intend
to prepare an after-action report from the General's
perspective addressing questions concerning operational
effectiveness and accountability, as well as our own
experiences in dealing with program officials.
Right now we think that the process or the experience level
of the people who are involved with the Cerro Grande program
has dramatically improved and it is functioning quite well.
Senator Bond. Joe, you had a view on that? It is not as
bad?
Mr. Opfer. We had some problems in the field in the
beginning. We had to address it at a higher level in the
agency. Program staff appear to be cooperating now, however. I
would like to comment on the efforts of the Acting Deputy
Director, Mike Brown, in helping us attain that cooperation.
When things came to my level, I oftentimes turned to Mike for
assistance. He was very helpful in making sure personnel from
the management side of the Cerro Grande program were responsive
to our inquiries. We have had excellent cooperation from Mike.
NEW YORK INVESTIGATIONS
Senator Bond. While you are up there, Mr. Opfer, we
indicated lots of money going into New York after the tragedy
of 9-11. Are there adequate controls in place, procedures in
place to ensure that any fraud or abuse or misuse of taxpayer
money with regard to New York City assistance are in place? Can
we be comfortable that all the money going there is being spent
well?
Mr. Opfer. I think you can understand from my accent that I
am quite familiar with New York, being born and raised there. I
started my government career with the Secret Service in 1969
working in the New York field office. I was with the Secret
Service for 25 years before coming to FEMA.
Senator Bond. Takes one to know one.
Mr. Opfer. We worked very hard with the District Attorney
in New York. He has opened up his office to us. We actually
have our agents located in the Manhattan District Attorney's
office so, from an investigative point of view, we are working
quite well with the city of New York and their police
department, investigators, and all their appropriate law
enforcement agencies. We are also working with the U.S.
Attorney's Office in Manhattan. I believe we have a very good
handle on how the money is being used in New York City.
Furthermore, some of the other Federal agencies involved,
Social Security Administration Inspector General, for example
working very closely with us are reviewing all complaints or
allegations that are referred to us to determine whether.
Federal funds are involved, and to determine who would be best
equipped to address the issue. We are on site, and from our
perspective, we feel very comfortable at this stage that all
the appropriate Federal guidelines are being followed.
Senator Bond. Are there a relatively large number of actual
indictments or criminal proceedings which have been commenced
in New York City?
Mr. Opfer. At this stage, we have made 39 arrests, mostly
dealing with false applications for Federal assistance. In one
case an applicant claimed that her spouse was killed in the
World Trade Center, but was actually alive and well in another
State. We are also looking at some contractor fraud that is,
false billings. Unfortunately, what we are seeing is not
anything that we do not see in other major disasters. In the
Northridge Earthquake, for example, we had people that would
take the identity of the deceased victims and file for Federal
assistance. We are basically, unfortunately, seeing the same
type of problems in New York.
Senator Bond. Thank you very much.
MERGER OF TRAINING PROGRAMS
Senator Shelby. Thank you, Madam Chairman. Director
Allbaugh, in earlier conversations, you discussed the need to
collapse all training programs into one. Could you explain to
me in detail what you mean by collapse? Does this merely mean
put all existing programs under one roof or literally collapse
them all and give rise to another, to one specific training
program? In other words, could you discuss exactly how you
envision FEMA operating at the current national domestic
preparedness consortium that the President has proposed your
agency take over?
Mr. Allbaugh. I think what we have to do is merge those
programs that we know about that exist at the Federal level
already, and take advantage of the pluses of all the programs,
improving those programs and training so that the recipients of
the training can go one place, as opposed to hunting around for
training. Now what concerns me right now is that I cannot
certify the type of training that ODP is conducting nor can
they certify the type of training that we are doing. The
American taxpayer deserves to know that there is one entity,
regardless of where it is, that is going to be held accountable
for that training that local responders desperately need.
Senator Shelby. Mr. Director, could you discuss how FEMA
proposes to deal with a live agent training facility at the
center for domestic preparedness? How does FEMA propose to
obtain live agents for training? Under the current law I
believe it authorizes the Secretary of Defense to transfer
chemical agents to the Department of Justice. In addition,
there are issues relating to the existing Chemical Weapons
Treaties. If you could comment on these issues and how FEMA
proposes to address them?
Mr. Allbaugh. Well, I can't speak to the law, Senator,
directly. I will have to check on that and respond back. But
there are two particular facilities that I know, have seen one
and know about another. Yours at Fort McClellan is a first
class facility that I think would do nothing but enhance the
training that already goes on for our first responders. The
other facility is the Nevada test site outside of Las Vegas. It
is extremely important for individuals, whether it is hazmat,
chemical, radiological or biological to experience as much as
they possibly can reality in real live exercises.
Last week I was at the Nevada test site and witnessed a
radiological exercise where a hazmat team had come in from
another State, for the specific purpose of this type of
training and those individuals learned so much from this
exercise.
Senator Bond. Under real conditions.
Mr. Allbaugh. That makes a vast amount of difference as
opposed to a table top exercise in a classroom, or even
exercises that they may do in their own community. It is a
vital asset to take advantage of what you have at Fort
McClellan and at the Nevada test site.
Senator Bond. Thank you, Madam Chair.
Senator Mikulski. All right. I see Senator Domenici.
FIRST RESPONDER GRANT PROGRAM
Senator Domenici. Could we talk a minute about first
responders.
Mr. Allbaugh. I will do my best.
Senator Domenici. First responders are statutory and they
are created by law. As I understand it, what you wanted to do,
I do not have any feelings as to whether I favor it or do not.
I would assume that for consolidation purposes if nothing else
that I will. But as I understand it, this activity by our
Federal Government has been shifted from one place to another
over the last three or 4 years. It is very hard at this point
to decide who really has jurisdiction. I think it is the
Justice Department. I am not sure. Have you been told that to
do the consolidating that you desire you are going to have to
pass a statute permitting this First Responder training?
Mr. Allbaugh. What I understand, Senator, is that for the
most part under the fire act we really have broad authority to
implement and operate these programs, but we are working with
our authorizing committees in both houses with language that
OMB has brought forth to further clarify the authorization that
some individuals believe that we need to have. And we will
continue to do that.
Senator Domenici. Under the First Responder program that
the Appropriations Committee finally put into effect through
the great efforts of Senator Judd Gregg who worked for a year
and a half, as I understand it, that program has been used in
128 cities of America to bring the responders together
programmatically and they worked together, the fire department,
the police department, the doctors in the town, the hospitals
and they prepared a so-called preparedness First Responder
plan. Now, that whole effort is going to change and be under
FEMA?
Mr. Allbaugh. I wouldn't say it is going to change. I think
we will merge the two programs and it will be a stronger
program at the end of the day. We do that with the rest of the
communities across the country right now to the best of our
ability along with the States.
Senator Domenici. Well, I think it ought to be in one place
and if we can get it in your shop, I am all for it, count me as
one at this point from what you have told me we ought to do
something like that. There is no reason to have it in three
places.
Mr. Allbaugh. I commend Senators Shelby and Gregg and
Hollings. They were caring about this program long before
others did. It was shopped around and it was, ended up in
Justice and probably, in my opinion based upon what my 15-month
exposure has been at FEMA, it should have been in FEMA all
along.
Senator Domenici. Actually that is a statute prepared by
Senators Lugar, Nunn and myself. We left it up to the President
as to the whole program and where it would be headquartered. We
thought it would be best as part of a national security effort
with the country but nobody wanted it and he did not want to
push too hard so maybe we could make it work in a consolidated
matter.
Mr. Allbaugh. It is a high priority for this President, as
all of you know.
FIRE MANAGEMENT ASSISTANCE
Senator Domenici. One last question has to do with forest
fires. Actually it hardly seems realistic that the fire season
is back upon us, but--for forest fires, but it is. And New
Mexico is currently in a drought State, which you know from
going out there, and on top of that, we had already some major
fires. We now have a fire management assistant system
assistance grant program. We did not have that before, and it
is kind of a program that is born out of frustration that there
weren't any adequate assistance grants for drought areas that
had forest fires.
Could you explain to the subcommittee what authorities you
have and how you are responding to wildfire forest fire
emergencies now?
Mr. Allbaugh. Yes, sir. I have learned also in that 15-
month period that many of the programs that we now have, have
been born out of frustration with the inability to respond
immediately, which is why FEMA exists to begin with.
Senator Domenici. That's right.
Mr. Allbaugh. Fire Management Assistance Program is a
wonderful program that gives us real time ability to respond to
a States request when life and property are in danger. We turn
this around within a 24-hour process. It is a verbal
communication. We have done five in the last 3 days. We have
three or four in New Mexico, a couple in Colorado that we
utilized. It is a successful program and the greatest benefit
of this program quite frankly, most of these small communities
worry about how they are going to pay for a fire that could get
out of control. We removed that responsibility right at the
outset, that way they can focus on putting out the fire when
they need to do it and utilizing the assets they need to and to
the State it is a 75/25 match program.
It is a very successful program and unfortunately, as you
pointed out we will probably use this program quite a bit this
year. We are suffering a drought all over the United States and
fires tend to start in the South but later on in the year and
move North, Northwest and I remember vividly using a couple of
fire management grants in January and February of that year,
which is basically unheard of. It is going to be a tough year,
but it is a successful program and I appreciate your support
for the program.
Senator Domenici. I just wondered since every one knew that
was going to be a tough year, was there an extra amount of
money asked for in the President's budget because of this, it
was pretty obvious we would all predict you would have a heavy
load in this area. Do you remember whether there was any extra
money?
Mr. Allbaugh. This comes out of our disaster relief fund. I
don't remember if we asked for extra money. It is treated as
part of a whole. I know that Congress will always make sure we
have enough money in the disaster relief fund to do what we
need to do.
Senator Domenici. Thank you.
FLOOD MAPPING
Senator Mikulski. The time is growing short and we have so
many questions. I am going to submit for the record my
questions on flood insurance reforms, as well as the very
important need for mapping because I feel that so much of our
communities are hit by flooding that really flood mapping would
go a long way to maximizing resources for hazard mitigation. In
fact, that was the flooding in Senator Bond's State and my own.
CITIZENS CORPS
I really need to ask some questions about the Citizen Corps
initiative. First of all, we support President Bush's effort
for renewed and reinvigorated sense of volunteerism and the
concept behind freedom Corps but the Citizen Corps is something
that I have questions about whether not the need to volunteer,
but the need for FEMA to be in charge of a volunteer effort.
Looking at the President's request, he is talking about,
for example, five programs under FEMA, one would be what you
are doing already, the CERT program. You spoke about that. But
then there are three Department of Justice programs, volunteers
in police service, a neighborhood watch program and something
called TIPS, terrorist information and prevention. Why FEMA
would be involved in that I do not know. Then there is the
Medical Reserve Corps, $10 million which I think would be a new
program which I think offers tremendous potential. Why you and
not HHS that interacts with the timing they have this excellent
office of bioterrorism that my own former head of the school of
public health Dr. Henderson was involved in.
I am concerned that we are going into a corps du jour with
a lot of new corps and then second, others that are just not
connected to FEMA where a CERT definitely is. I see volunteers
in disasters even in La Plata for many nights showed up really
to help with building, women who had heard that a senior
citizen in the hospital lost her wedding band and some key
things and over 30 women showed up to dig to help her find her
treasures. You know what, they found it. They found her wedding
ring of over 60 years. This is terrific.
But at the same time why would you be involved in terrorist
information tips. What do you have to do with the Neighborhood
Watch Program? And I will tell you, the volunteer firefighters
are prickly about this because they feel they are the
volunteers and last year we were foraging for funds to put
money in the fire program. So we have got $360 million, we have
a request here for $230 million more than we put in fire grants
so you see where we are headed here?
Mr. Allbaugh. I sure do.
Senator Mikulski. We want to encourage volunteerism, to
have them really help you in response to any disasters, but I
think we are not so sure the Citizen Corps is the way to go.
Could you tell us about this?
Mr. Allbaugh. The best logic I can offer is one that makes
sense is that we do well in coordinating other activities at
Federal agencies when there is any type of response mechanism
required. We have a great relationship with all of these
agencies you mentioned, and I believe the President, what he
had in mind was one of a coordinating role. Except for Citizen
Corps. There we have the ability to specifically offer
technical assistance.
I know it is a concern of members of the committee that it
detracts from our obligations day-to-day. Thus far from what I
have seen there has been no inability to provide those
services. Quite frankly, it occupies a few individuals, their
time on a regular basis, but it is not something that will ever
detract from our core responsibilities responding to man-made
or natural disasters. That is probably about the best logic on
the coordination of those other programs that I can offer you
at this time, Senator.
Senator Mikulski. Let me conclude. First of all, you have
got the CERT program. And there is a request in that, there is
a line item for $61 million. We absolutely want to help you
with CERT but let me ask, are you going to own and operate the
Medical Reserve Corps?
Mr. Allbaugh. No, ma'am. That will be at HHS.
Senator Mikulski. I apologize. Are you going to own and
operate that?
Mr. Allbaugh. That will be under coordination.
Senator Mikulski. Same with the Neighborhood Watch Program?
Mr. Allbaugh. Correct.
Senator Mikulski. Same with the police search program?
Mr. Allbaugh. Yes, ma'am.
Senator Mikulski. How do you coordinate it, and why does it
mean anything to FEMA? Particularly with the watch program and
TIPS program. The Medical Reserve, of course, is very
important.
Mr. Allbaugh. I think there is an advantage to be in a
coordinating role because of our relationships with State and
local officials already. We are just trying to capitalize to
make sure that everyone knows what is going on. It is not that
we are going to be running those programs. It is more one of
awareness than anything else.
Senator Mikulski. Well, I do not know. I do not know. But I
do know that some of the programs have been outstanding. The
CERTS program. We really do applaud the Medical Reserve Corps.
Those are the programs that we respond to. But Neighborhood
Watch and TIPS. I am not sure. I will yield now to Senator
Bond.
FIRE FIGHTER GRANTS
Senator Bond. Thank you very much, Madam Chair. I want to
say thanks and amen to a couple of things. Number one, the fire
grant program, the firefighters in my State is I think as in
all States really believe strongly in the peer review process
and we are delighted to understand where you are coming from,
and whatever your position was, I think we could say that
Congress was probably going to keep that fire grant program
administered by fire professionals.
CITIZEN CORPS AND VOLUNTEERS
Second, I concur 100 percent with the chair on the Citizen
Corps. I admit having daily conversations with my good friend
John Ridgeland. I have a minimum amount of high enthusiasm for
adding that responsibility of coordinating those programs to
people. We have gone down a whole list of things that you have
to do and we are going to give you more and you have got, you
have got every kind of crisis to handle and if you think that
with just a few individuals and taking away very little time
from your other responsibilities, you could coordinate large
groups of volunteers, you have not had the same experience with
volunteers I have.
We have traditionally had the best volunteer organization
when it comes to politics in the State of Missouri. We have a
dynamite volunteer organization, but if you do not have a good
professional staff running it, they are going to run into each
other, run over each other, get you in trouble and absolutely
drive you nuts. Volunteers well managed are the greatest
resource we have. I think we have got something called National
Service Corps, which has been in the business of dealing with
volunteers. I'd like to see them use their people, their
recipients as wholesale coordinators. We will have, we will
continue that discussion later, but I just, I like the
President's idea. I think it is great. I just think that you
have got more than you can shake a stick at and you do not need
to put a new volunteer coordinator hat on.
Mr. Allbaugh. Senator, thank you for your comments on the
fire grant program. And one of the reasons I feel so strongly
about the fire grant program is that for years and years
firefighters have always been the first in line for budget cuts
and the last in line for recognition and for the first time in
a very long time Congress has recognized the need, Congress has
stepped up to the plate to devise a very successful program and
we are doing a good job of implementing it, and I thank you for
your support.
FLOOD INSURANCE PARTICIPATION
Senator Bond. I have just got two quick questions
remaining. They are not brief ones and you may want to submit
more for the record. The first is what can we do about the poor
participation in the flood insurance program? I have seen ads.
This thing, this thing requires more people involved. We are
not getting involved in it. And really what can we do? How can
we get more people?
Mr. Allbaugh. I would like to respond because it does take
an elaborate answer that is pretty lengthy to solve this. There
are ways to improve it. I think we have taken some concrete
steps just recently with Bob and hopefully today Anthony Lowe
is having his hearing as new Federal Insurance Administrator.
We will have him on board. That will be a tremendous step.
PREVENTION AND CONSEQUENCE MANAGEMENT
Senator Bond. The final one I will pass along to my
colleagues. We are, I believe very strongly that FEMA should
handle the consequence management in any kind of homeland
security emergency. I think that is very clear that is what you
do. That is what you ought to focus on. The question is how do
we draw the line between prevention and consequence management
and that is I think that is going to be a lengthy discussion.
We have already raised a lot of troubling questions and we
would like to be able to discuss with you and that your
thoughts on how we draw that line.
Mr. Allbaugh. I would be happy to do that, Senator. We have
had great conversations about this. I would point out to the
members here that we may have stumbled into a process and a
template that works in the future, and by that I mean the setup
between the Secret Service, the FBI, and FEMA that we utilized
at the Super Bowl this past year and the Olympics that took
place. It was a relationship. It was a partnership that
absolutely worked when it comes to delineating those lines of
responsibility between crisis and consequence and response. I
think it is something that we can look to to talk about in the
future.
Senator Bond. Thank you very much.
Senator Mikulski. Senator Shelby.
FIRST RESPONDER TRAINING BUDGETS
Senator Shelby. Mr. Director, you might want to, submit
this answer for the record, and I hope you will. Could you
please explain to the subcommittee the budget request for the
existing consortium members, specifically, how much money FEMA
proposed to spend on each of the consortium members and how
those programs will expand or contract in light of the new
focus on First Responder training?
Mr. Allbaugh. It is a great question. I would like to
respond for the record. I'd like to do a little research. I
know a little bit about it, but I would respond for the record.
Senator Shelby. Thank you for your appearance today.
Mr. Allbaugh. Thank you.
CONCERN FOR FEMA
Senator Mikulski. Well, thank you very much, Mr. Allbaugh.
I think the number of Senators that appeared, the length of
questions shows our concern of course, like yours and the
President's for the Nation and we do look forward to working
with you and making sure that FEMA has the right sources as
well as the right framework to respond. We look forward to
seeing you again and we look forward also in seeing you take a
tour of southern Maryland and also for the excellent
responsibilities that you have assigned to the Fire Academy in
Emmitsburg. So again, 50 disasters, an aerial attack on the
United States. You and your team have had a lot on your plate.
ADDITIONAL COMMITTEE QUESTIONS
We would like to thank you for really all that you have
done and know that you and your team are not alone.
Mr. Allbaugh. Thank you very much.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Patrick J. Leahy
Question. Director Allbaugh, I am very happy to see the proposal to
add $300 million for FEMA's flood map modernization initiative. Many
town and regional planners in Vermont do not have updated maps, so it
is difficult to know exactly what areas might be affected by different
rain or run-off levels. I am concerned, though, that a small State like
Vermont will not receive adequate funding from the program, either
because it lacks the matching funding or because funds might be
distributed in a manner that favors more urban areas. Can you please
tell me exactly how FEMA plans to distribute this funding? Do you see
the need for Congress to include strong small-State minimums when it
authorizes the modernization program?
Answer. It is important to note that FEMA's Map Modernization Plan,
if funded and implemented as planned, will result in the issuance of
modernized flood hazard mapping for all States and territories,
regardless of size. The plan requires funding in fiscal year 2003 and
the two subsequent fiscal years to accomplish this.
Over the past several months, FEMA has been working with the States
and territories to develop statewide mapping plans to accomplish the
remapping effort. These plans call for remapping work to commence in
all fifty States in fiscal year 2003. Accordingly, FEMA sees no need
for Congress to include strong small-State minimums when it authorizes
the modernization program.
Question. Director Allbaugh, I am very concerned about proposed
reductions to the Hazard Mitigation Grant Program, otherwise known as
404 mitigation funds. This funding allows communities to reduce
potential repeats of disasters, permitting such sensible moves as
buying out homes located in floodplains. This program needs
improvements, especially in disbursing funds more quickly and fairly to
small States. Yet it will save lives and reduce disaster costs over the
long-term. Don't you think it would have been more effective to make
changes to the program, including adding in very strong small-State
minimum funding levels, than to request a total elimination of the
program?
Answer. The President's 2003 Budget did not propose a reduction in
funding for FEMA mitigation programs overall. In general, the Hazard
Mitigation Grant Program has been a flexible and effective tool for
States and communities to accomplish mitigation priorities in the
aftermath of a disaster, while at the same time assisting residents
affected by the disaster. However, because the funds are tied to
specific disaster events, implementation of long-range mitigation
priorities established through a comprehensive planning process at the
State and local community level is sometimes difficult to achieve.
Therefore, I believe that some combination of both pre and post-
disaster mitigation is worth considering.
______
Questions Submitted by Senator Christopher S. Bond
hmgp plans
Question. HMGP permits States to receive an increased amount of
HMGP's funding from 15 percent to 20 percent of the disaster funds if
the State has an approved State Hazard Mitigation Plan. This plan would
ensure that HMPG funds are used for important and comprehensive
mitigation efforts. How many States have these plans in effect and what
is FEMA doing to ensure that States develop these plans.
Answer. The Disaster Mitigation Act of 2000 (DMA) amended the
Stafford Act by adding Section 322 on Mitigation Planning. FEMA's new
planning regulation, 44 CFR Part 201, Hazard Mitigation Planning, which
was published as an Interim Final Rule in the Federal Register on
February 26, 2002, establishes new criteria for State and local hazard
mitigation planning consistent with the requirements of Sec. 322. The
deadline for approval of State and local mitigation plans as a
condition of receiving Hazard Mitigation Grant Program (HMGP) grants
will be November 1, 2004. A November 1, 2003 deadline for plans has
been set as a condition for local governments to receive Pre-Disaster
Mitigation (PDM) grants (authorized by Section 203 of the Stafford Act,
as amended by the DMA) for ``brick and mortar'' mitigation projects.
The Interim Final Rule:
--Continues the requirement for State mitigation planning as a
condition of disaster assistance (which allows a State, tribal
or local government to receive HMGP funding based on 15 percent
of the total estimated eligible Stafford Act assistance), and;
--Provides incentive for strengthening mitigation programs by
establishing criteria for States to receive increased (20
percent) HMGP funding if, at the time of the declaration of a
major disaster, they have an enhanced mitigation plan in place;
--Establishes a new requirement for local mitigation plans as part of
the HMGP, which will be phased in; and
--Allows States to use up to 7 percent of HMGP funds for the
development of State, Tribal, and local mitigation plans. This
provision has been in effect for all disasters declared after
October 30, 2000.
The new planning initiative provides a framework for linking pre-
and post-disaster mitigation planning and initiatives with public and
private interests to ensure a comprehensive approach to disaster loss
reduction. Such decision-making, based on sound understanding of
vulnerability to hazards and appropriate mitigation measures, is the
best indicator of a successful mitigation strategy that can be
sustained over the long-term.
Because meaningful, effective mitigation planning takes both time
and resources, FEMA established the 2003 and 2004 deadlines to give
States, tribal and local governments sufficient time to understand the
intent and scope of the requirements, and to undertake the planning
process that will meet those requirements. It is in the States'
interest to submit and have approved an Enhanced Mitigation Plan as
soon as possible. Although no States have yet met the requirements for
an Enhanced Plan, several States have submitted plans to their FEMA
regional offices to get feedback on what it will take to upgrade them
to the Enhanced level, so we know that work is underway to develop
these plans.
FEMA has undertaken an aggressive technical assistance effort to
ensure that States develop plans that meet the Standard Plan
requirements at a minimum, and to go beyond those to meet the Enhanced
Plan requirements as well. Technical assistance is also being provided
to support local and tribal governments efforts to meet the new plan
requirements.
Shortly after publication of the Interim Final Rule, FEMA conducted
mitigation planning workshops in all 10 FEMA Regional Offices for
Regional and State mitigation staff, to provide a detailed orientation
on the planning provisions of the DMA and requirements of the Interim
Final Rule. In addition to training on the requirements of local plans
and Standard and Enhanced State Mitigation plans, the workshops
included an opportunity for each State, in close coordination with the
FEMA regional office staff, to begin developing its approach to meeting
the requirements for the Enhanced Plan.
Each workshop also explained and provided copies of planning
technical assistance tools developed by FEMA to assist State and local
governments in undertaking a meaningful mitigation planning process
that will meet the requirements of the DMA. These materials include
Mitigation Plan Guidance and Evaluation Criteria, a ``canned'' workshop
for local mitigation planning that each State may use ``as is,'' or
adapt as it chooses, a series of ``How-To'' Guides for Mitigation
Planning, and numerous other publications, courses, etc.
In fiscal year 2002, FEMA awarded PDM grants to every State as well
as the District of Columbia, the U.S. Virgin Islands, the Commonwealth
of Puerto Rico, American Samoa and the Commonwealth of the Northern
Mariana Islands. FEMA placed an emphasis on mitigation planning in
fiscal year 2002 in order to position States and local governments to
meet the new criteria for State and local hazard mitigation plans. Most
States have chosen to use fiscal year 2002 PDM funds to support
planning and risk assessment for local governments. In addition, we
awarded 18 PDM grants directly to Indian tribal governments for hazard
identification and risk assessment, comprehensive multi-hazard
mitigation planning, and public education and outreach.
The mitigation planning process begun at the Regional workshops
held in March and April, 2002 envisioned continual two-way
communication between States and their respective FEMA Regional Offices
to facilitate the development of effective mitigation plans that will
meet the new requirements. We know from our Regional Offices that this
process is, in fact, occurring. Further, FEMA Regional and Headquarters
staff are also taking every possible opportunity to speak at national,
regional and State-level conferences and meetings held by professional
associations, States, etc., to discuss the mitigation planning process
and the new requirements, and disseminate our technical assistance
materials. FEMA is providing materials in both traditional hard copy,
as well as on CD-ROM, and posting them on our website.
FEMA is confident that all States will have an approved Standard
Plan in place by the November 1, 2004 deadline, and that several States
will have approved Enhanced Plans by then, if not sooner.
goals for assisting disaster victims
Question. Per the Budget, the Administration has set a goal of
meeting the needs of disaster victims for shelter, food and water
within 12 hours after the President declares a major disaster. What has
FEMA done to meet this goal?
Answer. Mission assignments are one tool that FEMA uses to meet
requests for Federal assistance. When a State lacks the capability to
perform or to contract for eligible emergency work, FEMA may issue
direct Federal assistance (DFA) mission assignments to provide
essential assistance for eliminating an immediate threat to life and
property resulting from a major disaster or emergency. FEMA has been
working with the U.S. Army Corps of Engineers to develop pre-scripted
statements of work (SOWs) under FEMA issued mission assignments. These
pre-scripted SOWs are intended to expedite the mission assignment
process and provide the needed assistance quickly and effectively. When
mission assignments are required, it is anticipated they will be issued
from the Regional Operations Center and/or the Disaster Field Office.
FEMA has also improved its ability to preposition essential
supplies and equipment in affected States and has accelerated the
establishment of FEMA's field infrastructure, including disaster field
offices and disaster recovery centers.
fema disaster relief fund
Question. Outside of the available FEMA Disaster Relief funds for
New York City, how much Disaster Relief funding is available for the
rest of the Nation for fiscal year 2002? Are these funds consistent
with the 5-year rolling average that FEMA uses to assess its needs for
disaster assistance?
Answer. Outside of the set-aside for the Inspector General and the
funding provided as a result of the September 11 terrorist attacks,
there was approximately $2.7 billion available for other disasters in
2002. Fortunately, 2002 was a less than normal year in disaster
activity with no disasters that exceeded $500 million in projected
costs.
buyouts
Question. As you know, former FEMA Director Witt was a big
supporter of buyouts of properties in the floodplain. Unfortunately,
despite massive dollars provided by Congress for buyouts, FEMA still
does not have a coordinated cohesive buyout program with clear rules
and procedures. What is your view about the role of Federal buyouts in
terms of a national mitigation plan?
Answer. FEMA's Mitigation grant programs generally operate
successfully as flexible and effective tools for States and communities
to accomplish mitigation priorities, including buyouts. In fact, these
programs have become an integral part of the overall recovery process.
Many States across the nation have successfully used buyouts to move
homes and businesses out of harm's way. As many as 24,000 properties
have been purchased nationally as part of this program since 1993. In
many of those cases, the land left behind has been flooded again.
Without a buyout, those homes and families would have suffered once
more.
To the extent allowable, given differences in the authorizing
statutes, FEMA guidance on buyouts for all funding sources is
consolidated and consistent. Our guidance provides adequate flexibility
to States and local communities to plan and implement the best project
to meet their unique situations and needs.
FEMA continues to evaluate the implementation of buyouts in order
to strengthen our ongoing program. During fiscal year 2002, FEMA
entered into a cooperative agreement with the University of North
Carolina to conduct a study on the Impact of Property Acquisition
Programs on Participating Communities. The purpose of this research is
to conduct a national study that focuses on the process of conducting
buyout programs as well as an evaluation of outcomes of these programs.
The research focuses on examining the structure of buyout programs and
their impact on individual decision-making. The study will provide FEMA
with useful information to evaluate existing practices in the property
acquisition program, and to identify steps to strengthen coordination
and collaboration with other Federal programs, such as the National
Flood Insurance Program (NFIP) and the Small Business Administration
(SBA) in order to better assist households and communities affected by
disaster events.
In addition, FEMA's believes that effective coordination and
planning at the local, Tribal, State and Federal Government levels, as
well as the coordination of pre- and post-disaster mitigation funding
opportunities, is essential to achieving mitigation goals and the
prevention of disaster losses. FEMA's new planning regulation, 44 CFR
Part 201, Hazard Mitigation Planning, establishes new criteria for
State and local hazard mitigation planning, carrying out the
authorities provided by Congress in the Disaster Mitigation Act of
2000. With this emphasis on mitigation planning, many communities will
be better positioned to develop proposals for cost-effective mitigation
projects and activities, including buyouts, and to link pre-and post-
disaster mitigation planning and initiatives with public and private
interests to ensure a comprehensive approach to disaster loss
reduction. Such decision-making, based on sound understanding of
vulnerability to hazards and appropriate mitigation measures, is the
best indicator of a successful mitigation strategy that can be
sustained over the long-term.
In fiscal year 2003, FEMA expects to publish a proposed regulation
that will amend the existing regulations for HMGP. The proposed rule
revises the existing regulations to implement amendments to the
Stafford Act that provide for delegating the administration and
management of the HMGP to States. FEMA is taking this opportunity to
amend the existing regulations to clarify implementing procedures for
buyout projects and open space maintenance, to more fully reflect
program and grants management practices previously detailed in
guidance, to strengthen the use of cost-effectiveness in prioritizing
and selecting projects at the State level, and to make the rule more
reader-friendly.
cerro grande fire assistance
Question. On May 4, 2000, the National Park Service initiated a
prescribed burn that exceeded the containment capabilities and
destroyed a significant amount of New Mexico. In response, the Congress
appropriated $455 million through the Cerro Grande Fire Assistance Act
to compensate residents for losses from the Cerro Grande fire. What is
the status of this program? I also would like to understand what
accountability requirements were put in place to ensure that any
payments were consistent with losses.
Answer. Earlier this year, FEMA notified Congress of a projected
$80 million funding shortfall. In July, $61 million of the projected
$80 million shortfall was included in a $20 billion supplemental
appropriations bill passed by Congress. This $80 million was included
in the $5.1 billion in non-emergency funding contained in the
supplemental appropriation and, as a result, was not funded. Without an
additional appropriation, FEMA will run out of claims money early in
fiscal year 2003 before all valid claims are paid. Consistent with the
priority provisions of the Cerro Grande Fire Assistance Act, FEMA has
not paid any of the subrogation claims, which are estimated to total
around $104 million.
FEMA plans to prioritize payments within the remaining
appropriation pending receipt of additional funding. FEMA will use the
following order of priority in paying claims: individual claimants,
business claimants, claimants awarded compensation during the
administrative appeal process, claimants awarded compensation in an
arbitration decision, claimants seeking individual mitigation measures
and lastly, insurance subrogation claimants. If insufficient funds
remain to pay claims, FEMA will notify claimants with valid claims that
the claim will be paid pending the appropriation of additional funding.
The deadline to receive all claims except those seeking mitigation
assistance passed on August 28, 2002. Now that the final date to submit
most claims has passed and the universe of claims is known, FEMA
estimates that as of September 17, 2002, an additional $150 million
plus $5 million in administrative costs will be needed to complete the
program.
Initial claim evaluation and approval is now nearly completed, and
the program is beginning to transition the remaining files to FEMA's
National Processing Service Center in Denton, Texas. As FEMA brings the
initial claim process to a conclusion, however, claimants who are
dissatisfied with the award continue to pursue the internal appeal
process implemented by regulation that serves as the preliminary to
statutorily-mandated arbitration. FEMA anticipates that the appeals and
arbitrations procedures will not be completed for most claims until
well into 2003 and for claims for mitigation assistance through 2004.
FEMA has implemented procedures to ensure that payments from the
Cerro Grande Fire fund are consistent with losses suffered in the fire.
First, the Agency prepared policy guidelines that deal with the most
common types of losses and provide guidance on the appropriate
methodology to document, analyze and pay each claim. To ensure
consistency and accountability, each claim is processed by a minimum of
four people: (1) a thorough review is made by claims reviewers who make
an initial payment recommendation; (2) the recommendation is reviewed
and approved by a supervisor; (3) an authorized official then
independently reviews the claim on the merit of the documentation
provided and either approves or reduces the recommended amount; and (4)
a comptroller signs the payment schedule.
Computer systems and a mandatory review help us to identify and
avoid duplicating benefits from insurance companies or other aid
providers. FEMA's Office of the General Counsel provides periodic legal
review of the policies and procedures to ensure that our determinations
are consistent with New Mexico law. An experienced private contracting
firm with expertise in evaluating medical records and personal injury
claims reviews the bodily injury claims and assists us in determining
whether an injury was caused or aggravated by the fire and in setting a
fair amount of compensation consistent with similar claims paid
elsewhere in New Mexico.
new york city 9/11 losses from terrorism
Question. What steps has FEMA put in place to ensure that fraud and
abuse with regard to FEMA disaster assistance funds are minimized?
Answer. Under the direction of FEMA's Inspector General, George
Opfer, the Office of Inspector General at FEMA became proactively
involved within a week after the September 11 attack. Both auditors and
investigators were dispatched to New York and have remained on site
since that time actively auditing and investigating allegations or
complaints of fraud, waste and abuse involving the FEMA programs. They
provided fraud awareness and financial accountability briefings to
FEMA, State, and City disaster personnel. They created a permanent
satellite office in New York and staffed it with five full-time
employees. In addition, they continue to rotate five to six temporary
disaster assistance employees to the Disaster Field Office on a regular
basis. They are currently auditing the City's major debris removal
contracts and working criminal investigations with the Manhattan
District Attorney's Office, the Southern and Eastern Districts of the
United States Attorney's Offices, and the State of New York Attorney
General's Office. The OIG's investigative cases are being coordinated
with the New York Police Department, Port Authority Police Department,
New York Department of Investigations, Small Business Administration
OIG, Internal Revenue Service Criminal Investigation Division, General
Services Administration OIG, Social Security Administration OIG, and
others. Following are their investigative statistics as of September
30, 2002:
Information/Indictment............................................ 61
Arrests........................................................... 60
Open Complaints................................................... 91
Closed Complaints................................................. 619
Open Investigations............................................... 104
Closed Investigations............................................. 24
flood map modernization
Question. FEMA's Budget Request for fiscal year 2003 includes $300
million for flood map modernization as well as $51 million derived from
flood insurance premium fees. This must be a priority since flooding
causes some $6 billion annually. Unfortunately, 63 percent of the flood
maps are more than 10 years old and some 38 percent are more than 15
years old. How much are the overall costs to improve or replace the old
and inaccurate maps? Does FEMA have any estimate for savings once all
flood maps are modernized? How does the flood map modernization program
work with the Flood Insurance program?
Answer. Funding levels of $300 million in new monies (over and
above $51 million derived from flood insurance premium fees through the
National Flood Insurance Program) in fiscal year 2003 and the two out
years are planned to fund the Map Modernization Program. Program costs
will be evaluated and refined as scoping meetings are held with the
individual communities to be mapped, and community needs are factored
into the mapping process.
The following chart illustrates that that modernized flood mapping
for the Nation will help avoid an estimated $45 billion in flood
damages to new buildings and infrastructure over a 50-year period.
The modernized flood maps will serve as the actuarial and
floodplain management bases of the National Flood Insurance Program.
Moreover, the digital form of the flood mapping will facilitate policy
rating by insurance agents, enhanced floodplain management by
communities, and more accurate determinations by banks of whether a
structure must be protected by flood insurance.
flood insurance program
Question. FEMA is recommending that the Flood Insurance program be
reformed to, among other things, (1) phase-out the pre-firm taxpayer
subsidy on second homes, vacation properties and rental properties; and
(2) include the expected costs of coastal erosion in the premiums for
policies in coastal areas. I assume that these changes need
legislation. Are you working with the appropriate authorization
committees?
Answer. Yes, legislative changes will be needed in order to bring
about these proposals. FEMA has briefed key staff on the appropriate
subcommittees of both the Senate Committee on Banking, Housing and
Urban Affairs and the House Committee on Financial Services, on the
legislative changes needed for these proposals.
Question. The Flood Insurance program is not actuarially sound.
What does this program owe on its Treasury line of credit? What other
steps can FEMA take to make this program actuarially sound?
Answer. Although the NFIP is not actuarially sound in the
traditional sense the term is used of charging full actuarial rates for
all coverage, NFIP enabling legislation authorizes the charging of
actuarial rates only for structures that are newly constructed after
being provided with detailed flood risk information by FEMA. At the
same time, such legislation has required the charging of highly
subsidized rates for older, existing structures in Special Flood Hazard
Areas. In the aggregate, NFIP premium levels are sufficient to pay
losses associated with the average NFIP historical loss year.
In addition to the proposal contained in FEMA's portion of the
President's fiscal year 2003 budget, to phase out the pre-FIRM taxpayer
subsidy on second homes, vacation property and rental property, as
mentioned above, FEMA engages in a number of activities that assist in
making the program more actuarially or financially sound. FEMA
continues to review its annual and historic loss experience to
determine and make annual adjustments to NFIP rates, as needed, and
within the limitations contained within the NFIP's enabling
legislation. At this point in time, more than 70 percent of NFIP
policyholders are charged premiums that are considered to be full-risk
premiums. Annual review and adjustment maintains the integrity of these
rates. Slower progress is being made in reducing the levels of program
subsidy by gradual rate changes for older construction.
FEMA also continually promotes sound floodplain risk management
among State and local governments to minimize the risk of flooding to
new structures, which lowers their flood risk exposure and related loss
potential. FEMA estimates that these efforts result in reduced damages
by about $1 billion each year.
Finally, FEMA further promotes sound floodplain risk management by
aggressively administering the Flood Mitigation Assistance and Hazard
Mitigation Grant Programs, encouraging State and local governments to
take definitive flood loss reduction actions to properties at risk.
Marketing the NFIP Community Rating System and providing technical
assistance to local communities also promotes loss reduction which
contributes to a more actuarially sound program.
Question. FEMA has a poor record of getting homeowners to
participate in the Flood Insurance program. What is the current rate of
participation? How does this compare over the last 4 years and what is
FEMA doing to ensure increased participation?
Answer. As of July 31, 2002, the NFIP has 4,370,066 policyholders
with over $617 billion of insurance coverage in force. Participation in
the NFIP varies around the country. In areas without recent flood
threats or with low mortgage activity, it can be particularly low. On
the other hand, market penetration in much of the Southeast and States
bordering the Atlantic and the Gulf of Mexico is relatively high.
As an example of the result of that market penetration, in 2001 the
NFIP paid over $1.1 billion in claims to more than 30,000 flood
insurance policyholders in Texas and Louisiana after Tropical Storm
Allison--the NFIP's biggest payout to date. Tropical Storm Isidore
struck in September 2002 and is projected to result in 9,200 claims
from policyholders in Louisiana, Mississippi, Alabama, Florida and
Texas. Hurricane Lili affected many of the same Louisiana and
Mississippi policyholders in October 2002, with 3,000 claims projected.
Total flood insurance policies in force over the last four calendar
years are as follows:
Calendar Year Policies in Force
2001.......................................................... 4,476,836
2000.......................................................... 4,369,087
1999.......................................................... 4,329,985
1998.......................................................... 4,235,138
In fiscal year 2001, through the work of our stakeholders, new
business increased nearly 15 percent with the addition of 630,944 new
policies to the National Flood Insurance Program's (NFIP's) books.
These gains in flood insurance policies, however, were offset by
attrition (552,783 policies) from the previous year's total number of
policies in force. While a certain degree of policyholder non-renewal
has to be expected, we recognize that to improve overall NFIP
participation we must not only continue to attract new business, but
also boost the retention of current policyholders. Therefore, we have
initiated a number of strategies and tactics to improve policy
retention, both from a mandatory and a voluntary purchase perspective.
FEMA will be working to reinvigorate its marketing and advertising
campaign. FEMA will be developing a fresh campaign with a paramount
objective of increasing the number of NFIP policies. This new national
marketing and advertising campaign will be grounded in effective risk
communication principles and practice. In this way the campaign will
address one of the major obstacles to flood insurance purchase, the
lack of perception of risk. It is expected that the campaign will
effectively convince consumers of their vulnerability to flood damage
and the value of buying and retaining flood insurance protection.
Retention has been identified as a key issue.
FEMA does not have oversight authority for lending institutions.
Nevertheless, we foster lender compliance with mandatory purchase
provisions by conducting lender training seminars across the country,
developing guidance materials for lenders both in hard copy and
electronically via our website, and by maintaining regular
communication with Federal lending regulators, Government Sponsored
Enterprises (GSE's), and the lending community.
Recent analyses indicate that lenders may be correctly requiring
the purchase of flood insurance as a condition of mortgage loan
origination. We believe, based on policy attrition rates for the past
several years and other data, that enough borrowers may not be
maintaining flood insurance throughout the term of the loan, as
required by law, to have a significant impact on our policy retention.
GAO issued a June 2002 report on this issue, ``Flood Insurance: Extent
of Noncompliance with Purchase Requirements Is Unknown''.
We plan to work with Federal lending regulators and GSE's to
identify actions we can take to ensure borrowers are required to renew
flood insurance policies annually. Although we do not have oversight
authority, we can help identify whether there are any means by which we
can prevent renewals of mandatory purchased policies from ``falling
through the cracks.''
Also, we plan to assess State escrow laws and systems to determine
whether any obstacles to flood insurance escrow may exist and, where
necessary, work with the States on amendments. It bears further
research and consideration because monthly-automated payments have been
shown to improve the persistency of flood and other lines of insurance.
To better guide our strategies we need current information
regarding customers' views of our products. FIMA is in the process of
contracting for research to determine why policyholders do or do not
renew their policies. Another research project will assess the
relationship of customers' perception of risk to the pricing and
structure of the flood insurance product.
To encourage retention of policies voluntarily purchased, we are
seeking opportunities to drive the message that flood insurance should
be maintained. When maps are updated and a flood risk zone is
determined to be of lower risk than before, the message will be for
policyholders to switch to a lower premium policy, not to drop
coverage. Additionally, as the memory of certain significant flood
events fades, we are working to convey to policyholders the importance
of renewing their coverage, and that damaging floods can occur again.
These efforts involve working through the media and asking lenders,
insurance companies and agents to amplify the messages through their
own direct mailings, advertising and public relations.
A pilot project is underway to enable certain State risk pools to
sell flood insurance to publicly-owned buildings. These risk pools will
operate under the same rules as insurance companies that participate in
the Write Your Own Program.
Additionally, FEMA published an interim final rule on September 30,
2002 to adjust the Group Flood Insurance Policy (GFIP) to be consistent
with changes in the disaster assistance program. At that time we asked
for comments about allowing the States to renew GFIP policies after the
36 month expiration, provided the States pay the premium on behalf of
certificate holders. This rule has a 6-month comment period.
Last, we are implementing a number of technology improvements over
the next several years that will make flood insurance easier for
insurance companies and agents to sell and for consumers to buy.
emergency food and shelter program
Question. The Administration is recommending that FEMA transfer the
Emergency Food and shelter program from FEMA to HUD. This program has a
long history of success at FEMA. What are the advantages to moving this
program to HUD?
Answer. The success of the Emergency Food and Shelter (EFS) Program
is primarily due to the structure in which Congress established the
program. As such, the program is administered by FEMA and governed by a
board whose membership includes representatives from six national non-
profit organizations. The National Board, as it is referred to, governs
the day-to-day operations of the program, develops program policies and
requirements, ensures the timely distribution of funds, monitors
program compliance by the funded agencies, and compiles reports
detailing accounting of the use of all program funds. FEMA's role is to
chair the National Board and provide oversight and guidance to ensure
adherence to Federal laws. Therefore, continued success is predicated
on preserving the current structure of the EFS Program, which is
allowing the National Board to continue to govern the program and
allowing a Federal agency to administer it. Should the program be
transferred to HUD and operated in the same manner, it will continue to
be successful.
The advantages of transferring the program to HUD are:
--It will be easier to assess how the EFS Program is being
coordinated with other major Federal homelessness prevention
and assistance programs and to determine if structural changes
to the program are necessary to ensure an integrated approach
to assisting persons facing housing emergencies.
--It will enable the EFS Program to link housing and services for the
chronically homeless to other comprehensive services. Linking
emergency homeless services for the homeless would mean that a
full range of needs of the homeless could be addressed in a
coordinated and comprehensive manner.
--It would decrease duplication of services and allow for scarce
resources to be utilized more efficiently and effectively.
Currently, several Federal homeless assistance programs are
providing funding to the same agencies for the same services
and same individuals.
fiscal year 2001 independent auditor's report
Question. After 3 years of clean opinions, FEMA's 2001 financial
statement was issued a qualified opinion. What are the key concerns
raised in the qualified opinion and what steps is FEMA taking to
address these concerns?
Answer. A qualified opinion was received in the fiscal year 2001
Independent Auditor's Report for the following reasons: (1) the
auditors could not sufficiently satisfy themselves as to the accuracy
of the net amount ($10,753,000) of FEMA's equipment and related
depreciation and (2) FEMA recorded an unsupported reduction
($77,000,000) to unliquidated obligations. FEMA management has
addressed these areas and both financial management and the IG expect
an unqualified opinion for fiscal year 2002. To resolve the equipment
issues, a complete inventory of equipment is being conducted and values
established for fiscal year 2002 statements. This effort and new
procedures for the current year should eliminate this qualification in
fiscal year 2002. To resolve the reduction to unliquidated obligations
issue, a complete reconciliation of all unliquidated obligations has
been completed which will eliminate this qualification.
prevention vs. homeland security
Question. There remain significant concerns among Members as to how
best to allocate Homeland Security responsibilities among Federal
agencies. The President supports FEMA as the lead domestic agency over
DOJ because of its experience and expertise in responding to natural
disasters, such as earthquakes, hurricanes and tornados. In addition,
FEMA has been developing additional expertise to plan and respond to
acts of terrorism through its Office of National Preparedness. Others
suggest that DOJ is the appropriate agency because of its experience in
developing strategic planning through the Office of Domestic
Preparedness. What are the strengths and weaknesses of each of these
agencies in taking on the responsibilities for being the lead domestic
agency in preventing and responding to acts of terrorism?
Answer. In preparing and responding to a man-made national disaster
or emergency, FEMA's core mission is to save lives, limit casualties,
and minimize damage to property. Police officers, firefighters, and
emergency medical teams are America's front-line responders in the
event of both man-made and natural disasters, including a terrorist
attack. With the right training and equipment, these first responders
have the greatest potential to accomplish the mission of saving lives,
limiting casualties, and minimizing damage to property. In the same
terrorist scenario, Justice's core mission is to gather intelligence to
prevent or mitigate the event, and to conduct the criminal
investigation to identify and prosecute the perpetrator(s).
FEMA has an established history of working with the State and local
governments and the first responder community to prepare for, mitigate
against, and respond to all-hazards. Our mission is to provide
leadership and support to reduce the loss of life and property and to
protect our nation's institutions from all types of hazards through a
comprehensive, risk-based, all-hazards approach. As evidenced in the
Federal Response Plan, FEMA coordinates all facets of emergency
management without directly ``owning'' many of the specific programs
and activities. The First Responder Initiative will require an agency
well skilled in coordination, and FEMA is the lead agency in both
Federal and State and local government coordination. This permits FEMA
to coordinate programs in the most effective manner possible.
One of the primary reasons for locating the new consolidated
program within FEMA is the agency's strong record for quickly
distributing emergency planning and assistance grants. FEMA has
extensive experience providing direct assistance to local governments
through its disaster assistance programs and its Fire Grant program.
Because First Responder grants will be allocated to States according to
a formula, FEMA will be able to disburse these funds quickly and
without difficulty. We are already working with our State and local
partners to establish a sound, working grants management process
specifically for this program so that a system is in place and ready
should the First Responder Initiative receive Congressional approval.
Since FEMA is the lead agency for consequence management and for
preparing State and local governments for all hazards, including
weapons of mass destruction terrorism, FEMA is the most logical agency
to coordinate all these functions.
Question. There seem to be a clear demarcation in how we view the
responsibilities of domestic Federal agencies with regard to acts of
terrorism. First, there is prevention and then there is response and
consequence management. It seems clear that DOJ is best equipped to
handle prevention and FEMA is best equipped to handle response and
consequence management. The key appears to be, in part, how we define
prevention and how we define consequence management. How do we define
these issues? Are there overlapping issues? What are those issues and
how do we reconcile overlapping issues in order to allow DOJ and FEMA
to work together?
Answer. FEMA is not seeking the transfer of a law enforcement
function. In preparing and responding to a man-made national disaster
or emergency, FEMA's core mission is to save lives, limit casualties,
and minimize damage to property. Police officers, firefighters, and
emergency medical teams are America's front-line responders in the
event of a terrorist attack. With the right training and equipment,
these first responders have the greatest potential to accomplish the
mission of saving lives, limiting casualties, and minimizing damage to
property. In the same terrorist scenario, Justice's core mission is to
gather intelligence to prevent or mitigate the event, and to conduct
the criminal investigation to identify and prosecute the
perpetrator(s). FEMA has not, nor does it intend to train and exercise
law enforcement officials with respect to these core investigative
duties.
In the President's Executive Order establishing the Office of
Homeland Security, elements of preparedness and prevention were
defined. Preparing for and mitigating the consequences of terrorist
threats or attacks involves working with Federal, State, and local
agencies and private entities to review and assess emergency response
plans, coordinating domestic exercises and training programs, ensuring
the readiness of response teams, and ensuring national preparedness
programs and activities are evaluated under appropriate standards.
Prevention involves working with Federal, State, and local agencies
and private entities to facilitate the exchange of information related
to preventing the entry of terrorists and terrorist materials,
coordinating investigations of threats and attacks, and coordinating
the security of borders, water, and airspace.
To reconcile these issues, the President has recommended in both
the fiscal year 2003 Budget and the Department of Homeland Security
proposal that the Office for Domestic Preparedness be transferred to
FEMA. With this proposal, the President has shown true leadership in
his willingness to address a long-standing problem--the need for
central coordination among the myriad of Federal programs dealing with
terrorism preparedness.
FEMA looks forward to enhancing the training provided by ODP and
serving as a ``single point of contact'' for State and local
governments as numerous Commissions and recent GAO reports have
recommended. In fact, by eliminating the duplication, confusion and
inefficiencies of the current system as the fiscal year 2003 budget
proposes, we will be helping to ensure that our nation's first
responders are better trained, better equipped and better prepared.
This consolidation and simplifying of the Federal Grant process by
consolidating all First Responder grants at FEMA will allow our
terrorism preparedness programs to mirror our terrorism response
programs and satisfy repeated State and local government requests.
fire act grants
Question. FEMA currently is administering the FIRE Act Grants
program at $360 million in fiscal year 2002. This is a popular program
that targets funds to firefighters, who are the first line of response
to both disasters and terrorism. The program is authorized at $900
million for both Fiscal Years 2002 and 2003. Nevertheless, the
Administration's budget assumes that this program will be absorbed into
a proposed larger block grant program that is administered by States.
There are real concerns that these funds will be slowed by a new
bureaucracy and watered down at a time of great need. I believe that we
need to preserve this program. However, if we do, how will this impact
the proposed Homeland Security block grant and is there a way to
reconcile this program with the block grant proposal?
Answer. We believe as you do that the FIRE Act program does need to
be preserved separately from the grants provided to States for the
first responder initiative. Subsequent to the President's submittal to
the Congress of the 2003 budget, the Administration is on record as
supporting separate programmatic funding between the first responder
grant program and the Assistance to Firefighter grants. There are
numerous reasons to maintain this separation: (1) the governing statute
for the fire grants emphasizes fire prevention as well as response
capacity (2) the first responder program funding priorities will be
based on a different threat profile (i.e., terrorism) than the fire
grants; and (3) the fire grants are required by statute to be made
directly to local fire departments, not to the States as the first
responder grants will be made.
Nevertheless, there clearly are ties between the two programs, and
therefore we also believe these two programs demand a close
coordination with each other.
legislation
Question. Many of the Administration's proposals for Homeland
Security depend on appropriations without any authorization structure.
I believe that we need authorizing legislation in order to ensure a set
of standards and benchmarks with regard to Homeland Security as well as
ways to ensure accountability on how Homeland Security funds are spent.
Please provide your comments.
Answer. We believe FEMA's current authorities, transferred to the
Department of Homeland Security as well as sections 502 and 506 of H.R.
5005, or section 102 of S. 2452 should provide adequate authority and
accountability.
Question. On March 21, 2002, I introduced the S. 2061, the National
Response to Terrorism and Consequence Management Act of 2002, which is
designed to provide a statutory structure for the full funding of the
Urban Search and Rescue Response System as well as a new FEMA program
to provide technical and planning grants for States to develop State
and local capacity to respond to acts of terrorism, including those
involving weapons of mass destruction. If you have had an opportunity
to review the legislation, I would like your views on the bill. If not,
I would like your views on the need to fund fully the urban search and
rescue response system.
Answer. We have reviewed the legislation and believe that it
contains important authorizing language for the National Urban Search
and Rescue System. We have taken steps to develop a rulemaking for the
system, which is currently under review. Your legislation provides FEMA
with an important framework for the system and will allow for better
financial support to the program in future years. Under the legislation
the number of teams will continue to be 28, with the option for
expansion resting on the judgment of the agency based on need and the
expectation that all 28 teams will be fully capable and mission ready.
We support this concept as we work to develop greater capability within
the existing system. We feel that it is critical to provide the utmost
support to the existing teams before adding additional teams.
We believe it important to fully fund the National Urban Search and
Rescue System to include the 28 teams and their equipment, training,
exercises and support for deployment. It is also critical that we have
the staff resources within the program office to provide an outstanding
level of support to the teams before, during, and after deployment.
Toward that end we have requested the $32 million in the emergency
supplemental for fiscal year 2002 to bring the teams up to status to
respond to WMD situations. Thanks to your support that effort to equip
and train all of the teams is underway. We also have requested $16
million for fiscal year 2003 to develop the training and exercise
program further and to allow us to implement improved team
accountability and peer review programs. We are looking at the addition
of at least seven critical positions to the National Urban Search and
Rescue Division of USFA to carry out these tasks. It is essential that
we develop the system with care to provide increased capability, while
meeting the needs of the teams and providing them with the training and
equipment they need.
disaster assistance criteria
Question. Congress has repeatedly sought to have FEMA establish
clear criteria for evaluating a Governor's request for a presidential
disaster declaration. However, FEMA has continued to employ county-wide
and State-wide per capita cost thresholds as its primary means of
determining whether damages exceed a State's capabilities. The FEMA
Office of Inspector General and the General Accounting Office have
suggested alternative methods to determine a State's financial ability
to respond to a disaster, including assessments of its total taxable
resources. Recently, the President, in his fiscal year 2002 budget
plan, called on FEMA to develop ``improved guidelines for disaster
assistance that provide States with meaningful criteria that must be
met in order to become eligible for Federal disaster assistance.'' What
is the status of these efforts and review?
Answer. During fiscal year 2001, a FEMA-State Working Group
consisting of staff from FEMA headquarters, regions, and selected
States, including leadership from the National Emergency Management
Association, conducted a broad review of the disaster declaration
factors and considered various options for revising them. A
considerable amount of discussion focused on the specificity of the
factors--if the factors are very definitive and precise, they are
perceived as too stringent and inflexible (and possibly too
complicated), not allowing the agency the discretion to address the
varying nature of disasters and the range of impacts on States. The
opposing viewpoint is that factors that are more flexible and open to
interpretation are seen as too vague and subjective, not defining a
true baseline for assistance. Though a number of possible revisions to
the factors were discussed (including using total taxable resources as
a criterion), the Working Group generally supported the current
factors, stressing their simplicity and the agency's inherent
discretion in using the factors to evaluate Governors' requests for
disaster assistance. One common concern within the Working Group was
that any effort to revise the factors that would devolve more
responsibility to the States for responding to and administering
disasters, would equate to passing on additional costs at a time when
State budget surpluses were turning into budget deficits.
As a result of the Working Group's efforts and subsequent
discussions, FEMA is continuing to use the current disaster declaration
factors, as they provide general guidelines for the States to use in
determining whether they are eligible for disaster assistance. For
example, the factors that provide a baseline for assistance from the
Public Assistance Program (which represents the majority of FEMA
disaster assistance expenditures) are generally well understood. For
example, the factor that focuses on the per capita impact of disaster
damages on a State, clearly establishes that a figure of $1.09 per
capita is used as an indicator that the disaster is of such size that
it could warrant Federal assistance. Other more general factors (such
as whether other Federal program assistance is available and the amount
of insurance coverage in force) are also considered, allowing the
agency to look at the collective impact of all of the factors when
making a recommendation to the President. This approach considers the
total impact and specific circumstances of a unique disaster within a
particular State. Thus, the current declaration process provides an
appropriate level of executive discretion, as well as flexibility for
the President and the Governors.
______
Questions Submitted by Senator Pete V. Domenici
Question. Director Allbaugh, those of us in the west are facing a
100-year drought by some accounts, and the forest fire season looks to
be the worst in decades. New Mexico has had its first fires of the
season, and I was interested to see that FEMA has a role in responding
to wildland fires under its fire management assistance grant program.
Could you explain to the Subcommittee what authorities FEMA has in
responding to wildland fire emergencies? What new activities can FEMA
undertake in these situations that it couldn't under earlier
authorities? What actions did FEMA take in assisting New Mexico
communities in the recent fires? What is the fiscal year 2003 request
for these grants, and what is FEMA's estimate of the potential need for
this type of assistance next year? Did FEMA anticipate a significant
fire season when it developed its fiscal year 2003 budget request?
Answer. Could you explain to the Subcommittee what authorities FEMA
has in responding to wildland fire emergencies?
The Fire Management Assistance Grant Program (FMAGP) is the primary
vehicle FEMA uses to provide assistance to State and local governments
for wildland firefighting activities. Section 420 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (Stafford Act),
42 U.S.C. 5187, as amended by the Disaster Mitigation Act of 2000,
established FMAGP. Under approved fire management assistance
declarations, FEMA provides assistance, primarily in the form of
grants, to any State or local government for the mitigation,
management, and control of any fire on public or private forest or
grassland that threatens such destruction as to constitute a major
disaster.
Under fire management assistance grants, total eligible costs are
reimbursed at a 75 percent Federal and 25 percent non-Federal cost
share. Eligible wildland firefighting activities covered under FMAGP
may include costs for field camps; equipment use, repair, or
replacement; tools, materials, and supplies; mobilization and
demobilization; limited pre-positioning; emergency work; and temporary
repair of damage caused by firefighting activities.
In addition to submitting requests to FEMA for fire management
assistance declarations, States may submit requests to the President
for emergency or major disaster declarations for wildland fire
emergencies. If a declaration were warranted, the President would
authorize FEMA to provide the Federal disaster assistance designated in
the declarations. It should be noted however, that funds for recovery
and hazard mitigation can be designated only under a Presidential major
disaster declaration.
Question. What new activities can FEMA undertake in these
situations that it couldn't under earlier authorities?
Answer. Section 420 of the Stafford Act, Fire Management
Assistance, expands the scope and level of assistance previously
available under Section 420 of the Stafford Act, Fire Suppression
Assistance. Instead of limiting Federal assistance to the
``suppression'' of forest or grassland fires that threaten such
destruction as would constitute a major disaster, Section 420, Fire
Management Assistance, expands the range of eligible activities to
include the ``mitigation, management, and control'' of such fires. In
the final rule for FMAGP, ``mitigation, management, and control'' is
interpreted as a flexible and broad-based provision intended to reduce
the spread of a fire, reduce associated health and safety threats,
prevent potential damages by the fire, repair damage caused by the
firefighting activities, and provide for the limited pre-positioning of
certain types of wildland firefighting resources.
Another activity FEMA is authorized to undertake under FMAGP are
those activities allowable under Section 403 (42 U.S.C. 5170b),
Essential Assistance, of the Stafford Act necessary to mitigate,
manage, and control the fire. Section 403 authorizes assistance for
activities required to meet threats to life and property. Section 403
activities that may be eligible for funding under FMAGP include police
barricading and traffic control, evacuations and sheltering, search and
rescue, arson patrol, and the dissemination of public safety
information.
Under FMAGP, FEMA is also authorized to provide funding to State
and local governments. Previously, we could only provide assistance to
the State as the sole applicant eligible for assistance.
Question. What actions did FEMA take in assisting New Mexico
communities in the recent fires?
Answer. Between March and August 2002, the State of New Mexico
submitted and FEMA approved nine requests for fire management
assistance declarations. The State has a maximum timeframe of up to one
year from the date of the fire management assistance declarations to
submit its grant applications to FEMA for review and processing. We
have already obligated approximately $5 million to the State for one
fire management assistance declaration and our Regional staff is
continuing to work with the State and local governments to document
actual eligible costs so that the State can submit its eight other fire
management assistance grant applications within the timeframes allowed.
Question. What is the fiscal year 2003 request for these grants,
and what is FEMA's estimate of the potential need for this type of
assistance next year?
Answer. FMAGP provides reimbursement to State and local governments
in the form of grant assistance for actual costs incurred in the
performance of eligible wildland firefighting activities for a declared
fire. We have not received any requests for fire management assistance
declarations since October 1, 2002, the beginning of fiscal year 2003.
It should be noted, however; that as part of the Regulatory Planning
and Review requirement published as part of the final rule for FMAGP,
we estimated that in extraordinary years, with severe fire conditions
and a high level of fire activity, fire management assistance grants
may total more than $50 million.
Question. Did FEMA anticipate a significant fire season when it
developed its fiscal year 2003 budget request?
Answer. FEMA did not anticipate a significant fire season when it
developed the fiscal year 2003 budget request due to uncertainties in
trying to forecast the number and severity of wildland fires that would
be eligible for assistance under FMAGP.
Question. Director Allbaugh, I want to thank you for your personal
attention to the recovery of Los Alamos and surrounding areas from the
devastating Cerro Grande Fire that occurred in New Mexico just about
two years ago. This fire consumed almost 48,000 acres of forest,
destroyed nearly 400 homes and caused damage or injury to 1,000
families, countless businesses, the county of Los Alamos, the State of
New Mexico, four Indian pueblos, and Los Alamos National Laboratory. I
would remind my colleagues that this fire was started by the Federal
Government when a controlled burn at Bandelier National Monument burned
out of control. For that reason, the Congress enacted the Cerro Grande
Fire Claims Assistance Act of 2000, and appropriated $455 million to
FEMA to establish a claims program to compensate victims of the fire.
New Mexicans had until August 28 of this year to file claims under the
Act, and according to recent assessments of the Cerro Grande fire
claims program, additional appropriations will be needed to pay
anticipated claims.
Would you please give the Subcommittee the latest figures on: the
number and amount of claims filed; the number and amount of claims
approved; the number and amount of claims paid; the number and amount
of claims pending; and the number of claims anticipated to be filed by
August 28.
Answer. Claims filed: 21,512
Claims paid: 14,614 ($430 million)
Claims closed: 19,060 (included in $430 million)
Number of claims pending: 2,452 ($150 million)
Question. Under the recent assessment of the program, FEMA
indicated that additional appropriations will be needed. What is FEMA's
estimate of the additional appropriations needed to pay anticipated
claims?
Answer. We estimate that we will need an additional $150 million to
pay all claims. The amount is based on estimates of our current
liabilities. Please see Table below:
OCGFC CLAIMS LIABILITY AS OF 10/03/02
------------------------------------------------------------------------
Category Sub-Totals Totals
------------------------------------------------------------------------
Total Appropriation.............. ................. $455,000,000
Reimbursement from Stafford...... $2,305,601 2,305,601
Total Paid to Date............... ................. (424,554,223)
Estimated Remaining Liabilities:
Individual Claims Liability.. 23,311,587 ..................
Business Claims Liability.... 18,004,441 ..................
Government Claims Liability.. 16,313,928 ..................
Pueblo Liability............. 4,984,127 ..................
Appeals Liability............ 100,615 ..................
--------------------------------------
Sub-total Liabilities...... ................. 62,714,698
======================================
Liabilities Remaining without ................. -29,963,320
Subrogation and Unknowns........
Subrogation...................... 103,775,814 ..................
Projections for Inestimable
Liabilities:
Potential appeals............ 2,552,766 ..................
Potential arbitrations/ 10,000,000 ..................
Federal Court...............
Mitigation................... 2,910,000 ..................
--------------------------------------
Sub-total Inestimable........ ................. 119,238,580
======================================
Additional Funds Required........ ................. -149,201,900
------------------------------------------------------------------------
The formula to determine the OCGFC liability will be as follows:
Appropriation; Plus Reimbursement from Stafford; Less Total Paid to
Date; Reserves on Individual, Business, Government and Pueblo Claims
(Open Claims); Open Appeals; Subrogation liability.
Projections for Inestimable Liabilities: Mitigation; Future Appeals;
Future Arbitrations/Federal Court.
Equals--Additional Funds Required.
Question. When does FEMA expect to need these funds, and for what
purpose?
Answer. The funding will be needed by the end of the first quarter
to continue processing payments. We continue to hold payments to
insurance companies, as specified in the Act, until additional funding
is available. However, we are fast approaching a time when additional
dollars will be needed in order to continue payments to individuals and
businesses affected by the fire.
Question. With these funds, will FEMA be able to keep on schedule
processing and paying claims?
Answer. Depending on the amount of funding approved, whether it is
the full amount or a partial amount, we could continue the processing
of payments and delay payment of subrogation claims until funding
becomes available.
Question. What would be the effect of not receiving these funds in
the fiscal year 2002 supplemental appropriations bill now before
Congress?
Answer. The effect of not receiving the funds would be that
starting in late November 2002 any additional payments would be
prioritized. We would continue to pay claims already in process. Those
that cannot be paid would receive a letter detailing the agreed award
to be paid contingent upon funding.
Initially, FEMA would cease making payments to all claimants other
than individual and business claims received before a financially
determined cut off date. Individuals and businesses who filed after the
calculated cut off date would be paid initial awards on a first
completed basis from remaining funds until funding was depleted.
Remaining amounts awarded through appeals, mitigation claims, or
arbitrations would not be awarded until funding was made available.
Director Allbaugh, I would first like to say that I support
President Bush and his Administration 100 percent in their efforts
regarding the war on terrorism. There is nothing more important and no
higher priority for this country at this time in history. That having
been said I would like to ask you some questions regarding the shift in
funding regarding the training of our first responders, an activity
that, up until this particular Presidential budget request, has been
administered by the Department of Justice (DOJ).
Question. Has the entire activity of first responder training been
transferred to the Federal Emergency Management Agency (FEMA) or does
DOJ still retain some aspects of this critically important function?
Answer. The fiscal year 2003 Budget and the President's Department
of Homeland Security proposal would transfer all functions and
activities of the Office for Domestic Preparedness (ODP) of the
Department of Justice to FEMA. FEMA will continue the preparedness
activities at facilities currently funded by ODP, and will build upon
and enhance those activities at a greater level. These are not law
enforcement functions. They include only those activities that have
long been a part of the FEMA preparedness mission.
FEMA is not seeking the transfer of a law enforcement function. In
preparing and responding to a man-made national disaster or emergency,
FEMA's core mission is to save lives, limit casualties, and minimize
damage to property. Police officers, firefighters, and emergency
medical teams are America's front-line responders in the event of both
natural and man-made disasters, including terrorist attacks. With the
right training and equipment, these first responders have the greatest
potential to accomplish the mission of saving lives, limiting
casualties, and minimizing damage to property. In the same terrorist
scenario, Justice's core mission is to gather intelligence to prevent
or mitigate the event, and to conduct the criminal investigation to
identify and prosecute the perpetrator(s). FEMA has not, nor does it
intend to train and exercise law enforcement officials with respect to
these core investigative duties.
Question. Director Allbaugh, I think we all agree that a shift in
first responder training responsibilities would require legislative
authorization by the Congress. You recently mentioned that you were
working with the Environment and Public Works Committee on such
legislation. As a new member of that Committee, could you tell me the
nature of these discussions, and bring me and my staff up to date on
those discussions?
Answer. Senator Jeffords introduced S. 2664, the First Responder
Terrorism Preparedness Act of 2002, in June 2002. This bill would amend
the Robert T. Stafford Disaster and Emergency Assistance Act to
establish a program to provide assistance to enhance the ability of
first responders to respond to incidents of terrorism, including
incidents involving weapons of mass destruction. To accomplish this
purpose, the bill would establish the Office of National Preparedness
within FEMA to coordinate and build viable terrorism preparedness and
response capability at all levels of government.
The Committee on Environment and Public Works met to consider S.
2664 on June 27, 2002. By voice vote, the committee agreed to three
amendments offered by Senator Clinton. The first amendment, as
modified, established a program to protect the health and safety of
first responders. The second amendment required States to use criteria
established by FEMA to disburse funds to local governments and local
entities within 45 days and to coordinate with them concerning the use
of this assistance. The third amendment provided that FEMA will
coordinate with the Department of Justice in relation to the Community
Oriented Policing Services program. The committee then agreed to
favorably report S. 2664, as amended, by voice vote. Report Number 107-
295 was reported by Senator Jeffords on October 1, and the bill, as
amended, was placed on the Senate Legislative Calendar; Calendar number
625.
Under the leadership of Senator Judd Gregg as the then-Chairman of
the Senate Commerce, Justice, State, and the Judiciary Appropriations
Subcommittee, the Congress established the first responder training
program in the Department of Justice, and it has been extremely
successful in training 80,000 police, fire, and emergency personnel.
Last May, when the President proposed the transfer of first responder
training to FEMA, it was a program of about $30 million. For fiscal
year 2002, the National Domestic Preparedness Consortium received $32.7
million with an additional $63 million added after the September 11
attacks. The President proposes to transfer $234.5 million for all
Department of Justice counter-terrorism funding associated with
domestic preparedness to FEMA, and the new program is now proposed at
$3.5 billion!
Question. The proposed $3.5 billion program is a significant
expansion of the first responder training program. I asked this same
question to the Attorney General--would FEMA have the capability of
implementing a dramatically expanded first responder training program
in fiscal year 2003 considering that legislation has not yet been
considered to establish this program?
Answer. Yes. FEMA believes it has existing authority to implement
the First Responder Initiative as derived from the Stafford Act as well
as the Federal Fire Prevention and Control Act. Grant making or other
financial assistance authority for training is found in a number of
sections of the Stafford Act. The Stafford Act (42 USC 5196(f))
authorizes the Director of FEMA to ``conduct or arrange, by contract or
otherwise, for training programs for the instruction of emergency
preparedness officials and other persons in the organization,
operation, and techniques of emergency preparedness'' as well as
``conduct or operate schools'' and ``provide instructors and training
aids as necessary.''
In addition, the Federal Fire Prevention and Control Act (15 U.S.C.
2206) authorizes the establishment of the National Fire Academy and
permits the Superintendent to ``admit to the courses and programs of
the Academy individuals who are members of the firefighting, rescue,
and civil defense forces of the Nation and such other individuals [. .
.] as he determines can benefit from attendance.''
Question. Is FEMA prepared to implement this program in a fashion
that will not delay critical first responder training activities while
it sets up an internal structure to implement this new program
responsibly? Other significant program expansions are proposed for FEMA
in the budget that will also place administrative burdens on the
agency.
Answer. One of the primary reasons for locating the new
consolidated program within FEMA is the agency's strong record for
quickly distributing emergency planning and assistance grants. FEMA has
extensive experience providing direct assistance to local governments
through its disaster assistance programs and its Fire Grant program.
Because First Responder grants will be allocated to States according to
a formula, FEMA will be able disburse these funds quickly and without
difficulty. That being said, FEMA intends to monitor the funds closely,
ensure they are awarded based on risk and need and require that mutual
aid agreements are in place as a prerequisite to funding.
The Administration expects that FEMA will begin operating the First
Responder program immediately following the passage of FEMA's 2003
appropriations bill. FEMA intends to award grants to the States shortly
after receiving the appropriation from Congress. FEMA has developed a
process for the distribution of the fiscal year 2002 supplemental
grants that will be adapted and used for the fiscal year 2003 First
Responder grants.
Question. How would FEMA utilize the current training partners of
the National Domestic Preparedness Consortium, which includes the New
Mexico Institute of Mining and Technology, under its proposed first
responder training program?
Answer. FEMA intends not only to continue the preparedness
activities at the New Mexico Institute of Mining and Technology and the
other facilities currently funded by ODP, but also to build upon and
enhance those activities at a greater level. Training is a crucial
component of this countries' ability to prepare and respond to
terrorism activities. The request for $3.5 billion will ensure that we
begin providing the enhancements and new efforts necessary to get our
First Responders on track for the level of preparedness that is
necessary to deal with any future terrorist or WMD events.
ODP provides funding for a number of training programs and non-
Federal terrorism centers. In 2003, FEMA will continue to fund those
activities for which the Administration requested funding in fiscal
year 2002, including:
--Center for Domestic Preparedness (Ft. McClellan)--chemical weapon
training
--Texas A&M--Emergency response training
--Louisiana State University--Bio-preparedness training
--DOE Nevada Test Site--Large-scale WMD training
--New Mexico Institute of Mining and Technology--Live explosives
training
Question. How would FEMA make provision to train first responders
for weapons of mass destruction, including biological, chemical, and
radiological weapons, which require highly specialized facilities to
ensure safe exercises?
Answer. FEMA will continue the preparedness activities currently
funded by the Office of Domestic Preparedness that offer specialized
training activities, to include live-agent training and will build upon
and enhance those activities at a greater level. Training is a crucial
component of this country's ability to prepare for and respond to
terrorism activities.
Question. Assuming that a comprehensive first responder training
program is developed, it is clear that responding to potential attacks
using weapons of mass destruction--chemical and biological agents and
even nuclear devices--requires very specialized training. In your
opinion, are there necessary trainers available throughout the country
to carry out a significant first responder training program,
specifically one that is comprehensive and coordinated to provide a
seamless response to a disastrous attack?
Answer. It is critical that a comprehensive, coordinated and
consolidated terrorism training program be established. This is why the
President asked FEMA to manage the First Responder Grant Program which
would provide over $1 billion in training funding alone. It is also why
I have put all FEMA training under the same directorate, so all first
responder training could be centrally coordinated and each emergency
discipline could learn to work as a team with others. FEMA has for many
years used a robust and coordinated training system that utilizes over
50 State fire academies and State emergency management training
programs, there are also robust State and local fire, emergency medical
services and police academies as well. These systems train hundreds of
thousands of responders each year and have largely been left out of the
funding and support from DOD and the Justice Department's programs.
There are thousands of trainers that can be brought to bear on this
issue. We are also aggressively working to develop additional train-
the-trainer opportunities to assist first responder training systems
with the expertise they need. Chemical incidents are not dissimilar
whether the cause is accidental or terrorism and our nation's hazardous
materials teams are well suited to respond. We continue to work with
the Environmental Protection Agency, the Department of Transportation
and others to strengthen their training. Biological events, while
having some similarities to chemical incidents, do require additional
training and we look forward to working with the CDC and the Department
of Health and Human Services to address these needs. The bottom line is
that through FEMA, we need to fully utilize the existing robust
training systems we have in place, that have not yet seen significant
support, rather than creating new mechanisms that will perpetuate a
disjointed program of Federal assistance. In that way we can make sure
that our first responders are well prepared to respond to any attack
regardless of cause.
Question. On Sunday April 28, 2002 a tornado touched down in
Southern Maryland destroying many homes and businesses in Charles and
Calvert Counties. It also caused an estimated $3.5 million in damages
to Southern Maryland Electric Cooperatives (SMECO) facilities which
serves the entire area. Can you give me a time frame as to when SMECO
can expect reimbursement from FEMA and an approximate percentage of
recovery?
Answer. Six Project Worksheets (PW) totaling $1,100,358.09 (75
percent Federal Share) were approved and obligated for the SMECO on or
before 5/31/02. The majority of these projects were 100 percent
completed at the time of the PW preparation and therefore actual
eligible costs were reimbursed. There are currently no outstanding
issues related to this applicant.
Question. Over the past decade FEMA has stepped in and provided
vital support in helping to rebuild local communities and entire
regions when natural disasters have occurred. Timely assistance in
helping homeowners rebuild, small businesses recover from structural
and economic damages, and providing grant assistance for public and
cooperatively-owned utilities in order to restore critical
infrastructure will be essential to Southern Maryland's recovery. Do
you foresee any delays or problems with the State of Maryland's
request?
Answer. The incident occurred on Sunday, April 28, 2002, and was
declared on Wednesday, May 1, 2002. Tornado damage is normally covered
by homeowners' insurance. While the majority of applicants received
insurance settlements, FEMA was able to provide disaster housing
assistance in the amount of $158,247.60 to 87 eligible applicants. The
Individual and Family Grant (IFG) Program provided grant awards for
serious unmet needs in the amount of $175,676.00 to 70 eligible
applicants. Disaster Unemployment Assistance (DUA) was given to 50
applicants in the amount of $32,618.00. To date, Crisis Counseling
grants have been awarded in the amount of $716,617.00. In addition to
FEMA assistance, the U.S. Small Business Administration (SBA) has given
106 loans totaling $5,987,600.00 (70 home loans in the amount of
$3,268,200 and 36 business loans in the amount of $2,719,400.00).
A total of $1,100,358.09 (75 percent Federal Share) was approved
and obligated for Southern Maryland Electric Cooperatives to reimburse
them for emergency costs incurred and to restore their infrastructure.
All of these funds were obligated by 5/31/02.
SUBCOMMITTEE RECESS
Senator Mikulski. God bless you. God bless America. And
this hearing stands in recess until next week Wednesday, May
15, when we will listen to the National Science Foundation and
the Office of Science and Technology Policy.
[Whereupon, at 11:10 a.m., Wednesday, May 8, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MAY 15, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:46 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Johnson, Bond, and Domenici.
NATIONAL SCIENCE FOUNDATION
STATEMENT OF DR. RITA COLWELL, DIRECTOR
ACCOMPANIED BY:
DR. WARREN WASHINGTON, CHAIR, NATIONAL SCIENCE BOARD
TINA BOESZ, INSPECTOR GENERAL
EXECUTIVE OFFICE OF THE PRESIDENT
Office of Science and Technology Policy
STATEMENT OF JOHN H. MARBURGER III, DIRECTOR
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. My colleague, Senator Bond, is on his way
from a meeting, but I am going to go ahead and start the
hearing and then he will be able to join in his statement,
because we have to wrap up as close to 11 o'clock as we can,
just because of all of the things going on, on the floor.
So, I want to state that the subcommittee on VA/HUD will
come to order. And today we are going to take the testimony for
fiscal year appropriations from Dr. Rita Colwell, the Director
of the National Science Foundation, who is now approaching her
fourth year of her term; and we welcome her.
To Dr. Warren Washington, the new chair of the National
Science Board. And, Doctor, I understand that you were just
elected by your peers to be the next chairman of the National
Science Board, so congratulations and a most warm and cordial
welcome to you.
And also we have asked Dr. John Marburger to come, as well.
He is the Director of the Office of Science and Technology
Policy, the President's advisor on science. Dr. Marburger, this
is your second appearance before this subcommittee. You and
Administrator Whitman, the administrator of EPA, testified last
year on the Anthrax situation concerning the Hart Building and
the Brentwood Mail Facility, in which you helped to get the
post office very important and crucial technical assistance.
So, we welcome you as well.
In reviewing this year's appropriations requests from the
administration, I was really taken aback at what I regard as a
rather spartan budget for the National Science Foundation. I
really, in the course of our testimony this morning, will want
to ask all of you what you think the administration's long-term
plan is for scientific research.
Last year--I was disappointed as well in the
administration's budget, because it actually cut into research.
And everyone from those who are advocating the United States of
America maintaining its strategic and competitive edge, to
those interested in national security and homeland security, we
are all turning to science and technology, and we are turning
to scientists to help maximize--to really maximize the human
capacity we have in our country.
So looking at this, I was really concerned. Last year,
Senator Bond and I worked on a bipartisan basis to increase NSF
by 8 percent. It is well known that Senator Bond and I want to
double the National Science Foundation. And he and I continue
to be committed to that on a bipartisan basis.
And I know he will speak for himself in his usual unabashed
way; it is the characteristics of who chairs this committee.
This year's budget sent up by the Administration is a bit
better. It does contain a 5 percent increase, but one-third of
the increase is made up from programs from other agencies,
meaning a transfer of--from NOAA and other agencies. So it is
really only 3 percent.
I find this really disturbing in light of: This is the
beginning and the dawn of the 21st Century and some of the
great institutions created in the last half of the last century
are staying--seeing us well.
And I just point to NATO and the National Science
Foundation. NATO has helped preserve the peace, bring about the
end of a Cold War, has protected both this country and its
allies, and was a very crucial institution in this century.
The National Science Foundation was created so that we
could advance science and technology, particularly in the
civilian sector. Science and technology helped us win World War
II, and we knew that it would help win the war of the future,
in terms of economics and national security.
So we want to make sure, of course, NATO is strong. But I
want the National Science Foundation to be strong and funding
the cutting edge research that needs to be done, and bringing
along the next generation.
We have to do more than keep up with inflation if we are to
expect our scientific enterprise to give us the ability to meet
our national and economic security challenges. And, again, I
will reiterate that Senator Bond and I want to double this
budget.
In order to meet that goal, we would need a 15 percent
increase in NSF this year, not 3 percent proposed by the
Administration. So we are going to have a tremendous amount of
work to do.
In the areas of research, the Administration is proposing
transferring three programs from other agencies to NSF. NOAA's
Sea Grant program--and Dr. Colwell, I know this is one of your
great areas of interest, because of your previous job heading
up the Marine Biotech Center at the University of Maryland.
But really, does Sea Grant belong at NSF, or does it stay
at NOAA where it has done such an outstanding job over the
years? Then there is EPA's environmental education program and,
of course, the Administration wants to transfer the U.S.
Geological Survey's water quality research program.
To me this is the illusion of creating an increase; this is
not an increase. It simply moves the responsibility from one
area to another. We want to be able to discuss this.
I do not believe a merger of these programs is warranted--
but I do want to hear the justification of the Administration.
I am pleased, however, with proposed increases in
information technology, nano-technology and bitechnology. I
believe that these are cutting edge, and we will want to
discuss these further.
Though in reviewing the basics, which is always the basics,
I was disappointed with the funding level of basic science, or
the core sciences, to really see that in areas like physics and
chemistry that I know you, Dr. Colwell, have said have long
been neglected, are really again at--they have gone from
spartan to--I am afraid they are on the verge of skimpy.
We can see that the investments in science are yielding
results. My colleague here, Senator Bond, has been a very
strong advocate of mapping the plant genome. And we see the
results of this.
They have completed the genetic map of rice, which, of
course, could have untold consequences in terms of world food
supply, disease resistance, all of these things. I mean, this
is what--you know, this is what we want to be able to help do,
not only the practical applications, but the basics, so that
even the private sector can value add. This discovery will be a
major step, as I said, in preventing world hunger.
Then we look at things like info-tech. That takes us to
issues like cyber-security, when just about everything we do
relies on a computer network, cyber-attacks could make us very
vulnerable in the United States of America.
So, we want to discuss the core science programs and what
really is needed to maintain this.
In the area of education, of course, I am interested in the
next generation of science. I know that over 40 percent of our
PhD's--students studying for PhD's, are from other countries.
That is not a xenophobic statement on my part.
But what is happening to our young people? Where are they
in science and in engineering and so on?
Well, I know that one of it is that the stipends used were
really quite modest and we were able to increase that to
$21,500. And I note that this goes a long way to increasing it
to $25,000. So in my mind, one of the jobs of NSF is to be
bringing along the next generation, which if it were medicine,
it would be interns and residencies and so on.
And this is what we need to be thinking about here, as well
as them being attracted to the basic sciences, so we can move
ahead in other areas of science and technology.
I am concerned that undergraduate education funding
declines by 5 percent and that programs for women and
minorities decline by over 7 percent.
I think that is very shortsighted. Then there is the issue
of work force readiness. I think it is well-known that I
believe, like our Secretary of Labor, Elaine Chao, that we do
not have a job shortage in this county; we have a skill
shortage. And then that takes us, again, through this.
I will be at a press conference shortly after this on the
issues related to the digital divide. So, we are looking at the
basics--our basic scientists, our basic research, the future
scientists of America. Well, we know that science education
really starts at the K through 12 level and even before that.
Finally, we go to NSF management. We want to know what NSF
and the National Science Board have done to improve its project
and fiscal management of large-scale projects.
We need to understand how NSF sets priorities, particularly
among new, major equipment projects and how are they being
managed. We need to maintain a strong management focus
particularly as--hopefully as the budget increases. This budget
proposes a significant increase in salaries and--increases. So,
we want to hear from you on that.
Dr. Marburger, also, we welcome you, as we will be asking
you: What are the administration's over-arching objectives in
science and technology? What is the role of OSTP when it comes
to major agency science programs, such as the space station?
Does it really do cutting edge research? Where are we going in
areas that have specific strategic interest to the United
States and, of course, the balance between the life sciences,
and physical sciences and engineering science?
We really would like to also know what kind of interagency
task forces are going on in the area of science and technology
and particularly in the areas of education.
And we will have more to go in on this. I note that my
ranking member has arrived. I want to really thank him for his
very strong advocacy on the National Science Foundation.
We have worked on a bipartisan basis on this. And I think
it is one of the things that we have really enjoyed working
together. So Senator Bond, let me turn it over to you.
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you very much, Madam Chair; I thank you
for your kind words. I also thank you for your leadership and I
could just say, ``Amen, I agree with everything you said,'' but
being this is the United States Senate, I am going to say it
anyhow. Because this is an area where we both have a deep
personal interest and concern, I want to share with you some of
those concerns, some of the optimism, some of the hope.
I apologize to you, Madam Chair, and to the witnesses. I
was late. I was on the phone with another friend from the White
House talking about VA/HUD issues. It is certainly nice to be
popular. They have our phone numbers and I apologize for the
delay.
I join in welcoming Dr. Colwell, Dr. Marburger, and Dr.
Washington.
Dr. Washington, in your first appearance as the Committee--
before the Committee as chair of the National Science Board, I
look forward to working with you. You have very big shoes to
fill, since Dr. Kelly was very active, very helpful to us and
played a major role in boosting NSF's budget.
I also understand that the Inspector General, Dr. Tina
Boesz, is here. She has done an outstanding job in reviewing
NSF management practices, especially of the large facility
project area.
Also, I add a special commendation for the outstanding work
of Dr. Bob Eisenstein, who is departing the Foundation at the
end of the month. Dr. Eisenstein is a native Missourian, who is
in charge of the math and physical sciences directorate at NSF,
and leaves a very distinguished record. I wish him the very
best and thank him for his great service.
This is our last budget hearing, or at least regularly
scheduled hearing in this Committee. But it is very important
to us, because it gives an opportunity to talk about the
critical role that science and the National Science Foundation,
OSTP play in the economic and intellectual growth and in the
well-being of the Nation.
According to many economists, over the past half century,
advances in science and engineering have stimulated at least
half of the Nation's economic growth. Further, investment in
scientific research has led to innovative developments in the
high-tech industry, most notably the Internet, lasers, and
supported notable scientists such as Carl Sagan and John Nash.
And that is why my colleague, Senator Mikulski, and I have
led the bipartisan, effort to double NSF's budget. As she has
said, unfortunately, we have a long way to go. We do not have
the budget recommendation.
And while Federal support in life sciences, specifically
NIH, has increased significantly. The combined share of the
funding for physical sciences and engineering in the Federal
research budget total has actually dropped.
I am very disappointed that the Administration has not
demonstrated the same level of support for NSF, as we have
continued to argue for NSF and ask Dr. Marburger to help us
change the Administration's views about the importance of the
physical sciences.
Support for NSF is vital to the research in the bio-medical
field, as well. And that is what so many doctors have told me
throughout Missouri and throughout the country.
They have been alarmed at the disparity in Federal funding
between life science that NIH supports and the physical
sciences that NSF mainly supports. Without NSF's supported
research and the physical sciences, medical advances will
stagnate.
Many medical technologies such as magnetic resonance
imaging, ultrasound, digital mammography, genomic mapping,
could not have occurred and cannot improve to the next level of
proficiency without underlying knowledge from NSF supported
work in biology, physics, chemistry, math, engineering, and
computer sciences. Simply put, supporting NSF supports the work
of NIH.
Now, the Federal Government's drop in support of the
physical sciences has also alarmed the high-tech industry,
because of the significant decline in bachelor degrees in
physical sciences. As the chair pointed out, this decline has
put our Nation's capabilities for scientific innovation at
risk; and equally important, at risk of falling behind other
industrial Nations.
The high-tech industry is struggling to find qualified
engineers and scientists and, as noted, becoming much more
reliant on foreign nationals to fill those positions. That is
fine if we can encourage those people to come here and stay
here, but when they go home and take their knowledge with them,
that is a serious brain drain.
Many notable researchers in the high-tech industry have
told me that the shortages of trained American scientists and
engineers has limited the growth potential of the electronics
and software industries and allowed foreign competitors to
catch up to U.S. industry.
To address the shortage of the tech talent in this country,
I have joined with Senate colleagues, including Senator
Mikulski, Senator Lieberman, Senator Frist, and Senator
Domenici, in introducing legislation to improve undergraduate
education in math, science, engineering, and technology.
I appreciate the Administration's support of the program
and its budget request and hope we can provide more money there
this year.
As, again, as the Chair has mentioned, one of my specific
areas of interest is plant biotechnology. I strongly believe
that biotechnology, namely the plant genome research, is
critical in maintaining the long-term sustainability and
competitiveness of our Nation's agriculture. In particular,
NSF's plant genome program has generated exciting possibilities
for improving human health and nutrition.
It can be a very powerful tool for addressing hunger in
many third-world countries, as well as improving our own
environment and our own nutrition values in food.
Now, while I would prefer to spend more minutes
highlighting the importance of scientific endeavors, such as
the plant genome, I need to raise some questions about the
Foundation's management.
As you all know, I am a big advocate for the Foundation.
But my enthusiasm for boosting the NSF's budget runs into
problems when we have management problems.
In the inspector general's written testimony submitted for
this hearing, she found three significant management problems
related to post-award management, work force planning, and most
notably, large facility project management. These findings are
troubling, especially since these issues are not new and are
not difficult to resolve.
The most troubling management issue is NSF's management and
oversight in large research facilities. At my request, the I.G.
audited NSF's funding and management of major research
equipment and facilities, and recently issued its final report
on May 1.
The I.G. report noted that the Foundation has made some
effort to improve its management and oversight of large
facilities; however, the I.G. found that the lack of adequate
guidance ``have allowed NSF to use multiple appropriation
accounts to fund the acquisition and construction costs of
major research and equipment and facilities, and led to
inconsistency in the types of costs funded through the MRE
account.''
Unbeknownst to the science board and Congress, NSF
practices have resulted in significant cost overruns and
cannibalization of funds from other worthy research projects.
For example, the I.G. report found that NSF's contribution to
the Large Hadron Collider project would exceed its budgeted
amount by $59 million or 73 percent. According to the I.G.'s
report, this practice seems to be common in other large
facility projects.
This report confirmed my fears about the oversight of NSF's
large facilities. It appears that once the money is out the
door, too little follow-up occurs.
Now, NSF has taken some important steps, such as developing
a management and oversight plan, but much more needs to be done
and needs to be done very promptly. I've seen how mismanagement
often leaves other agencies open to budget cuts and NSF would
not be immune.
Related to this issue is my concern about the Foundation's
process for prioritizing its large facility projects. I have
recently asked my staff to begin discussions with the National
Academy of Sciences to see if the Academy could provide us some
guidance on how NSF can better prioritize its numerous large
facility projects.
I plan to pursue this matter and hope that the Science
Board and the Foundation can work with us and we can develop a
better plan.
Lastly, I need to express my concern about the proposed
national underground science laboratory at the Homestake Mine
in South Dakota. Since I first became involved with this
subcommittee, I have defended the peer review system.
However, despite my remarks--or remarks made by the lab's
political advocates that the Homestake project will be judged
solely on the scientific merits, I am skeptical. I fear that
the peer review system is in danger and that political pressure
may prevail.
I have been concerned about the project ever since the
Homestake Identification Bill was forced through Congress last
year. I believe that the passage of the indemnification bill
has tainted what could otherwise be a scientific worthy
project. The bill has created a dark cloud around the Homestake
Mine project, due to the dangerous legal, budgetary, and policy
implications it may create.
And it could be, unfortunately, a great, big, black hole in
the ground where we pour research dollars badly needed in other
areas.
This very costly program may be largely redundant since
there are already sophisticated neutrino labs in Canada and
Europe. I urge NSF and the Science Board to review this project
carefully and I assure you I intend to monitor it carefully as
well.
With that, I thank the Chair for her indulgence. I have a
lot to say, because this is a very important agency to me.
Senator Mikulski. Yes, absolutely.
Senator Johnson, did you want to have an opening statement
or any remarks?
STATEMENT OF SENATOR TIM JOHNSON
Senator Johnson. Well, Madam Chairman, I will submit an
opening statement. I want to expedite the opportunity to listen
to this panel.
I would make just a very brief observation. One is just
that I want to express my enthusiasm for Federal science and
technology investments, despite the fact that my own State of
South Dakota ranks 52nd in Federal expenditures in research and
development, dead last behind the District of Columbia and
Puerto Rico.
And I share your support for higher education, NSF
stipends. I benefitted, myself, as a graduate student from an
NSF grant.
I want to express strong support for the EPSCoR program,
which has done a great deal to help small States develop the
research infrastructure that they need to have at their
colleges and universities. And lastly, I want to observe that a
panel of experts convened by the NSF recommended the Home Stake
Gold Mine as a potential site for a national underground
science laboratory.
That assessment was conducted by scientists who evaluated
the proposals on the merits, and the subsequent proposal is now
before the NSF for further consideration and peer review.
I appreciate that the future of the proposal be determined
by its scientific merit. And I do not believe the South Dakota
delegation, the bipartisan delegation effort to make sure that
the Home Stake Mine as an option is inappropriate political
intervention.
We have had to work with the Home Stake Mining Company to
see that they do not flood this unique resource, an 8,000-foot
shaft, so that it remains an option. But the Congressional
delegation from South Dakota has no intention of intervening
and otherwise pressuring or causing the selection process that
would involve anything other than scientific peer review on its
merits.
We have worked on a parallel track to ensure that the
research opportunities of mining are available, should the NSF
and the National Science Board recommend proceeding with such
an initiative. And I want to thank Madam Chairman for her work
in that regard to allow us to preserve this as an option. But
that is the extent of the Congressional involvement in this NSF
project, and it is my hope it will go forward untainted by any
political concerns, and that the base science in the end wins
out.
So thank you, Madam Chairman, and I will submit a more
complete statement for the record.
Senator Mikulski. Thank you, Senator Johnson.
Senator Johnson. Oh, I would observe that, unfortunately, I
have a conflicting obligation involving a foreign trade
delegation and I am going to have to leave much sooner than I
would otherwise like. But I do want to welcome the panel. And I
appreciate their working with this subcommittee. Thank you
Senator Mikulski. Let us now turn to our witnesses. And the
way we would like to proceed is first to Dr. Colwell, then to
Dr. Washington; and then Dr. Marburger, we are going to ask you
to be the wrap up.
I am going to ask unanimous consent that your written
statements be included in the record. I know you have--each
have oral statements. And in the interest of time, just presume
that you have all been introduced and proceed, kind of like you
are defending your dissertation, okay?
Dr. Colwell. Thank you, Chairwoman Mikulski, Senator Bond,
and members of the committee. Thank you for providing the
opportunity to discuss the President's budget request for the
National Science Foundation.
Before I begin, I would just like to say that we are
thrilled to have Dr. Warren Washington, the newly elected chair
of the National Science Board here with us. And with your
permission, I would ask that Dr. Washington be permitted to
address the committee.
So, Dr. Washington.
STATEMENT OF DR. WARREN WASHINGTON
Dr. Washington. Thank you. First of all, I would like to
say, Madam Chair and to Ranking Member Bond, and the members of
the subcommittee, I appreciate having the opportunity to
testify before you as chair----
Senator Mikulski. Dr. Washington, would you pull that
microphone closer?
Dr. Washington. Okay.
Senator Mikulski. Thank you.
Dr. Washington [continuing]. As chair of the National
Science Board. I am Warren Washington, senior scientist and
section head of the climate change research section of the
National Center for Atmospheric Research.
On behalf of the science board, I thank the subcommittee
for its sustained commitment to a broad portfolio of
investments in science, mathematics, engineering and technology
research and education. These investments contribute to our
Nation's long-term security and economic vitality, and to the
well-being of all Americans.
The National Science Board has approved and supports the
National Science Foundation's budget request for fiscal 2003.
The 5 percent increase in funding will allow NSF to continue to
nurture people, ideas, and tools needed to generate new
knowledge and new technologies.
Among the important initiatives that this budget includes
are priorities for science and engineering work force,
mathematical and statistical science research that will advance
interdisciplinary science and engineering, and research in the
social, behavioral and economic sciences to explore the complex
interactions between technology and society.
The NSF director, Dr. Rita Colwell, will discuss these and
other specifics of the budget request in her testimony.
Among the Federal agencies, NSF has the unique mission of
advancing the Nation's health, prosperity, and welfare by
supporting basic research and education in all fields of
science and engineering.
NSF programs support new discoveries and innovative
educational programs at all levels. NSF funded research and
education are critical to sustaining United States strength in
science and technology, which is a key element of national
security.
Revolutionary advances such as those in information
technology, nano-technology, materials and biotechnology,
remind us that such breakthroughs with promising benefits to
the economy, the work force, education, health, and national
security require long-term, high-risk investments.
Despite wide-spread recognition of the benefits that flow
from federally supported research, as a Nation, we are
seriously under-investing in basic research. In our $10
trillion gross domestic product, the Federal Government budgets
$24 billion to basic research, which represents one-fourth of 1
percent of the gross domestic product.
Of the $24 billion, NSF receives $3 billion to support
cutting edge science. It is estimated that the NSF proposals,
representing another $5 billion, are worthy of investment if
funds were available.
Achieving a balanced portfolio in the basic sciences is as
important as the quality and quantity of the research funded.
For example, as Congressional leaders and others have pointed
out, the success of the National Institutes of Health's efforts
to find cures for deadly diseases depends heavily on the
underpinning of basic research supported by NSF.
In addition to providing oversight to NSF, the board
provides advice to the President and Congress on matters of
science and engineering policy. I would like to mention some of
our current activities related to major issues affecting the
health of the science and engineering enterprise.
The level of Federal investment is crucial to the health of
the science and engineering enterprise. Equally crucial is how
effectively that investment is made. The growing opportunities
for discovery and the inevitable limits on Federal spending
mean that hard choices must be made and priorities set.
In its recent report, ``Federal Research Priorities, A
Process for Setting Priorities,'' the board offers its
recommendations for a more effective budget process, including
an improved information base and a process for allocating
Federal funding to research.
The conduct and the communication and the use of science
are intrinsically global. The collaborations and international
partnerships contribute to addressing a broad range of
international problems and help build more stable relations
among Nations.
In its recent report ``Towards A More Effective Role for
the U.S. Government in International Science and Engineering,''
the board recommends that the Federal Government increase the
effectiveness of its coordination activities, increase
international cooperation, especially with developing countries
and by younger scientists, and improve the use of science and
engineering information in dealing with global issues.
An area of constant concern for the NSF and the board is
the quality and the adequacy of infrastructure to enable
scientific discoveries in the future. The rapidly changing
environment of new knowledge, new tools, and new information
capabilities has created a demand for more complex and more
costly facilities for scientific research. A board task force
is assessing the changing needs and strategies to ensure that
the Nation will have the infrastructure to sustain cutting-edge
science and engineering research.
We expect to receive the task force's preliminary findings
this summer.
For the U.S. leadership in science and engineering, there
is no more important an issue than the development of a skilled
technical work force. As a Nation, we are not attracting the
number of science and engineering students our Nation needs to
sustain its leadership, nor are we successfully tapping all of
our domestic resources, especially the under-represented
minorities and women.
A board task force is considering policy options for
ensuring an adequate science and engineering work force for the
future. We anticipate receiving the task force's report by the
end of the year.
Madam Chair, at this point I would like to close my formal
remarks. I thank the subcommittee for its long-time support of
science--for the science community, especially the National
Science Foundation, and for allowing me to comment on
significant national policy concerns, as well as on the
foundation's budget. Thank you.
[The statement follows:]
Prepared Statement of Dr. Warren Washington
Madame Chair, Ranking Member Bond, and members of the Subcommittee,
I appreciate having the opportunity to testify before you as Chair of
the National Science Board. I am Warren Washington, Senior Scientist
and Section Head of the Climate Change Research Section at the National
Center for Atmospheric Research.
On behalf of the National Science Board, I thank the Subcommittee
for its sustained commitment to a broad portfolio of investments in
science, mathematics, engineering, and technology research and
education. These investments contribute to our Nation's long-term
security and economic vitality and to the well being of all Americans.
The National Science Foundation's Budget Request
The National Science Board has approved and supports the National
Science Foundation's budget request for fiscal year 2003. The 5 percent
increase in funding will allow NSF to continue to nurture the people,
ideas, and tools needed to generate new knowledge and new technologies.
Among the important initiatives that this budget includes are
priorities for the science and engineering workforce; mathematical and
statistical science research that will advance interdisciplinary
science and engineering; and research in the social, behavioral, and
economic sciences to explore the complex interactions between
technology and society. The budget continues support for the Math and
Science Partnership program; increases funding for the Foundation's six
priority areas, which have the potential of enormous payoff for the
Nation; and provides a much-needed increase in annual stipends for
graduate fellows in a critical investment, the future U.S. science and
engineering workforce. The NSF Director, Dr. Rita Colwell, will discuss
these and other specifics of the budget request in her testimony.
As this Committee recognizes, NSF is a major contributor both to
scientific research and science education. Federal investments in the
basic sciences through NSF have produced new discoveries and new
technologies essential to our national security and economic
prosperity. In addition, NSF supports innovative education programs
from pre-kindergarten through graduate school, preparing the next
generation of scientists and engineers and contributing to a more
scientifically literate workforce and society.
Each year NSF evaluates, primarily through external peer review,
32,000 proposals from 2,000 colleges, universities, and institutions.
The value of the proposals is approximately $16 billion. NSF annually
makes 10,000 awards, totaling nearly $3 billion, in a highly
competitive merit review process. It is estimated that NSF proposals
representing an additional $5 billion are worthy of investment if the
funds were available.
The Health of the Science and Engineering Enterprise
The new knowledge and technologies emerging today are a tribute to
Federal research investments made years ago in a spirit of
bipartisanship. When those investments began, no one could foresee
their future impact. Revolutionary advances such as those in
information technology, nanotechnology, materials, and biotechnology
remind us that such breakthroughs with promising benefits to the
economy, the workforce, our educational systems, and national security
require long-term, high-risk investments. Among Federal agencies, NSF
has the unique mission of advancing the Nation's health, prosperity,
and welfare by supporting research and education in all fields of
science and engineering. NSF plays a critical role in supporting new
discoveries and knowledge as well as innovative educational programs at
all levels. NSF-funded research and education are critical to
sustaining U.S. strength in science and technology, a key element of
national security.
Despite widespread recognition of the benefits that result from
federally supported scientific research, as a Nation, we are seriously
under-investing in basic research. In our $10 trillion Gross Domestic
Product, the Federal Government budgets $24 billion to basic research,
which represents one-fourth of 1 percent of the Nation's Gross Domestic
Product. Of the $24 billion, NSF receives $3 billion to support
cutting-edge science and the search for new knowledge.
Achieving a balanced portfolio in the basic sciences is as
important as the quality and quantity of research funded. For example,
as Congressional leaders and others have pointed out, the success of
the National Institutes of Health's efforts to find cures for deadly
diseases depends heavily on the underpinning of basic research
supported by the National Science Foundation.
National Science Board Policy Studies
In addition to providing oversight to NSF, the Board provides
advice to the President and the Congress on matters of science and
engineering policy. I would like to mention some of our current
activities related to major issues affecting the health of the science
and engineering enterprise.
federal investment in science and engineering
The level of Federal investment is crucial to the health of the
science and engineering enterprise. Equally crucial is how effectively
that investment is made. The growing opportunities for discovery and
the inevitable limits on Federal spending mean that hard choices must
be made and priorities set.
In its recent report, Federal Research Resources: A Process for
Setting Priorities, the Board offers its recommendations for a more
effective budget process, including an improved information base and a
decision-making process for allocating Federal funding to research. The
Board's conclusions are based on reviews of the literature on budget
coordination and priority setting for public research and invited
presentations from and discussions with representatives of the Office
of Management and Budget, the Office of Science and Technology Policy,
the Federal research and development agencies, congressional staff,
high-level science officials from foreign governments, experts on data
and methodologies, and spokespersons from industry, the National
Academies, research communities, science policy community, and academe.
u.s. government role in international science and engineering
In the 21st century, advances in science and engineering will to a
large measure determine economic growth, quality of life, and the
health and security of our planet. The conduct, communication, and use
of science are intrinsically global. New ideas and discoveries are
emerging all over the world and the balance of expertise is shifting
among countries. Collaborations and international partnerships
contribute to addressing a broad range of international problems. They
also contribute to building more stable relations among nations by
creating a universal language and culture based on commonly accepted
values of objectivity, sharing, integrity, and free inquiry. The
Federal Government plays a significant role in promoting international
science and engineering activities and supporting research with
international dimensions.
In its recent report entitled Toward a More Effective Role for the
U.S. Government in International Science and Engineering, the Board
concludes that new approaches to the management and coordination of
U.S. international science and engineering activities are needed if the
United States is to maintain the long-term vitality of its science and
engineering enterprise and the vitality of its economy. The Board
recommends that the Federal Government (1) increase the effectiveness
of its coordination of international science and engineering
activities, (2) increase international cooperation in fundamental
research and education, particularly with developing countries and by
younger scientists and engineers; and (3) improve the use of science
and engineering information in foreign policy deliberations and in
dealing with global issues and problems.
u.s. science and engineering infrastructure
An area of constant concern for NSF and the Board is the quality
and adequacy of infrastructure to enable scientific discoveries in the
future. The rapidly changing environment of new knowledge, new tools,
and new information capabilities has created a demand for more complex
and more costly facilities for scientific research.
A Board task force is assessing the current status, changing needs,
and strategies needed to ensure that the Nation will have the
infrastructure to sustain cutting-edge science and engineering
research. We expect to receive the task force's preliminary findings
this summer.
national workforce policies for science and engineering
For U.S. leadership in science and engineering, there is no more
important issue than the development of a skilled technical workforce.
As a Nation, we are not attracting the numbers of science and
engineering students our Nation needs to sustain its leadership. Nor
are we successfully tapping all our domestic resources, especially
under-represented minorities and women. The pool of potential science
and engineering students will increasingly reflect the growing
diversity in the American workforce and society.
A Board task force on workforce policies for science and
engineering is reviewing U.S. workforce needs, the role of foreign
students and workers, and policy options for ensuring an adequate
science and engineering workforce for the future. We anticipate
receiving the task force's report by the end of this year.
Madame Chair, at this point I would like to close my formal
remarks. I thank the Subcommittee for its long-time support of the
science community, especially the National Science Foundation, and for
allowing me to comment on significant national policy concerns, as well
as on the Foundation's budget request.
Senator Mikulski. Thank you very much, Dr. Washington.
Dr. Colwell.
STATEMENT OF DR. RITA COLWELL
Dr. Colwell. I would--will continue, Madam Chair. Every
year, the foundation's optimal use of limited public funds has
relied on two conditions. One is ensuring that our research and
education investments are aimed and continuously re-aimed at
the frontiers of understanding, and then certifying every
dollar goes to competitive merit reviewed and time limited
awards with clear criteria for success.
NSF has been proactive in implementing the President's
management agenda, and we welcome--and we will apply input from
many sources to continuously improve the way we manage programs
at NSF.
As an aside, I would say that NSF is, by far, the leading
agency in the world and looked to by other countries in
following the procedures that we have developed.
When these conditions are met, our Nation gets the most
intellectual and economic leverage from its research and
education investment. The National Science Foundation is
requesting $5.036 billion for fiscal year 2003, $240 million or
5 percent more than the previous year.
For the United States to stay on the leading edge of
discovery and innovation, we cannot do less. Before providing a
few highlights of the budget, let me stress that the priority
setting process at NSF results from continual consultation with
the research community.
New programs are added or enhanced only after seeking the
combined expertise and the experience of the science and
engineering community, the Director, the Deputy Director and
the National Science Board.
Programs are initiated or enlarged based on consideration
of their intellectual merit, the broader impacts of the
research that is done, the importance to science and
engineering for the United States and balance across fields and
disciplines, as well as synergy with research and other
agencies and other Nations.
NSF coordinates its research with our sister research
agencies informally by program officers being actively informed
of other agencies' programs and formally through interagency
agreements that spell out the various agency roles in research
activities.
Moreover, through our committee of visitors process, there
is continuous evaluation. There is feedback of information on
how the NSF programs are performing. One of the highlights of
the budget of this year is the second installment of $200
million for the national 5-year, $1 billion Math and Science
Partnership Program, the President's program, which we heartily
and thoroughly endorse.
The program links local schools with colleges and
universities to improve pre-K to 12 math and science education,
trains teachers, and to create innovative ways to raise the
performance of all students and schools.
An investment of approximately $37 million will increase
the annual stipends for graduate fellows to $25,000, to attract
more of the Nation's most promising students in science and
engineering. I would like to thank the Chair and Senator Bond
for your support of graduate student fellowships.
The budget also includes funding for six priority areas,
including $221 million for nano-technology research,
fundamental and important for our country; $286 million for
information technology research; and $60 million as part of the
new priority area in mathematical and statistical sciences
research that will ultimately advance interdisciplinary science
and engineering.
We will direct $185 million to the NSF's Learning for the
21st Century Work Force priority area, including $20 million to
fund three or four new multi-disciplinary, multi-institutional
Science of Learning Centers to enhance our understanding of how
we learn, how the brain stores information, and how we can best
use the new information technology to promote learning in our
classrooms.
We are also requesting $10 million to seed a new priority
area in the social, behavioral, and economic sciences to
explore the complex interactions between new technology and
society, so that we can better anticipate and prepare for their
consequences.
Finally, the budget requests $79 million for research on
bio-complexity and the environment. Now, this builds on the
past investments to study the remarkable, the dynamic web of
interrelationships that arise when living things at all levels
interact with their environment. Research in two new areas this
year as part of bio-complexity are the microbial genome
sequencing and the ecology of infectious diseases that will
help us develop strategies to assess and manage the risks of
infectious diseases, invasive species, and biological weapons.
I should add that as part of the Administration's new
multi-agency Climate Change Research Initiative, we will
implement a $15 million research program to advance
understanding in highly focused areas of climate science to
reduce uncertainty and facilitate policy decisions.
Our budget also includes $76 million for programs slated to
be transferred to NSF from NOAA, EPA, and the USGS. I want to
assure the committee that NSF has been working closely with
these agencies to develop plans for implementing these
transfers, should they be approved by Congress.
In large facilities, we will continue support for the next
phase of construction for the Atacama Large Millimeter Array,
ALMA. New construction projects in fiscal year 2003 include two
prototype sites for the National Ecological Observatory
Network, NEON, at a cost of $12 million to analyze data to
detect abrupt changes or long-term trends in the environment.
The budget also requests $35 million for EarthScope to
detect and investigate earthquakes, volcanic eruptions, and
landslides on the North American continent.
The events following September 11 demonstrated our
capacity--the National Science Foundation's capacity to engage
the research community in ways that are immediately responsive
to national needs. We owe this flexibility to a highly trained
scientific and engineering work force that's capable of
selecting the most interesting, the most challenging problems
for their research.
It is this flexibility, enabled by the merit review system,
that makes ours a model of scientific support that is clearly
the envy of the world. Madam Chair, I thank you for allowing me
to include a copy of the NSF budget summary as part of my
testimony and I will be pleased to respond to any questions
that the committee may have. Thank you.
[The statements follow:]
Prepared Statement of Dr. Rita R. Colwell
Chairwoman Mikulski, Senator Bond, and Members of the Committee,
thank you for providing this opportunity to discuss the President's
budget request for the National Science Foundation.
Every year, the Foundation's optimal use of limited public funds
has relied on two conditions: Ensuring that our research and education
investments are aimed--and continuously re-aimed--at the frontiers of
understanding; and certifying that every dollar goes to competitive,
merit-reviewed, and time-limited awards with clear criteria for
success.
When these two conditions are met, our nation gets the most
intellectual and economic leverage from its research and education
investments.
The National Science Foundation is requesting $5.036 billion for
fiscal year 2003, $240 million or 5 percent more than the previous
fiscal year. For the United States to stay on the leading edge of
discovery and innovation, we cannot do less.
Before providing a few highlights of the budget, let me stress that
the priority setting process at NSF results from continual consultation
with the research community. New programs are added or enhanced only
after seeking the combined expertise and experience of the science and
engineering community, the Director and Deputy, and the National
Science Board. Programs are initiated or enlarged based on
considerations of their intellectual merit, broader impacts of the
research, the importance to science and engineering, balance across
fields and disciplines, and synergy with research in other agencies and
Nations. NSF coordinates it its research with our sister research
agencies both informally--through the active monitoring by program
officers of other agencies' programs--and formally, through more than
150 MOUs and Interagency Agreements that spell out the various agency
roles in research activities.
One of the highlights of the budget is a second installment of $200
million for the national 5-year, $1 billion Math and Science
Partnership Program. The program links local schools with colleges and
universities to improve pre-K-12 math and science education, train
teachers, and create innovative ways to raise the performance of all
students and schools.
An investment of approximately $37 million will increase annual
stipends for graduate fellows to $25,000 to attract more of the
Nation's most promising students to science and engineering.
The budget also includes funding for six priority areas, including
$221 million for nanotechnology research, $286 million for information
technology research, and $60 million as part of a new priority area in
mathematical and statistical sciences research that will ultimately
advance interdisciplinary science and engineering. $185 million is
directed toward NSF's Learning for the 21st Century Workforce priority
area--including $20 million to fund three to four new multi-
disciplinary, multi-institutional Science of Learning Centers to
enhance our understanding of how we learn, how the brain stores
information, and how we can best use new information technology to
promote learning.
We are also requesting $10 million to seed a new priority area in
the social, behavioral, and economic sciences to explore the complex
interactions between new technology and society so that we can better
anticipate and prepare for their consequences.
Finally, the budget requests $79 million for research on
biocomplexity in the environment. This builds upon past investments to
study the remarkable and dynamic web of interrelationships that arise
when living things at all levels interact with their environment.
Research in two new areas this year--microbial genome sequencing and
ecology of infectious diseases--will help develop strategies to assess
and manage the risks of infectious diseases, invasive species, modified
organisms, and biological weapons.
I should add that as part of the Administration's new multi-agency
Climate Change Research Initiative, we will implement a $15 million
research program to advance understanding in highly focused areas of
climate science, to reduce uncertainty and facilitate policy decisions.
Our budget also includes $76 million for programs slated to be
transferred to NSF from NOAA, EPA, and the USGS. I want to assure the
Committee that NSF has been working closely with these agencies to
develop plans for implementing these transfers should they be approved
by Congress.
In large facilities, we will continue support for the next phase of
construction of the Atacama Large Millimeter Array (ALMA). New
construction projects in the fiscal year 2003 budget include two
prototype sites of the National Ecological Observatory Network (NEON)
at a cost of $12 million to analyze data to detect abrupt changes or
long-term trends in the environment. The budget also requests $35
million for EarthScope to detect and investigate earthquakes, volcanic
eruptions, and landslides on the North American continent.
Madam Chair, if there are no objections, I would like to include a
copy of the NSF budget summary as part of my testimony, and I would be
pleased to respond to any questions that the committee may have.
______
Prepared Statement of Dr. Christine C. Boesz
Madam Chair, Senator Bond, and distinguished members of the
Subcommittee, I am Dr. Christine Boesz, Inspector General at the
National Science Foundation (NSF). I appreciate the opportunity to
appear before you today. As you know, NSF continues to be an innovative
agency dedicated to maintaining American leadership in the discovery
and development of new technologies across the frontiers of scientific
and engineering research and education. NSF has had an extraordinary
impact on scientific and engineering knowledge, laying the groundwork
for technological advances that have shaped our society and fostered
the progress needed to secure the Nation's future. Because the
scientific enterprise and its underlying basic research are
everchanging, NSF continuously faces new challenges. Consequently, my
office is working closely with NSF management to identify and address
issues that are important to the success of the Agency. Today I would
like to provide an update on the status of NSF's progress in three
areas critical to its success: post-award management, workforce
planning, and large facilities management.
post-award management
NSF's primary mission is to fund extramural research and education
activities that will advance science and engineering. Over 95 percent
of NSF's fiscal year 2002 budget is in support of these activities,
which are funded primarily through grants and cooperative agreements.
The Agency's scientific directorates and offices have a shared
responsibility with the Office of Budget, Finance, and Award Management
to oversee the financial and programmatic management of these awards.
Because of its enormous impact on NSF's daily operations, for the past
2 years I have identified award administration as one of NSF's top ten
management challenges.\1\
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\1\ Memorandum from Christine C. Boesz, Inspector General, National
Science Foundation, to Eamon M. Kelly, Chairman, National Science
Board, and Rita R. Colwell, Director, National Science Foundation
(January 30, 2002) (on file with the National Science Foundation Office
of Inspector General) [hereinafter 2001 Management Challenges]; Letter
from Christine C. Boesz, Inspector General, National Science
Foundation, to Senator Fred Thompson, Chairman, Senate Committee on
Governmental Affairs (Nov. 30, 2000) (on file with the National Science
Foundation Office of Inspector General) [hereinafter 2000 Management
Challenges].
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In addition, during the most recent annual audit of NSF's financial
statements, our external auditors identified, as a reportable
condition, weaknesses in NSF's internal controls over the financial
aspects of post-award management.\2\
---------------------------------------------------------------------------
\2\ Auditor's Report, fiscal year 2001 National Science Foundation
Financial Statement Audit, (January 18, 2002).
---------------------------------------------------------------------------
The auditors found that, while NSF has a robust system of award
management over its pre-award and award phases, it needs to develop a
more rigorous, risk-based monitoring program for the post-award phase.
In addition, NSF needs to significantly improve its current policies
and procedures for the valuation and tracking of its assets, including
facilities and equipment held and maintained by other entities.
NSF management agrees that award administration is one of NSF's top
management challenges, but disagrees that it should be classified as a
reportable condition for the purposes of financial statement reporting.
Nevertheless, NSF is working to continuously improve its business
processes by refining its award management procedures to include a more
structured, risk-based monitoring element. Further, NSF is taking steps
to improve its oversight of assets for which it holds title.
In support of these efforts, my office is currently conducting a
review of best practices in grant award administration to assist NSF in
addressing this audit finding and meeting its management challenge. We
are looking at organizations in both the public and private sectors
that dispense and administer financial assistance awards, and we plan
to issue our report by the end of the year. In addition, we will
continue to assess NSF's overall progress in developing a more
effective post-award management system.
workforce planning
Despite an increasing workload and a budget that has grown from $1
billion to $5 billion over the past 20 years, the number of full-time
equivalent positions (FTEs) at NSF has remained relatively static.\3\
In addition, NSF, like much of government, is vulnerable to a wave of
retirements in key areas. Because of these concerns, I identified
workforce planning and training as another management challenge for
NSF.\4\
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\3\ Compare NSF's fiscal year 1983 Budget Request to Congress with
NSF's fiscal year 2001 Budget Request to Congress. Between 1983 and
2001, FTEs increased by less than 2 percent, from 1200 to 1220.
\4\ 2001 Management Challenges and 2000 Management Challenges,
supra note 1.
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The strategic management of human capital is a major component of
the President's Management Agenda \5\ and has been identified by the
Government Accounting Office (GAO) as posing a significant risk
government-wide.\6\ Last year, this Subcommittee requested that my
office analyze the adequacy of the agency's staffing and management
plans in light of the efforts to expand NSF's budget over the next 5
years.\7\ In response to that request, my office has performed a review
of NSF's workforce planning activities.
---------------------------------------------------------------------------
\5\ Executive Office of the President of the United States, the
President's Management Agenda: Fiscal Year 2002 (Aug. 2001).
\6\ High-Risk Series: An Update, GAO-01-263 (2001); Human Capital:
Meeting the Government-wide High-Risk Challenge, GAO-01-357T (2001).
\7\ S. REP. NO. 107-43 (2001).
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NSF's workforce planning to date, like that of most Federal
agencies, has largely been confined to stating broad goals and
standards. It falls short of an actionable plan, which requires
specific objectives, clearly assigned responsibilities, well-defined
milestones for discrete actions, and practical measures of
effectiveness for accountability. However, NSF is in the process of
contracting for a multi-year business analysis of its operations that
will include a human capital management plan component identifying its
future workforce requirements.\8\
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\8\ NSF has issued a Request for Quotations for a multi-year
business analysis of its operations, including a comprehensive human
capital management plan. NSF expects to award this contract, which is
estimated at $15 million over a 3 to 4 year period, next month. RFQ
Number CPO 020027.
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While it may be premature to attempt a meaningful assessment of
future workforce planning at NSF, due to the imminent launch of the
Agency's ambitious business analysis initiative, I can offer some
preliminary conclusions. I believe that the Agency's proposed business
analysis, if diligently conducted by the contractor and properly
overseen by NSF, represents a comprehensive and rigorous approach to
reviewing NSF's primary operations and the human resources needed to
staff them. It has the potential to generate an actionable plan that
will help NSF identify and meet its current and future workforce needs,
as well as plan ways to head off future problems. The ultimate value of
the initiative, of course, will be determined by the validity of the
findings of the business analysis and the actions that NSF takes
pursuant to them. Given NSF's investment in time and resources, I look
forward to substantial, concrete results that will improve the agency's
business processes, including workforce planning and management.
large facilities management plan
NSF's management of large facility projects is another issue that I
have identified as one of the Agency's top ten management
challenges.\9\ In response to the President's Budget Blueprint,\10\
increased scrutiny from the Office of Management and Budget (OMB) and
the Congress, and recommendations from my office, NSF developed a
Facilities Management and Oversight Plan (Plan) last fall.\11\
---------------------------------------------------------------------------
\9\ 2001 Management Challenges and 2000 Management Challenges,
supra note 1.
\10\ Executive Office of the President of the United States, A
Blueprint for New Beginnings: A Responsible Budget for America's
Priorities 161 (Feb. 2001).
\11\ National Science Foundation, Large Facility Projects
Management & Oversight Plan NSB-01-153 (Sept. 2001).
---------------------------------------------------------------------------
As part of its implementation, the Plan calls for significantly
upgrading the current procedures and guidelines for oversight and
management of large facility projects. The implementation has been
slower than originally anticipated, and recruitment of a new Deputy
Director for Large Facility Projects is now expected to be completed
this summer. However, despite the delay, I am encouraged by recent
progress. Last month, members of the team charged with drafting the new
guidelines and procedures briefed my office on their progress, and I am
pleased to see NSF is on track for full implementation later this year.
To assist NSF in carrying out this plan, we have identified
additional ways that NSF can enhance its policies and procedures to
provide a more robust facilities management system.
During our audit of the Major Research Equipment (MRE)
appropriation account, which was requested by this Subcommittee, we
found several areas that NSF needs to address to continue improving its
management and oversight for large projects and facilities. My office
issued a report responding to your request earlier this month.\12\ We
found that questionable practices discovered during our audit of the
Gemini project \13\ have occurred in other MRE-funded projects as well.
NSF's existing policies and procedures have led the Agency to apply
funding sources inconsistently among these projects and fail to account
for each project's total cost.
---------------------------------------------------------------------------
\12\ Office of Inspector General, National Science Foundation,
Audit of Funding for Major Research Equipment and Facilities, Report
No. 02-2007 (May 1, 2002).
\13\ Office of Inspector General, National Science Foundation,
Audit of the Financial Management of the Gemini Project, Report No. 01-
2001 (Dec. 15, 2000).
---------------------------------------------------------------------------
As a result of these findings, we have recommended that NSF revise
its financial management policies and procedures to ensure that it
identifies the full cost of major research equipment and facilities and
improves its administration of MRE accounts.
NSF should be able to incorporate these improvements into its
current efforts to implement the large facilities Plan.
Finally, the MRE account provides funding for two distinctly
different types of projects: those that invest in state-of-the-art,
scientific tools for research and the development of new knowledge and
ideas; and those that support the investment in mission critical
property, plant, and equipment (PP&E) owned by NSF. The latter provide
the facilities and logistical means for a broad range of science
endeavors, primarily in NSF's Polar Programs. Both types of projects
require effective management, i.e., planning, budgeting, construction
oversight, and risk management, to ensure that these multimillion-
dollar projects proceed on schedule, stay within budget, and perform as
expected. Both also require full-cost accounting in accordance with
Federal accounting standards.
But funding these types of projects from a single appropriation
account creates a situation where the replacement, renovation, and
upkeep of assets critical to the safety and health of researchers and
their support personnel could potentially compete with new scientific
tools for limited funding. In updating its large facilities policies
and procedures, therefore, NSF should (1) plan and prioritize the
mission critical PP&E projects separately from the development and
construction of research tools and (2) distinguish their different
funding sources, to avoid possible negative impact on the broad range
of programs these assets support. More specific accounting will reduce
confusion about how funds are being allocated, improve the accuracy of
budget planning, and allow more effective monitoring of the use of
funds.
I am pleased to see NSF addressing large facility management
through the development of this Plan. As the guidelines and procedures
are fully developed and implemented, my office will continue to assess
this critical area and recommend further enhancements where necessary.
We share the same goal--efficient and effective management of these
large and complex projects--and I look forward to assisting NSF in
realizing this goal.
Madam Chair, this concludes my statement. I would be happy to
answer any questions you or other members of the subcommittee may have,
or to elaborate on any of the issues that I have addressed today.
contact information
For information about this statement, please contact Dr. Christine
C. Boesz at 703-292-7100 or [email protected].
Senator Mikulski. Thank you very much, Dr. Colwell.
Dr. Marburger, please.
STATEMENT OF JOHN H. MARBURGER III
Dr. Marburger. Madam Chairman and members of the
subcommittee, I am pleased to appear before you today. And I
ask that my written testimony, which described OSTP's budget
and highlights of the Administration's fiscal year 2003 R&D
budget request, be included for the record.
Senator Mikulski. So ordered.
Dr. Marburger. As you well know, the terrorist attacks on
September 11th dramatically changed the context for this
budget. The attacks laid bare vulnerabilities in our physical
security and exacerbated weaknesses in our economy.
The priorities of the Nation drastically changed in a
matter of a few hours. And this budget reflects the change in
priorities and three primary goals, winning the war on
terrorism, protecting the homeland, and reviving our economy.
Recognizing that science must play a role in these
priorities, the President provides for an unprecedented level
of investment in Federal R&D, marking the first time in history
that a President has requested an R&D budget greater than $100
billion. It is $111.8 billion, up eight points--8 percent
overall from the previous fiscal year. This is the largest
requested increase for R&D in over a decade.
I cannot emphasize enough how dedicated the Administration
is to working with you to see this R&D budget enacted.
Madam Chairman, I believe you and I share a commitment to
keeping America the world's leader in science and technology,
and I hope you agree that OSTP plays a vital role in leveraging
the government's science and technology investments for broad
national goals.
Our small staff advises the President on fast breaking
science and technology developments. We coordinate the work of
the R&D agencies to ensure that we get the biggest bang for our
science and technology bucks, and we promote strategic
partnerships among science and technology stake holders
including State and local government, industry, the academic
sector, and various international players as well.
We bring real value added to the national science and
technology enterprise, and I have two examples in my oral
testimony that I would like to give that provide a sense of
breadth of our scope.
The two examples are the Administration's initiative on
nano-technology, an interagency committee, and our efforts to
improve mail security in response to the anthrax contamination,
a relatively new type of function for our office.
As you know, Madam Chairman, OSTP was deeply involved in
the formation of the multi-agency, national nano-technology
initiative. And your help was key to its implementation. OSTP,
through the auspices of the National Science and Technology
Counsel, convened an interagency working group to look into the
feasibility of a nano-technology initiative for fiscal year
2001.
This subcommittee continues to provide the important
interagency coordination and long-range planning for Federal
research and nano-scales science and engineering and
technology. These ongoing efforts have culminated this year in
providing the nano-technology initiative with a 17 percent
increase in funding, bringing the total effort to $679 million
distributed among nine Federal agencies.
This $100 million increase over last year's budget will
accelerate long-term research in the manipulation of matter
down to the atomic and molecular levels, increasing our
understanding of fundamental building blocks for both material
and microscopic devices. Research at the nano-scale promises
revolutionary advances in pharmaceuticals, more efficient
manufacturing, higher performance materials, faster computers
and networks, and a cleaner environment.
Priority research areas for this year will range from
research to enable efficient nano-scale manufacturing to
innovative nano-technology solutions for the detection of and
protection from bio, chemical, and radiological explosive
agents.
Roughly 70 percent of the funding proposed under the
initiative continues to go to university-based research. These
investments will help provide the education and training of a
new generation of workers for future industries and
partnerships to enhance industrial participation in the nano-
technology revolution.
Another quite different example of the diverse work of OSTP
is our response to the anthrax contamination last fall. As I
previously testified to, the office of homeland security
requested that our office help resolve this issue. We assembled
an irradiation technical team on short notice, which performed
experiments at the U.S. Postal Service irradiation facilities
to optimize the proper configuration of mail and to ensure the
proper dose of sterilizing radiation is delivered.
This team, which is still in existence, updates OSTP
bimonthly and offers recommendations to the postal service to
refine the irradiation process. We have added experts for the--
from the Centers for Disease Control and Prevention on--to
conduct ongoing experiments that have helped to eliminate some
of the negative effects of irradiation.
The ability of OSTP to coordinate rapidly the many Federal
agencies involved in these issues allowed the generation of
scientific data from which recommendations were made to the
postal service within 1 month of the original contamination.
While irradiation of the letters and flat mail solves one
set of problems, irradiation may not be the answer for parcels
and packages due to irregularities in thickness and density.
OSTP has formed an ethylene-oxide technical team, with
support from the Department of Justice, experts from FDA, EPA,
AFRE, CIA, OSHA, U.S. Postal Service, have designed and are
conducting experiments to test the ability of this ethylene to
oxide gas to sterilize packages.
The recommendations from this technical team will be
presented to the postal service, and will include guidelines
and parameters, by which to document the sterility of the
packages and protect critical contacts from harm.
While our work on nano-technology and mail irradiation are
just two examples of the outstanding work that OSTP does for
the Nation, over the past year, we have also played a critical
role in developing coordinated interagency budgets and policies
in the areas of the homeland security, plant genome, food
safety, networking and information technology, educational
research, as well as others.
I ask today for your continued support of OSTP's role in
coordinating science and technology policy for the executive
branch for our Nation at large. Our budget request of $5.37
million and 40 FTE's for the fiscal year 2003 represents no
increase in the FTE level and a slight increase in budget
authority of less than 2 percent.
These additional resources are essential to continue to
provide the highest quality of work across our broad spectrum
of responsibilities.
Madam Chairman and members of the subcommittee, I hope that
this brief overview, combined with my written statement, convey
to you the extent of this Administration's commitment to
advancing science and technology in the national interest and
the importance of OSTP's role in that enterprise. I ask, of
course, not only for your support for our budget for OSTP, but
also want to express my appreciation for the longstanding,
bipartisan support of this committee for the Office of Science
and Technology Policy and for the Science and Technology
Research Enterprise.
Madam Chairman, you mentioned a large number of issues and
questions in your opening statement. I would be glad to respond
to these now, as time permits, and would respond to others in
writing, if that is necessary. Thank you.
[The statement follows:]
Prepared Statement of John H. Marburger III
Madam Chairman, Members of the Subcommittee, I am pleased to appear
before you today to discuss the Office of Science and Technology
Policy's (OSTP) budget request for fiscal year 2003.
When I testified before the House Committee on Science prior to my
confirmation by the Senate last October, I expressed my desire to
``form a close and productive relationship with Congress, which has
long provided bipartisan and enduring support of our world-leading
science and engineering enterprise. The counsel and support of Members
of Congress is an essential element of continued U.S. leadership across
the frontiers of scientific knowledge.'' I look forward to working with
you, Madam Chairman, and your Subcommittee, to demonstrate this
commitment to science and engineering excellence once again this year.
President Bush has set forth an agenda for science funding in the
forthcoming fiscal year that takes advantage of important opportunities
for discovery and development and sustains the basic machinery of
research and development that is necessary for continued national
leadership in science and technology.
Last October I also referred to the fact that we must make
important choices together because we have neither unlimited resources
nor a monopoly of the world's scientific talent. I continue to believe
that wise choices among the multitudes of possible research programs
are necessary and that we must decide which programs to launch,
encourage, and enhance and which ones to modify, reevaluate, or
redirect in keeping with our national needs and capabilities. The
President's fiscal year 2003 Budget includes principles that will
improve the management of the Nation's science and technology
enterprise, taking advantage of best practices, and emphasizing the
importance of good planning, execution, reinforcement of good
performance, and changing poor performance. I look forward to working
with Congress to ensure that the Federal Government's significant
investment, now over $100 billion, in science and technology is
deployed to optimal effect.
President Bush's fiscal year 2003 R&D budget
Shortly after I was confirmed the Director of OSTP at the end of
October, the Director of the Office of Management and Budget invited me
to attend and participate in internal OMB decision-making sessions
involving science programs. This series of meetings gave me a greater
appreciation for the issues and an opportunity to represent the science
perspective on important aspects of the forthcoming budget, such as
increased accountability and performance measures for R&D agencies.
Following these meetings, my office has continued to work closely with
OMB to share information and develop mutual understanding of the
complex issues involved in establishing the Nation's science and
technology budgets.
As you well know, agency budget proposals are submitted to OMB in
mid-September for their review. The terrorist attacks on September 11
dramatically changed the context for this budget. The attacks laid bare
vulnerabilities in our physical security and exacerbated weaknesses in
our economy. The priorities of the Nation drastically changed in a
matter of hours.
The budget reflects the change in priorities by focusing on three
primary goals:
--Winning the war on terrorism;
--Protecting the homeland;
--Reviving our economy.
Recognizing that science must play a role in these priorities, the
President provides for an unprecedented level of investment in Federal
R&D, marking the first time in history that a President has requested
an R&D budget greater than $100 billion. The precise figure is $111.8
billion, up 8 percent overall from last year--the largest requested
increase for R&D in over a decade.
In addition to the R&D budget, another compilation, the Federal
Science and Technology Budget, was originally proposed by the National
Academy of Sciences to highlight the Federal investment in research
programs central to the creation of new knowledge. In this ''FS&T''
portfolio, the President's budget is up 9 percent. The FS&T activities
account for nearly all of Federal basic research, over 80 percent of
Federal applied research, and about half of civilian development.
Madam Chairman, this is a good budget for science, and I look
forward to working with Congress to see it successfully enacted.
These science and technology investments will enable the
Administration to:
--Enhance homeland defense, national security, and global stability;
--Promote long-term economic growth that creates high-wage jobs;
--Sustain a healthy, educated citizenry;
--Harness information technology;
--Improve environmental quality; and
--Maintain world leadership in science, engineering, and mathematics.
Now let me direct your attention to some specifics within this
budget.
Interagency Initiatives
The budget increases funding for a number of priority research
areas that require multi-agency efforts. Information technology,
nanotechnology, and health research continue to be high priorities for
our Nation. The past year also has seen an increase in priority for
climate change R&D. After the events of September 11, antiterrorism
efforts naturally lead the list.
--Antiterrorism--our success in preventing, detecting, and responding
to terrorist activities over the long term will depend on
technology. The President's fiscal year 2003 Budget continues
the Administration's strong support of research and development
to counter emerging terrorist threats by increasing R&D funding
for homeland security and combating terrorism (including
protecting critical infrastructure) from nearly $1 billion in
2002 to an estimated $3 billion in 2003.
--The National Nanotechnology Initiative will increase by 17 percent
over last year. This $679 million multi-agency initiative
focuses on long-term research on the manipulation of matter at
the atomic and molecular levels, giving us unprecedented
opportunities for new classes of devices as small as molecules
and machines as small as human cells.
--Networking and Information Technology R&D will increase by 3
percent. This brings the overall investment to $1.9 billion in
this mature, but still critically important area. It provides
the base technologies necessary for the U.S. to maintain its
dominant position in the application of information technology
to critical national defense and national security needs, as
well as to scientific research, education, and economic
innovation.
--Improving human health depends on health research that draws on the
capabilities of many agencies. During the Presidential
campaign, the President promised to double the budget of NIH by
2003 from its 1998 levels. That commitment is met in this
budget, which includes the final installment, a $3.9 billion
increase, paving the way toward better diagnostics, treatments,
and cures that affect the lives of all Americans.
--Climate Change research has become an important driver for the
Nation's research agenda. The President created two new
initiatives in this budget. The Climate Change Research
Initiative will share $40 million among five agencies, and the
National Climate Change Technology Initiative will receive $40
million within the DOE budget. The ongoing U.S. Global Change
Research Program will receive $1.7 billion, a $44 million (3
percent) increase.
Highlights of Agency FS&T Budgets
The following examples provide a snapshot of the Administration's
S&T request within the agencies under the jurisdiction of the
Subcommittee.
--National Aeronautics and Space Administration (NASA). The budget
provides $8.7 billion (an 8 percent increase) for NASA's
programs in the FS&T budget, including $3.4 billion for Space
Science (a 13 percent increase) and $2.9 billion for Aerospace
Technology. The latter includes planned funding increases for
NASA's Space Launch Initiative ($759 million), which will lead
to safer and lower cost commercial launch vehicles to replace
the Space Shuttle.
--National Science Foundation (NSF). The budget provides a $241
million increase (5 percent) for NSF. This increase will
provide $678 million for NSF's lead role in the Networking and
Information Technology R&D program, and $221 million for NSF's
lead role in the National Nanotechnology Initiative. The
President's Math and Science Partnerships Initiative, aimed at
increasing the quality of math and science education in Grades
K-12, will increase by $40 million to $200 million. The budget
also raises graduate level stipends from $21,500 to $25,000
annually, in order to further attract and retain the most
promising U.S. students into graduate level science and
engineering. NSF is very effective at managing competitive
research programs, and the budget proposes transferring to NSF
programs that will benefit from their effective management.
These programs include Sea Grants from the National Oceanic and
Atmospheric Administration, Water Quality Research from the
U.S. Geological Survey, and Environmental Education from the
Environmental Protection Agency.
--Environmental Protection Agency (EPA). The budget provides $797
million (a 6 percent increase) for EPA's programs in the FS&T
budget. The EPA budget funds research that provides a sound
scientific and technical foundation for environmental policy
and regulatory decision-making. The budget includes $75 million
for R&D in technologies and procedures to cope with future
biological or chemical incidents.
In addition to the agencies that fall within your Subcommittee's
jurisdiction Madam Chairman, the Department of Defense R&D efforts
increase $5.4 billion (an 11 percent increase) to $54.5 billion and the
National Institutes of Health budget increases by $3.9 billion (a 17
percent increase) to $27.3 billion.
The President's Management Agenda
In addition to funding these priority areas, the budget places
emphasis on spending dollars effectively. The budget includes a
scorecard to rate agency performance and progress in five important
management areas. I am pleased to point out that the only agency to
achieve a green light in any category is the National Science
Foundation. The President's Management Agenda is as relevant to science
missions as to other agency operations, and I look forward to working
with OMB to make its provisions a more useful tool for all the
agencies.
Among the other provisions of the President's Management Agenda are
investment criteria for R&D programs, pilot-tested at DOE this past
year. In consultation with agencies, industry, and academia, OMB and
OSTP will broaden the design of the criteria to all R&D and apply them
to other R&D agencies in the preparation of the 2004 budget.
The OSTP mission
In support of our Nation's science and technology priorities, OSTP
has two primary responsibilities: advising the President on S&T and
providing leadership and coordination for our government's role in the
national S&T enterprise.
In the 1950's, in response to Soviet advances, highlighted by the
launch of Sputnik, President Eisenhower saw the need for expert S&T
counsel, and he invited James Killian, then president of MIT, to
Washington to serve as the head of the first President's Science
Advisory Committee, an OSTP predecessor. Since then our Nation's
Presidents have drawn on the expertise of our office for S&T policy
advice, and I see this as a contribution that will continue to grow in
value as the challenges we face become increasingly complex.
Within our agency, a small staff of professionals analyzes
developments at the frontiers of scientific knowledge and aids the
President in shaping policy. OSTP also provides scientific and
technical information and recommendations to the Vice President, the
White House Offices, the Executive Branch Agencies, and Congress.
A second responsibility of OSTP is to provide leadership and
coordination across the Administration. OSTP plays this role for a
range of Administration priorities, including national security and
global stability, environment, science, and technology. The National
Science and Technology Council has been an invaluable partner with OSTP
in developing interagency evaluations and forging consensus on many
crucial S&T issues.
OSTP Budget Request
I ask today for your continued support of OSTP's role in
coordinating S&T policy for the Executive Branch and for our Nation at
large. OSTP's budget request of $5,368,000 and 40 full-time equivalent
positions in fiscal year 2003 represents a net increase of $101,000, or
1.9 percent, over our fiscal year 2002 enacted budget. The number of
full-time equivalent positions remains unchanged.
The requested amount would allow OSTP to fulfill its
responsibilities in a White House committed to an increased role for
science and technology in achieving national goals, including
strengthening the economy, creating high quality jobs, winning the war
against terrorism, defending the homeland, protecting the environment,
and improving health care.
The requested fiscal year 2003 budget will support the Director and
two Associate Directors plus a staff of seasoned professionals with
diverse training and experience. Our requested increase is essential to
continue to provide quality support to the President and information to
the Congress. Since personnel costs constitute the largest portion of
OSTP's budget, our fiscal year 2003 budget request reflects our
commitment to operate more efficiently and cost-effectively without
compromising the essential element of a top caliber science and
technology agency--high quality personnel.
National Science and Technology Council
To meet the Administration's priority S&T goals, we must combine
the efforts and the expertise of multiple agencies. OSTP personnel
support the work of the NSTC, a Cabinet-level Council that sponsors
interagency initiatives to advance key S&T objectives.
Our distributed system of research funding also places a premium on
coordination among complementary agency programs. The NSTC improves
such coordination.
NSTC membership includes Cabinet Secretaries, heads of science and
technology agencies, and key White House officials with significant S&T
responsibilities. In the process of generating specific budgetary and
policy recommendations, NSTC routinely reaches beyond the Federal
Government to seek input from a wide spectrum of stakeholders in the
public and private sectors.
An important objective of the NSTC is to guide individual agency
budget priorities for R&D and orient the S&T spending of each Federal
mission agency toward achieving national goals. To this end, in late
2001 the NSTC established an interagency Task Force on Antiterrorism
Research and Development with several working groups to address broad
categories of issues. The four working groups focus on:
--Biological and Chemical Preparedness
--Radiological and Nuclear Detection and Response
--Protection of Vulnerable Systems
--Social, Behavioral, and Education Sciences A fifth working group--a
rapid-response team--serves as an action-oriented team to
grapple with emergencies that may arise.
Other standing NSTC committees, along with ad hoc working groups
within the NSTC, provide an effective forum to resolve crosscutting
issues such as nanoscale science, engineering, and technology,
information technology R&D, and plant genome research.
The President's Council of Advisors on Science and
Technology
As Director of the Office of Science and Technology Policy, I co-
chair the President's Council of Advisors on Science and Technology
with Floyd Kvamme. The PCAST, which consists of distinguished
individuals from industry, education, research institutions, and other
non-governmental organizations, serves as the highest level private
sector advisory group for the President and the NSTC.
President George Bush originally established PCAST in 1990 as a
means to gain advice from the private sector and academic community on
technology, scientific research priorities, and math and science
education. The organization follows a tradition of Presidential
advisory panels on science and technology dating back to Presidents
Eisenhower and Truman.
Madam Chairman and Members of the Subcommittee, I hope that this
overview has conveyed to you the extent of this Administration's
commitment to advancing science and technology in the national
interest. I look forward to achieving bipartisan support for a national
S&T strategy that will combine the resources of industry, academia,
non-profit organizations, and all levels of government to protect our
citizens, advance knowledge, promote education, strengthen
institutions, and develop human potential.
I ask not only for your support of OSTP's fiscal year 2003 budget
request, but I also want you to know how much I appreciate the long-
standing bipartisan support of the Subcommittee for the Office of
Science and Technology Policy and for the science and technology
enterprise. I would be pleased to answer any questions.
TRANSFERRED PROGRAMS TO NSF
Senator Mikulski. Thank you all very much for your
testimony. And each one of the aspects presented could be the
subject of a hearing unto itself and so--but let me go right to
the core of this hearing, which is an appropriations hearing.
As I said in my opening statement, there is an apparent 5
percent increase in the funding for the National Science
Foundation, but one-third of it comes from the transfer of
three programs. I would like to raise the issues around those
three programs and these questions are really for you, Dr.
Colwell.
Why is the Administration proposing to transfer the Sea
Grant program from NOAA to the National Science Foundation and
what is it that we are trying to fix by doing this? The
authorizers strongly object to the transfer of these three
programs.
Dr. Colwell. Let me say that the Administration views the
management of the NSF, of which we are very proud, to be very
strong and the merit review process to be consistent with the
President's management agenda. The Administration believes that
increased use of competitive merit-based processes will improve
the performance and the effectiveness of the investments.
But NSF, since the Sea Grant program originated at the
National Science Foundation, will operate the program as a
competitive merit-based research, education and outreach
program.
Senator Mikulski. It is not being operated that way at
NOAA?
Dr. Colwell. I am sure it is being operated effectively.
Should it be transferred, we would continue the processes.
Senator Mikulski. So what is the reason for moving it
though, because you started it there?
Dr. Colwell. It is a matter of merit-based review and the
integration of the management with the National Science
Foundation.
Senator Mikulski. Well, Dr. Colwell----
Dr. Colwell. This is not----
Senator Mikulski. I am not going to debate this with you,
because you did not make the decision, but the transfer so it
could be merit based and peer reviewed and all that, we
presumed that is going on at NOAA.
And if it is not going on at NOAA, that needs to be done
through the authorizing and appropriations, not a transfer to
you.
With all due respect. So I do not want to debate that
point.
Why are they moving the Environment Education Program? One
of my concerns is that EPA graduate fellowship programs would
have no funding.
Dr. Colwell. Let me just point out that the overhead costs
at NOAA are higher. They are lower at the National Science
Foundation. That is not the sole justification, but is a point
I would like to make.
With the Environment Protection Agency transfer, we will
work out the process with the EPA. And, again, it is the
management process that fits with the President's agenda.
The research grants program fits with the current
educational program we have underway at NSF. And, again, I
would have to say, this is not my highest priority.
PROPOSED NSF FISCAL YEAR 2003 BUDGET INCREASE
Senator Mikulski. Well, as you know, there are very serious
objections to these three transfers. It gives the illusion that
the NSF has increased. You really are only getting a 3 percent
increase here.
Dr. Colwell. I have to agree that it is----
Senator Mikulski. That is pretty spartan.
Dr. Colwell. Three fourths percent increase.
CORE SCIENCES
Senator Mikulski. Which takes me, though, to the core
sciences. And I know you have been so passionate--you and Dr.
Kelly and I know Dr. Washington have been, ``We have got to do
the core sciences.''
Do you remember when you came over with your charts on how
the funding has gone up for life science, but everything else
was flat? Young people were being discouraged that there was no
money either in stipends or the opportunity for research. And
then zip, it is being cut here.
Why are the core science programs being cut? And what do
you think are the consequences of this?
Dr. Colwell. Well, let me point out that the core areas
benefit from the priority areas. In other words, each of the
directorates participates in the information technology
priority, similarly in nano-technology, so that if one adds the
components of those initiatives that involve mathematics,
chemistry, and physics, you will find that it is more like
level funding for these disciplines.
I agree that we need to invest in the future, very heavily
in these areas. We are doing this in a planned step-wise
process, working with OSTP and the Office of Management and
Budget.
The budget that has been given us addresses our priorities
and it is a budget that can advance science and engineering.
Senator Mikulski. Well, you know, we are looking at also a
decade of decline. And we are hoping that through our doubling,
which we are committed to, that these would be the areas of
increase, which would be in the core sciences.
Do you remember when I proposed my strategic research
initiative and scientists all over America jumped all over me,
and you and Dr. Brody and Dr. Vest, helped sort all of that
out.
Well, I am ready to fund the core, while we also look at
those things that do maintain homeland security, competitive
edge and all that. But this is the core.
Dr. Colwell. Senator, I am married to a physicist. He
reminds me daily of the necessity of funding physics,
chemistry, and mathematics. I agree with you, Senator; I do.
Senator Mikulski. I am going to turn to Senator Bond, but
there has been a 3 percent cut in chemistry and a 3 percent cut
in physics. And----
Dr. Colwell. When one takes into account the participation
I am not arguing. I am simply saying that when one takes into
account IT and nano-tech, it is about level.
Senator Mikulski. Senator Bond.
FEDERAL R&D SUPPORT
Senator Bond. Thank you, Madam Chair.
While we are on a roll, I thought I would turn to Dr.
Marburger and continue this line of questioning.
According to the National Research Council report on trends
and Federal support of research and graduate education, there
is ``cause for concern about the allocation of funding among
fields, in the Federal research portfolio in particular, with
respect to most of the physical sciences and engineering, whose
funding in contrast with the biomedical sciences has, with few
exceptions, stagnated or declined.''
Dr. Marburger, would you agree with the Research Council's
view on that?
Dr. Marburger. Well, far be it from me to disagree with the
National Research Council. The fact is that the balance issue,
the issues that are assembled under the phrase balance are
important issues. And we believe that it is necessary to tune
the mechanism of science, so that it can move forward
effectively.
We do not believe that the right way to do that is to fix
on arbitrary formulas of doubling or tripling, but rather to
identify those areas that need funding and address them and
fund them--give them priority and over a period of years bring
back the necessary balance if there is an imbalance.
In this budget for fiscal year 2003, the President has
identified a priority for science spending and funded it quite
substantially in the life sciences. And I believe that
subsequent years will see an addressing of the balance issues
that are being identified at this time.
Senator Bond. I think I heard what you said, but I am not
sure that I got an answer to my question. You said that
arbitrary doubling or something like that, yes, well the Chair
and I are pushing for an arbitrary doubling, because we started
out with the NIH budget and the NSF budget here. And everybody
agreed on the arbitrary doubling of NIH. And it has now so far
outstripped NSF that we are absolutely falling behind.
Do you agree that advances in biomedical science depend
upon things like fundamental research and physics, chemistry,
electrical engineering, chemical engineering, and the other
things?
Dr. Marburger. I do, indeed. It is interesting to note that
in the accounting of the budget for fiscal year 2002, the
current year, the annual study that is made by the American
Association for the Advancement of Science, takes a look at
each of these areas of science, life sciences, physical
sciences, engineering, and so forth.
And in that accounting, they show that NIH, for example,
owns about 15 percent of the funding in the physical sciences;
whereas NSF owns only 12 percent of the funding for physical
sciences. The major player in the physical sciences game is the
Department of Energy, then NASA, but actually NIH is quite
substantially supporting the physical sciences, so that it is
not the case that funding--increased funding for NIH
necessarily means that there is not increased funding for the
physical sciences as well, through their allocations.
Through an interagency effort that was sponsored by my
predecessor in the Office of Science and Technology Policy, we
arranged for NIH to provide very substantial support in basic
energy sciences through the Department of Energy, supporting
beam lines at--synchrotron light sources around the country,
which are heavily used by biological science researchers.
So, the--my point is, and the point of the Administration
is, that the balance issue is a complicated issue. Many
agencies are involved; many fields of science are involved. And
we would like to go at it in a sort of a rifle-shot approach,
establishing priorities and funding them systematically. And I
believe that--that is what is going to happen.
FUNDING PHYSICAL SCIENCES
Senator Bond. Well, Dr. Marburger, as I understand it, what
little I know about the NIH physical science, that is more
applied science. We are talking about the need for basic
science that only comes through NSF.
And the White House has taken great pride in doubling the
NIH budget.
Can you sit here and tell me, as a scientist who is looking
over the whole area, that there is not an imbalance between
what we are putting in NIH and what we are putting in the basic
physical sciences?
Dr. Marburger. I would like to see more money in all of
them. It is hard for me to tell----
Senator Bond. No, no, no, no; that is not the question.
Dr. Marburger. There is no doubt that priorities have been
identified and that some areas are funded more than others, and
there is no question that life sciences has received more
support.
Senator Bond. Thank you.
Dr. Marburger. That was done intentionally.
Senator Bond. I give up, Madam Chair, here.
I turn the questions back to you.
UNDERGRADUATE AND MINORITY PROGRAMS
Senator Mikulski. Well, I see I agree with that line of
questioning, but let me also turn--first of all, in the areas
of nano-technology, info technology and your bio-complexity. I
think we are on the right track. We would like to pursue those,
but, again, I am under very difficult time constraints this
morning.
I am going to go to the attraction of undergraduate
students into science. Dr. Colwell, I am going to ask--and Dr.
Washington, I would like you both to be able to respond.
We are committed to K through 12, and the funding of
informal science education. And, again, we could talk about
those, but our undergraduates are now looking at business. They
are looking at marketing. They are looking at areas other than
science and technology.
And I am not--I mean, everybody has got to follow their
dream and their passion. But today, the foreign students do
comprise 40 percent of our PhD's. You cannot go for a PhD
unless you have an undergraduate major.
Yet, this budget cuts undergraduate programs by over $10
million. The community college program declines, which is also
a way particularly for first generation people to go to college
to get into it and maybe pursue the night school programs at
wonderful places like University of Maryland and Hopkins. The
the new undergraduate ``tech talent'' program declines by 60
percent.
My question is: What are the resources that are needed to
truly fund undergraduate science programs in--I mean, really to
be able to, again, attract more undergraduate students into
science, and also the whole issue of recruiting the entire
American community, which is women and minorities, who are
often discouraged now because of the issue around money,
particularly the minority students? And I am thinking of the
Latino community, first generation, moving in.
Dr. Colwell. Senator, you touch on one of the most
perplexing, and one of the most difficult, international
problems.
I have just returned from a G-8 meeting of the heads of
research councils. This problem is universal.
In fact, in Japan, where the meeting was held, we learned
that even though the Japanese students performed better in math
and science, after they get to a university, they deflect off
into business and other areas.
Senator Mikulski. Just talk to me about our own country
today----
Dr. Colwell. Yes, I will.
Senator Mikulski [continuing]. With all due respect.
Dr. Colwell. I just wanted to point out that it is an
international problem.
Having said that, we are focusing on women and minorities,
bringing them into science and engineering. Because, as you
have pointed out, it is the human resources, that are going to
make the difference if we have decreased participation in
foreign students.
We have taken a different approach--or we are beginning to
take a different approach, at the National Science Foundation
in integrating horizontally all of our efforts that address
students, from K-12 through continuing education, and are
focusing on undergraduate education, as well. And that is to
link our programs and to link our efforts with those of other
agencies.
If you look only at the specific programs addressing women
and minorities, it appears to be a decrease. In fact, we have
programs within the directorates that are addressing bringing
women and minorities, for example, into mathematics, physics
and bio-sciences directorates, so that we have, in fact, a
greater effort financially----
ADDITIONAL FISCAL YEAR 2003 FUNDS
Senator Mikulski. So, you are talking about leveraging and
synergistic effects of the money you have?
Dr. Colwell. Yes.
Senator Mikulski. Could you use more money in this area?
Dr. Colwell. We can always use more money and, this is an
area----
Senator Mikulski. And I am not always talking about
``always use more money.'' Could you use more money in this
area?
Dr. Colwell. Let me answer by saying that this is the most
important problem we address as a Nation. And I would quote the
Hart-Rudman report, which says that second only to an invasion
or an attack on one of our major cities, losing leadership in
science and math and in science and math education.
Senator Mikulski. Well, Dr. Colwell, I--again, not to cut
you short. I am going to turn to Dr. Washington, because here
is where I am. First of all, I agree it is a national problem.
I believe it is an international problem. But my responsibility
is to the United States of America, and then to the world.
I have got to know what we really need here. Now, I know
that you are a good soldier and you have to work under OMB and
everything done as vetted and checked to see who has been
naughty and who has been nice, but I really must know, and I
know my colleague, here----
Dr. Colwell. Yes.
Senator Mikulski [continuing]. We believe in the farm team.
You know, if sports can have a farm team, certainly science
should.
Dr. Colwell. So do I.
Senator Mikulski. We spend more money on our academic
institutions being a farm team for the NFL than for the Nobel
prize. Now, I think we've got to get our priorities straight as
a country, and I am ready to use whatever money muscle I have
here to do that.
Dr. Washington, how do you think we ought to do it?
Dr. Washington. Well, first of all, let me say that the----
Senator Mikulski. What would be required?
Dr. Washington. I think I would actually like to sort of
list several things. One is that the National Science Board
regards education as one of our key priorities for the Nation
and for the National Science Foundation.
We are now in the process of preparing a report on the work
force and that will be ready sometime in the summer or the
fall.
At the board meeting last week--we issued a diversity
statement that deals with women and minorities, and it
reaffirms a very strong commitment of the National Science
Board to this issue and with regard to additional funds. There
is a--the board feels very strongly that we can make very wise
use of increased funding in the area of education.
There are proposals out there that are very high merit
and--however, with limited funding, we cannot fund them all.
And I think that we could actually make----
NSB RECOMMENDATIONS
Senator Mikulski. Well, Dr. Washington, I am going to turn
to the board as we ponder how we are going to do this year's
appropriations. We would like to hear from the board what their
specific recommendations would be, particularly on this, what
we consider, crisis issue. I view this as a crisis issue.
And while we want to fund the research, we have got to fund
the people who are going to do the research. And we believe
that this excellent board of which you are a chair--I think you
will continue the great tradition--we really would like to have
like five ideas on what you think it would take to really keep
the momentum going.
I think Dr. Colwell, I know has had a great commitment, but
we would like to really turn to the board to be able to do
that, as well as, of course, you, Doctor. But you are shackled
in a lot of ways for what you can ask for. So----
Dr. Washington. I think that the board can----
Senator Mikulski [continuing]. I am going to turn to the
unfettered----
Dr. Washington [continuing]. Easily--I should not say
easily, but the board would--will be very happy to respond.
Senator Mikulski. Thank you very much, Dr. Washington. I
look forward to getting better acquainted.
[The information follows:]
National Science Board Activities on Science and Engineering Education
and Workforce
It is the National Science Board's position that ``there is no
greater challenge and no more fundamental a need than the assurance of
a skilled, highly educated, and diverse workforce (for science and
engineering) and of a public that is not just well disposed toward
science, but one that is also able to use its knowledge of science and
mathematics for individual and collective improvement.'' \1\ Education
and the development of our human resource base and workforce for
science and technology is the most important science policy issue
confronting the Nation today. Consistent with this view, the Board has
been examining education and workforce issues from a number of
perspectives, from K-12 through the graduate and postdoctoral levels.
---------------------------------------------------------------------------
\1\ National Science Board. National Science Board Strategic Plan,
p.11.
---------------------------------------------------------------------------
The Board has made numerous statements addressing all levels of
education within the last several years alone, and has developed a
range of recommendations on nurturing the S&E workforce. A few of the
most important include:
(1) Preparing Our Children on K-16 education in science,
mathematics, engineering, and technology, March 1999. The report
focuses on the need for partnerships across sectors at the State and
local levels to achieve a continuum of excellence in K-16 education,
and recommends active participation of individual scientists and
engineers and their institutions in creating a seamless K-16 system for
science, mathematics, engineering and technology education (http://
www.nsf.gov/pubsys/ods/getpub.cfm?nsb9931a);
(2) The Federal Role in Science and Engineering Graduate and
Postdoctoral Education (NSB 97-235), 1997, offers recommendations for a
more productive Federal/university partnership in graduate and
postdoctoral education (http://www.nsfgov/pubsys/ods/
getpub.cfm?nsb97235);
(3) Resolution NSB 01-167, October 2001, affirming the importance
of Criterion Two for evaluating proposals for funding in the Merit
Review process. Criterion Two addresses broader impacts of proposed
research and education activities, including impacts on the workforce;
\2\ and
---------------------------------------------------------------------------
\2\ ``The National Science Board affirms the significance of both
the intellectual merit and the broader impacts of projects supported by
NSF, and endorses actions to raise awareness of the importance of both
merit review criteria. These actions should include wide dissemination
of generic examples of activities that address the broader impacts
criterion, and amendments to policies and procedures for proposers,
reviewers and NSF Program Managers on the use of both criteria in the
proposal and award process.''
---------------------------------------------------------------------------
(4) ``National Science Board Statement Concerning NSF's Continuing
Role in Promoting Diversity in Science, Technology, Engineering and
Mathematics'' (NSB-02-75) \3\ in May 2002, focusing on the importance
of broad participation of U.S. citizens in the science and engineering
workforce.
---------------------------------------------------------------------------
\3\ ``The National Science Foundation (NSF) invests public
resources to realize ``a diverse, internationally competitive and
globally-engaged workforce of scientists, engineers and well prepared
citizens"(NSF GPRA Strategic Plan for fiscal year 2001-2006, p.3). This
goal, encompassing a variety of strategies, supports NSF's mission to
strengthen scientific and engineering research and education and their
integration. In this context, the National Science Board believes such
a diverse science and engineering workforce is necessary to ensure the
Nation's health, prosperity, and security.
As Congress declared in the Science and Engineering Equal
Opportunities Act of 1980, 42 U.S.C. 1885, ``the highest quality
science and engineering over the long-term requires substantial
support, from currently available research and educational funds, for
increased participation in science and engineering by women and
minorities.'' The National Science Board recognizes that an integral
part of accomplishing NSF's strategic goals requires engaging all those
who are under represented in the Nation's science and engineering
enterprise. Therefore, the Board strongly supports the Foundation's
commitment to developing and strengthening all of its programs for this
purpose, ensuring broader individual and institutional participation
across all research and education programs.''
---------------------------------------------------------------------------
The National Science Board, primarily through its standing
Committee on Education and Human Resources, \4\ exercises oversight of
the National Science Foundation programs and activities to support the
development of human resources for science and engineering and
scientific and mathematical literacy for the general public. The Board
fully supports the objectives of the new Math and Science Partnership
initiative funded through the National Science Foundation, which is in
accord with the work the Board has undertaken on K-16 math and science
education policy and with the long-term NSF investment in State, rural,
and urban systemic initiatives to reform math and science education at
the K-12 level.
---------------------------------------------------------------------------
\4\ Charge to Education and Human Resources Committee: http://
www.nsfaov/nsb/committees/ehrcharve.htm; ``EHR Committee Workplan''
(NSB 99-179): http://www.nsf.gov/pubsys/ods/getpub.cfin?nsb99179
---------------------------------------------------------------------------
The Board's ongoing national policy efforts that concern the
science and engineering workforce include the establishment in October
2000 of a special Task Force on National Workforce Policies (NWP), \5\
reporting to the Education and Human Resources Committee. The Task
Force is charged with examining workforce development issues in a
systemic framework that incorporates various levels of the educational
process, industry roles and requirements, and national policies related
to education and immigration. This is one of two current Task Forces
charged by the Board to undertake special studies. The second is the
Task Force on Science and Engineering Infrastructure, \6\ reporting to
the Committee on Programs and Plans, which is charged to assess the
quality and adequacy of the infrastructure for U.S. fundamental science
and engineering.
---------------------------------------------------------------------------
\5\ Charge to the Task Force on National Workforce Policies (NSB
00-192) http://www.nsf.gov/nsb/committees/nwpcharge.htm.
\6\ Charge to the Committee on Programs and Plans Task Force on
Science and Engineering Infrastructure (NSB 00181): http://www.nsfgov/
nsb/committees/infcharge.htm.
---------------------------------------------------------------------------
In addition to the work of the NWP Task Force, the Education and
Human Resources Committee is now focusing its attention on policies for
undergraduate education in science, technology, engineering, and
mathematics (STEM). I will be happy to keep you informed on our
progress in ongoing policy activities related to the workforce,
especially the recommendations of the Board pursuant to the completion
of the work of the Task Force on National Workforce Policies, expected
by the end of this year.
Senator Bond.
Senator Bond. Senator, if I could----
Senator Mikulski. Okay.
Senator Bond. All right.
Senator Mikulski. I am going to turn the gavel over to
Senator Bond. I have to be somewhere really on the topic of the
digital divide with my colleague, Senator Cleland, our civil
rights organizations. I know that Senator Bond--well, first of
all, we--you know, we are like the Amen chorus here.
Why do I not turn it to you, Senator Bond? I know you have
management issues, and then would you please make sure that
Senator Domenici has all rights for the committee?
Thank you very much. And we look forward to further
conversation on this.
NSF IG REPORT
Senator Bond [presiding]. Thank you.
Might I invite the inspector general, Dr. Boesz, to come up
please?
I want to follow up on some of these questions I raised in
my opening statement, particularly the audit of the NSF's major
research equipment and facilities. Can you summarize for us,
please, because I want to hear your side, and also I want to
hear the Foundation's response and comments on it? I would like
to get it out here in the open.
Can you summarize your audit findings and illustrate those
findings with some--perhaps some examples? And based on your
observations, do you believe the NSF has the ability to provide
a full cost accounting of each of its large facilities?
Dr. Boesz. Good morning, Senator. I will be happy to
respond to that. My name is Tina Boesz, I am the Inspector
General.
And we did do an audit of the large facility projects at
NSF and we do recognize that in the past year, NSF has made a
concerted effort to improve the general management and
oversight of these projects. However, it still needs to do a
lot of work on improving the financial management of the
projects.
NSF's current policies and practices do not yet provide
adequate guidance to program managers to oversee and manage the
financial aspects of the major research equipment and
facilities projects.
The current policies have allowed NSF to use multiple
appropriation accounts to fund the acquisition, construction,
and development cost of major research equipment and
facilities. This has led to inconsistencies in the types of
costs funded through the MRE account.
And in addition, NSF's current practice is to track only
those costs funded from the MRE account, and not the full costs
of the projects. As a result, NSF today cannot ensure that it
stays within the authorized funding limits that have been
approved by Congress or by the National Science Board for any
one particular project.
This makes it impossible without having the total costs of
a project--it is impossible for decision makers to monitor how
well the projects are going. For example, in the report, I
mention the large Hadron Collider as one project which the
National Science Board approved, the construction of two
detectors at an amount approximately of $81 million.
We know that NSF has already spent $2 million from the R&RA
research and related activities, account to develop software.
We also have identified approximately $57 million that NSF
intends to fund from the research and research affiliated
account to fund additional software development--this is
software that is necessary for the detectors to work. They
also--this money would go for implementing or putting the
detectors into the collider and also the commissioning costs.
So it does not really--the $81 million does not get at a
full functioning detector operating in a collider. That is one
example.
And I--so I think that the issue basically is how is NSF
going to get at the issue of total project costs. At the
present time, their systems are not able to do that.
We are told by the end of the summer, they intend to have
these policies and procedures in effect. We have reviewed some
of the drafts. They are making progress. They intend to have a
large facilities manager, a deputy to the CFO in place. And we
think that by the end of the summer, we are hopeful that many
of these items will be addressed.
NSF RESPONSE TO IG REPORT
Senator Bond. Dr. Colwell, I raised this question
previously and I had hoped to have it resolved. I would like to
hear your comments on it.
Dr. Colwell. Yes.
Senator Bond. And where you think--what can be done and
when?
Dr. Colwell. Well, first, Senator, I genuinely want to say
to you and Senator Mikulski that I deeply appreciate your
commitment to the foundation.
NSF believes in continued improvement of our financial
management and policies. The recommendation of the inspector
general is sound. The recommendations, in fact, endorse many of
the changes we already are implementing as part of the new plan
for management in oversight of the large facility projects.
I would like to emphasize that it is vital to retain the
flexibility that allows these projects to realize their full
potential to the Nation, like encouraging participation by
EPSCoR States and institutions.
What we have done is complete our guidelines and
procedures. We are instituting internal controls to prevent
mixing of R&RA with MRE funds. We are revising our criteria for
prioritizing large projects. We are hiring staff and providing
travel funds for increased oversight of large facilities, and
we are providing management reviews of each of the MRE projects
to the committee of programs and plants of the National Science
Board.
I would say that the draft audit report of the I.G. does
set forth several recommendations, but in part some are
characterizations that do not fully and accurately describe our
processes of the specific projects mentioned. And we will have
a full report of our response no later than June 15, which we
would be very pleased to provide you, Senator Bond, because I
know you are keenly interested.
Finally, let me say that the agency is recognized as one of
the best managed in the entire Federal Government, if not the
best managed. We are very proud of that.
We can always do better. We are already taking these
recommendations into account and changing processes
accordingly.
NSB RESPONSE TO IG REPORT
Senator Bond. Dr. Washington, any comments on this before
we turn to Senator Domenici?
Dr. Washington. No.
Senator Bond. Okay. Well, that solves that. Well, thank
you. Senator Mikulski and I are going to be the best friends of
NSF. We are going to continue to fight. It looks like we have
to fight some on our own team to get the resources. We want to
make sure that we have solved all the management problems; and
the accounting problem is a troubling one that needs to be
resolved.
With that, let me turn to Senator Domenici.
Senator Domenici. Thank you very much, Senator.
Dr. Colwell, how are you? It is nice to see you again.
Dr. Colwell. Thank you, Senator. It is a pleasure to see
you.
HOMESTAKE MINE AND NEUTRINO RESEARCH
Senator Domenici. Last year when we met in June for this
hearing, I had just been in Carlsbad, New Mexico, with the
National Science Foundation Committee that was reviewing the
potential for a new underground science facilit7 in the United
States.
In New Mexico, the waste isolation pilot project, commonly
known as WIPP, was being looked at and evaluated. The NSF--the
committee eventually came up with the Home Stake Mine in South
Dakota as the best alternative, based on the advantages of a
very deep facility for neutrino studies.
I still am doubtful about that choice, but things have to
move along. Certainly evident in the discussions at WIPP was
that many experiments that benefit from an underground facility
do not need an ultra-deep site.
In fact, for many experiments, scientists have told me that
the extremely low background radiation and very dry conditions
of WIPP lend themselves to better experiments than relatively
high radiation backgrounds and better experiments can take
place.
What is the current plan for the Home Stake Mine and the
neutrino research?
Dr. Colwell. Senator, we are in the process of reviewing
scientifically, the proposal that has come to the NSF. There
has been no decision. We are also awaiting, in concert with the
Office of Science and Technology Policy, Dr. Marburger, a
report from the National Academy of Sciences, which will
convene a work shop, with participation by the physics
community, to determine priorities for neutrino research.
I do think since, to my right is an expert in physics, that
I will ask Dr. Marburger also to comment.
Senator Bond. Dr. Marburger.
Dr. Marburger. There is no--thank you very much, Mr.
Senator. There--the--there is no question that neutrino
research is a very interesting area of fundamental science, and
that there are a number of experiments ongoing in other
countries, as well as in the United States.
It--I believe that the choices among the different options
available to us have to be made by the science community in the
context of a considered review of all the factors. I am not
prepared or--nor am I technically capable, despite my
colleagues' confidence in my expertise, to make a statement
about that at this time.
I think it is going through the right process. We are
asking the right people and I am certain that this decision
will be made on the basis of good science.
Senator Domenici. Doctor, while I have you. Why do I not
just go through a couple of questions with you?
First, it is nice to have you up here, too, and to visit
with you.
Dr. Marburger. It is a pleasure.
FEDERAL COORDINATION OF NANO-TECHNOLOGY
Senator Domenici. One of the more recent scientific watch
words is nano-technology. The DOE's Office of Science has a
significant nano-technology program; and three centers are
being constructed, including one center for integrated nano-
technology, called CINT, which is a combination of Sandia
National Laboratory at Los Alamos National Laboratory, and NSF.
The NSF's budget includes $221 million for nano-science and
engineering, and other departments of the government seem to be
finding that nano-science fits them also. Do you think that the
many different approaches to nano-technology by various
agencies are coordinated and integrated to avoid duplication
and to present our country with the maximum productivity?
Dr. Marburger. Yes, I do, Mr. Senator. The National Nano-
technology Initiative is coordinated through my office. There
is an interagency working group that meets frequently and tries
to understand the scope of the nano-technology field.
As you probably know, nano-technology encompasses much of
chemistry and the whole promise of being able to make materials
and make what I call functional materials from scratch, atom by
atom.
Senator Domenici. Correct.
Dr. Marburger. And the capabilities are--for doing this are
distributed throughout a number of different agencies. And we
believe that request in the 2003 budget accurately reflects the
capabilities as they are distributed throughout the agencies.
There is an 11 percent increase in this program in NSF.
There is a 53 percent increase in the DOE program to address
the centers that you described in your question.
VERY LARGE ARRAY (VLA)
Senator Domenici. Dr. Colwell, this is my last question.
Last year, the NSF included funding in its budget for the
expansion and modernization of the Very Large Array, commonly
known as the VLA.
Dr. Colwell. Yes, sir.
Senator Domenici. It is a world class center, in radio-
astronomy, near Socorro, New Mexico. The project has been
reviewed and approved by the National Science Board and also
approved as a second priority for ground-based astronomy by the
Decadal survey. It is my understanding that the budget request
is $5.3 million short of providing the resources that are
needed to operate the National Radio Astronomy Observatories
and to continue with the plan and the VLA expansion. Is that
number correct?
Dr. Colwell. I am not sure about the exact number, but I
must say that we do have a crunch in the major research
equipment and that certainly is one of our priorities.
As part of the ongoing project management, there has been a
management peer review completed on the upgrade. The report is
to be released in about 2 months.
The upgrade presently is adhering to the projected time
schedules and budgets, so we are on time and on budget for that
particular project, Senator.
Senator Domenici. Well, the same thing is happening with
the National Solar Observatory at Sacramento, Peak, New Mexico.
The way the monies are being applied be NSF there is not going
to be enough for what it needs. I will just give you that
question in writing and you can answer it.
Dr. Colwell. Yes. Yes, sir. Thank you, Senator.
Senator Bond. If you have--if you want to go ahead, you
may.
PHYSICAL SCIENCES SUPPORT
Senator Domenici. That is fine. Mr. Chairman, let me just
say that I know you and the chairperson have already spoken to
the fact that we have our national funding a little bit out of
balance, in terms of the physical sciences versus the more
readily supportable NIH.
Some of us are trying to get the natural sciences back into
a rhythm where they can be doubled within a given period of
time, if that is what it takes around here to make progress.
To me, we are doing a very big disservice by not pushing
funding for the physical sciences up, as we let NIH go very,
very alive with new ventures. I think one is going to stop the
other. I think you are going to need more of the physical
science break throughs to keep the NIH programs going, as we
hope they will.
We are going to continue in this subcommittee and elsewhere
to do what we can to see that the National Science Foundation
is funded.
It is the one Agency that we know. It is not exactly like
the Department of Energy, which runs the programs themselves.
It is a different model. I believe it is very, very imperative.
I would ask you, Doctor--many people are showing great respect
for you when they ask you for your opinions.
On the same token, you work for the President, and he
produced the budget. We are all his friends. I mean, at least
the two of us are his good friends.
If it is not going to affect anybody out there, could--you
tell me whether I am on the right track that we better put some
more funding into the physical sciences.
Dr. Marburger. I think the track is good. The fact that is
balance is important and that the machinery of science--the
pieces of the machinery have to work together.
The issue that we have, this Administration has, with the
concept of doubling is its lack of specificity, its lack of
prioritization, and recognizing the differentiation among
different areas of science.
And there are certain things that need to be funded,
probably deserve more money, and we will get it. We are getting
the attention, and there may be other things in that mix of
activities that we call science or even physical sciences, that
are perfectly healthy and do not require the additional
funding.
So as I pointed out in response to Senator Bond's question,
I believe, yes, that physical sciences are, in fact, supported
by a number of different agencies. And they--it encompasses a
very wide range of sciences.
I think it is important for us to be--to have an
intelligent approach that makes distinctions, establishes
priorities and funds--pulls out the things that need funding
and fund them.
It includes nano-science, instrumentation. It includes
basic computer sciences. We need all of these things to keep
the machinery of science going.
And many of these have been identified as priorities in the
President's 2003 budget request and signal the intention to
continue to tune up the funding in future years.
Senator Domenici. Well, let me just close my comments and
say to Senator Bond, and I am sure I am speaking to the
chairperson just in the same manner, but I think it really
behooves us to pursue funding of NSF to a larger extent than
our President is able to do, and where we can to boost the
physical sciences.
And I close today by inviting you, Doctor, at some point in
time to come out and see Sandia's Nano-Research Facility. Right
now, they are in some old barracks from whence some of the best
nano-science has evolved. And micro-engineering is going full
blast there too in some broken-down buildings. But they will
soon be the beneficiary of a very major $400 million facility,
which would put them apparently at the cutting edge for most
Americans who are interested in nano-science and micro-
engineering.
I thank you for your great work.
Dr. Marburger. Thank you.
Dr. Colwell. Senator, I would like to express my
appreciation to you for your commitment and support of the
National Science Foundation. We really very much appreciate it.
Thank you, Senator Domenici.
Senator Domenici. Thank you very much, Doctor.
ADDITIONAL NSF FUNDING IN FISCAL YEAR 2003
Dr. Washington, I did not have any questions for you, but I
do not want you to feel that is neglecting you.
Dr. Washington. Well, I do want to just comment on one
thing. In my oral presentation, I did mention that there are
many unfunded proposals that are very high in their merit
rating, but due to the lack of funds, we are not able to fund
those. And I think that additional resources would help.
LARGE FACILITY PRIORITIZATION
Senator Bond. Thank you very much, Senator Domenici. I like
Senator Domenici's question and Dr. Washington's answer, and I
think we will put those two together.
I do not think there is any question and I do not have a
science degree or a science background, but I do not think
there is any problem finding very useful, fruitful investments
that the NSF could make if we were able to get the dollars
there, and I believe I speak for--on a bipartisan basis for
this whole committee.
But having said that, let me--let me get back to the
questioning and one of the things that I thought we would go
into is the priority setting for the large research projects.
We have heard complaints about the Foundation's process for
ranking and prioritizing large facility proposals. Some have
said to us that it appears to be subjective and ad hoc.
Now, I understand the House Science Committee's re-
authorization bill requires NSF to submit a report to Congress,
ranks the project, describes how each project was prioritized.
It sounds like a good idea and, as I indicated, I wanted to ask
the National Academy of Science to work with you to ascertain
whether there is adequate criteria, what criteria should be
used to rank and prioritize large research facilities.
Dr. Colwell, I would like to hear your views on that. And
what do you think about the House Science Committee's action?
Dr. Colwell. I think that it is very, very important to
note that priority setting is an integral part of the NSF
budget and planning process. It is based really on a very
rigorous internal review by NSF senior management.
That is a project that comes out of the NSF to the Board to
be considered can really usually take years.
Senator Bond. Yes.
Dr. Colwell. In the case of ALMA, there was about 8 years
of really very careful review and analysis.
The ultimate decision has to be made by the director with
the OMB guidance. The dominant factors are readiness,
timeliness, and appropriateness for funding in a given fiscal
year.
We have to take into account balance, including
disciplinary balance. It is really critical that there be
flexibility in order for us to address all of these factors.
Having said that, we do have a priority that ongoing
projects have the highest priority to ensure that they get
completed, in order to be fiscally well managed and sound. Then
to simply rank numerically, one, two, three, four, does not
take into account the need to balance disciplines and the need
to be flexible.
Now, again, it means that the priority setting process that
includes the community, the NSF, the director, senior
management, the science board, and OMB, is complicated. I do
believe it has served the Nation well for the past 50 years.
NATIONAL ACADEMY OF SCIENCES
Senator Bond. Well, you have outlined things that may be
legitimate criteria that go beyond the strict science ranking,
but I think perhaps a problem may be that the--that it is not
sufficiently transparent, because there is a sentiment that
there is not an understanding of how it is done.
You say, ``Okay. We have to have--we have to spread it out
over disciplines to utilize for other reasons.'' I would like
to see you work with the National Academy of Science. We would
like to talk with you about that, to make sure that when you
are applying the scientific criteria, it is readily
understandable and the scientific community knows how you are
going to rank them.
Dr. Washington, any question--any comment on that?
Dr. Washington. Well, I just want to point out that we have
a standing committee of the board, a committee on programs and
plans, and they do a very thorough review of each of these
projects, and we have to explicitly approve them.
And we have a set of guidelines for how the projects are
approved inside of the Science Board processes.
Dr. Colwell. Let me add, Senator, that we do indeed call on
the National Academy of Sciences. A case in point is the Home
Stake Mine issue.
Neutrinos, I should say, to put it more appropriately, the
neutrino research. There is, for example, a neutrino experiment
in Japan. There is one in Italy. There is one in Sudbury,
Canada. There is one in Antarctica, underway and to be
extended, Ice Cube, for example.
The question is how do we prioritize and how many neutrino
experiments does the world need?
Senator Bond. Yes.
Dr. Colwell. We have called on the National Academy, so I
agree with your suggestion.
NSB MEETINGS
Senator Bond. Yes. Well, I have a view on that one, too;
but I will let the scientists reach that conclusion.
Dr. Washington, you have only been on board a few days, so
I want to ask you this question. You are coming in fresh. And I
have--again, we have received complaints that the board holds
most of its meetings, including committee meetings, where much
of the board's work is done behind closed doors with a single
session open to the public at the meetings' end.
Do you think this is the right way to do its business? The
House Science Committee apparently included something about
opening up the meetings. What does your view on letting the
public, but primarily the scientific community, which you
serve, hear the debates and the discussions and the
deliberations of the board?
Dr. Washington. I think philosophically I agree that we
should do as much of the business as we can in the--in public
open meetings.
I wonder if I could get back to you on this, because I
think this will be one of the issues that I need to have a
little bit more time to look into.
PLANT GENOME
Senator Bond. I think that would be a good idea, because
this one may become a problem. If it can be dealt with, let us
save the heartburn and not go down that path.
Dr. Colwell, I want to thank you for holding the work shop
at the Plant Science Center in St. Louis on the new math and
science partnership program. From all accounts, it was very
well received.
How is the planning going for the program? What is your--
what do you see the goals this year?
Dr. Colwell. Senator, if I may, I would like to say that
the Plant Science Genome Program is spectacular, and that we
have had great success in completing the arabidopsis genome.
We are in the process now also of establishing a microbial
genomes program, because we need to look at plant pathogens----
Senator Bond. Yes.
Dr. Colwell.--As well as the plant genome itself. And that
is a very rich area exploit what we know about the plant genome
to determine how best to deal with resistance to disease and
infection.
It is going splendidly and I would be very happy to provide
any additional information you would like.
MAIZE SEQUENCING PROJECT
Senator Bond. The--of course, the sequencing grant--and we
appropriated an initial $10 million for the plant genome
program and for economically important crops such as maize,
wheat, and barley. Is the sequencing project for maize still
under consideration, and how are you using the additional funds
and supporting the sequencing projects?
Dr. Colwell. The maize project is continuing and it is my
understanding that it is doing very well. I do not know of any
difficulties and it is very exciting.
The rice genome project has gone extremely well; that has
been international. It is extremely useful to have partnerships
with other countries and to have this be an open process, with
the data shared in order to benefit all of humankind.
Senator Bond. Well, thank you very much, Dr. Colwell, Dr.
Marburger, Dr. Washington. We will have some additional
questions for the record and I assume that maybe some other
members of the committee will as well.
CONCLUSION OF HEARINGS
I believe the Chair had said she would do it. And we thank
you very much for your participation. And with that, the
hearing is recessed.
[Whereupon, at 11:25 a.m., Wednesday, May 15, the hearings
were concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
----------
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
NONDEPARTMENTAL WITNESSES
[Clerk's note.--The following testimonies were received by
the Subcommittee on VA, HUD, and Independent Agencies for
inclusion in the record. The submitted materials relate to the
fiscal year 2003 budget request.
The subcommittee requested that public witnesses provide
written testimony because, given the Senate schedule and the
number of subcommittee hearings with Department witnesses,
there was not enough time to schedule hearings for
nondepartmental witnesses.
Prepared Statement of Alachua County, Florida
Mr. Chairman: Thank you for allowing the Alachua County Board of
County Commissioners to submit this written testimony before your
Subcommittee regarding two innovative initiatives the County has
undertaken: (1) Partners for a Productive Community Enhancement
Initiative and (2) the Emerald Necklace Land Conservation Initiative.
partners for a productive community enhancement initiative
Alachua County seeks $2.3 million in federal funds to assist in the
expansion of its award winning neighborhood revitalization program.
This public/private program has been designed, developed and
implemented to stabilize, revitalize and sustain specific at risk
communities in Alachua County. Funding is being sought as an Economic
Development Initiative (EDI) through the Department of Housing and
Urban Development (HUD).
In response to a spiraling crime rate in southwest Alachua County,
the Alachua County Sheriff's Office requested help from the Board of
County Commissioners in 1993. Specifically, the Sheriff reported that
57 percent of its 911 calls came from an area that had only 3.2 percent
of the County's population. The County Commission responded by
providing $38,000 in funding for a Program Manager to staff the
Partners for a Productive Community (PPC) Program in fiscal year 1994.
The PPC was launched as a strategic planning effort with three
goals: the establishment of neighborhood-based services, the
development of public/private partnerships and a focus on crime
prevention. The success of this project depends upon the coordinated
efforts of the Alachua County Sheriff's Office, the Courts and the
Alachua County Department of Community Support Services. The goal of
the Sheriff's Office was to reduce the number of calls from the area,
and to develop a relationship of trust with the area's residents. The
goal of the Courts was to help with the swift prosecution of cases, and
to increase personnel in key areas. Finally, the goal of the County's
Department of Community Support Services was to develop and implement a
neighborhood needs assessment process that would determine the social
service needs in the targeted area. The Community Support Services
Department was also responsible for developing public/private community
partnerships, and community based organizations comprised of tenants,
property owners and managers. Thus, this project represents a multi-
agency strategy to stabilize, revitalize and sustain five specific
neighborhoods of Alachua County.
In addition to improving the area's basic infrastructure, federal
funding is also being requested to provide community recreational
programs for the area's youth. These activities will provide positive
alternatives to crime, and allow youth to participate first hand in
community improvement programs. In doing so, these programs will build
and encourage positive self-esteem, leadership skills and academic
achievement. To complement these programs, additional improvements will
be made in the community Safe Havens.
Finally, the requested funding will also allow the PPC to expand
this successful demonstration program into other at-risk Alachua County
communities such as Archer, Florida. Specifically, the PPC will develop
a partnership strategy to address the unmet needs of health care,
education, training, employment, youth recreation and transportation
for the residents of Archer. This request for federal funding is
justified by the tremendous improvements and accomplishments that have
been made in the five targeted southwest neighborhoods since 1995.
These achievements include: free community day care for 75 children, 30
community day care slots, 24 in-home day care slots, the creation of 30
new jobs by the Early Progress Center, the reduction in 911 calls from
57 percent to 14 percent of total calls in the area, and substantial
increases in the property values for four of the five neighborhoods.
Furthermore, the implementation of seasonal recreation programs in
the targeted Communities by the Y.M.C.A. has been instrumental in
providing positive, character-building activities for children,
teenagers and adults. Day camps are provided during the summer months,
and backyard sports are provided at the end of the school day during
the school year. In addition, two 4-H Clubs serving 60 neighborhood
children were established along with after school and community
designed teen programs. Adult literacy and GED classes were made
available at a nearby school campus. Finally, other programs have been
established for the purpose of creating a sustainable neighborhood.
These programs include quarterly informational forums concerning
small business development, educational opportunities, self-help
seminars, budget management and landlord/tenant issues. With respect to
community-wide improvement programs, a total of nine neighborhood
cleanups were completed this year. With the active involvement of the
residents of the neighborhoods, the Alachua County Office of Codes
Enforcement has been able to reduce from twenty to two the number of
abandoned and vandalized buildings. Furthermore, a new Waste Collection
Ordinance, which was supported by the PPC, permits the efficient and
timely citation of violators.
The sustaining factor within this program is the formally organized
Partners for a Productive Community Council. The Council is the guiding
force that deals with issues and determines unmet needs. For example, a
block captain organization was started this year with the assistance of
the PPC Council, and the Alachua County Sheriff's Office. This group
monitors and manages crime prevention programs block by block. In
recognition of the numerous accomplishments described above, the PPC
received the National Association of Counties' Achievement Award in
1996 for distinguished and innovative contributions to improving county
government.
The League of Women Voters presented the County with a similar
award for out-standing community service. Additionally, in December
1999, Alachua County received Official Recognition from the Executive
Office of Weed and Seed for two of the neighborhoods being served by
the Partners for a Productive Community Program. Pursuant to this
recognition, these communities have been awarded a $175,000 Weed and
Seed Grant for prevention and intervention strategies focusing on Cedar
Ridge and Linton Oaks neighborhoods. This grant will further strengthen
the long-term efforts to improve the quality of life in these
neighborhoods. As previously indicated, the federal funding requested
will also be used to expand the successful Partners Initiative into the
rural community of Archer. Incorporated in 1858, Archer is located in
the southwestern portion of Alachua County. Archer and the rural areas
surrounding it have a population of 16,348, of which 16 percent fall
below the poverty level. The Town of Archer has one elementary school.
Emergency rescue, fire and police services are contracted from
Gainesville and Alachua County. There are also two public housing
communities, and a small obsolete community center that is used as a
congregate meal site for senior citizens. Consequently, many of
Archer's residents travel to Gainesville for employment, social
services, recreational activities, adult and continuing education and
health care.
Recently, the University of Florida School of Nursing received
$200,000 from the Florida Legislature to provide primary health care
through a clinic based in Archer. This minimal funding does not provide
adequate funding for the primary health care needs for this area. Thus,
a portion of the federal funding in this request could be channeled
through the Alachua County Health Department in our continuing effort
to develop partnerships, maximize resources and expand services to the
citizens of Alachua County through our rural service initiative.
Employment opportunities, recreation for teens and outreach social
services continue to be a challenge for the community of Archer.
According to the Alachua County Sheriff's Office, Archer's crime rate
is disproportionately high for a community its size. In 2000, the
Alachua County Sheriff's Office received 2,657 calls for service. Of
the dispatched calls, 30 were assaults and batteries, and 5 were for
sexual battery. The largest number of dispatched calls (869) concerned
burglary and theft.
In conclusion, Alachua County requests $2.3 million in federal
funding to continue it's highly successful and award winning
neighborhood revitalization programs; and to expand these successful
model programs to other neighborhoods, including the Town of Archer,
Florida.
emerald necklace land conservation initiative
Alacua County is also seeking funding for its Emerald Necklace Land
Conservation Initiative. This intergovernmental land conservation
initiative will provide a publicly accessible, connected, and protected
network of trails, greenways, open spaces and waterfronts surrounding
the Gainesville urban area. The County is seeking $10 million to
directly provide for multiple public uses and benefits, including
passive recreation opportunities, protection of drinking water sources,
watershed restoration, and preservation of diminishing fish and
wildlife habitats.
On November 7, 2000, a large turnout of Alachua County voters
overwhelmingly endorsed passage of a local land acquisition bond
referendum that provides up to $29 million in local funds to acquire
and preserve environmentally significant lands. This local initiative
received broad public support, with endorsements from diverse community
interests including business, environmental and community
organizations.
Alachua County is seeking state and federal matching funds to
leverage this substantial local commitment to land conservation.
Property acquisitions are proposed to link existing conservation lands
to provide for connected areas of protected water quality and wildlife
habitat, as well as resource-based recreational opportunities. Federal
matching funds will be critical to the success of this project. Alachua
County is committed to responsible land use practices and conservation
policies that encourage future growth to occur in areas of lesser
environmental sensitivity with adequate infrastructure.
Alachua County has five large-scale land acquisition projects
(5,000+ acres) on Florida's Conservation and Recreation Lands (CARL)
acquisition list.
--Paynes Prairie Additions (a large freshwater wetland and watershed,
managed as a state preserve)
--San Felasco Hammock Additions (a mature hammock and sandhill
forest, with ravines and unique sinkhole drainage features)
--Watermelon Pond (an upland sandhill and scrub forest community with
important ephemeral wetlands surrounding a relatively pristine
lake)
--Newnan's Lake (a diverse flatwoods forest surrounding a major
community fishing lake with declining water quality)
--Lochloosa Forest (a pine flatwoods forest, largely in commercial
timber production surrounding two large fishing lakes)
These tracts are under substantial land development pressures that,
if left unchecked, will further fragment and diminish their
environmental, water resource, and recreational values.
A major portion of the larger tracts proposed for acquisition are
currently timberlands. Timber production, where conducted in
conformance with best management practices to avoid soil erosion and
water quality degradation, is a land use considered to be generally
compatible with Alachua County's land conservation goals. In these
areas, the purchase of development rights and conservation easements,
as opposed to fee simple acquisition, are proposed as key components of
the Emerald Necklace acquisition strategy. These conservation
alternatives, which stretch the available acquisition dollars, allow
the properties to continue to be used for lower impact, more compatible
land use activities while remaining under private ownership and
management.
In addition to these five larger tracts, acquisitions are proposed
for smaller, but environmentally significant properties that will
preserve vital connections between the larger tracts, creating the
``Emerald Necklace.'' These smaller, linking parcels, often overlooked
by state and federal land acquisition programs, are easier to manage by
a local land conservation program such as that established by Alachua
County.
Although most of the properties proposed to be included in this
project are relatively undisturbed, an important objective of the
Emerald Necklace initiative is to accomplish several critical
restoration projects. Alachua County in consultation with the City of
Gainesville has identified four priority restoration areas:
Newnan's Lake; a large lake in a relatively natural setting with
spectacular recreational, scenic, and wildlife resources that is being
adversely affected by water quality degradation and sedimentation.
Specific projects requiring federal assistance include: investigations
to determine the source of water quality problems and appropriate
remedies, mechanical removal of muck and sedimentation, land
acquisition for surrounding properties, a multi-use trail system
circling the lake and connecting two existing rail-trails, and the
designation and enhancement of a canoe trail connecting Newnan's and
Orange Lake via Prairie Creek and the River Styx. The St. Johns River
Water Management District is another willing partner for this
restoration project, having made substantial commitments in the past
and demonstrating an interest to expand land conservation and water
resources protection in the area while enhancing public access.
Sweetwater Branch watershed restoration to improve water quality,
reduce sedimentation, and to prevent adverse impacts on Paynes Prairie
State Preserve (a designated National Natural Landmark) and the
underlying Floridan Aquifer, the region's primary source of drinking
water. Prior to draining into the drinking water aquifer via Alachua
Sink on Paynes Prairie, this urban creek in eastern Gainesville is
severely impacted by untreated stormwater runoff and further eroded by
a major discharge of treated municipal waste-water.
Tumblin Creek watershed restoration to improve water quality,
reduce sedimentation and toxicity to fish, and to prevent adverse
impacts to Paynes Prairie State Preserve and the Floridan Aquifer. This
severely degraded urban creek flows through a minority neighbor-hood
and a public school campus prior to transporting untreated stormwater
and potentially toxic sediments into Bivens Arm Lake. This lake, a
state-designated wildlife sanctuary, provides an increasingly rare
opportunity for subsistence and recreational bank fishing for low
income and unemployed residents.
The restoration of Hogtown Creek, which drains the largest
watershed in Gainesville. The City of Gainesville has acquired $3.0
million in properties to establish the Hogtown Creek Greenway. Federal
funding assistance is needed for the development of recreational trails
and for water quality improvements.
The Emerald Necklace initiative, with federal assistance, can serve
as a model land conservation program, demonstrating a successful local,
state, and federal environmental partnership as well as effective
conservation alternatives to fee simple acquisition.
We hope that the Subcommittee will look favorably upon these
worthwhile and innovative projects as the appropriations process moves
forward.
Thanks you for your consideration.
______
Prepared Statement of the Alliance to Save Energy
introduction
My name is David Nemtzow. I am the President of the Alliance to
Save Energy, a bi-partisan, non-profit coalition of business,
government, environmental, and consumer leaders dedicated to improving
the efficiency with which our economy uses energy. Senators Charles
Percy and Hubert Humphrey founded the Alliance in 1977. The leadership
of the Alliance is also a partnership between the private sector and
government chaired by Senator Byron Dorgan (D-ND) and co-chaired by
Dean Langford the former CEO of Osram Sylvania. Over seventy companies
currently participate in the Alliance's Associates program and with
your permission Mr. Chairman, I would like to include for the record a
complete list of the Alliance's Board of Directors and Associates. This
list includes the nation's leading energy efficiency firms, electric
and gas utilities, and other companies committed to promoting sound
energy use.
Thank you for the opportunity to testify regarding the energy-
related components of the Environmental Protection Agency's fiscal year
2003 budget request. Specifically, I respectfully urge you to
significantly increase your support for Energy Star, a program of the
Environmental Protection Agency (EPA) which uses energy efficiency to
deliver significant environmental benefits to the nation while yielding
significant economic benefits for businesses, state and local
government institutions such as colleges and universities, public
schools, and hospitals, and of course to millions of consumers who
purchase Energy Star-labeled products.
The Alliance has a long history of advocating for as well as
researching and evaluating the effectiveness of federal efforts to
promote energy efficiency. While many of these include laws passed by
this Congress and federal regulations and standards issued pursuant to
those laws, we especially applaud those that rely not on government
mandates, but on cooperative partnerships between government and
business and between the federal and state governments. The EPA Energy
Star program is a shining example of these voluntary partnerships.
President Bush and Vice President Cheney have referred to Energy Star
for furthering national goals of broad-based economic growth,
environmental protection, energy security and economic competitiveness
simultaneously. The Climate Protection Division at EPA works closely
with private sector manufacturers, retailers, building owners, and
energy service providers, as well as state and local governments, non-
profits, and other organizations to promote energy efficient products
and buildings. And they do it extremely well for every tax dollar spent
by the Energy Star program, 75 dollars worth of energy savings is
returned.
Energy Star Improves Energy Reliability
Mr. Chairman, last year our nation faced emergencies in energy
reliability. This could happen again. The dire situation surrounding
electricity supply in California and the West brought renewed concern
about America's energy needs. President Bush took a large step in
issuing conservation orders for federal agencies in the midst of the
crisis, yet this could do little to address demand. It was the help of
Americans who stood up to the crisis and reduced their demand that
helped prevent a further strain on supply. While this winter was mild,
last year Americans staggered under massive increases in natural gas
for their heating needs.
Energy Star has an important role to play in reliability. By
promoting energy-efficient buildings, appliances, and other products
Energy Star is helping reduce peak demand for electricity in homes,
businesses, hospitals, and government buildings. By giving consumers
guidance on heating and cooling equipment, Energy Star is helping those
homeowners take back control of their home finances.
Energy Efficiency as a Potent Energy Resource
Mr. Chairman, the debate over energy policy is in full swing on the
Senate floor. Much of that debate can be boiled down to the simple
elements of supply and demand. There are those who are focusing on the
supply end, calling for increasing the supply of our energy resources
through expanded drilling, power plant licensing, and through other
avenues. Then, there are those Senators who have turned their backs to
supply to focus on demand. While we at the Alliance to Save Energy
applaud that endeavor we realize that we cannot save our way our out of
our dependence on fossil and nuclear fuels. An effective energy policy
must include a combination of measures that provides electricity,
heating fuel, and motor fuel to Americans. But to do that we must first
go after the resource that is cheapest, can be delivered most quickly,
and can stand up to all environmental scrutiny that resource is energy
efficiency.
Energy efficiency isn't just a marginal activity by which we can
chip a little bit off of our consumption and save a few bucks around
the edges. Energy efficiency measures are powerful and dynamic policy
tools through which prices, supply, and emissions can be radically
changed. It seems that every year technological developments bring more
and better measures at our disposal to reduce electricity demand, make
homes more energy-efficient, and go further on less gasoline. But Mr.
Chairman, a strategy to maximize these resources must begin with
reasoned analysis of our energy situation, not a predisposition to one
course or another.
Energy Star Capitalize on this Resource
Mr. Chairman, EPA's Energy Star has proven to be an extremely
effective way for this nation to capitalize on the untapped potential
of energy efficiency as a resource. In fact, Energy Star proves that
environmental protection can not only be achieved without harming the
economy, but also that such protections can act to boost consumer
savings and economic growth.
Energy Star is composed entirely of voluntary partnerships, and
they have grown since the early 1990s to include thousands of
partnerships with product manufacturers, private and public building
owners and operators, homebuilders, small businesses, utilities, and
retailers. The sheer number of these partnerships is a testament to the
fact that energy efficiency delivers ``pollution prevention at a
profit.''
Recently, the Alliance to Save Energy asked many of Energy Star's
partners if they would support our request for a significant increase
in funding for these important programs. The response was remarkable.
Hundreds of businesses, from large manufacturers like Canon USA in New
York to smaller businesses like Mayer Electrical Supply Co. in Alabama,
have pledged their company's support for these important programs. Each
member of the Subcommittee with receive a copy of this letter with the
list of businesses.
Energy Star serves broad constituencies across every state in the
country. Energy Star includes over 1,600 manufacturing partners of over
30 different product types, who make and market over 11,000 different
models of Energy Star compliant products. Energy Star assists over
2,800 small businesses with their efforts to maximize the energy
efficiency of their facilities. Energy Star's work with partners
further advances the education of energy efficiency and the reduction
in energy consumption. For example, by working with builders, Energy
Star helps the customers of those builders make smart decisions
decisions that will save the consumer money and the country pollution
for as long as the home is standing. Energy Star counts more than 1,600
builder partners and partners who supply products and services for
energy-efficient home construction. To date, more than 25,000 Energy
Star labeled homes have been built, locking in financial savings for
homeowners of more than $7.5 million annually. Energy Star Buildings
participants now include over 15 percent of the nation's total
commercial, public, and industrial market, resulting in more than 25
billion kilowatt hours of energy saved.
Energy Efficiency Investments Pay Back for Years
Energy efficiency improvements achieved through Energy Star are
like ``the gift that keeps on giving.'' There are not only the
immediate environmental and economic benefits, but also those that are
achieved through the long term investments.
While consumers who purchase Energy Star labeled products save
through the life of the product, product manufacturers get the economic
boost and incentives from the purchases of these products. EPA predicts
expenditures on energy-efficient technology of almost $13 billion
through 2010. In addition, EPA predicts cumulative net energy bill
savings for consumer and businesses of $70 billion through 2010 an
average net savings of more than $5 billion per year.
Pollution savings are as dramatic as the financial savings. In 2001
alone, reductions in greenhouse gas emissions totaled 38 million metric
tons of carbon equivalent (MMTCE) that's similar to taking more than 25
million cars off the road. Last year, emissions of 140,000 tons of
nitrogen oxides (NOX) were also prevented. Because many of
the investments in energy-efficient technology promoted by Energy Star
offer a life of ten years or more, these investments will continue to
deliver economic and environmental benefits through 2010 and beyond.
EPA estimates that emissions reductions averaging more than 35 MMTCE
per year between now and 2010 were locked in last year based on actions
already taken by Energy Star partners.
In considering the environmental value of the purchasing decisions
that Energy Star helps consumers make more wisely, it is important to
realize that over 50 percent of U.S. greenhouse gas emissions in 2010
will be coming from products and capital equipment not yet purchased.
The Energy Star program seeks to influence those capital investment
decisions in a way that helps individual purchasers save money while
simultaneously helping the nation meet its clean air and greenhouse gas
emissions-reduction goals.
All of this through voluntary participation in Energy Star, and the
voluntary, market-based choices made by thousands of partners and
millions of American consumers. No regulations, no government mandates.
Energy Efficiency Enhances Electric System Reliability
Mr. Chairman, Energy Star, and energy efficiency in general, also
enhance the security of our energy supply in another very significant,
but largely unappreciated, way. I am referring to the reliability of
our electric system. As every member of Congress is aware, the nation
is in the midst of a transition in the structure of our electric
utility industry from a system of regulated monopolies to a competitive
market for electricity generation and retail sales. While true
competition should be a boon for efficiency on the generation side,
this transition brings with it many uncertainties. Under regulation,
utilities planned for and built power plants to meet a predetermined
reserve generation capacity, and were assured of recovering costs plus
a profit margin through the regulatory rate-setting process. Under
competition, markets composed of electric generating businesses,
investors, and consumers will decide which supplies will be needed and
economical. The ability of markets to accurately forecast future demand
and potential revenues and translate those into timely investments in
supply capability remains to be seen.
Compounding this problem, impending restructuring has put a chill
on utilities' interest in helping their customers to use energy more
efficiently. Since 1993, utilities have slashed spending on their
``demand-side management'' programs, the largest component of which is
usually energy efficiency, by 45 percent. The reason for this is
simple: in a competitive environment, electricity generators no longer
have an interest in helping their customers reduce the consumption of
their product. The foregone energy savings and peak demand reductions
from energy efficiency programs have been substantial, and they have
exacerbated the steady growth in demand for electricity created by our
strong economy. Many summers have brought ``capacity crunches'' in
various regions of the country; shortages of either electric supply or
transmission and distribution capacity needed to deal with peak demand
on hot summer days.
Energy efficiency, by reducing demand, unquestionably contributes
to system reliability. Quite simply, energy efficiency reduces both the
base load, the amount of energy required to be supplied to an area or
region, as well as the peak power demand. Different technologies may
contribute primarily to one or the other, for example: lighting and
refrigeration efficiencies reduce base load, while air conditioner
efficiency improvements reduce summertime peak load. (Of course, any
reduction in base load also reduces the ``height'' of peak loads.)
Thus, energy efficiency in the aggregate helps maintain adequate
margins of generation supply, and by reducing the load and stress on
various points in the power distribution network, also enhances the
security of the system. Energy Star, with its broad reach, covers all
the bases. In fact, EPA works with more than 100 utilities and state
energy efficiency providers that serve approximately 50 percent of the
households in the United States in promoting energy efficiency with
Energy Star.
The Bush Administration's energy policy released last year also
touted the benefits of the Energy Star program and called for an
expansion of this important initiative. In their report to the
President, the National Energy Policy Development Group recommended
that: ``the President direct the EPA Administrator to develop and
implement a strategy to increase public awareness of the sizable
savings that energy efficiency offers to homeowners across the country.
Typical homeowners can save about 30 percent (about $400) a year on
their home energy bill by using Energy Star labeled products.'' The
report further complimented the program. Noting not only that
``Conservation and energy efficiency are important elements of a sound
energy policy'' but also that ``The federal government can also promote
energy efficiency through programs like the Energy Star program, and
search for more innovative technologies that improve efficiency and
conservation through research and development.''
The Need, and the Answer, Are Clear
The need for energy efficiency to contribute even more strongly to
our nation's economic growth and energy security is clear. The
potential for energy efficiency programs like Energy Star to meet that
need is just as clear, and just as strong. At the end of its first
decade, Energy Star is now achieving widespread recognition. EPA's
latest market research shows that not only do most American's recognize
the unique Energy Star label, but it also is highly influential in
influencing their purchases. Each year, Energy Star recognizes
companies and organizations that go above and beyond to advance energy
efficiency, and these honors speak volumes about the program itself.
Corporations such as Maytag, located in Newton, Iowa, are being
recognized this year for their products and public education efforts
that demonstrate that, working with businesses, Energy Star can
leverage private sector dollars to advance marketing efforts for
efficient products. Maytag now offers 68 Energy Star qualified
appliance models, which is almost 100 percent increase over last year.
In 2001, Maytag concluded a concert tour with educational messages
about energy and water savings and their ``Mother Earth'' float in the
Macy's Day Parade displayed the Energy Star logo reaching millions of
consumers around the country with messages of energy saving.
In addition to marketing efforts with Energy Star partners, the
Energy Star program participates in research and is always on the
lookout for new and innovative ways to reduce energy use. This year, a
West Virginia company will receive one of the special recognition
awards for technical innovation. Royal Venders, Inc. located in
Kearneysville, West Virginia has developed a new vending machine
technology; Royal Vendors' customers use approximately 50 percent less
energy. The technology consists of a more energy efficient T8 lighting
package, cooling unit, GE evaporator fan, and software to further
reduce consumption during non-peak hours. All new 2002 Royal Vendors
machines are available with the optional energy efficiency package,
which saves energy, money, and maintenance/service calls. With
approximately one million Royal Vendors machines in place in the United
States, upgrading the existing stock of machines will bring energy
savings for years to come. Recognition of the technology is another way
that Energy Star helps push energy efficiency advancements into more
common use.
Much Has Been Accomplished, but Huge Potential Remains Untapped
The questions are often asked: ``If energy efficiency is so great,
why don't consumers and businesses just do it on their own? Why do we
need a government program to promote it and incent people to do it?''
Well, we know that for reasons sometimes hard to understand, people
often don't do what is in their own interest. For example, people
should save for their retirement, right? It's certainly in their long-
term self-interest. Yet, the government goes to great lengths, and
great expense, to goad people into saving for their retirement, through
tax breaks for 401(k)s and other retirement plans, IRA's etc. How about
home ownership? It's the American dream to own your own home for peace
of mind, long-term security, etc. yet Congress long ago enacted the
home mortgage-interest tax deduction, to convince people to buy their
home and help them afford it. Compared to things like these, the
federal funds spent on Energy Star are a pittance.
There are no tax breaks or subsidies in these programs.
Appropriations go directly to fund the underlying research, program
implementation, and technical assistance to partners. These funds are
hugely leveraged through EPA's thousands of voluntary partnerships with
product manufacturers, home builders, state and local government
institutions, commercial building owners, and small businesses. For
every federal dollar spent on these programs, EPA can show an average
of $75 in utility bill savings to someone, $15 in private sector
investment in energy efficient technology, reductions in greenhouse gas
emissions of 1.0 MMTCE, and an addition of over $60 to the economy.
Conclusion
Over the past decade, the Energy Star programs have demonstrated
their effectiveness by achieving great savings in the nation's
collective energy bill and in energy-related pollution. But, as
successful as these programs have been, much more could be accomplished
with increased funding. It is estimated that if all consumers chose
only Energy Star-labeled products over the next decade or so, the
nation's energy bill would be reduced by about $100 billion, while
avoiding 300 MMTCE in greenhouse gas emissions. If all commercial
building owners took advantage of the cost-effective efficiency-
improvement opportunities, they could achieve another $130 billion in
energy savings and 350 MMTCE in emissions reductions over the next 10
years.
These programs are wildly successful by any measure. They are well-
run, they are cost-effective, they have consistently exceeded their
goals, and they have the support, even explicit endorsement of
businesses across the country. Unfortunately, these important programs
have received a virtual level funding request for the past 2 years,
even as the number of products and manufacturers in the Labeling
program has greatly expanded, the number of partners in the Buildings,
Homes, and Small Business programs have soared, and both President Bush
and Vice President Cheney have publicly touted the benefits of Energy
Star and promoted voluntary pollution reduction.
Energy Star's effectiveness in terms of national energy bill
savings and pollution reduction are truly impressive. While there are
many demands on the countries financial resources, I respectfully urge
greater support to what works. Energy Star has proven tremendously
cost-effective and it can deliver even greater benefits to the nation
with increased funding resources.
Thank you again for the opportunity to testify.
______
Prepared Statement of the American Astronomical Society
executive summary
astronomy and astrophysics in the new millennium
In the first decade of the new millennium, we are poised to take a
giant step forward in understanding the universe and our place within
it. The decade of the 1990s saw an enormous number of exciting
discoveries in astronomy and astrophysics. For example, humanity's
centuries-long quest for evidence of the existence of planets around
other stars resulted in the discovery of extrasolar planets, and the
number of planets known continues to grow. Astronomers peered far back
in time, to only a few hundred thousand years after the Big Bang, and
found the seeds from which all galaxies, such as our own Milky Way,
were formed. At the end of the decade came evidence for a new form of
energy that may pervade the universe. Nearby galaxies were found to
harbor extremely massive black holes in their centers. Distant galaxies
were discovered near the edge of the visible universe. In our own solar
system, the discovery of Kuiper Belt objects--some of which lie beyond
the orbit of Pluto--opens a new window onto the history of the solar
system. This report presents a comprehensive and prioritized plan for
the new decade that builds on these and other discoveries to pursue the
goal of understanding the universe, a goal that unites astronomers and
astrophysicists with scientists from many other disciplines.
The Astronomy and Astrophysics Survey Committee was charged with
surveying both ground- and space-based astronomy and recommending
priorities for new initiatives in the decade 2000 to 2010. In addition,
the committee was asked to consider the effective implementation of
both the proposed initiatives and the existing programs. The
committee's charge excludes in situ studies of Earth and the planets,
which are covered by other National Research Council committees: the
Committee on Planetary and Lunar Exploration and the Committee on Solar
and Space Physics. To carry out its mandate, the committee established
nine panels with more than 100 distinguished members of the
astronomical community. Broad input was sought through the panels, in
forums held by the American Astronomical Society, and in meetings with
representatives of the international astronomical community. The
committee's recommendations build on those of four previous decadal
surveys (NRC, 1964, 1972, 1982, 1991), in particular the report of the
1991 Astronomy and Astrophysics Survey Committee, The Decade of
Discovery in Astronomy and Astrophysics (referred to in this report as
the 1991 survey; also known as the Bahcall report).
The fundamental goal of astronomy and astrophysics is to understand
how the universe and its constituent galaxies, stars, and planets
formed, how they evolved, and what their destiny will be. To achieve
this goal, researchers must pursue a strategy with several elements:
--Survey the universe and its constituents, including galaxies as
they evolve through cosmic time, stars and planets as they form
out of collapsing interstellar clouds in our galaxy,
interstellar and intergalactic gas as it accumulates the
elements created in stars and supernovae, and the mysterious
dark matter and perhaps dark energy that so strongly influence
the large-scale structure and dynamics of the universe.
--Use the universe as a unique laboratory for probing the laws of
physics in regimes not accessible on Earth, such as the very
early universe or near the event horizon of a black hole.
--Search for life beyond Earth, and if it is found, determine its
nature and its distribution.
--Develop a conceptual framework that accounts for all that
astronomers have observed.
Several key problems are particularly ripe for advances in this
decade:
--Determine the large-scale properties of the universe: the amount,
distribution, and nature of its matter and energy, its age, and
the history of its expansion.
--Study the dawn of the modern universe, when the first stars and
galaxies formed.
--Understand the formation and evolution of black holes of all sizes.
--Study the formation of stars and their planetary systems, and the
birth and evolution of giant and terrestrial planets.
--Understand how the astronomical environment affects Earth.
These scientific themes, all of which now appear to offer
particular promise for immediate progress, are only part of the much
larger tapestry that is modern astronomy and astrophysics. For example,
scientists cannot hope to understand the formation of black holes
without understanding the late stages of stellar evolution, and the
full significance of observations of the galaxies in the very early
universe will not be clear until it is clear how these galaxies have
evolved since that time. Although the new initiatives that the
committee recommends will advance knowledge in many other areas as
well, they were selected explicitly to address one or more of the
important themes listed above.
In addition, the committee believes that astronomers can make
important contributions to education. Building on widespread interest
in astronomical discoveries, astronomers should:
--Use astronomy as a gateway to enhance the public's understanding of
science and as a catalyst to improve teachers' education in
science and to advance interdisciplinary training of the
technical work force.
optimizing the return on the nation's investment in astronomy and
astrophysics
The United States has been generous in its support of astronomy and
astrophysics and as a result enjoys a leading role in almost all areas
of astronomy and astrophysics. So that the nation can continue to
obtain maximum scientific return on its investment, the committee makes
several recommendations to optimize the system of support for
astronomical research.
Balancing New Initiatives with the Ongoing Program
An effective program of astronomy and astrophysics research must
balance the need for initiatives to address new opportunities with
completion of projects accorded high scientific priority in previous
surveys.
--The committee reaffirms the recommendations of the 1991 Astronomy
and Astrophysics Survey Committee (NRC, 1991) by endorsing the
completion of the Space Infrared Telescope Facility (SIRTF),
the Millimeter Array (MMA; now part of the Atacama Large
Millimeter Array, or ALMA), the Stratospheric Observatory for
Infrared Astronomy (SOFIA), and the Astrometric Interferometry
Mission (now called the Space Interferometry Mission, or SIM).
Consistent with the recommendations of the Task Group on Space
Astronomy and Astrophysics (NRC, 1997), the committee stresses
the importance of studying the cosmic microwave background with
the Microwave Anisotropy Probe (MAP) mission, the European
Planck Surveyor mission, and ground-based and balloon programs.
The committee endorses U.S. participation in the European Far
Infrared Space Telescope (FIRST), and it endorses the planned
continuation of the operation of the Hubble Space Telescope (HST) at a
reduced cost until the end of the decade.
--To achieve the full scientific potential of a new facility, it is
essential that, prior to construction, funds be identified for
operation of the facility, for renewal of its instrumentation,
and for grants for data analysis and the development of
associated theory.
NASA already follows this recommendation in large part by including
Mission Operations and Data Analysis (MO&DA) in its budgeting for new
missions. The committee recommends that funds for associated theory be
included in MO&DA as well. It recommends further that the National
Science Foundation include funds for facility operation, renewal of
instrumentation, and grants for data analysis and theory along with the
construction costs in the budgets for all new federally funded, ground-
based facilities. These recommendations are consistent with those of
the 1991 survey. For the purpose of total project budget estimation,
the committee adopted a model in which operation amounts to 7 percent
of the capital cost per year and instrumentation amounts to 3 percent
per year for the first 5 years of operation. The committee recommends
that total project budgets provide for grants for data analysis and
associated theory at the rate of 3 percent of the capital cost per year
for major facilities and 5 percent per year for moderate ones. On the
basis of this model, the committee has included funds for operations,
instrumentation, and grants for a period of 5 years in the cost
estimates provided in this report for most ground-based initiatives.
--Adequate funding for unrestricted grants that provide broad support
for research, students, and postdoctoral associates is required
to ensure the future vitality of the field; therefore new
initiatives should not be undertaken at the expense of the
unrestricted grants program.
Grants not tied to a facility or program--unrestricted grants--
often drive the future directions of astronomy.
Strengthening Ground-Based Astronomy and Astrophysics
The committee addresses several structural issues in ground-based
astronomy and astrophysics.
--U.S. ground-based optical and infrared facilities, radio
facilities, and solar facilities should each be viewed by the
National Science Foundation (NSF) and the astronomical
community as a single integrated system drawing on both federal
and nonfederal funding sources. Effective national
organizations are essential to coordinate, and to ensure the
success and efficiency of, these systems. Universities and
independent observatories should work with the national
organizations to ensure the success of these systems.
--Cross-disciplinary competitive reviews should be held about every 5
years for all NSF astronomy facilities. In these reviews, it
should be standard policy to set priorities and consider
possible closure or privatization.
The National Radio Astronomy Observatory (NRAO) and the National
Astronomy and Ionosphere Center (NAIC) currently serve as effective
national organizations for radio astronomy, and the National Solar
Observatory (NSO) does so for solar physics. The National Optical
Astronomy Observatories (NOAO) as currently functioning and overseen
does not fulfill this role for ground-based optical and infrared
astronomy. A plan for the transition of NOAO to an effective national
organization for ground-based optical and infrared astronomy should be
developed, and a high-level external review, based on appropriate,
explicit criteria, should be initiated.
The Department of Energy (DOE) supports a broad range of programs
in particle and nuclear astrophysics and in cosmology. The scientific
payoff of this effort would be even stronger with a clearly articulated
strategic plan for DOE's programs that involve astrophysics.
--Given the increasing involvement of the Department of Energy in
projects that involve astrophysics, the committee recommends
that DOE develop a strategic plan for astrophysics that would
lend programmatic coherence and facilitate coordination and
cooperation with other agencies on science of mutual interest.
Ensuring the Diversity of NASA Missions
NASA's Great Observatories have revolutionized understanding of the
cosmos, while the extremely successful Explorer program provides
targeted small-mission opportunities for advances in many areas of
astronomy and astrophysics. The committee endorses the continuation of
a vigorous Explorer program. There are now fewer opportunities for
missions of moderate size, however, despite the enormous role such
missions have played in the past.
--NASA should continue to encourage the development of a diverse
range of mission sizes, including small, moderate, and major,
to ensure the most effective returns from the U.S. space
program.
Integrating Theory Challenges into the New Initiatives
The new initiatives recommended below are motivated in large part
by theory, which is also key to interpreting the results. Adequate
support for theory, including numerical simulation, is a cost-effective
means for maximizing the impact of the nation's capital investment in
science facilities. The committee therefore recommends that
--To encourage theorists to contribute to the planning of missions
and facilities and to the interpretation and understanding of
the results, one or more explicitly funded theory challenges
should be integrated with most moderate or major new
initiatives.
Coordinating Programs among Federal Agencies
Because of the enormous scale of contemporary astronomical projects
and the need for investigations that cross wavelength and discipline
boundaries, cooperation among the federal agencies that support
astronomical research often has benefits. To determine when interagency
collaboration would be fruitful, each agency should have in place a
strategic plan for astronomy and astrophysics and should also have
cross-disciplinary committees (such as DOE and NSF's Scientific
Assessment Group for Experiments in Non-Accelerator Physics [SAGENAP]
and NASA's Space Science Advisory Committee [SSAC]) available to
evaluate proposed collaborations. The Office of Science and Technology
Policy could play a useful role in facilitating such interagency
cooperation.
Collaborating with International Partners
International collaboration enables projects that are too costly
for the United States alone and enhances the scientific return on
projects by bringing in the scientific and technical expertise of
international partners. In many cases, international collaboration
provides opportunities for U.S. astronomers to participate in major
international projects for a fraction of the total cost, as in the case
of the European Solar and Heliospheric Observatory (SOHO), XMM-Newton,
Planck Surveyor, and FIRST missions, and the Japanese Advanced
Satellite for Cosmology and Astrophysics mission. Valuable
opportunities for international collaboration exist for smaller
missions as well. Collaborations on major projects require the full
support of the participating scientific communities, which can be
ensured if the projects are among the very highest priorities of the
participants, as is the case with ALMA.
The committee affirms the value of international collaboration for
ground- and space-based projects of all sizes. International
collaboration plays a crucial role in a number of this committee's
recommended initiatives, including the Next Generation Space Telescope,
the Expanded Very Large Array, the Gamma-ray Large Area Space
Telescope, the Laser Interferometer Space Antenna, the Advanced Solar
Telescope, and the Square Kilometer Array technology development, and
it could play a significant role in other recommended initiatives as
well.
new investments in astronomy and astrophysics
Many mysteries confront us in the quest to understand our place in
the universe. How did the universe begin? What is the nature of the
dark matter and the dark energy that pervade the universe? How did the
first stars and galaxies form? Researchers infer the existence of
stellar mass black holes in our galaxy and supermassive ones in the
nuclei of galaxies. How did they form? The discovery of extrasolar
planets has opened an entirely new chapter in astronomy, bringing a
host of unresolved questions. How do planetary systems form and evolve?
Are planetary systems like our solar system common in the universe? Do
any extrasolar planetary systems harbor life? Even a familiar object
like the Sun poses many mysteries. What causes the small variations in
the Sun's luminosity that can affect Earth's climate? What is the
origin of the eruptions on the solar surface that cause ``space
weather''?
To seek the answers to these questions and many others described in
this report, the committee recommends a set of new initiatives for this
decade that will substantially advance the frontiers of human
knowledge. Table ES.1 presents these initiatives, combined for both
ground- and space-based astronomy, in order of priority. The committee
set the priorities primarily on the basis of scientific merit, but it
also considered technical readiness, cost-effectiveness, impact on
education and public outreach, and the relation to other projects. The
initiatives were divided into three categories--major, moderate, and
small--that were defined separately for ground- and space-based
projects based on estimated cost (see Chapter 1). The estimated cost of
the recommended program for the decade 2000 to 2010 is $4.7 billion in
fiscal year 2000 dollars, about 20 percent greater than the $3.9
billion inflation-adjusted cost of the recommendations of the 1991
survey. Two of the recommended projects, the Terrestrial Planet Finder
(TPF) and the Single Aperture Far Infrared (SAFIR) Observatory, could
start near the end of this decade or at the beginning of the next. The
committee has assumed that about 15 percent of the total estimated cost
for these two projects will fall in this decade.
Major initiatives
The Next Generation Space Telescope (NGST), the committee's top-
priority recommendation, is designed to detect light from the first
stars and to trace the evolution of galaxies from their formation to
the present. It will revolutionize understanding of how stars and
planets form in our galaxy today. NGST is an 8-mclass infrared space
telescope with 100 times the sensitivity and 10 times the image
sharpness of the Hubble Space Telescope in the infrared. Having NGST's
sensitivity extend to 27 m would add significantly to its
scientific return. Technology development for this program is well
under way. The European Space Agency and the Canadian Space Agency plan
to make substantial contributions to the instrumentation for NGST.
The Giant Segmented Mirror Telescope (GSMT), the committee's top
ground-based recommendation and second priority overall, is a 30-m-
class ground-based telescope that will be a powerful complement to NGST
in tracing the evolution of galaxies and the formation of stars and
planets. It will have unique capabilities in studying the evolution of
the intergalactic medium and the history of star formation in our
galaxy and its nearest neighbors. GSMT will use adaptive optics to
achieve diffraction-limited imaging in the atmospheric windows between
1 and 25 m and unprecedented light-gathering power between 0.3
and 1 m. The committee recommends that the technology
development for GSMT begin immediately and that construction start
within the decade. Half the total cost should come from private and/or
international partners. Open access to GSMT by the U.S. astronomical
community should be directly proportional to the investment by the NSF.
The Constellation-X Observatory is a suite of four powerful x-ray
telescopes in space that will become the premier instrument for
studying the formation and evolution of black holes of all sizes. Each
telescope will have high spectral resolution over a broad energy range,
enabling it to study quasars near the edge of the visible universe and
to trace the evolution of the chemical elements. The technology issues
are well in hand for a start in the middle of this decade.
The Expanded Very Large Array (EVLA)--the revitalization of the
VLA, the world's foremost centimeter-wave radio telescope--will take
advantage of modern technology to attain unprecedented image quality
with 10 times the sensitivity and 1,000 times the spectroscopic
capability of the existing VLA. The addition of eight new antennas will
provide an order-of-magnitude increase in angular resolution. With
resolution comparable to that of ALMA and NGST, but operating at much
longer wavelengths, the EVLA will be a powerful complement to these
instruments for studying the formation of protoplanetary disks and the
earliest stages of galaxy formation.
The Large-aperture Synoptic Survey Telescope (LSST) is a 6.5-m-
class optical telescope designed to survey the visible sky every week
down to a much fainter level than that reached by existing surveys. It
will catalog 90 percent of the near-Earth objects larger than 300 m and
assess the threat they pose to life on Earth. It will find some 10,000
primitive objects in the Kuiper Belt, which contains a fossil record of
the formation of the solar system. It will also contribute to the study
of the structure of the universe by observing thousands of supernovae,
both nearby and at large redshift, and by measuring the distribution of
dark matter through gravitational lensing. All the data will be
available through the National Virtual Observatory (see below under
``Small Initiatives''), providing access for astronomers and the public
to very deep images of the changing night sky.
The Terrestrial Planet Finder (TPF) is the most ambitious science
mission ever attempted by NASA. It is currently envisaged as a free-
flying infrared interferometer designed to study terrestrial planets
around nearby stars--to find them, characterize their atmospheres, and
search for evidence of life--and to obtain images of star-forming
regions and distant galaxies with unprecedented resolution. The
committee's recommendation of this mission is predicated on the
assumptions that TPF will revolutionize major areas of both planetary
and nonplanetary science and that, prior to the start of TPF, ground-
and space-based searches will confirm the expectation that terrestrial
planets are common around solar-type stars. Both NGST and SIM lie on
the technology path necessary to achieve TPF.
The Single Aperture Far Infrared (SAFIR) Observatory is an 8-m-
class space-based telescope that will study the important and
relatively unexplored spectral region between 30 and 300 m. It
will enable the study of galaxy formation and the earliest stage of
star formation by revealing regions too enshrouded by dust to be
studied by NGST, and too warm to be studied effectively with ALMA. As a
follow-on to NGST, SAFIR could start toward the end of the decade, and
it could form the basis for developing a far-infrared interferometer in
the succeeding decade.
Moderate Initiatives
Ground-Based Programs.--The committee's recommended highest-
priority moderate initiative overall is the Telescope System
Instrumentation Program (TSIP), which would substantially increase NSF
funding for instrumentation at large telescopes owned by independent
observatories and provide new observing opportunities for the entire
U.S. astronomical community. Its second priority among ground-based
initiatives is the Advanced Solar Telescope (AST), which offers the
prospect of revolutionizing understanding of magnetic phenomena in the
Sun and in the rest of the universe. The committee's next
recommendation is that a program be established to plan and develop
technology for the Square Kilometer Array, an international centimeter-
wave radio telescope for the second decade of the century. In order of
priority, the other recommended moderate initiatives are the following:
The Combined Array for Research in Millimeter-wave Astronomy (CARMA)
will be a powerful millimeter-wave array in the Northern Hemisphere.
The study of very-high-energy gamma rays will take a major step forward
with the construction of the Very Energetic Radiation Imaging Telescope
Array System (VERITAS). The Frequency Agile Solar Radio telescope
(FASR) will apply modern technology to provide unique data on the Sun
at radio wavelengths. The South Pole Submillimeter-wave Telescope
(SPST) will take advantage of the extremely low opacity of the
Antarctic atmosphere to carry out surveys at submillimeter wavelengths
that are possible nowhere else on Earth.
Space-Based Programs.--The committee's top recommendation for a
moderate space-based mission is the Gamma-ray Large Area Space
Telescope (GLAST). This joint NASA-DOE mission will provide
observations of gamma rays from 10 MeV to 300 GeV with six times the
effective area, six times the field of view, and substantially better
angular resolution than the Energetic Gamma Ray Experiment aboard the
Compton Gamma Ray Observatory. The committee's second-priority space-
based project is the Laser Interferometer Space Antenna (LISA), which
will be able to detect gravity waves from merging supermassive black
holes throughout the visible universe and from close binary stars
throughout our galaxy. The committee has assumed that LISA's cost will
be shared with the European Space Agency. Four additional space-based
missions have priority. The Solar Dynamics Observer (SDO), a successor
to the path-breaking SOHO mission, will study the outer convective zone
of the Sun and the structure of the solar corona. The highly variable
hard-x-ray sky will be mapped by the Energetic X-ray Imaging Survey
Telescope (EXIST), which will be attached to the International Space
Station. The Advanced Radio Interferometry between Space and Earth
(ARISE) mission is an orbiting antenna that will combine with the
ground-based VLBA to provide an order-of-magnitude increase in
resolution for studying the regions near supermassive black holes in
active galactic nuclei.
Small Initiatives
Several small initiatives recommended by the committee span both
ground and space. The first among them--the National Virtual
Observatory (NVO)--is the committee's top priority among the small
initiatives. The NVO will provide a ``virtual sky'' based on the
enormous data sets being created now and the even larger ones proposed
for the future. It will enable a new mode of research for professional
astronomers and will provide to the public an unparalleled opportunity
for education and discovery.
The remaining recommendations for small initiatives are not
prioritized. The committee recommends establishing a laboratory
astrophysics program and a national astrophysical theory postdoctoral
program for both ground- and space-based endeavors. Augmentation of
NASA's Astrophysics Theory Program will help restore a balance between
the acquisition of data and the theory needed to interpret it.
Ultralong-duration balloon flights offer the prospect of carrying out
small space-based experiments at a small fraction of the cost of
satellites. The Low Frequency Array (LOFAR), a joint Dutch-U.S.
initiative, will dramatically increase knowledge of the universe at
radio wavelengths longer than 2 m. The Advanced Cosmic-ray Composition
Experiment for the Space Station (ACCESS) will address fundamental
questions about the origin of cosmic rays. Expansion of the Synoptic
Optical Long-term Investigation of the Sun (SOLIS) will permit
investigation of the solar magnetic field over an entire solar cycle.
Technology
Technological innovation has often enabled astronomical discovery.
Advances in technology in this decade are a prerequisite for many of
the initiatives recommended in this report as well as for initiatives
in the next decade. For the recommended space-based initiatives,
technology investment as specified in the existing NASA technology road
map is an assumed prerequisite for the cost estimates given in Table
ES.1. It is essential to maintain funding for these initiatives if NASA
is to keep these missions on schedule and within budget. The committee
endorses NASA's policy of completing a mission's technological
development before starting the mission. The committee similarly
endorses such a policy as the NSF is applying it to the design and
development of ALMA.
For possible ground-based initiatives in the decade 2010 to 2020,
investment is required in very large, high-speed digital correlators;
in infrared interferometry; and in specialized dark-matter detectors.
Future space-based initiatives require investment in spacecraft
communication and x-ray interferometry, as well as technology for the
next-generation observatories. Such technology will include energy-
resolving array detectors for optical, ultraviolet, and x-ray
wavelengths; far-infrared array detectors; refrigerators; large,
lightweight optics; and gamma-ray detectors.
astronomy's role in education
Because of its broad public appeal, astronomy has a unique role to
play in education and public outreach. The committee recommends that
the following steps be taken to exploit the potential of astronomy for
enhancing education and public understanding of science:
--Expand and improve the opportunities for astronomers to engage in
outreach to the K-12 community.
--Establish more pilot partnerships between departments of astronomy
and education at a few universities to develop exemplary
science courses for preservice teachers.
--Improve communication, planning, and coordination among federal
programs that fund educational initiatives in astronomy.
--Increase investment toward improving public understanding of the
achievements of all NSF-funded science and facilities,
especially in the area of astronomy.
Table ES. 1.--Prioritized Equipment Initiatives (Combined Ground and
Space) and Estimated Federal Costs for the Decade 2000 to 2010
1}2
Initiative Cost \3\
Major Initiatives:
Next Generation Space Telescope (NGST) \4\.................... 1,000
Giant Segmented Mirror Telescope (GSMT) \4\................... 350
Constellation-X Observatory................................... 800
Expanded Very Large Array (EVLA) \4\.......................... 140
Large-aperture Synoptic Survey Telescope (LSST)............... 170
Terrestrial Planet Finder (TPF) \5\........................... 200
Single Aperture Far Infrared (SAFIR) Observatory \5\.......... 100
______
Subtotal for major programs............................... 2,760
=================================================================
________________________________________________
Moderate Initiatives:
Telescope System Instrumentation Program (TSIP)............... 50
Gamma-ray Large Area Space Telescope (GLAST) \4\.............. 300
Laser Interferometer Space Antenna (LISA) \4\................. 250
Advanced Solar Telescope (AST) \4\............................ 60
Square Kilometer Array (SKA) Technology Development........... 22
Solar Dynamics Observer (SDO)................................. 300
Combined Array for Research in Millimeter-wave Astronomy
(CARMA) \4\................................................. 11
Energetic X-ray Imaging Survey Telescope (EXIST).............. 150
Very Energetic Radiation Imaging Telescope Array System
(VERITAS)................................................... 35
Advanced Radio Interferometry between Space and Earth (ARISE). 350
Frequency Agile Solar Radio telescope (FASR).................. 26
South Pole Submillimeter-wave Telescope (SPST)................ 50
______
Subtotal for moderate initiatives......................... 1,604
=================================================================
________________________________________________
Small Initiatives:
National Virtual Observatory (NVO)............................ 60
Other small initiatives \6\................................... 246
______
Subtotal for small initiatives............................ 306
=================================================================
________________________________________________
Total..................................................... 4,670
\1\ Cost estimates for ground-based capital projects include technology
development plus funds for operations, new instrumentation, and facility
grants for 5 years.
\2\ Cost estimates for space-based projects exclude technology
development.
\3\ Best available estimated costs to U.S. government agencies in
millions of fiscal year 2000 dollars and rounded. Full costs are given
for all initiatives except TPF and the SAFIR Observatory.
\4\ Cost estimate for this initiative assumes significant additional
funding to be provided by international or private partner; see Panel
Reports (NRC, 2001) for details.
\5\ These missions could start at the turn of the decade. The committee
attributes $200 million of the $1,700 million total estimated cost of
TPF to the current decade and $100 million of the $600 million total
estimated cost of the SAFIR Observatory to the current decade.
\6\ See Chapter 1 for details.
Prepared Statement of the American Geological Institute
To the Chairman and Members of the Subcommittee: I appreciate this
opportunity to present testimony on behalf of the American Geological
Institute (AGI) in support of fiscal year 2003 appropriations for the
National Science Foundation (NSF). The fundamental research supported
by NSF has fueled our present economic growth and contributed to
improvements in our health, safety, and quality of life. This
subcommittee has shown leadership in expanding the federal investment
in fundamental research, and that leadership will be even more critical
in the coming year. AGI urges the subcommittee to carefully examine the
president's request. In particular, we encourage the Subcommittee to
reconsider the requested program transfers, enhance support for core
programs in the Geosciences Directorate, and expand the Major Research
Equipment account to accommodate both existing projects and the
requested new starts. Such increases represent an important investment
in the future of our nation and our planet at a time when we can ill
afford not to make that investment.
AGI is a nonprofit federation of 40 geoscientific and professional
societies representing more than 100,000 geologists, geophysicists, and
other earth scientists. Founded in 1948, AGI provides information
services to geoscientists, serves as a voice for shared interests in
our profession, plays a major role in strengthening geoscience
education, and strives to increase public awareness of the vital role
the geosciences play in mankind's use of resources and interaction with
the environment.
The rationale for supporting geoscience research and education has
never been stronger. Global climate change, natural disasters, energy
resources, and water quality issues are reported daily by the news
media. Geoscience research plays an increasingly important role in an
ever- growing range of scientific and societal problems, and federal
investments in geoscience research should increase accordingly. Federal
investments in geoscience R&D continue to pay enormous dividends, and
both the federal government and the nation clearly have a stake in
maintaining the health of the basic science on which applications and
policy decisions ultimately must be based.
NSF support for geoscience research activities covers the entire
spectrum from individual investigators to major research centers and
large research programs. Many of the most creative and important
advances in geoscience research continue to be made by individual
investigators and small research teams that are the backbone of the
research and graduate education system. NSF should maintain and enhance
support for this vital component of geoscience research.
NSF Geosciences Directorate
The NSF Geosciences Directorate (GEO) is the principal source of
federal support for academic earth scientists who are seeking insight
into the fundamental earth processes that ultimately sustain and
transform life on our planet. The president's request appears to
provide a significant increase to this directorate, but the bulk of the
increase is due to several proposed transfers. In fact, all of the
proposed transfers into NSF go into this one directorate. As a result,
an apparent 13.4 percent requested increase for GEO includes only a 1.2
percent increase for existing programs. Whether or not the transfers
are approved, we encourage the Subcommittee to provide real increases
to existing programs in the Earth Sciences, Ocean Sciences and
Atmospheric Sciences Divisions within GEO.
AGI asks the Subcommittee to take a hard look at these proposed
transfers to determine whether they fit the NSF mission or whether they
are better left in their current agencies. We recognize that these
transfers reflect the president's desire to reward agencies like NSF
that have demonstrated good management practices. But there may be a
mission mismatch, particularly in the case of the proposed transfer of
the U.S. Geological Survey's Toxic Substances Hydrology program, which
funds highly targeted, long-term, mission-oriented research that is
very different from the fundamental, university-based research NSF
supports.
NSF Major Research Equipment Account: EarthScope
AGI urges the subcommittee to support the NSF Major Research
Equipment (MRE) budget request of $35 million for a new earth science
initiative called Earthscope. Taking advantage of new technology in
sensors and data distribution, this four-pronged initiative will
systematically survey the structure of the Earth's crust beneath North
America. The fiscal year 2003 request includes support for three
components: a dense array of digital seismometers that will be deployed
in stages across the country; a 4-km deep borehole through the San
Andreas Fault, housing a variety of instruments that can continuously
monitor the conditions within the fault zone; a network of state-of-
the-art Global Positioning System (GPS) stations and sensitive
strainmeters to measure the deformation of the constantly shifting
boundary between the Pacific and North American tectonic plates. The
fourth component will move forward in conjunction with NASA: a
satellite-based Synthetic Aperture Radar mission that can measure
changes in the Earth's crust after earthquakes and volcanic eruptions.
All data from this project will be available in real time to both
scientists and students, providing a tremendous opportunity for both
research and learning about the Earth.
EarthScope has broad support from the earth science community with
endorsements from a number of AGI's member societies, including the
Association of American State Geologists, Geological Society of America
and Seismological Society of America. The National Science Board has
not only endorsed EarthScope but has listed it as a priority for fiscal
year 2003, a first for the Board. EarthScope has received a very
favorable review from the National Academy of Sciences, which released
a report last year entitled Review of EarthScope Integrated Science.
Some key assertions from the report:
``The committee concludes that EarthScope is an extremely well
articulated project that has resulted from consideration by many
scientists over several years, in some cases up to a decade. During
that time, the proponents have become experts, not just in the
observing technology but in the data handling and retrieval systems
that are necessary to manage information on this vast scale.''
``The committee concludes that EarthScope will have a substantial
impact on earth science in America and worldwide. It will provide
scientists with vast amounts of data that will be used for decades.''
``The time is right to undertake a full exploration of the nature
of the continental crust of the United States and its underlying
mantle. Such exploration is a critical requirement for understanding
the nature of the earth on which we live and how society needs to
manage and adapt to its rhythms and processes.''
``EarthScope provides an excellent opportunity to excite and
involve the general public, as well as K-12 and college students, to
work together with the earth science community to understand the earth
on which they live.''
``The NSF should ensure that EarthScope's scientific potential is
effectively realized and capitalized upon by continuing its support for
the disciplinary and interdisciplinary programs within NSF's Division
of Earth Sciences (EAR) that form the scientific foundation of the
project.''
``The committee concludes that InSAR is an integral part of the
EarthScope vision that will greatly enhance the effectiveness of the
project, and it should not be viewed merely as a desirable add-on to
the project. The committee urges NSF and NASA to collaborate to realize
this goal at the earliest opportunity, so as to make [Interferometric
Synthetic Aperture Radar] capability a reality during the lifetime of
the other EarthScope components.''
AGI applauds the Subcommittee's commitment to fund existing MRE
projects, but at the same time we strongly encourage the Subcommittee
to provide enough funding to accommodate the president's requested
projects as well.
NSF Support for Earth Science Education
Earth science plays a unique and essential role in today's rapidly
changing world. Most human activities involve interactions with the
planet Earth, and citizens need a basic understanding of the Earth in
order to make informed decisions about the delicate balance between
resource use and environmental protection. NSF can improve the nation's
scientific literacy by supporting the full integration of earth science
information into mainstream science education at the K-12 and college
levels. The inclusion of earth science as a key component in the
National Science Education Standards developed by the National Academy
of Sciences presents a tremendous opportunity to achieve this goal.
AGI urges the subcommittee to support the 25 percent increase that
the president has requested for the NSF Math and Science Partnerships
program with the Directorate for Education and Human Resources (EHR).
These partnerships will be awarded through competitive, merit-reviewed
process, and will work to develop and implement plans to raise math and
science standards at both the classroom level and above. Unlike the
similar partnerships that would be provided to each state by the
Department of Education, the NSF partnerships will provide an
opportunity for university scientists to play an active role.
We encourage the EHR directorate to expand its interaction with the
Directorate for Geosciences to further integrate research and education
activities in the geosciences. Improving geoscience education to levels
of recognition similar to other scientific disciplines is important
because:
--Geoscience offers students subject matter that has direct
application to their lives and the world around them.
Civilization depends on responsible use of Earth's natural
resources, including energy, minerals, and water. Moreover,
geoscience plays a key role in environmental protection.
--Geoscience exposes students to a diverse range of interrelated
scientific disciplines. It is an excellent vehicle for
integrating the theories and methods of chemistry, physics,
biology, and mathematics.
--Geoscience awareness is a key element in reducing the impact of
natural hazards on citizens--hazards that include earthquakes,
volcanic eruptions, hurricanes, tornadoes, and floods.
We urge NSF to continue playing an active role in the major
transformation that is taking place in geoscience education. For
example, at the college level, geoscience curricula are changing to
better incorporate environmental issues and changing employment
opportunities. Improved teaching methods and new educational
technology, combined with improvements in college and pre-college
geoscience curricula, may help capture and hold the curiosity and
enthusiasm of students and better prepare them for the workplace of the
21st century. At the graduate and postdoctoral level, fellowships are
increasingly critical in the geosciences because students, following
the lead of industry and consumer needs, are conducting research that
crosses traditional departmental, disciplinary, and funding boundaries.
Yet some Americans, particularly those of lower income, are still
significantly underrepresented in geoscience education. The problem is
substantially worse at the graduate level. It is unlikely that any
profession, including the geosciences, can flourish without greater
participation by all Americans, including those from historically
underrepresented groups such as ethnic minorities and women. Continued
NSF leadership is needed to increase recruitment and retention of
students from these groups through improved access to education and
research experiences. We must all work together to address the
underlying factors that prevent such participation.
I appreciate this opportunity to provide written testimony to the
Subcommittee and would be pleased to answer any questions or to provide
additional information for the record. I can be reached at 703-379-2480
ext. 228, 703-379-2480 fax, [email protected], or 4220 King Street,
Alexandria VA 22302-1502.
______
Prepared Statement of the American Indian Higher Education Consortium
Mr. Chairman and Members of the Subcommittee, on behalf of this
nation's 32 American Indian Tribal Colleges and Universities (TCUs),
which comprise the American Indian Higher Education Consortium (AIHEC),
thank you for the opportunity to express our views and requests for
fiscal year 2003, to the Subcommittee.
summary of requests
Department of Housing and Urban Development (HUD).--In fiscal year
2001 a TCU initiative was established and funded within the Community
Development Block Grant program. This competitive program is designed
to help address the dire facilities and infrastructure needs at tribal
colleges. We strongly urge the Subcommittee to support this program at
a minimum $3 million, included in the President's fiscal year 2003
budget request.
National Science Foundation (NSF) Programs:
--Tribal Colleges and Universities Program (TCUP).--This $10 million
program is designed to encourage American Indians to pursue
Information Technology and other science and technology fields
by building capacity at eligible institutions and assisting
them in strengthening teaching and learning in ways that
improve student access, retention, and completion of science,
technology, engineering and mathematics (STEM) programs. We
request Congress expand the $10 million included in the
President's budget request and fund this vital program at $15
million, to help support the addition of the Alaska Native and
Native Hawaiian serving institutions as eligible participants
in the program.
--Tribal College-Rural Systemic Initiative (TC-RSI) was created
within NSF's Educational System Reform (ESR) division, to
promote systemic change in the areas of science, technology,
engineering and mathematics (STEM) at K-12 reservation schools
through partnerships with tribal colleges. There are currently
14 tribal college partners in this program. We strongly urge
the Subcommittee to support the ESR division budget.
Additionally, we seek report language reaffirming the expansion
of the tribal college program to include the remaining 18
tribal colleges.
--Louis Stokes Alliances for Minority Participation (LSAMP)
Program.--In fiscal year 2001, funding was secured for phase II
of the All Nations Alliance for Minority Participation program,
which provides services to tribal colleges and is based at
Salish Kootenai College in Pablo, Montana. The goal of the
program is to establish a comprehensive interactive network to
substantially increase the number of American Indians receiving
baccalaureate and graduate degrees in science, mathematics,
engineering, and technology. We urge Congress to continue to
support and build upon this program to help prepare all
Americans for the 21st Century workforce.
National Aeronautics and Space Administration (NASA).--In fiscal
year 2001, the tribal colleges established a formal cooperative
agreement with NASA for a $1.197 million project designed to increase
access, participation, and success of American Indians in high quality
pre-K to 16 mathematics, science, engineering, and technology programs.
The agreement includes a tribal college liaison between AIHEC and NASA
to oversee implementation of the project and provides modest program
enrichment grants to the colleges. We urge Congress to include report
language that encourages NASA faculty exchange programs and IPA
contracts with TCUs to provide on-site expertise and partnerships. We
respectfully request additional report language to encourage expansion
of existing NASA programs, as well as new initiatives to address the
critical technology infrastructure needs at TCUs.
background
The Tribal College Movement began in 1968 with the establishment of
Navajo Community College, now Dine College, in Tsaile, Arizona. A
succession of tribal colleges soon followed, primarily in the Northern
Plains region. In 1972, the first six tribally-controlled colleges
established AIHEC to provide a support network for member institutions.
Today, AIHEC represents 32 Tribal Colleges and Universities located in
12 states, begun specifically to serve the higher education needs of
American Indian students. Collectively, they serve approximately 30,000
full-and part-time students from over 250 Federally recognized tribes.
All tribal colleges offer 2 year degrees, and several institutions
offer baccalaureate and graduate-level degrees. The majority of the
tribal colleges are fully accredited by independent, regional
accreditation agencies.\1\ In addition to college level programming,
TCUs provide much needed high school completion (GED), basic
remediation, job training, college preparatory courses, and adult
education. Tribal colleges fulfill additional roles within their
respective communities functioning as community centers, libraries,
tribal archives, career and business centers, economic development
centers, public-meeting places, and child care centers. Each TCU is
committed to improving the lives of students through higher education
and to moving American Indians toward self-sufficiency.
---------------------------------------------------------------------------
\1\ The Tribal Colleges and Universities are accredited by regional
accreditation agencies and must undergo stringent performance review on
a periodic basis. The higher education division of the respective
regional accreditation agency accredits twenty-seven of the TCUs. Two
TCUs are at the Pre-candidate stage as they complete work to attain
Candidate status; one TCU is at Candidate status. Two TCUs are
accredited as ``Vocational/Adult Schools'' by the ``schools'' division
of the respective regional accreditation agency.
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Tribal colleges provide needed access to higher education for
American Indians and others living in some of this nation's most rural
and economically depressed areas. These institutions, chartered by
their respective tribal governments, were established in response to
the recognition by tribal leaders that local, culturally-based
education institutions are best suited to help American Indians succeed
in higher education. TCUs combine traditional teachings with
conventional postsecondary courses and curricula. They have developed
innovative means to address the needs of tribal populations and are
successful in overcoming long-standing barriers to higher education for
American Indians. Since the first tribal college was established on the
Navajo reservation, these vital institutions have come to represent the
most significant development in the history of American Indian higher
education, providing access to under-represented students and promoting
achievement among students who may otherwise never have known
postsecondary education success.
Despite their remarkable accomplishments, tribal colleges are the
most poorly funded institutions of higher education in the country.
Grossly inadequate funding levels remain the most significant barrier
to their success. Funding for basic institutional operations for 25
reservation-based colleges is provided through the Tribally Controlled
College or University Assistance Act (TCCUAA), Public Law 95-471.
Funding was first appropriated through the Act in 1981, and is still
less than two-thirds of its authorized level of $6,000 per full-time
Indian student. In fiscal year 2002, these colleges receive $3,916 per
full-time Indian student. While mainstream institutions have a
foundation of stable state tax support, TCUs must rely on annual
appropriations from the Federal government for their institutional
operating funds. Because tribal colleges are located on federal trust
territories, states have no obligation to fund them. In fact, most
states do not even pay our colleges for the non-Indian state-resident
students who account for approximately 20 percent of TCU enrollments.
Inadequate funding has left many of our colleges with no choice but
to operate in severely distressed conditions. Many colleges operate in
surplus trailers; cast-off buildings; and facilities with crumbling
foundations, faulty wiring, and leaking roofs. Sustaining quality
academic programs is a challenge without a reliable source of
facilities maintenance and construction funding.
Today, one in five American Indians live on reservations. As a
result of more than 200 years of Federal Indian policy--including
policies of termination, assimilation and relocation--many reservation
residents live in abject poverty comparable to that found in Third
World nations. Through the efforts of tribal colleges, American Indian
communities receive services they need to reestablish themselves as
responsible, productive, and self-reliant.
justifications
Department of Housing and Urban Development.--We are pleased that
the President's budget request for fiscal year 2003 includes $3 million
for HUD-TCUP, the TCU initiative funded under the Community Development
Block Grant program. This competitive grants program enables our
institutions to expand our roles and effectiveness in addressing
development and revitalization needs in our communities. Some areas
that currently receive support include housing rehabilitation, business
development, job training, pre-employment counseling, and job creation.
We strongly urge Congress to continue to fund this program at a minimum
$3 million, included in the President's budget request, to help ensure
that much needed community services and programs are continued.
National Science Foundation Programs:
--Tribal Colleges and Universities Technology Initiative.--In fiscal
year 2001, NSF launched a new tribal college initiative
designed to enhance the quality of science, technology,
engineering and mathematics (STEM) instruction and outreach
programs, with an emphasis on the leveraged use of information
technologies at tribal colleges. Through the program, colleges
are able to implement comprehensive institutional approaches to
strengthen teaching and learning in ways that improve access,
retention, and completion of STEM programs, particularly those
that have a strong technological foundation. Through this
program, colleges gain support their efforts to bridge the
``digital divide'' and prepare students for careers in
information technology, science, mathematics, and engineering
fields. Because this program was broadened to include Alaska
Native and Native Hawaiian serving institutions in its first
year, after the original TCU-based funding level had been
determined, we request that Congress build upon the funds
requested in the President's budget to better reflect the true
needs of the greatly expanded eligible pool, and fund this
program at $15 million.
--Tribal College Rural Systemic Initiative.--NSF expanded its
commitment to the High Plains Rural Systemic Initiative (HP-
RSI) and created a tribal college component of the project.
Currently there are 14 tribal colleges participating in this
program. Each college is responsible for providing leadership
to the K-12 school systems located on their respective
reservations. All aspects of the school system are addressed in
systemic reform, including community and parental
participation, professional development activities, broad-based
business community support, convergence of multiple resources
to support the initiative, and coordinated student assessment
systems. All of these activities are organized and implemented
with careful consideration of the cultural academic needs of
the respective tribe and students being served. We strongly
urge Congress to support the ESR division budget. We request
report language to reaffirm the expansion of the tribal college
program to include the 18 remaining tribal colleges and to
afford them greater access to other NSF programs.
--Louis Stokes Alliances for Minority Participation (LSAMP)
Program.--The All Nations Alliance for Minority Participation,
which provides services to tribal colleges, is based at Salish
Kootenai College in Pablo, Montana. The program brings together
25 TCUs and 32 state colleges and universities in nine states
and is designed to substantially increase the quantity and
quality of American Indian students receiving baccalaureate
degrees in science, technology, engineering and mathematics
(STEM). Subsequently, AMP aims to increase the number of these
students entering graduate school to attain doctorates in STEM
fields. AMP supports undergraduate systemic reform within this
Alliance with partners from both 2 and 4 year colleges;
businesses and industries; national research laboratories; and
local, state and federal agencies We strongly urge Congress to
continue to support the Louis Stokes Alliance for Minority
Participation program, at the highest possible level.
National Aeronautics and Space Administration (NASA).--Through
AIHEC, the tribal colleges have established a cooperative agreement
with NASA to increase access, participation, and success of American
Indians in high quality pre-K to16 science, mathematics, engineering,
and technology programs. This cooperative agreement includes the
appointment of a TCU liaison between AIHEC and NASA to serve as the
focal point for implementation of the agreement. Additionally, the
agreement provides modest funding to help improve the capacity of each
TCU to help fulfill its technology objectives, as they relate to the
mission and goals of NASA. We urge Congress to include report language
that would encourage NASA faculty exchange programs and IPA contracts
with TCUs to provide needed on-site expertise and partnerships.
Additionally, we ask for report language to encourage expansion of
existing programs, as well as new initiatives to address the technology
infrastructure needs at the Tribal Colleges and Universities.
conclusion
In light of the justifications presented in this statement and the
overwhelming evidence of inequitable access to technology in rural
America, we respectfully request the Subcommittee to increase funding
for Tribal Colleges and Universities to help bring economic self-
sufficiency to Indian Country. Fulfillment of AIHEC's fiscal year 2003
request will strengthen the missions of TCUs and the enormous, positive
impact they have on their communities. Your support will help ensure
that they are able to properly educate and prepare thousands of
American Indians for the workforce of the 21st Century. Tribal colleges
have been proven to be very responsible with the Federal support they
have received in the last 21 years. It is important that the Federal
Government now capitalize on its investment.
Thank you again for this opportunity to present our views and
requests to this Subcommittee. We respectfully request your continued
support and full consideration of our fiscal year 2003 appropriations
requests.
______
Prepared Statement of the National Congress of American Indians
On behalf of the National Congress of American Indians (NCAI) and
its more than 200 member tribal Nations, we are pleased to have the
opportunity to present written testimony on the fiscal year 2003 VA-HUD
Independent Agencies appropriations bill.
The tragic events of September 11 brought forth the strength and
the determination of our Nation to survive in the face of adversity. It
is this same spirit that has carried Indian Country through years of
annihilation and termination. It is this same spirit that has propelled
Indian Nations forward into an era of self-determination. And it is in
this same spirit of resolve that Indian Nations come before Congress to
talk about honoring the Federal Government's treaty obligations and
trust responsibilities throughout the fiscal year 2003 budget process.
The Federal trust responsibility represents the legal obligation
made by the U.S. Government to Indian tribes when their lands were
ceded to the United States. This obligation is codified in numerous
treaties, statutes, Presidential directives, judicial opinions, and
international doctrines. It can be divided into three general areas
protection of Indian trust lands; protection of tribal self-governance;
and provision of basic social, medical, and educational services for
tribal members.
NCAI realizes that Congress must make difficult budget choices this
year. Aselected officials, tribal leaders certainly understand the
competing priorities that members of Congress must weigh over the
coming months. However, the fact that the Federal Government has a
solemn responsibility to address the serious needs facing Indian
Country remains unchanged, whatever the economic or political climate
may be. We at NCAI urge you to make a strong commitment to meeting the
Federal trust obligation by fully funding those programs that are vital
to the creation of vibrant Indian Nations. Such a commitment, coupled
with continued efforts to strengthen tribal governments and to uphold
the government-to-government relationship, will truly make a difference
in helping us to create stable, diversified, and healthy economies in
Indian Country. NCAI's statement focuses on our key areas of concern
surrounding the President's budget request. Of course, there are
numerous other programs and initiatives within the VA-HUD-Independent
Agencies appropriations bill that are important to American Indians and
Alaska Natives. Attached to this testimony is a breakdown of key
programs for which we urge your support at the highest possible funding
level as the appropriations process moves forward.
department of veterans affairs
Native American veterans have served the United States with honor
and distinction since this Nation was founded, and Indian people have
the highest percentage of veterans of any population within the United
States. Native people also carry the proud distinction of being the
most decorated group in this country's history. Today, Native veterans
have many pressing needs such as housing, health care, benefits, and
other concerns that include issues unique to Indian Country.
We urge continued support for the Native American Veterans Housing
Loan Program. While small, it serves an important function, providing
direct loans to veterans living on trust land. Many times, these
veterans are unable to secure such loans through local banks or credit
unions. In these instances, the Native American Veterans Housing Loan
Program provides the resources to help purchase, construct, or improve
their homes. A VA direct loan can be used to purchase, construct, or
improve a home on Native American trust land. These loans may also be
used to simultaneously purchase and improve a home or to refinance
another VA direct loan made under this program in order to lower the
interest rate. The principal amount of loans under this authority is
generally limited to $80,000 or the cost of the home, whichever is
less.
department of housing and urban development
According to statistics provided by the National American Indian
Housing Council, 40 percent of the homes in tribal communities are
overcrowded and have serious physical deficiencies. The comparable
national average is 5.9 percent, almost six times lower. These types of
conditions have a very real and detrimental impact. Respiratory
illness, skin conditions, head lice, sleep deprivation that affects
schooling, and a lack of privacy that sometimes leads to child physical
and sexual abuse can all be traced back to the housing crisis that
plagues some of our reservations.
The fiscal year 2003 request for programs under the Native American
Housing Assistance and Self-Determination Act (NAHASDA) block grant
actually cuts funding for training and technical assistance and for
loans and loan guarantees, and it fails to provide adequate base
funding for the NAHASDA block grant program. Per NCAI Resolution #SPO-
01-094, NCAI supports the NAIHC proposed request and urges Congress to
address the real housing need in Indian Country by appropriating $1.1
billion in fiscal year 2003 for the NAHASDA block grant.
environmental protection agency
Tribes are sovereign entities with the ability to set environmental
quality standards, make environmental policy decisions, and manage
programs consistent with EPA standards and regulations. In order to
preserve and enhance the environmental quality of Indian Country for
present and future generations and sustain tribal cultures, tribes
deserve equitable funding for their environmental regulatory programs.
Therefore we urge support for the following funding levels:
General Assistance Program.--Tribal environmental program managers
view GAP activities, funded under the multimedia section of State and
Tribal Assistance Grants, as their highest priority. We request that
the program receive $75 million, a $25 million increase, which would
provide the minimum coverage needed for all federally recognized tribes
to build capacity for EPA-delegated environmental programs.
Clean Water Act State Revolving Fund.--We request that Congress
raise the program cap from 1.5 percent to 2 percent for tribal
governments to help address the estimated $650 million in wastewater
treatment unmet needs in Indian Country. Within the State Revolving
Fund program, we urge continued funding for wastewater treatment
facilities for Alaska Natives.
Safe Drinking Water Act State Revolving Fund.--Section 1452(i)
provides a tribal government allocation for public water system
expenditures to facilitate compliance with the national primary
drinking water regulations. NCAI urges Congress to provide an
additional $5 million for tribal drinking water programs under this
program and raise the program cap from 1.5 percent to 2 percent.
Cooperative Agreements.--Congress in fiscal year 2001 and fiscal
year 2002 authorized EPA to enter into cooperative agreements with
tribal governments and tribal consortia to assist the agency in
implementing Federal environmental programs. NCAI strongly recommends
the permanent continuation of this authority and that $2 million be
appropriated for tribal-EPA cooperative agreements.
conclusion
Thank you for this opportunity to present written testimony
regarding VA-HUD-Independent Agencies programs that benefit Indian
Country. The National Congress of American Indians calls upon Congress
to fulfill the Federal Government's fiduciary duty to American Indians
and Alaska Native people. This responsibility should never be
compromised or diminished because of any political agenda or budget cut
scenario. Tribes throughout the Nation relinquished their lands and in
return received a trust obligation, and we ask that Congress maintain
this solemn obligation to Indian Country and continue to assist tribal
governments as we build strong, diverse, and healthy Nations for our
people.
Attachment A: VA-HUD-Independent Agencies Appropriations Benefiting
Tribes
Department of Veterans Affairs
The President's budget increases the VA's discretionary budget
authority from $24.7 billion to $26.4 billion, with much of the
increase going toward health care for veterans.
(Dollars in millions)
----------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal year Fiscal year
VA 2001 enacted 2002 enacted 2003 request
----------------------------------------------------------------------------------------------------------------
Native American Veterans Housing Loan Program................... $.54 $.54 $.56
----------------------------------------------------------------------------------------------------------------
Department of Housing and Urban Development
The President has requested $31.4 billion for HUD, a $2 billion
increase in budget authority, including $204 million for 34,000 new
housing vouchers to subsidize rental housing for the poor and a $238
million increase to the HOME investment partnerships program for
housing rehabilitation and to encourage home ownership among low- and
moderate-income households. The budget cuts several NAHASDA programs,
but provides a $3 million increase for the Indian Community Development
Block Grant.
(Dollars in millions)
----------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal year Fiscal year
HUD 2001 enacted 2002 enacted 2003 request
----------------------------------------------------------------------------------------------------------------
Indian Housing Block Grant...................................... $650.0 $648.6 $647.0
Title VI Loans.................................................. 6.0 6.0 2.0
Section 194 Indian Housing Loan Guarantee Program \1\........... 6.0 6.0 5.0
Indian Community Development Block Grant \2\.................... 71.0 70.0 73.0
Rural Housing and Economic Development (small amt to tribes).... 25.0 25.0 0
Empowerment Zones Round II...................................... 200.0 45.0 0
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2002 funding for the Section 184 Loan Guarantee Program will subsidize a loan principal of not
more than $234.3 million. The fiscal year 2003 request will support a loan principal of not more than $197
million.
\2\ The $4.3 billion appropriated for the Community Block Grant Development program in fiscal year 2002 includes
the following additional set-asides for Indian programs: $4 million for Alaska Native and Native Hawaiian-
Serving Institutions; $2.6 million for the National American Indian Housing Council; and $3 million for
competitive facilities grants for tribal colleges and universities. The fiscal year 2003 request of $4.4
billion for CDBG includes level funding for tribal colleges, $2 million for Alaska Native and Native Hawaiian-
Serving Institutions, and $2 million for the NAIHC.
NCAI Resolution #SPO-01-094 Supports $1.075 billion for the Indian Housing Block Grant.
Environmental Protection Agency
The President's budget would cut EPA spending from $7.9 billion in
fiscal year 2002 to $7.6 billion in fiscal year 2003, primarily by
eliminating $300 million in Congressional earmarks and projects that
were not requested in the Administration's fiscal year 2002 budget. The
budget includes $4.1 billion for general operations, the highest
funding level ever for regulatory, enforcement and State grants, but
would freeze hiring to fill vacancies in the enforcement division while
shifting $15 million to the States for increased enforcement
activities.
(Dollars in millions)
----------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal year Fiscal year
EPA 2001 enacted 2002 enacted 2003 request
----------------------------------------------------------------------------------------------------------------
Environmental Programs and Management........................... $2,083 $2,055 $2,048
Water and Wastewater Grants for Alaska Natives and Rural Areas.. 35 40 40
Clean Water State Revolving Fund Tribal......................... 20.2 20.2 18.2
Safe Drinking Water State Revolving Fund........................ 823 850 850
Superfund....................................................... 1,267 1,270 1,000
Leaking Underground Storage Tank Facilities..................... 71 73 72
State and Tribal Assistance Grants.............................. 3,621 3,733 3,464
Tribal General Assistance Grants................................ 52.5 52.5 52.5
American Indian Tribal Environmental Office..................... n/a 9.9 10.2
----------------------------------------------------------------------------------------------------------------
NCAI recommends that the 2003 appropriation for EPA include
permanent authorization for tribal cooperative agreements; a $25
million increase for the tribal General Assistance Program (GAP) to
provide minimum coverage to all federally recognized tribes; $10
million for Section 106 Clean Water Act grants; a $20 million earmark
for tribes under the new watershed management grants to States;
increased funding for tribal air quality programs; and, a permanent
increase in the tribal set-aside from 1.5 percent to 2 percent for both
the Clean Water Act State Revolving Fund and the Safe Drinking Water
Act program.
______
Prepared Statement of the American Psychological Association
The American Psychological Association (APA) is a scientific and
professional organization of more than 155,000 psychologists and
affiliates. Because our behavioral scientists play vital roles within
the National Science Foundation (NSF), the National Aeronautics and
Space Administration (NASA) and the Department of Veterans Affairs
(VA), APA will address the proposed fiscal year 2003 research budgets
for each of these three agencies.
national science foundation
As a member of the larger science community and an active leader in
the Coalition for National Science Funding (CNSF), APA strongly
recommends increasing NSF's overall budget by $718 million (or 15
percent) above the fiscal year 2002 level of $4.79 billion, bringing
the agency's budget to $5.508 billion in Fiscal Year 2003. We also
would like to highlight the importance of fully funding two new NSF
priorities in 2003, the special research initiative in the Social,
Behavioral and Economic Sciences, slated to receive $10 million in its
first year of support, and the Science of Learning Centers (SLCs),
proposed at $20 million.
Core Psychological Research at NSF
NSF is the only federal agency whose primary mission is to support
basic research and education in math, engineering and science including
behavioral and social science. NSF's investment in basic research
across these disciplines has allowed for extraordinary scientific and
technological progress, ensuring continued economic growth, improved
prevention of disease, and strengthened national security. NSF's
concern for education from kindergarten through graduate school allows
for what we know about developmental processes, cognition, learning,
and the environment to best construct the schools in which our children
learn and to well inform the teachers who educate them, enabling our
citizens to meet the intellectual and social challenges of the Twenty-
First Century.
The necessity to support basic research continues to be paramount.
With the increasing globalization of science, the U.S. faces greater-
than-ever competition for scientific innovation and discovery. At the
same time that we must work in international communities of researchers
and scholars, we must find new ways to make our country safe from
threats not only to our physical structures but to the American
tradition of free and shared science and to the many challenges we face
at home. Our best defense is an offensive strategy in which we continue
to be the best producer of science, ideas, and technology. We can do
this only on the basis of a solid foundation of basic research.
APA and CNSF recommend that additional funds for NSF above the
fiscal year 2002 baseline be devoted to achieving the following
objectives: (1) increase by $220 million the funding for core programs
of research and education; (2) increase funding by $220 million to
continue supporting key initiatives, including nanotechnology,
biocomplexity, information technology research, workforce development
(including mathematics and science partnerships), mathematics research,
and a new priority area in social, behavioral and economic sciences;
(3) provide an additional $130 million to increase grant size and
duration; (4) provide an additional $100 million for Major Research
Equipment and Facilities Construction and Major Research
Instrumentation; (5) provide an increase of $25 million to assist with
homeland security and anti-terrorism efforts; and (6) provide $23
million to increase graduate student stipends.
Although psychologists receive funding from diverse programs within
NSF, most core psychological research is supported by the Social,
Behavioral and Economic Sciences Directorate (SBE), with its focus on
the variables that determine human behavior across all ages, affect
interactions among individuals and groups, and decide how social and
economic systems develop and change. A number of psychological
scientists funded through SBE also lead ongoing basic research efforts
with direct relevance to the events of September 11 and their
aftermath, and APA applauds SBE for moving quickly to provide
psychological researchers with emergency grants (through the agency's
Small Grants for Exploratory Research program) to address time-critical
issues such as trauma prevention and intervention and large-scale risk
management.
The Biological Sciences Directorate provides support for
psychologists who ask questions about the very principles and
mechanisms that govern life at the level of the genome and cell, or at
the level of a whole individual, family or species. Our increasing
sophistication about the genetic mechanisms of life allows us to ask
increasingly complex questions about brain functioning. It also can
lead us to ask how the genome is translated into a functioning,
thriving organism that is, what is the exchange of gene and environment
that decides whether the individual is more likely to learn than to
forget, to love than to hate? These kinds of question cannot be
answered by biology alone. An understanding of behavior requires
analysis at all levels of functioning, from the cell to the whole
organism, and an appreciation of the complex ways in which the
environment impacts on the individual. It also requires description of
the manner in which such interactions are written into the individual's
history, and then serve to shape its behavior in the future.
Special Research Priority in the Social, Behavioral and Economic
Sciences
Given the pace and demands of our increasingly technological
society, APA strongly supports NSF's proposed $10 million initial
investment in fiscal year 2003 for a new priority area in Social,
Behavioral and Economic Sciences to further explore the complex
interactions among society, its institutions, and technology. This
priority area will examine human issues in the design and development
of technological advances along with human adaptation to these dramatic
changes, enabling us to develop technologies which enhance human
capabilities while giving us tools to take greater advantage of
technology and better anticipate and prepare for its consequences. The
rapidly changing societal capabilities associated with technological
development provide us with new opportunities to interact with the
natural environment as well as with social and economic systems, and
the new SBE priority area also will seek to address questions about
these human-ecosystem interactions in support of the Administration's
climate change research program. APA expects that the initial level of
support for the special SBE research priority area will be a ``down
payment'' on more significant investments in future years.
New Science of Learning Centers
Investment in research on the learning process, the context of
learning and learning technologies is crucial to both successful
educational reform and effective workforce development, and the new NSF
Science of Learning Centers (SLCs) will serve as the foundation-wide
centerpiece of the Learning for the 21st Century Workforce priority
area in fiscal year 2003. These multidisciplinary, multi-institutional
centers will build collaborative research communities of scientists,
educators, community groups and industries capable of addressing
fundamental questions in learning and applying that knowledge to
schools and workforce contexts.
APA strongly recommends that Congress support the new SLCs, with
the longer-term goal of making strides in math and science education
analogous to the tremendous leaps forward we currently are making by
applying research on reading. These improvements in our understanding
of how children learn to read and how teachers can better help them are
due in large part to research sponsored by the National Institute of
Child Health and Human Development at the National Institutes of
Health. NSF is uniquely poised to support similar breakthroughs in the
critical areas of math and science learning, skills which are
particularly critical in our technologically-sophisticated world. NSF
scientists can engage investigators from the range of disciplines it
supports, from cognitive psychology and neuroscience to geography,
engineering and robotics, and examine learning in adult and child
populations to support both workforce and formal education needs.
national aeronautics and space administration
Humans perform critical functions throughout all aspects of every
NASA mission from concept development, system design and acquisition
through operations. People are critical elements of complex aerospace
systems. The ability to measure and predict human performance through
all mission phases enhances mission safety and mission success. NASA
Human Factors research and technology enhance the national capability
to explore the stars and understand our own planet while contributing
to the safety, affordability and efficiency of aerospace operations.
Office of Biological and Physical Research
In order to continue advancing our understanding of human
adaptation to space, APA joins the Federation of American Societies for
Experimental Biology (FASEB) in recommending an annual increase of $100
million for investigator initiated, peer reviewed research in fiscal
year 2003 for the Office of Biological and Physical Research (OBPR).
NASA is demonstrating an unprecedented interest in psychological
and behavioral research. That interest stems from historical
observations of astronauts and cosmonauts living aboard Mir and the
recognition that a multicultural workforce is building and occupying
the International Space Station. Psychologists are involved at many
levels within NASA, studying everything from basic neuroscience in rats
to optimization of the habitability of next-generation space suits.
Much of this research has been funded OBPR.
The Biomedical Research and Countermeasures and Advanced Human
Support Technologies Programs are both involved in reducing threats to
humans exposed to physiological and psychological health risks during
space flight. NASA has focused considerable energy on sleep and
circadian rhythms, performance related to neurovestibular function,
psychophysiological monitoring, and cognitive performance on short-
duration missions. There is increasing recognition, however, that NASA
needs to devote greater attention to behavioral health and psychosocial
adaptation as these factors could significantly impact the success of
long- duration missions.
Human factors considerations for long-duration spaceflight extend
far beyond physical crew interfaces into considerations of behavioral,
psychological, physiological, and operational factors' influence on
human performance and safety. The use of isolation chambers such as the
Bioplex facility at Johnson Space Center offer the potential, and have
been used successfully, to study behavior and performance under
conditions of extended isolation and confinement. As such, it
represents a high fidelity simulation facility for the development of
advanced technologies and methodologies for monitoring individual and
interpersonal behavior, as well as for studies of countermeasure
testing and evaluation.
Office of Aero-Space Technology
This arm of NASA makes good use of psychological science closer to
Earth. APA applauds NASA for its attention to human factors research
and recommends at least the $220.1 million requested for the Office of
Aeronautics and Space Technology (OAST) to allow for critical Aviation
Systems Safety and Airspace Systems programs to continue as planned.
Two of NASA's long-term interests have been to reduce the aircraft
accident rate and increase the aviation throughput. The vast majority
of accidents are attributed to human error. Recent increases in air
traffic volume and airport delays make these challenges especially
daunting. NASA will need to make an extraordinary investment in human
factors research to achieve these ambitious milestones. Fortunately,
several NASA programs support these important goals most notably the
Aviation Safety Program but also Aerospace Operations Systems,
Engineering for Complex Systems, Advanced Air Transportation
Technologies and Virtual Airspace Modeling Systems. Critical research
focuses on data mining, modeling and visualization for the proactive
management of aerospace system risk, allowing for the monitoring of
incidents and normal operations to identify precursors of error and
mitigate risk before accidents happen.
However, in order to do this, enormous volumes of qualitative and
quantitative data must be transformed into useful information for
expert analysts through the application of new information technology
tools. For example, the Aviation Safety Reporting System (ASRS) is a
national aviation safety resource consisting of first-hand verbal
reports of accidents and mishaps from a broad spectrum of aviation
professionals (e.g., pilots, controllers, mechanics, dispatchers,
flight attendants). These reports provide critical data for expert
trend analyses and queries that are then made available to the public
and private sector. Further, the Aviation Performance Measuring System
(APMS) provides a set of information technology tools to support
content analysis of the hundreds of flight data recorder parameters
(even thousands in the case of the Boeing 777) that are collected on
every commercial airline flight. These tools allow the reconstruction
of problems and entire flights from the collected data set and can
identify common problems across flights. Finally, from the control
tower, the Performance Data Analysis and Reporting System (PDARS)
routinely collects, processes and disseminates Air Traffic Control
radar track data for use in identifying normal operations and anomalous
flightpaths.
Collectively, such data tracking systems will become part of a
model to assess the impact of perturbations in the National Airspace
System.
Perturbations could include proposed technical innovations (such as
advanced automation-assisted decision support) and changes in
organizational structure or procedures, as well as accidents or
terrorist attacks. Such a model will require a distributed simulation
capability that can represent the full range of system behaviors at
multiple levels of analysis, including people the current backbone of
the aviation system.
department of veterans affairs
Investment in investigator-initiated research projects at the VA
have led to an explosion of knowledge that promises to advance our
understanding of disease and unlock new strategies for prevention,
treatment and cures. Psychological researchers play crucial roles in
addressing the many health challenges still confronting the veteran
community. APA joins the Friends of VA Medical Care and Health Research
(FOVA), a coalition of over 50 organizations concerned about veterans'
health, in recommending $460 million for the VA Medical and Prosthetic
Research Account in fiscal year 2003. We also strongly support the
Subcommittee's recommendation to expand the VA's Mental Illness
Research, Education and Clinical Center (MIRECC) program.
Psychological Research in the VA
Through its Medical and Prosthetic Research Account, the VA funds
intramural research that supports its clinical mission to care for our
nation's veterans. VA psychologists play a dual role in providing care
for veterans and conducting research in all areas of health, including
high-priority areas such as mental health, aging-related disorders and
substance abuse. Psychological researchers continue to make great
strides in: improving the diagnosis and treatment of Post Traumatic
Stress Disorder; developing more sensitive diagnostic tools to detect
the early stages of Alzheimer's disease and other dementias (problems
increasingly seen both in our veterans and our aging population in
society at large); and developing and implementing important substance
abuse prevention programs. Because research has such a positive impact
on the quality of care, APA strongly encourages the VA to ensure that
neither research nor care suffers by developing mechanisms to designate
time for clinicians to conduct research.
Mental Illness Research, Education and Clinical Centers
APA supports the important work being conducted by the eight VA
Mental Illness Research, Education and Clinical Centers (MIRECCs)
currently in existence throughout the country, but is disappointed that
the VA did not increase the number of MIRECCs in fiscal year 2002 as
directed by the Senate in last year's report. These MIRECCs sponsor
important basic and applied research as well as educational outreach to
the VA community, and have been particularly effective in translating
the findings of basic research into improved treatment protocols. The
MIRECCs substantially support and upgrade the provision of mental
illness services in their areas, but they exist in only eight of 22
networks and are clustered on the East and West coasts. We recommend
that the Subcommittee provide funds for the establishment of three
additional MIRECCs in fiscal year 2003.
Summary
APA appreciates this opportunity to provide written testimony in
support of psychological research sponsored by NSF, NASA and the VA,
and strongly encourages the Subcommittee to reaffirm its commitment to
basic behavioral science at all three agencies. We recognize that this
year there is a special need to strengthen research programs and
operations related to national security, and we hope that Congress also
will reinvest in the longer-term basic research which enables us to
meet the full range of social, economic, health, and security
challenges ahead.
Prepared Statement of American Rivers
This year, American Rivers was joined by over 600 local, regional
and national conservation organizations \1\ from all 50 states in
calling for significantly increased funding for the following
Environmental Protection Agency (EPA) programs and other programs
funded through the Veteran's Affairs, Housing and Urban Development,
and Independent Agencies (VA-HUD) Appropriations bill. I urge that
these requests be incorporated in the VA-HUD Appropriations bill for
fiscal year 2003.
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\1\ These groups have endorsed ``The River Budget 2003'', a report
of national funding priorities for local river conservation. A list of
groups endorsing the River Budget can be viewed at http://
www.americanrivers.org/riverbudget/default.htm
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enforcement of discharge permits under the clean water act
The Environmental Protection Agency's (EPA) ability to enforce
environmental laws is critical to our nation's efforts to fulfill the
Clean Water Act's clearly stated objective of restoring waters to
fishable and swimmable conditions. While our nation has made great
progress toward cleaning up our water, 40 percent of waters remain
unsafe for fishing or swimming, illustrating a continuing need for
enforcement.
The Clean Water Act prohibits discharges of pollutants through
point sources into U.S. waters without a National Pollution Discharge
Elimination System permit. These permits contain limits on what can be
discharged, monitoring and reporting requirements, and other provisions
to ensure that discharge does not harm water quality or human health.
To ensure that the permits are current and properly complied with, EPA
engages in enforcement activities, including inspections, sampling, and
testing, as well as civil and criminal enforcement actions. Civil and
criminal enforcement activities result in real improvements in
environmental quality. For instance, in fiscal year 1999, EPA's civil
enforcement actions achieved over 6.8 billion pounds of pollutant
reductions.
For the last 2 years, the Administration has proposed significant
reductions in funding for EPA's Office of Enforcement and Compliance.
Last year the Congress rejected this initiative, yet the Administration
has again recommended cuts for fiscal year 2003 that would reduce EPA
staff in the enforcement office by over 200 employees. It is essential
that Congress fund the EPA Office of Enforcement and Compliance at a
level sufficient to retain fiscal year 2001 staffing levels with
adequate increases to allow for cost of living increases. Congress
should fund EPA's enforcement programs at $485 million.
clean water state revolving fund
The Clean Water State Revolving Fund (SRF) provides capitalization
grants to states, who in turn provide low-cost loans to communities for
a variety of programs to clean up impaired water bodies and protect
pristine waters. This program has been extremely effective in helping
communities to improve water quality and provide safe drinking water.
However, the needs to improve, repair and replace the nation's aging
water infrastructure are tremendous. EPA and the WIN (Water
Infrastructure NOW) coalition estimate that between $450 billion and
$600 billion will need to be spent over the next 20 years just to
ensure that water quality standards are met and that drinking water
supplies are safe. Although the Federal Government should not be
expected to bridge that funding gap, higher SRF funding is a clear and
urgent priority. Postponing necessary water infrastructure investments
will only defer and increase costs that must eventually be met.
Congress has recognized this fact, giving strong bipartisan support to
legislation authorizing substantially higher SRF funding in bills
currently pending in the House and Senate.
Despite the pressing need for more water infrastructure funding and
strong support for the SRF program across the nation, the
Administration's budget calls for a 10 percent cut in SRF funding for
fiscal year 2003. We urge Congress to fund the Clean Water and Drinking
Water SRF programs at the full authorization levels called for in any
bill eventually passed this year by Congress. At a minimum, Congress
should sustain past funding levels: $1.35 billion for Clean Water SRFS,
and $859 million for Drinking SRFs.
total maximum daily loads, clean water act section 303(d)
One of the most powerful tools to reduce nonpoint source
pollution--the leading cause of impairment of the nation's waters--is
the Clean Water Act's Total Maximum Daily Load (TMDL) provision. The
TMDL provision is unique because it addresses the total level of
pollution regardless of its source and requires the EPA to step in if a
state fails to combat chronic water pollution problems. EPA
conservatively estimates that there are an average of 300 impaired
water bodies in every state in need of a TMDL plan. The polluted waters
include approximately 300,000 miles of river and shoreline and
approximately 5 million acres of lakes.
Given the scope of water body impairment across the nation, and the
need to help states develop and implement TMDL plans, we urge Congress
to ensure that the TMDL program, receives an increase in funding.
Congress should appropriate $250 million for EPA's State Program
Management Grants (Section 106 of the Clean Water Act) for grants to
states for funding for pollution control activities, surveillance,
monitoring, enforcement, and advice and assistance to local agencies to
meet TMDL development and implementation deadlines.
nonpoint source management program
Another tool for reducing nonpoint source pollution is the Clean
Water Act Section 319 Nonpoint Source Management Program. This program
provides grant money to states, territories, and Indian tribes that can
be used for a variety of nonpoint source pollution reduction activities
including technical and financial assistance, education, training,
technology transfer, demonstration projects, and monitoring.
Congress should fund the Section 319 Nonpoint Source Management
Program at $250 million.
watershed assistance grants
Solving today's water quality challenges, especially habitat loss
and nonpoint source pollution, requires the active involvement of
citizens who care about the water quality where they live and are
willing to take action to improve it. In most cases, solutions will be
most effective when they address problems on watershed-wide bases and
all affected parties are included in the development of the solutions.
To facilitate such solutions, EPA teamed up with citizen activists
to institute the Watershed Assistance Grants program. To date, 1,162
proposals (requesting approximately $15 million) have been submitted;
68 awards have been made to locally initiated watershed partnerships in
36 states.
In order to build the capacity of this program in fiscal year 2003,
Congress should fund the Watershed Assistance Grants program at $2
million.
project impact
The 20th century approach to flood control--trying to contain
rivers with dams and levees and allowing excessive development in
flood-prone areas--has devastated many river ecosystems while failing
to adequately protect communities. Dams and levees that break during
floods release even more devastating torrents, while those that hold
often merely shift the brunt of a flood to other areas. Poorly planned
floodplain development has put countless people in harm's way and
eroded natural flood protections. According to the Federal Emergency
Management Agency (FEMA), flood damages average more than $4 billion a
year.
Project Impact, run by FEMA, is changing how the nation deals with
floods by turning nature into an ally instead of an enemy. Project
Impact helps communities dramatically reduce disruption and loss caused
by floods and other natural disasters by restoring and protecting
healthy, more natural ecosystems.
FEMA estimates that every dollar spent on damage prevention in its
250 Project Impact communities saves two dollars in repairs. In fiscal
year 2003, Congress should appropriate $50 million to expand FEMA's
Project Impact to safeguard people and the environment.
chesapeake bay program
The Chesapeake Bay is the nation's largest estuary and one of the
most productive in the world, home to 3,600 species of plants and
animals. The 64,000 square mile watershed drains more than 100,000
rivers and streams; provides important opportunities for recreation and
refuge for fish and wildlife; and is a key resource for the prosperity
of the region.
Unfortunately, the ecological integrity and productivity of the
Chesapeake's watershed have been severely compromised by development,
agriculture, over-harvesting of resources, and more than 2,500 small
dams that block migratory fish from their historic spawning habitats.
Concern over these threats culminated in the creation of the
Chesapeake Bay Program in 1983, establishing what is now a national and
international model for estuarine research and restoration. In fiscal
year 2003, Congress should provide the Chesapeake Bay Program with $30
million to better protect and restore this valuable ecosystem.
beach act
The Administration's budget proposes $10 million for the Beaches
Environmental Assessment and Coastal Health Act (BEACH Act) of 2000,
equal to the amount approved by Congress for fiscal year 2002. While
$10 million was a helpful start for the BEACH Act program's first year,
it represents only one-third of what Congress originally authorized for
the Act. Under the BEACH Act, grants are provided to states to help
them improve water quality monitoring and public notification programs.
When it created the program in 2000, Congress unanimously authorized
$30 million for these grants. Congress should fund the BEACH Act grant
program at $30 million.
______
Prepared Statement of the American Water Works Association
Introduction
The American Water Works Association (AWWA) appreciates the
opportunity to present AWWA views on the Environmental Protection
Agency (EPA) budget for fiscal year 2003 (fiscal year 2003). AWWA and
its members are dedicated to providing safe, reliable drinking water to
the American people.
Founded in 1881, AWWA is the world's largest and oldest scientific
and educational association representing drinking water supply
professionals. The association's 57,000 plus members are comprised of
administrators, utility operators, professional engineers, contractors,
manufacturers, scientists, professors and health professionals. The
association's membership includes over 4,500 public water systems that
provides over 80 percent of the nation's drinking water.
AWWA utility members are regulated under the Safe Drinking Water
Act (SDWA) and other statutes. AWWA believes few environmental
activities are more important to the health of this country than
assuring the protection of water supply sources, and the treatment,
distribution and consumption of a safe and healthful adequate supply of
drinking water. We strongly support adequate levels of funding for
EPA's drinking water, ground water protection and clean water pollution
prevention programs in fiscal year 2003.
The events of September 11, 2001, have added a new dimension to the
protection of drinking water. In addition to protecting drinking water
from contamination, America's homeland security requires a secure water
supply. Public health, fire protection, and sanitation depend on it.
The role of public water systems for first responders has been largely
overlooked in the discussions concerning homeland security funding
priorities. AWWA strongly urges both the Congress and the
Administration to correct this oversight and make the protection of
public water systems a high priority for homeland security. The al
Qaeda terrorists network and others are known to have conducted
research on public water systems in the United States. If the intent is
to create terror in our society, water systems are targets of
opportunity for terrorists, not only to contaminate the water supply,
but also to deny first responders water for fire protection in a
coordinated terrorist attack.
Drinking water suppliers have a long history of security
preparedness. However, the post-September 11, world has added a new
understanding of security and has added an unprecedented financial
burden on public water systems for immediate steps needed to protect
our citizens. AWWA does not believe that the President's Budget request
for EPA is adequate for EPA to meet the homeland security needs of our
Nation's public water system infrastructure. We respectfully request
the Congress to appropriate significantly increased funds for public
water system security efforts that are essential to help provide a
secure water supply for our citizens and first responders in either an
emergency supplemental appropriation for fiscal year 2002 for security
needs that require immediate funding or in the EPA fiscal year 2003
appropriation. Our testimony today will highlight some of the major
public water system security needs.
Request Overview
AWWA recommends that the following funding be specifically
appropriated for the indicated purpose:
--For public water system water vulnerability assessments.--
$450,000,000 to complete vulnerability assessments for systems
serving over 3,300 peopleas required in H.R. 3448.
--For immediate public water system security upgrades.--
$1,600,000,000 for capital improvements to ensure security of
access to critical public water system assets through barriers,
detection devices and cyber security systems.
--For public water system security training.--$2,500,000 designated
for AWWA to develop and initiate peer-review or third party
certification programs to assure ongoing vigilance against
terrorist acts and educate water systems in distribution system
security and vulnerability assessments.
--For public water system security research.--$15,000,000 to develop
technologies and methodologies to help prevent and respond to
the contamination or disruption of public water systems.
(Funding expected to be authorized in H.R. 3448.)
--For the drinking water State revolving fund.--A minimum of
$1,000,000,000 as authorized in the SDWA.
--For the AWWA Research Foundation (AWWARF) drinking water
research.--$7,000,000.
--For public water system supervision (PWSS) grants to States.--
$100,000,000 as authorized in the SDWA.
--For drinking water research.--As requested in The President's
fiscal year 2003 Budget.
--For the EPA drinking water program.--As requested in The
President's fiscal year 2003 Budget.
Public Water System Vulnerability Assessments
Congress should appropriate $450 million to complete vulnerability
assessments for public water systems. The cost of completing
vulnerability assessments and revise emergency plans in all drinking
water systems serving more than 3,300 people as mandated in the House
version of H.R. 3448 is approximately $450 million, in addition to
funds already appropriated. The Defense appropriations bill for fiscal
year 2002 provided $83 million for assessment for the largest public
water systems.
--Recommended Action in the Fiscal Year 2002 Emergency Supplemental
or Fiscal Year 2003 Budget.--Appropriate $450,000,000 to
complete vulnerability assessments for public water systems.
Immediate Public Water System Security Upgrades
Congress should appropriate $1.6 billion specifically for capital
improvements to ensure security of access to critical public water
system assets through barriers, detection devices and cyber security
systems. AWWA research has determined the cost of immediate security
upgrades for public water systems to ensure secure control of access to
critical utility assets is approximately $1.6 billion. This will
provide initial security improvements for about 53,800 water systems
serving more than 264 million people. This does not include future
capital costs of upgrades to address vulnerabilities identified in
vulnerability assessments such as hardening pumping stations, chemical
storage buildings, transmission mains, add redundant infrastructure or
relocate facilities and pipelines.
--Recommended Action in the Fiscal Year 2002 Emergency Supplemental
or Fiscal Year 2003 Budget.--Appropriate $1,600,000,000 for
capital improvements to ensure security of access to critical
public water system assets.
Public Water System Security Training
Congress should appropriate $2.5 million for AWWA to develop and
initiate peer-review or third party certification programs to assure
ongoing vigilance against terrorist acts; educate water systems in
distribution system security and vulnerability assessments; and teach
emergency communications and legal issues. The details of this proposal
are in a letter previously sent to the subcommittee. As the world's
largest educational and scientific organization dedicated to safe
drinking water, AWWA is uniquely qualified and has the proven expertise
to accomplish these important tasks more effectively and in a more
timely manner than any other entity in the United States. Before
September 11 and since then, AWWA has been providing information and
training to prepare water utilities for terrorist attacks and measures
to prevent such attacks. With Federal assistance, AWWA can continue to
deliver this training at little or no cost to participants. With our
broad membership of over 57,000 members, AWWA can reach a large
audience of water suppliers and utilities of all sizes--small, medium,
and large. AWWA believes that these programs will significantly improve
the security of the Nation's public water supply.
--Recommended Action in the Fiscal Year 2002 Emergency Supplemental
or fiscal year 2003 Budget.--Appropriate $2,500,000
specifically designated for the American Water Works
Association for drinking water security training.
Public Water System Security Research
Congress should appropriate $15 million for a new program to
improve the technologies and processes that provide security for public
water systems. Funding for this program is expected to be authorized in
H.R. 3448 that is currently in a joint conference committee. One of the
most pressing needs facing public water systems is to develop
technologies and methodologies to help prevent and respond to terrorist
actions to contaminate or disrupt the water supply. Now is the time to
strategically invest in water security research and development in
order to deploy real-time detection, identification and response tools
to the field as soon as possible. Critical research needs are for the
identification and characterization of biological and chemical agents,
biological and chemical agent detectors, and security of cyber command
and control systems. This new program will promote the transfer of
results of research on critical infrastructure protection to the
private sector, public water systems and other parts of the Nation's
infrastructure. AWWA believes that public water system security
research is an essential part of homeland defense and strongly urges
Congress to fund this new program.
--Recommended Action in the Fiscal Year 2003 Budget.--Appropriate
$15,000,000 to develop technologies and methodologies to help
prevent and respond to the contamination or disruption of
public water systems.
Drinking Water State Revolving Fund (DWSRF)
AWWA believes that past funding to capitalize the DWSRF is not
adequate to meet the Nation's drinking water needs. The SDWA Amendments
of 1996 authorized for the DWSRF $599,000,000 for fiscal year 1994 and
$1,000,000,000 for fiscal years 1995 through 2003. Through fiscal year
2002, Congress has appropriated approximately $5.2 billion--which is
approximately $3.4 billion less than authorized for the DWSRF up to
this fiscal year. According to the 1999 EPA Drinking Water
Infrastructure Needs Survey released in February, 2001, $150.9 billion
is needed over the next 20 years just to comply with the requirements
of the SDWA. We believe that the EPA Needs Survey is conservative. More
recent comprehensive estimates developed by EPA in the Gap Analysis,
AWWA and the Water Infrastructure Network (WIN) indicate that the need
is much higher. WIN estimates that the Federal share to meet the needs
of replacing aging drinking water pipes should be approximately $28.5
billion over the next 5 years. We urge Congress to appropriate at least
the $1 billion authorized for the DWSRF in fiscal year 2003 to assist
States and public water systems in meeting current public health
related infrastructure needs. Although it represents only a fraction of
the need, the amount recommended by AWWA for the DWSRF will be a start
and provide a source of much needed loans for financial disadvantaged
communities that cannot obtain financing through other means. The
Federal funds will leverage State and local resources, thus helping
communities to comply with the mandates of the SDWA.
--Recommended Action in the Fiscal Year 2003 Budget.--Appropriate a
minimum of $1,000,000,000 as authorized in the SDWA.
AWWA Research Foundation
In a separate statement, the American Water Works Association
Research Foundation (AwwaRF), (an organization independent of AWWA),
requested that $7,000,000 in drinking water research funds be
designated specifically for AwwaRF for drinking water research. AwwaRF
proposes to allocate $5,000,000 of this amount for its ongoing research
programs that address issues such as the link between disinfection by-
products and miscarriages, compliance with the new arsenic regulation,
emerging contaminants such as perchlorate, infrastructure needs, and a
host of other drinking water public health related issues. The other
$2,000,000 will be allocated to high-risk security issues identified by
a comprehensive workshop. AwwaRF will produce the May workshop that
will include stakeholders from State and Federal Government, water
utilities, and leading academic institutions. A research plan will
emerge from this expert workshop on how to best protect public water
systems from terrorism. Since fiscal year 1984, when Congress
appropriated the first grant for AwwaRF, the Foundation has leveraged
an additional $228,000,000 from its subscribers to support research
projects across the country. Each dollar appropriated by Congress for
AwwaRF produced over $6.00 in drinking water research. AWWA strongly
believes that this kind of local/Federal research partnership is a wise
and cost effective use of public funds and the only way to secure
science-based drinking water regulations in these difficult budgetary
times.
--Recommended Action in the Fiscal Year 2003 Budget.--Appropriate
$7,000,000 specifically designated for the American Water Works
Association Research Foundation for drinking water research.
Public Water System Supervision Grants
To comply with the SDWA, Congress intended that EPA develop
drinking water regulations and that the States implement and administer
the program to ensure compliance with and enforcement of its
provisions. Implementation, administration, compliance and enforcement
activities are collectively known as ``primacy'' requirements and
Federal grants to the States are known as Public Water System
Supervision (PWSS) grants. The massive demands on States arising from
the SDWA have become increasingly apparent because of the dramatic
increase in the number of regulated contaminants over the past few
years. As each regulation is added, State resource shortfalls become
more acute. Additional regulations are scheduled to be promulgated over
the next few years and the SDWA Amendments of 1996 added new
responsibilities for the States such as source water assessments, a
consumer confidence report program and alternative monitoring programs.
The SDWA authorizes a Federal share of up to 75 percent, but Federal
funding has approximated only 35 percent. EPA's budget requests for the
last several years for PWSS funding for States has remained essentially
static in the face of increasing requirements. We strongly urge
Congress to appropriate the $100,000,000 authorized for PWSS grants to
States as the minimum necessary .
--Recommended Action in the Fiscal Year 2003 Budget.--Appropriate
$100,000,000 for Public Water System Supervision (PWSS) grants
to States.
Drinking Water Research Funding
Over the past several years, public water suppliers have worked
together with EPA and the Congress to secure increased research funding
for the Nation's drinking water program. We believe that, through this
cooperative effort, needed increases in research dollars have been
obtained for drinking water over the past few years after several years
of steady decline. The use of good science as the foundation of the new
drinking water standard-setting process under the SDWA amendments of
1996 will require extensive drinking water research--particularly
health effects research. Funding for drinking water research is
becoming more of a critical issue. Every 5 years EPA is required by the
SDWA to select at least five contaminants from the Contaminant
Candidate List (CCL) and determine whether to regulate them. To
determine whether to regulate a contaminant and establish a maximum
contaminate level (MCL) or another regulatory approach, EPA will need
good health effects research. Recognizing the serious burden this
regulatory mandate presents, the drinking water community has offered
its time, resources and expertise to work with EPA to develop a
research plan for the contaminants on the CCL. Given the enormous need
for immediate research to meet the deadlines of the SDWA amendments of
1996, AWWA urges Congress to appropriate at least the amount requested
in the President's fiscal year 2003 Budget for drinking water research
and specifically designate it in the appropriation.
--Recommended Action in the Fiscal Year 2003 Budget.--Appropriate
funding for the EPA drinking water research program as
requested in the President's fiscal year 2003 Budget.
EPA Drinking Water Program
EPA's drinking water program took on greatly increased
responsibilities in the 1996 SDWA amendments. In satisfying these
requirements, EPA has involved the public in the regulatory process to
an extent not equaled by another Federal agency and stands as a model
for Federal rule making.. EPA and the Office of Drinking Water and
Ground Water are to be commended for taking this new approach which
should result in better regulations that protect public health. AWWA
believes that funding the EPA drinking water program is vital to
continue this new regulatory approach and urges Congress to appropriate
the funds requested in the President's fiscal year 2003 Budget for the
drinking water program to continue to implement the new provisions of
the SDWA.
--Recommended Action in the Fiscal Year 2003 Budget.--Appropriate
funding for the EPA drinking water program as requested in the
President's fiscal year 2003 Budget.
This concludes the AWWA statement on the fiscal year 2003 EPA
budget.
______
Prepared Statement of the American Society of Mechanical Engineers
ASME International is a worldwide engineering society focused on
technical, educational and research issues. It conducts one of the
world's largest technical publishing operations, holds some 30
technical conferences and 200 professional development courses each
year, and sets many industrial and manufacturing standards.
national science foundation (nsf)
The National Science Foundation Task Force of the American Society
of Mechanical Engineers (ASME International) is pleased to provide the
following comments on the NSF fiscal year 2003 budget request.
NSF Fiscal Year 2003 Budget Request Overview
The National Science Foundation plays a critical leadership role in
directing the nation's non-defense related scientific and engineering
research. Through thoughtful and visionary planning, NSF has greatly
contributed to advancements in science, engineering and technology. The
Task Force shares NSF's broad-based, cross-cutting vision for basic
engineering and scientific research. As such, we strongly endorse the
Foundation's efforts to continually improve and expand the ``innovative
ideas, outstanding people, and cutting-edge tools'' that comprise the
nation's technological and scientific infrastructure.
The Budget Request for fiscal year 2003 reflects a 5.0 percent
increase over the fiscal year 2002 Current Plan to $5.04B. Within this
request, funding for the Engineering Directorate would increase 3.3
percent to $488M.
NSF has identified six initiative areas to headline the fiscal year
2003 budget request. These are:
--Information Technology Research (ITR),
--Nanoscale Science and Engineering (NSE),
--Biocomplexity in the Environment (BE),
--Learning for the 21st Century Workforce (STEM),
--Mathematical Sciences,
--Social, Behavioral and Economic Sciences (SBE).
Though not specifically identified as such, the Math and Science
Partnerships (MSP) is essentially a seventh initiative area. This
program began in fiscal year 2002 as part of President Bush's
initiative to enhance K-12 math and science education contained in his
``No Child Left Behind'' proposal.
Funding has been requested to create two new initiative areas,
Mathematical Sciences ($60.1M) and SBE ($10M) while expanding the four
ongoing areas: ITR by 3.0 percent (to $286M), NSE by 11.3 percent (to
$221M), BE by 36.3 percent (to $79M) and STEM by 27.5 percent (to
$185M). Each of these priorities, NSE and STEM in particular, continue
to be strongly supported by the Task Force.
TABLE 1.--NSF BUDGET OVERVIEW WITH AND WITHOUT THE INITATIVE AREAS
[In million of dollars]
----------------------------------------------------------------------------------------------------------------
NSF Agency Wide Engineering (ENG)
-----------------------------------------------------------------------------
Fiscal year
2002 Fiscal year Percent Fiscal year Fiscal year Percent
current 2003 change current 2003 reqest change
plan request plan
----------------------------------------------------------------------------------------------------------------
Total Budget...................... $4,795.88 $5,035.79 5.0 $472.32 $487.98 3.3
Salaries and Expenses......... 176.40 210.16 19.1 n/a n/a n/a
Inspector General............. 7.04 8.06 14.5 n/a n/a n/a
Total Program Budget.............. 4,612.44 4,817.57 4.5 472.32 487.98 3.3
ITR........................... 277.52 285.83 3.0 10.23 11.17 9.2
NSE........................... 198.71 221.25 1.3 86.30 94.35 9.3
BE............................ 58.10 79.20 36.3 3.69 6.00 62.6
STEM.............................. 144.82 184.69 27.5 3.40 4.87 43.2
Mathematical Sciences......... 30.00 60.09 100.3 0 0.91 n/a
SBE........................... 0.00 10.00 n/a 0 0 n/a
Remaining Funds................... 3,903.29 3,976.51 1.9 368.70 370.68 0.5
----------------------------------------------------------------------------------------------------------------
Comparisons include both agency-wide and engineering directorate.
In spite of the requested 5.0 percent overall increase in the total
NSF budget, expansions in the initiative areas significantly inhibit
growth in other programs. Table 1 clearly shows the impact on funding
for core programs. Agency-wide, there will only be a 1.9 percent
increase in funding available for core programs relative to current
year plans. If one accounts for the $76M in programs being transferred
from the Environmental Protection Agency (EPA), National Oceanic and
Atmospheric Administration (NOAA) and the United States Geological
Service (USGS), there will actually be a slight net loss in overall
funds for core programs. Flat funding for core programs is reflected
within the Engineering Directorate (ENG). After initiative areas are
removed, there will be a mere 0.5 percent increase in funding for core
research programs.
Position
The Task Force endorses the leadership role that NSF has played in
guiding the nation's basic research activities. Combining exciting new
developments with core programs to incubate such breakthroughs, NSF has
built an outstanding record of supporting a broad spectrum of research
of the highest quality. This record has been made possible only through
strict adherence to the independent peer review process. We recognize
the importance and timeliness of NSF's initiative areas that address
major national needs for the 21st century. However, as will be
discussed in the next section, it is not clear that an optimum balance
has been achieved.
There are a number of particularly positive items in the fiscal
year 2003 budget request, beginning with the planned increase in
graduate fellowship stipend levels. Ensuring a continuous stream of
well-trained, highly qualified research scientists into leadership
positions is critical to our economic growth and national security. In
this respect, we strongly endorse NSF's planned increase in stipends
for graduate fellows from $21,500 to $25,000. Making fellowship
stipends attractive to the nation's best and brightest students is
certainly a positive step. This serves to enhance the nation's pool of
science, engineering and technology educators and leaders.
The increase in numbers of graduate fellowships is also especially
positive. NSF is the only Federal agency directly chartered to train
graduate students for research and development careers. It is therefore
imperative that this be a major priority area in perpetuity. It is
interesting to note however that $80.6M is requested for the Graduate
Research Fellowship (GRF) program to support 2,350 students
in fiscal year 2003 while $41.4M for the GK-12 Fellowship program will
support only 800 students. It is not clear that the GK-12 program has
sufficient value added to justify its higher cost. Nor is it clear that
the correct balance between types of graduate fellowships has been
struck. It is critically important that education-based programs do not
jeopardize funding for research programs at NSF.
In general, the Task Force also supports and applauds activities
within ENG. NSF's vision of a committed balance between people, ideas
and tools is exemplified within ENG. It is important to recognize that
fundamental sciences and engineering funded by NSF quite frequently
spawns next generation technologies. Examples of successes emerging
from ENG include development of an artificial retina and, a biocapsule
for insulin delivery. ENG is also funding work on microscopic chains
for magnetized particles that may be precursors of materials that will
protect buildings from earthquakes.
ASME has strongly supported the nanotechnology initiative since its
inception as an NSF emphasis area in fiscal year 2000. In the past two
years, funding for this initiative has grown substantially. With a
growing record of research and development successes, the transitioning
of nano-science and engineering into commercially viable technologies
is becoming a pressing challenge for NSE. For this reason, it is
important that multi-institutional tools be developed in the near term
in which access, maintenance and staffing issues have been resolved.
Finally, the Task Force continues to endorse NSF's participation in
K-12 math, science and engineering education initiatives consistent
with the agency's broader mandate to lead the nation's research and
development enterprise. Most notably, NSF has included $200M in its
fiscal year 2003 budget request for the Math and Sciences Partnership
(MSP) program. The goal of MSP is coupling K-12 and higher education
STEM education into a single integrated effort by encouraging
universities to adopt STEM into their core missions.
In this technological age, providing the highest quality math,
science and technology education to all children should be a national
imperative. We applaud the ``No Child Left Behind'' Act and NSF's role.
However, the Task Force cautions that a proper balance' must be struck
to preserve the integrity of NSF's fundamental research and development
mission.
Concerns
Maintaining a fundamental knowledge base is essential for
intelligent and effective response to rapidly evolving technological
challenges facing the nation. Events since September 11th highlight the
impossibility of predicting what scientific and engineering disciplines
will be needed in response to future technology challenges. Because of
its commitment to core programs, ENG was able to rapidly respond to the
World Trade Center collapse by funding work on the failure of one of
the steel beams hit by a hijacked plane. However, the track record on
funding core programs over the past few years has not been strong. As
noted earlier, funds available for core programs are essentially flat
across NSF in fiscal year 2003. Thus, as in previous years, Our key
questions and concerns arising from the fiscal year 2003 budget request
center on matters of balance. In particular, the Task Force is
concerned with:
--the gross funding imbalance in the Federal R&D portfolio,
--inadequate funding levels for existing grants.
--insufficient support for core engineering programs at NSF, and
The overall imbalance in the Federal R&D portfolio remains a major
concern. The requested increase for NIH this year is equal to the
entire requested appropriation for Research and Related Activities at
NSF. Focusing purely on health issues while the nation faces threats
from dwindling energy supplies, aging infrastructure and geopolitical
instability, to name but a few, is entirely inconsistent with a
balanced leadership plan. Failure to adequately support broad, cross-
cutting fundamental research inherent to most NSF programs continues to
undermine the long-term health and vitality of the nation.
To date, NSF has had considerable success in stretching its funds
to bridge (i.e. mask) this imbalance. Indeed, NSF richly deserves the
governmental acclaim it has received for its efficiency and impact in
managing basic research and development. However, this efficiency is
coming at the expense of partial payment for the research. The
projected median research award size for fiscal year 2003 is estimated
to be $87,400 per year. This is in general sufficient to support one
graduate student and a senior investigator with only a limited amount
remaining to actually conduct the research. An extended period of
constant grant sizes has eroded buying power and the ability to
adequately support professional development. Further, forming small
teams (2-3 senior investigators) to pursue and define the major
initiative areas of the future is virtually impossible. Thus, to truly
advance the frontiers of science, engineering and technology,
significant increases must be made not only to the number of grants,
but to the size of each grant as well. By way of reference, NIH's
projection for the average size of new research project grants (RPGs)
in fiscal year 2003 will be $370,000; this is coupled with
an estimated 4 percent increase in the total number of RPGs funded.
As indicated in Table I, growth in NSF for fiscal year 2003 is
targeted at initiative areas and the transfer of programs from other
agencies. After inflation, there will be a net decrease in funding for
core programs. As an illustration of the imbalance this creates,
consider the World Trade Center disaster of September 11. In its budget
request documents, NSF points to the analytic and diagnostic tools
available to examine failure of structural steel beams at the point of
impact by the hijacked airliners. Funding for this work would come from
the Civil and Mechanical Systems (CMS) subactivity within ENG, an area
of strong interest to mechanical engineers. Yet CMS has seen, at best,
minimal growth over the past five years. It appears that this is
principally because steel (for example) is not tied to one of the
initiative areas and has not been included in the growth plan of the
Federal R&D portfolio.
Summary
The Task Force continues its enthusiastic support for the National
Science Foundation and its leadership in articulating the nation's
basic research and development vision. In fiscal year 2003, NSF has
requested funding to expand major, cross cutting initiatives addressing
pivotal technological issues facing the nation. This includes the
nanotechnology initiative strongly endorsed by ASME. Expansion of the
graduate fellows programs coupled with increases in stipend levels
reinforces NSF's commitment to graduate education. The focus on
developing people and ideas in general is certainly reflected
throughout the ENG directorate's budget request as well. The challenge
for this year appears to be maintaining a healthy balance between core
research programs and new initiatives such as the new K-12 Math and
Science Partnerships.
There is also great concern over continued growth in the imbalance
between Federal funding of life sciences and the physical sciences and
engineering. Crises, such as those occurring in the gasoline and power
production industries, reflect long term failure to value and support
core research focused at advancing the nation's technological
infrastructure. In addition, recent events strongly underscore the fact
that it is impossible to know what part of the science, engineering and
technology base will be needed on short notice to respond to rapidly
developing opportunities or crises. The current budget plan does not
appear to permit NSF to meet key fiscal year 2003 Performance Goals
(i.e. Goals III-1a and III-2). Increasing the number and size of its
awards will enable NSF to better position itself to fulfill its
leadership responsibility in directing the nation's research and
development activities.
national aeronautics and space administration (nasa)
The American Society of Mechanical Engineers (ASME International)
Aerospace Division and the Aviation Research and Technology Task Force
are pleased to provide their views on the NASA fiscal year 2003 budget
request as it affects the aeronautics research and technology programs.
In recent years, the Task Force has written at length about our
concerns that reducing Federal funding for aviation research and
technology will jeopardize the nation's leadership in providing the
technologies needed to develop the next generation aircraft, improve
aviation safety and security, and attract the next generation of
scientists and engineers. Over the last decade, funding for NASA's
aeronautics research and technology program has fallen by approximately
50 percent, and unfortunately, this trend is continuing. The
Administration's fiscal year 2003 request of $541.4M for aeronautics is
a reduction of $58M from fiscal year 2002 appropriated funding.
Although we continue to view with concern the level of government
investment related to aeronautics in NASA, we would like to commend the
NASA Leadership for their strategic plan called the ``Aeronautics
Blueprint.'' NASA's Aeronautics Blueprint not only describes the issues
and challenges facing U.S. aviation, but describes a vision for
reshaping the future architecture of the U.S. aerospace industry.
The Aeronautics Blueprint acknowledges many of the same concerns
our Task Force has addressed in earlier testimony, particularly our
concerns about the declining investment in aeronautics research and
development, the aeronautics infrastructure, and the aerospace
workforce. It is important to note that the Aeronautics Blueprint
states ``. . .the steady erosion of U.S. leadership in aeronautics,
which is being directly challenged by international competitors, must
be reversed'' and ``. . .the cost of inaction is gridlock, constrained
mobility, unrealized economic growth, and loss of U.S. aviation
leadership.''
NASA has taken the first step toward articulating a vision for
aviation research and technology. But that vision cannot be realized
unless the continued decline in aeronautics funding is reversed and
sufficient funding provided to develop near-term and revolutionary
technologies. We are disappointed with the reductions to the
aeronautics programs. We are also disappointed with the elimination of
the rotorcraft program from NASA's budget. NASA has eliminated from its
vision all rotary wing related activity, despite the fact that rotary
wing vehicle technology is substantially less mature (by approximately
four decades) than its fixed wing counterpart. Rotary wing vehicles
have a potential for revolutionizing our air transportation system and
make an important contribution to our national security.
The ``Commission on the Future of the U.S. Aerospace Industry,'' a
congressionally mandated Commission, recently issued their interim
report calling for the creation of ``a multi-agency task force with the
leadership to develop and implement an integrated plan to transform our
air transportation system.'' The Commission recommends ``significant
increases (in NASA R&D) to start developing a new air transportation
system for the nation. R&D investments should focus on: security, noise
and emission reductions, high bandwidth communications, precision
navigation and surveillance, small aircraft transportation
technologies, ground and airborne control automation, and advanced
weather sensing. New mechanisms and incentives need to be developed to
accelerate the application of existing and new technologies and
concepts into the marketplace.''
We heartily endorse the Commission's recommendations, and we urge
Congress to provide sufficient funds to enable the development of new
technologies that would reduce aviation gridlock, increase the margin
of safety for the flying public, and reduce the impact of aviation on
the environment.
Last year, in testimony to this Subcommittee, our Task Force noted
with concern the release of a report called the ``European Aeronautics:
A Vision for 2020.'' This strategy document charts the path for the
European Union to become a global leader in aeronautics, estimating
that total funding required to achieve their vision--from all public
and private sources over the next 20 years--could go beyond $95 billion
over the next 20 years.
Is there evidence to support the European Union's objective to
become a world leader in aerospace technology? In February 2000, the
National Research Council reported that the U.S. has been losing ground
in world aerospace market share, falling from over 70 percent in the
1980's to 55 percent in 1997. Today this situation continues, as U.S.
aerospace industries are being severely challenged by the European
aerospace industry, which is garnering a significant portion of the
U.S. market as well as of the world market.
In the past, large investments in evolutionary significant-risk
technologies, such as the transition to commercial jet aviation, have
been accomplished through a partnering among industry, NASA (and its
predecessor NACA), DOD and the FAA. These partnerships have proven to
be an efficient means for maintaining the past U.S. lead in
aeronautical technology with concomitant economic benefits. We are not
suggesting that the government share the cost of specific commercial
aviation developments, as has been the case in other countries. Rather,
we recommend that NASA undertake high-risk, potentially high-payoff
R&D, which then can become the basis for commercial enterprises. In our
view, NASA must resume its intellectual and financial support for
partnerships that sustain mid- and long-term innovative basic research
in core technologies (fluids, structures, materials) applicable not
only to spacecraft, but also to future fixed and rotary wing vehicles.
Partnerships between government and the private sector are essential to
meeting these growing challenges.
Turning the Aeronautics Blueprint into reality will require
sustained partnerships between NASA, the Department of Defense,
Department of Transportation, and the Federal Aviation Administration
to develop a national aviation research and technology policy to plan
and provide adequate resources that will ensure sustained U.S. world
leadership in civil and military aviation.
For the past 75 years American universities have provided creative,
skilled engineers for national defense and aeronautical commerce. The
development of an efficient global air transportation system has been
driven by American engineering. Students who have come from American
university campuses to industrial and governmental facilities have been
the source of an undisputed American commercial success; sales of
aircraft and aircraft equipment accounts for one of the largest single
positive balance of trade with other nations.
The nation is experiencing a diminishing pipeline of qualified
aeronautical engineering students at both the undergraduate and
graduate levels; young engineers and scientists do not consider
aerospace a growth industry. Therefore, they are pursuing careers in
life sciences, bioengineering, and other growth fields. We are very
concerned about this issue and look to NASA leadership to make a course
correction for the future.
In recent testimony before the Commission, Dr. John Marburger, the
Director of the Office of Science and Technology Policy stated ``the
President wants to make sure that U.S. aerospace leadership continues
in the 21st century,'' and ``Improvements in homeland defense, national
defense and civil aviation require the same core suite of technologies.
We can enhance the security while creating greater mobility for
America. This is what the Administration wants and what our country
needs.''
Aviation and aerospace are vital to the U.S.' future. If Americans
fail to support aeronautics and aviation-related research, there will
be no next generation of professionals to solve the obvious looming
problems and create products the world will demand. And without that,
the U.S. puts at risk a linchpin of its economy, national security and
quality of life.
Conclusions
Air transportation is a key ingredient to economic growth and
prosperity. Therefore, the decline of U.S. global market share in air
transportation products and services over the past two decades,
combined with European determination to become the dominant supplier of
such products and services within the next two decades, should be of
major concern to U.S. policy makers.
The need for adequate funding for NASA and DOD aviation R&T must be
addressed, not only with respect to the fiscal year 2003 budget, but
also--and even more significantly--with respect to the preservation of
U.S. capability and leadership in long term aeronautics research and
technology.
It is essential that the aeronautics research and technology
programs at key agencies (NASA, DOD and FAA) continue to be clearly
identified and defined as a separate line item, as required by Congress
in the fiscal year 2002 budget.
A fully coordinated National Aviation R&T policy--combining the
efforts of NASA, DOD, DOT, and FAA--is essential to plan and provide
adequate resources that will ensure sustained U.S. world leadership in
civil and military aviation.
environmental protection agency (epa)
The Environmental Protection Agency (EPA) Task Force of the ASME
Environmental Engineering Division (EED) of the Council on Engineering,
is pleased to have this opportunity to provide comments on the fiscal
year 2003 budget request for the Environmental Protection Agency (EPA).
Sound science is one of the key underpinnings of credible and
defensible policy formulation and decision making in environmental
management. The Task Force believes that the EPA's risk-based approach,
which engages all interested parties (i.e., ``stakeholders'') provides
a good framework for the formulation of environmental policies. We
support EPA's continuing effort to implement a research program aimed
at expanding the role, and improving the state-of-the-art, of
environmental science as it pertains to decision-making and policy
formulation. Overall, the requested increase in fiscal year 2003 budget
over fiscal year 2002 levels in most key R&D areas contributing to
environmental decision-making is fully supported by the Task Force.
One area that the Task Force believes deserve more attention is the
development and implementation of a decision-making framework that
integrates scientific information with socio-economic values and
issues. The continuous focus on strong, fundamental scientific research
is essential; however, increased understanding is needed in the non-
scientific (e.g. social/societal) aspects of risk-based decision-
making. We recommend that efforts in the latter should commence.
The Task Force is encouraged by the fact that the Science Advisory
Board's (SAB) budget will remain fundamentally steady from fiscal year
2002 to 2003. The SAB plays a key role in the prioritization of EPA's
research activities and addressing key emerging issues. We believe
that, given the SAB's pivotal role, the funding for SAB could be
increased.
Specific, focused research areas representing significant
challenges to the environment and human health have been identified in
the fiscal year 2003 budget request. We strongly support efforts in
these research thrust areas due to the potential impact that may be
generated by the substantial resources involved.
Climate Change Research.--The Task Force believes that the EPA
should commit more resources to the problem of greenhouse gas emissions
and climate change. The fiscal year 2003 appropriations request for
climate change research is $21.7M, a slight increase of $0.4M (1.9
percent) over the fiscal year 2002 appropriation. Climate change is an
issue of global significance. With the U.S. not participating in the
Kyoto framework regarding climate change, we must ensure that we
maintain and advance our scientific credibility and technological
leadership in climate change research and in the development of
technologies that reduce or eliminate the emissions associated with
climate change. It is imperative that the complex interplay of
increased energy demand and the environmental impacts that this
produces be addressed on a scientific and technological basis. We
strongly recommend increased funding in this area, which we project to
be one of the most significant environmental issues for the next decade
or more.
Particulate Matter Research.--The Task Force supports continued
research on the formation, migration, and mitigation of fine
particulate matter (particulate matter smaller than 2.5 micrometers,
termed PM2.5). These particles, primarily from combustion sources, have
been shown to have significant acute and chronic impact on human
health. The appropriation requested, $66.6M, is a slight increase (1.8
percent) from the fiscal year 2002 enacted budget of $65.7M. We believe
that EPA's commitment to ongoing research to address this significant
health concern is essential.
Tropospheric Ozone Research.--The Task Force supports continued
research into the formation and mitigation of troposhperic (ground-
level) ozone. Repeated exposure to ozone pollution can cause permanent
damage to the lungs, even at low levels. Ground-level ozone damages
plant life and is responsible for $500 million in reduced crop
production in the United States each year. The appropriation requested,
$6.8M, is a 4.6 percent increase from the fiscal year 2002 enacted
budget of $6.5M. We support EPA's commitment to ongoing research to
address this costly environmental and health problem.
Air Toxics Research.--The Task Force supports continued research in
the identification, reduction, and mitigation of air toxics. Humans and
animals can experience health problems when exposed to sufficient
concentrations of air toxics over time. Numerous studies conclude that
deposited air toxics are contributing to birth defects, reproductive
failure, and disease. Persistent toxic air pollutants are of particular
concern in aquatic ecosystems because the pollutants accumulate in
sediments and may bioaccumulate in tissues of animals at the top of the
food chain to concentrations many times higher than in the water or
air. The fiscal year 2003 appropriation request for Air Toxics
Research, $19.8M, is a 4.8 percent increase from the fiscal year 2002
enacted budget of $18.1M. We support EPA's commitment to ongoing
research to reduce the formation of air toxics.
Pollution Prevention.--The Task Force strongly supports EPA's
commitment to pollution prevention research and strategies. The
appropriation requested, $25.1M, represents a significant increase
(16.2 percent) from the fiscal year 2002 enacted budget of $21.6M.
However, the fiscal year 2003 request is still substantially lower (-
8.4 percent) than the fiscal year 2000 enacted budget of $27.4M.
Pollution prevention technologies can provide both environmental and
economical benefits while also avoiding the damage to human health and
the ecosystem that arises from the release of toxic and hazardous
substances. We urge EPA to increase funding for pollution prevention to
at least fiscal year 2000 levels and to maintain strong support for
this critical area of research.
Watershed and Drinking Water Research.--The Task Force remains
concerned regarding overall Federal funding necessary to protect
watersheds and drinking water supplies. Watershed protection comprises
a key issue, especially since severe drought conditions exist in both
Eastern and Western states. Competing needs in agriculture, protection
of endangered species, and water rights represent just a few of these
issues. The President's fiscal year 2003 budget proposal for EPA in the
areas of ecosystem protection remains essentially flat from fiscal year
2002 levels at $38M. We are encouraged by the proposed increase (18.6
percent, to $38.3M) in the Environmental Monitoring and Assessment
Program (EMAP), designed to provide watershed data for key inland
waterways, and by a proposed increase of 8.6 percent, to $49.5M in
funding for safe drinking water research. While EPA's proposed research
program addresses important needs, we are concerned that proposed
funding reductions for collaborative Federal agencies (USGS, USACE,
USDA) pose significant risks to improvement of the technical basis of
watershed protection. We suggest that the overall Federal budget for
watershed research be considered as a whole, and urge increased funding
over the overall levels proposed for fiscal year 2003.
Hazardous Waste Research/Superfund Innovative Technology
Research.--Hazardous waste cleanup, especially at Federal sites (i.e.,
Department of Defense and Department of Energy facilities) represents a
significant challenge for the EPA. Many of these challenges relate to
gaps in the scientific basis for risk assessment strategies and ongoing
needs for both policy changes and technology advances to achieve
cleanup at complex sites. For example, many hazardous waste streams
resulting from decades of nuclear weapons research lack identified
disposal methods. Through partnership agreements with industry and
other governmental entities, EPA traditionally leverages its own
research efforts. The Task Force supports these collaborative efforts,
but further recommends a more aggressive approach, such that the Agency
assumes a leadership role in the resolution of hazardous (including
radioactive) waste disposition. Target areas for this recommendation
are provided within the specific Agency funding objectives.
The budget request for hazardous waste research (science and
technology) for fiscal year 2003 is $9.6M, including continuation of
SITE (Superfund Innovative Technology Evaluation). The Task Force
supports these efforts, and recommends that the Agency continue to
leverage its own research funding to support related efforts at the
State and local level. We also note, with approval, that EPA recognizes
the need to reconsider policy decisions in the Resource Conservation
and Reclamation Act in view of recent technical advances or identified
needs. The Agency also proposes implementation of National Academy of
Sciences recommendations in contaminated sediment remediation. In view
of potential funding reductions for the USGS and USACE, measurable
progress in this effort remains at risk for 2003.
The EPA's environmental education program has been transferred to
the National Science Foundation (NSF) for fiscal year 2003. We are
concerned with regard to the possible adverse impact this transfer
could have on environmental education. In particular, the STAR
Fellowship Program has been eliminated in the EPA's fiscal year 2003
budget. In the past, this program provided a funding source for
graduate students interested in the solution of environmental problems
and allowed them to undertake research in areas directly relevant to
EPA's mission and objectives. It is the opinion of the Task Force that
EPA has a vested interest in environmental education and therefore EPA
would be a better steward of the environmental education initiatives.
The mechanism must be in place to train substantial numbers of
graduate students in areas relevant to EPA's core research areas if the
Agency is to maintain or strengthen its Science and Technology base.
Sound public policy requires a strong scientific and technological
basis. The overall decline in funding for physical sciences and
engineering within the Federal budget over the past decade must be
reversed in order to assure that the complex problems associated with
issues such as environmental contamination and public health can be
solved. In this vein, the Task Force recommends that extramural
research funding, such as the STAR Grants Program, allocated to the EPA
should increase, concomitant with the leadership role the Agency must
play. Furthermore, the research portion of the Federal budget is the
largest share of support for U.S. graduate students in fundamental
science and engineering disciplines, through both fellowships and
research grants to Universities. In areas such as environmental science
and national defense, a broad view across agencies, rather than a
programmatic view, is necessary to ensure sufficient graduates and
continuing quality in graduate programs to solve science and technology
problems of the future. The Task Force encourages lawmakers to consider
not only current programmatic needs, but also the number of graduate
students to be funded by Federal programs in particular science and
engineering disciplines, as vital to ensuring future success in
addressing national science and technology issues.
Conclusions
Because of the complex, multidisciplinary nature of environmental
issues, it is imperative that EPA base its actions on sound science.
The change from a command-style regulatory/compliance model to a
participatory risk-based model only heightens the need for a keen
awareness of the environmental science in making policy decisions and
recommendations. A strong R&D program is essential for the ongoing
development of science- based decision-making. The Task Force supports:
--Strong input and involvement of the Science Advisory Board in
helping set EPA research priorities;
--Focusing on national environmental priorities that impact human
health, ecosystem health, and climate, particularly particulate
matter, greenhouse gases, and water quality;
--Education of future environmental professionals, and building
interdisciplinary teams through the support of extramurally-
funded research; and
--Building a strong science and technology base, both within EPA, and
through partnerships with industry and other Federal and State
government agencies.
These collective comments represent the views of the NSF Task Force
of the Council on Education, the Aviation Research and Technology Task
Force of the Aerospace Division and the Environmental Protection Agency
(EPA) Task Force of the Environmental Engineering Division, of the
Council of Engineering, of the ASME International and are not
necessarily a position of the Society as a whole.
______
Prepared Statement of the American Thoracic Society and the American
Lung Association
The American Thoracic Society (ATS) and the American Lung
Association are pleased to present our recommendations for programs in
the Environmental Protection Agency and the Department of Veterans
Affairs medical and prosthetic research program.
The American Thoracic Society founded in 1905, in an independently
incorporated, international education and scientific society which
focuses on respiratory and critical care medicine. The Society's
members help prevent and fight respiratory disease around the globe
through research, education, patient care, and advocacy. The Society's
long-range goal is to decrease morbidity and mortality from disorders
and life-threatening acute illnesses.
The American Lung Association, established in 1904, is the nations
oldest voluntary health association. The ALA is committed to improving
the nation's lung-health through programs of education, community
service, advocacy and research.
The ATS and the ATS are united in our support for programs that
protect the lung-health of the American public.
Lung disease is a significant health problem in the U.S. Lung
disease is the third leading cause of death in the U.S.--responsible
for one in every seven deaths. More that 25 million Americans suffer
from a chronic lung disease. Lung diseases cost the U.S. economy an
estimated $89.1 billion annually. Lung disease represent a spectrum of
chronic and acute conditions that interfere with the lung's ability to
extract oxygen from the atmosphere, protect against environmental and
biological assaults, and regulate a number of vital metabolic
processes. Lung diseases include: chronic obstructive pulmonary disease
(COPD--which includes emphysema and chronic bronchitis) lung cancer,
tuberculosis, pneumonia, influenza, sleep-disordered breathing,
pediatric lung diseases, occupational lung diseases, sarcoidosis,
asthma and acute lung injury.
Nearly all lung diseases are impacted by air pollution. How well or
poorly our lungs perform is contingent on the quality of air around us,
making the impact of air pollution inescapable. Air pollution remains a
primary contributor to a high prevalence of respiratory diseases.
For nearly 40 years, the American Thoracic Society and the American
Lung Association have conducted scientific, public health and
educational programs to fight air pollution and to improve the quality
of the air we breathe. We remain strong supporters of the Clean Air Act
and its amendments. We can attest to the significant impact that the
Clean Air Act has had in improving the quality of our nation's air.
However, much remains to be done. It is estimated that millions
American's live in counties that do not meet current Clean Air Act
health-standards, including our nation's Capitol. The American Lung
Association State of the Air 2001 report estimates that 141 million
Americans live in areas that expose them to unsafe levels of ozone.
Millions live in areas that experience unsafe levels of particulate air
pollution.
Research has shown that air pollution is causing the premature
death of literally thousands of people due to complications from
exposure to air pollution.
environmental protection agency
Federal Enforcement Funding
The ATS and the ALA are extremely concerned that the Administration
has proposed dramatic reductions in EPA federal enforcement budget. We
are extremely concerned that the proposed reductions in the federal
enforcement program are a calculated attempt to weaken enforcement
efforts of the Clean Air Act. Without strong federal leadership in the
EPA enforcement, increases in funding for State, Tribal and local
government enforcement efforts will ineffective and will ultimately
erode recent gains in the quality of our nations air.
The American Thoracic Society and the American Lung Association
strongly encourage the Subcommittee to reject the Administration's
proposed cuts to EPA Clean Air federal enforcement budget.
NAAQS Research
The American Thoracic Society and the American Lung Association
strongly supports the EPA National Ambient Air Quality Standards
(NAAQS) research program. The NAAQS research program provides value
information the health effects of exposure to polluted air. The NAAQS
also helps develop the monitoring and pollution control technology that
will ultimately lead to cleaner air of all of America.
The American Thoracic Society and the American Lung Association
recommend a $50 million increase in the EPA NAAQS research program.
Fine Particulate Matter and Ozone
Recent studies have confirmed the significant adverse impact that
existing levels of smog and fine particles have on health. Two recent
studies have made clear the need to proceed with enforcement of the
health-based Clean Air standard established 1997. A study published in
the February 2, 2002 issue of Lancet showed a relationship between
exposure to high levels of ozone and the development of asthma in
children.\1\ A second study published in the March 6, 2002 edition of
the Journal of the American Medical Association establishes a
correlation between exposure to fine particulate air pollution and
increased mortality from lung cancer and cardiopulmonary diseases.\2\
Despite the growing body of evident that air pollution plays a direct
role in causing lung disease, the EPA has yet to implement the new more
protective standards finalized in July 1997.
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\1\ R. McConnell et. al, Asthma in Exercising Children Exposed to
Ozone: A Cohort Study, Lancet, Feb. 2, 2002, p.386-391.
\2\ C. Pope, et.al., Lung Caner, Cardiopulmonary Mortality, and
Lung-term Exposure to Fine Particulate Air Pollution, JAMA, March 6,
2002, p. 1132-1141.
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The American Thoracic Society and the American Lung Association
urge the Subcommittee to oppose any amendments, which would impair the
expeditious implementation and enforcement of these standards.
New Source Review
We are extremely concerned about the Administration initiatives to
weaken the Clean Air Act and undermine the enforcement of the law. In
particular, we are concerned about the effort to undercut the Clean Air
Act's New Source Review Program. New Source Review (NSR) is a simple
concept, made extremely complicated by those who want to avoid
complying with the law. Simply stated, the NSR program requires
facilities that undergo modification that significantly increase
emissions, to install pollution control equipment. If the facility does
not increase pollution, NSR does not apply. Do not buy the rhetoric.
This program only applies when pollution increases. The NSR program is
reducing pollution that is saving lives this year and every year.
Legislative proposals promising greater air pollution reductions are no
substitute for NSR. Such proposals must be implemented in concert with
NSR, just as the current acid rain reduction program is. The public
demands cleaner air and this program provides substantial public health
benefits.
The American Thoracic Society and American Lung Association urge
the Subcommittee to resist efforts by the Administration to weaken the
implementation or enforcement of the EPA New Source Review program.
Tier 2 and Heavy Duty Vehicles Standards
In 1999 the Environmental Protection Agency established new
tailpipe and gasoline standards for cars, light trucks, minivans and
SUVs. The EPA also established new limits on sulfur in gasoline. When
fully implemented, this program would be the equivalent of taking 164
million cars off the road. EPA calculates that the final rule will
prevent as many as 4,300 deaths, more than 10,000 cases of chronic and
acute bronchitis, and tens of thousands respiratory problems a year.
In 2000, EPA established new emission standards for heavy-duty
vehicles and diesel fuel. These standard provide dramatic pollution
reduction from heavy-duty vehicles. As a result of this program, each
new truck and bus will be more than 90 percent cleaner than current
models. The clean air impact of this program will be dramatic when
fully implemented. This program will provide annual emission reductions
equivalent to removing the pollution from more than 90 percent of
today's trucks and buses, or about 13 million trucks and buses.
The American Thoracic Society and the American Lung Association
encourage the Subcommittee to provide EPA the resources necessary to
proceed with implementation and enforcement of the Tier 2 and Heavy-
Duty Vehicle Standards.
va medical and prosthetic research program
The ATS/ALA recommends $460 million for the VA medical and
prosthetic research program for fiscal year 2003. The fiscal year 2003
2003 recommendations build on the $20 million increase provided for the
current year. The Administration's fiscal year 2003 budget request for
a $38 million (10 percent) increase in research program dollars is
notable for being the first time in many years that an administration
has proposed funding sufficient to maintain VA's current level of
effort in advancing treatments for conditions particularly prevalent in
the veteran population including prostate chronic obstructive lung
disease (COPD) lung cancer, pneumonia and other pulmonary related
diseases that impact the America's veterans. We applaud the
Administration and Department of Veterans Affairs Secretary Anthony J.
Principi for recognizing the invaluable contribution VA research makes
to delivering high quality care for veterans and toward improving the
health of veterans and the nation.
The American Thoracic Society and the American Lung Association
recommend the Subcommittee provide at least 4460 million for the VA
medical and prosthetic research program.
Please note that the Administration's budget request for a $38
million increase for VA research includes a shift from OPM to VA of $15
million in accrued government health and retirement benefit funds.
Consequently, the Administration's budget proposes a $23 million (6
percent) increase in research program funds plus $15 million in federal
employee benefit expenses previously paid by an OPM account, for a
total increase of $38 million (10 percent) over current year funding of
$371 million. We strongly recommend that the entire $38 million
increase be allocated to VA research's programmatic needs and that
accrued benefits continue to be paid out of the OPM trust fund.
However, even a $38 million increase would not allow VA to address
all of the opportunities it has to improve care for veterans, nor to
meet the new challenges presented by the tragedies of September 11 and
subsequent events. We strongly encourage the VA-HUD Subcommittee to
recommend an fiscal year 2003 appropriation of at least $460 million
for the VA medical and prosthetics research program. This represents
growth in program dollars of $89 million (24 percent).
Four core needs justify the ATS/ALA recommendation of $460 million:
Investments in investigator-initiated research projects at the VA
have led to an explosion of knowledge that promises to advance our
knowledge of disease and unlock new strategies for prevention,
treatment and cures. Attachment 1 is a list of just a few of VA's
recent achievements and initiatives. However, many health challenges
still confront the veteran community. Additional funding is needed to
take advantage of the burgeoning scientific opportunities and to
improve quality of life for our nation's veterans as well as the
general public. We urge the Committee to support additional funding for
the following research priority areas identified by the VA for fiscal
year 2003:
--Special Populations.--VA would expand research in quality of care,
community access and restoration of function to achieve greater
understanding of existing racial, ethnic and gender disparities
in health care.
--Micro Technology.--In the area of low vision, work in retinal
prostheses is an emerging science and may restore sight lost as
a result of a variety of disorders including age-related
macular degeneration and retinal pigmentosa.
--Patient Outcomes in Rehabilitative Care.--Specific areas of
emphasis include long-term care strategies to enhance patients'
independence and activities of daily life, consequences of
community reintegration and the impact of assistive technology
on quality and functionality of life.
--Chronic Disease Management.--VA is proposing two major initiatives
in comparing clinical efficacy of (1) vascular surgery
conducted on and off cardiopulmonary bypass machines, and (2)
open versus endovascular surgery for abdominal aortic
aneurysms. The ATS/ALA are working with the VA to expand the
Chronic Disease Management concept to include COPD--a major
cause of morbidity and morality in the veteran's population.
The complexity of research combined with biomedical research
inflation has increased the costs of research. The average cost of each
VA research project is now $150,000, a 9 percent increase in just 2
years. As a result, VA requires an increase of at least $15 million
just to maintain a stable number of programs.
In response to the events of September 11, VA seeks to establish a
research portfolio to address the threats of bio-terrorism. This
objective is consistent with VA's statutory obligation to provide
medical back-up services in times of national emergencies. VA has an
established history of research accomplishments in the areas of
infectious diseases and immunology, including vaccine development. The
laboratories of VA research scientists are disseminated nationwide, and
are affiliated with top-flight universities. VA research provides a
unique national resource that can be readily adapted and quickly
mobilized in response to diverse biological threats.
To meet this emerging challenge, consistent with H.R. 3253, the
National Medical Emergency Medical Preparedness Act of 2001, we
strongly support VA's proposal to establish four new centers of
research excellence focusing on fundamental issues critical for
responding to chemical, biological and radiological threats to public
safety. The targeted research portfolio would include pathogen
detection, disease diagnosis and treatment, protection, and vaccine
development. The mission of these centers would also encompass the
evaluation and management of illnesses consequent to military service,
especially in our current conflict.
VA's career development programs are a national resource for
training the next generation of clinician scientists, those doctors who
treat patients and address questions that have a direct impact on
patient care. Additional funding is needed to expand this program in
order to address the growing national shortage of clinician-
investigators.
In 1997, NIH conducted site visits of six VA research facilities
and concluded that, ``VA has had increasing difficulty in providing
sufficient resources via its congressional appropriation to
satisfactorily fund the infrastructure necessary to support research at
the VAMCs.'' It is our understanding that VA has made no significant,
centrally administered investment in its existing research facilities
since this finding. Ventilation, electrical supply and plumbing appear
frequently on lists of needed upgrades along with space
reconfiguration. Substandard facilities make VA a less attractive
partner in research collaborations with affiliated universities; reduce
VA's ability to leverage the R&D appropriation with other federal and
private sector funding; and make it difficult to attract cutting edge
researchers, both clinician investigators and laboratory scientists, to
careers in VA. Facility R&D Committees regularly disapprove projects
for funding consideration because the facility does not have the
necessary infrastructure and has little prospect of acquiring it.
Under the current system, research must compete with other medical
facility and clinical needs for basic infrastructure and physical plant
support. Unfortunately, the minor construction appropriation is
chronically inadequate to meet facility needs for clinical improvements
much less research upgrades, and year after year the list of urgently
needed research repairs and upgrades grows longer. VA has identified 18
sites in urgent need of minor construction funding to upgrade their
research facilities. These sites plus the many facilities with smaller,
but no less important needs, provide more than sufficient justification
for an appropriation of $45 million specifically for research facility
improvements.
We recommend that a new funding mechanism, such as a minor
construction appropriation specifically for research facilities, be
developed to provide a permanent, steady stream of resources dedicated
to upgrading and renovating existing research facilities. State-of-the-
art research requires state-of-the-art facilities.
Separate from its recommendations for the VA research
appropriation, ATS/ALA strongly encourage the Committee to address the
increasingly urgent need for improvements in VA's research facilities
by providing $45 million to address research facility improvements.
The America Thoracic Society and the America Lung Association thank
the Committee for consideration of its views. We look forward to
working with the Subcommittee to further promote and protect the health
of the American public.
______
Prepared Statement the American Psychological Society
Madam Chair, Members of the Committee: Thank you for this
opportunity to present the views of the American Psychological Society
(APS) on the fiscal year 2003 appropriations of the National Science
Foundation (NSF). I am Alan Kraut, Executive Director of APS. We are a
15,000-member organization of scientists and academics, most of whom
are located in colleges and universities across the country. Many
members of the American Psychological Society are supported by the NSF,
and much basic research in our field could not exist without NSF
funding.
APS strongly supports the Coalition for National Science Funding's
recommendation of $5.5 billion for the National Science Foundation in
fiscal year 2003. This would be a 14.7 percent increase over fiscal
year 2002.
Both Congress and the Administration have expressed a high degree
of confidence in NSF's mission and its efficient management of
resources. As the only government agency to receive a ``green light''
rating from the Office of Management and Budget (OMB) for financial
management in the President's budget, NSF has proven that this would be
an investment that pays off for Congress and America. OMB's praise did
not end there--its director, Mitch Daniels, added last November that
``The National Science Foundation is one of the true centers of
excellence in this government It has supported eight of the 12 most
recent Nobel Prize awards earned by Americans at some point in their
careers. Programs like these. . . deserve to be singled out, deserve to
be fortified and strengthened.''
More recently, the House Budget Committee proposed an increase of
11 percent for NSF in the fiscal year 2003 budget resolution passed on
March 13th. Chairman Boehlert's assessment, that ``the federal
investment in science and technology is absolutely vital to our
nation's economic stability and national security,'' could not be more
accurate. However, it should be noted that $76 million of this increase
is due to the transfer into NSF of three programs formerly operated run
by other agencies.
The increase that you and your colleagues in the Senate provided
for NSF in fiscal year 2002, and the increase that we are recommending
in fiscal year 2003, are important steps in offsetting the comparative
under-funding that has characterized NSF's budget in the past several
years. The scientific community is grateful for your support and it is
our hope that you will continue to approve the much-needed expansion of
NSF's budget.
Within the NSF budget, we ask the Committee to continue its history
of support for behavioral and social science research at NSF. This
Committee was instrumental in encouraging NSF to establish its Social,
Behavioral, and Economic Sciences (SBE) Directorate a decade ago, and
over the years has encouraged many of the initiatives coming out of
that directorate. The fiscal year 2003 budget request to Congress
contains a 15.9 percent increase for SBE as a whole, and an 11.6
percent increase in the Behavioral and Cognitive Science program.
These increases reflect the high regard in which NSF holds these
fields. For the first time at NSF, the budget calls for funding of a
Foundation-wide priority area in the Social, Behavioral and Economic
Sciences, which will explore the complex interactions between society
and technology. NSF's budget recommendation calls for $10 million in
``seed money'', with this goal in mind: for our society to take greater
advantage of the technology available to it, and to prepare for further
advances. There will be an emphasis on studies of decision-making,
cognition, and learning. The money is there, and the time is now.
Before addressing specific activities of the SBE directorate, I
first want to provide a brief overview of basic psychological research,
to give you an idea of the scope and breadth of the field that I
represent.
An Overview of Basic Psychological Research: Programs and
initiatives that involve psychological science are our best chance to
solve the enigma that has perplexed us for so long: How does the human
mind work and develop? APS members include thousands of scientists who
conduct basic research in areas such as learning, cognition, and
memory, and the linked mechanisms of how we process information through
visual and auditory perception. Others study decision-making and
judgment; mathematical reasoning; language development; the
developmental origins of behavior; and the impact of individual,
environmental and social factors in behavior. The basic psychological
research conducted by APS members has implications for a wide range of
applications, including designing technology that incorporates the
perceptual and cognitive functioning of humans; teaching math to
children; improving learning through the use of technology; developing
more effective hearing aids and speech recognition machines; increasing
workforce productivity; and ameliorating social problems such as
prejudice or violence. While this is a diverse range of topics, all of
these areas of research are bound together by a simple notion: that
understanding the human mind, brain, and behavior is crucial to
maximizing human potential. That places these pursuits squarely at the
forefront of several of the most pressing issues facing the Nation,
this Congress, and the Administration.
Progress and investments in psychological science will not simply
lead us to a better understanding of how humans think, decide,
evaluate, and adapt. It will lead us to revolutionary advances in our
powers to predict, detect, and prevent. In this time of uncertainty,
where we can come to rely so heavily on technology to keep us safe and
confident, we must turn to cognition in order to maximize this
technology. An understanding of how people process information will
enable us to design technology and computers that fit our needs and
make us comfortable when using them. The potential for advances would
be limitless.
Turning now to the SBE Directorate, I'd like to highlight some of
its programs, specifically those cognitive neuroscience, and those in
child development. These initiatives exemplify SBE's essential
leadership on the cutting-edge frontiers of research, and they
illustrate the important work that will only flourish if funded to the
levels that they deserve.
NSF's Cognitive Neuroscience Initiative.--Basic behavioral science
supported by SBE traditionally has included research in cognition,
perception, language, development, emotion/affect, and social
psychology. These have been funded primarily through its Division of
Behavioral and Cognitive Sciences. Theoretical work in behavioral
science has greatly advanced our understanding of the basic mechanisms
underlying memory, emotion, learning, and other psychological and
cognitive processes. Recognizing the potential contributions of
neuroscience to these and related areas, the directorate has added
funds to these programs for the express purpose of bringing more
neuroscience perspectives to bear on these topics to map these
psychological mechanisms onto the physical dimensions of the brain.
NSF, with the right support, will have the ability to link advances
in human thought and behavior to the natural and social sciences. Now,
with brain imaging and other non-invasive techniques, we are poised to
confirm and extend these theories through studies of the living brain.
Scientists from a range of areas will be able to test theories about
normal brain functioning; assess the behavioral consequences of brain
damage; and reach new levels of understanding of how the brain develops
and matures, in terms of both structure and function. NSF is currently
seeking highly innovative, interdisciplinary proposals aimed at
advancing the understanding of how the brain supports thought,
perception, action, social process, and other aspects of behavior.
One final point on this topic: Investment in new technologies is no
longer the sole domain of the physical sciences. A stable, long-term
commitment to the study and development of new technology ensures
continued advances in all fields, including our own discipline of
psychological science, which is part of the broader behavioral and
social science research enterprise. Emerging fields, such as behavioral
genetics and cognitive neuroscience--which employ the latest in imaging
and computing technology to unlock the mysteries of the mind and the
origins of behavior--are examples of where gains in technology are
necessary if we are to see a return on our investment in science. In
addition, addressing human factors in the design of technology is
essential; advances in technology would be severely undermined unless
we incorporate what we know about perception, learning and memory, and
other behavior-based processes that people draw on in using technology.
Advances in science and technology will not only make the U.S. a world
leader in many arenas, but will also contribute to better homeland
security and a stronger economy.
NSF's Children's Research Initiative.--Recognizing that a
combination of perspectives--cognitive, psychological, social, and
neural--is needed to fully understand how children develop and how they
acquire and use knowledge and skills, the SBE directorate will support
new interdisciplinary research centers that will focus primarily on
integrating traditionally disparate research disciplines concerned with
child development. Known as the Children's Research Initiative (CRI),
this program will bring together such areas as cognitive development,
cognitive science, developmental psychology, linguistics, neuroscience,
anthropology, social psychology, sociology, family studies, cross-
cultural research, and environmental psychology, to name only some of
the relevant disciplines. Basic researchers from these areas will focus
on problems that cannot be solved through single investigator studies.
This initiative aims to enhance the content knowledge of the fields
involved; build an intellectual infrastructure within and among
disciplines; and build a program of research in relevant aspects of
developmental, learning, and human sciences.
One of the CRI's four research centers is the one led by principal
investigator and psychology researcher Stephen J. Ceci, of Cornell
University. The Cornell Institute for Research on Children will conduct
rigorous multi-disciplinary research on issues of significance to
children and their families. Specifically, the center will commission
national teams of the nation's most distinguished developmental
scientists to study policy relevant questions, and to create a
consensus position for dissemination to the public. Ultimately, this
project will place science-based information in the hands of Congress
and other policymakers.
The two initiatives I just described are in the Division of
Behavioral and Cognitive Science. SBE's other main component, the
Division of Social and Economic Sciences, also supports a substantial
amount of basic psychological science. Examples of research topics
being addressed in that division include: human dimensions of global
change, group and individual decision making, risk management, and
human factors. Research in these areas has the potential to increase
employee and organizational productivity, improve decision making in
critical military or civilian emergency situations, and inform the
public policymaking processes across a range of areas.
The Science of Learning.--How people think, learn and remember is a
core area of interest at NSF. Known as the science of learning, this
field draws from a variety of research topics across psychology, such
as brain and behavior, learning, memory, perception, social psychology,
and development. The basic challenge for both the science and education
communities is this: How can we apply and extend our knowledge of how
people think, learn and remember to improve education?
NSF's program has two broad goals: improving our understanding of
the learning process, and then transferring that understanding into
application. We have the knowledge base and a critical mass of top-
flight scientists to help solve the educational and learning issues
that have been identified by the government as high priorities. But
getting that knowledge into the classroom is going to require a multi-
disciplinary, multi-agency effort. This will be facilitated via
investigations in human-computer interactions, cognitive psychology,
cognitive neuroscience, and other activity related to child learning
and cognitive development. Through the establishment of three or four
multi-disciplinary Science of Learning Centers, NSF will for the first
time attempt to focus the full range of science and research onto a
scientific workforce objective. These centers will also provide a
research base for the President's Math and Science Partnership.
I'm pleased to report to the Committee that two recent editions of
the APS journal Psychological Science in the Public Interest (PSPI) are
excellent examples of how psychological science can be used to enhance
the education of our children. One of three scientific journals we
publish, PSPI presents reports modeled after those generated by the
National Academy of Sciences. Developed by panels of distinguished
scientists, our reports focus on issues where psychological science can
contribute to our understanding of topics of national importance, such
as education and education research.
The May 2001 issue of PSPI, entitled ``Does Class Size Matter,''
describes what we know about the effects of class size on children's
learning. Of all the ideas for improving education, few are as simple
or attractive as reducing the number of pupils per teacher. With its
uncomplicated appeal, class-size reduction has lately gone from being a
subject of primarily academic interest to a policy juggernaut. In the
United States, more than 20 states and the federal government have
adopted policies aimed at decreasing class sizes, and billions of
dollars have been spent or committed in the past few years. But those
policies are based on anecdotal assumptions. The research summarized in
this report indicates that class size alone is not the only determinant
of effective learning.
Similarly, in the November 2001 issue of PSPI, ``How Psychological
Science Informs the Teaching of Reading,'' the authors examine
research, theory, and practice relevant to how children learn to read
English, summarizing research from developmental psychology on
children's language competency when they enter school and on the nature
of early reading development. Two inescapable conclusions emerged: (a)
Mastering the alphabetic principle (Phonics) is essential to becoming
proficient in the skill of reading, and (b) methods that teach this
principle are more effective than those that do not. Using whole-
language activities to supplement phonics for instruction does help to
make reading fun and meaningful for children, but ultimately, phonics
instruction is critically important because it helps beginning readers
understand the alphabetic principle and learn new words. Thus,
elementary-school teachers who make the alphabetic principle explicit
are most effective in helping their students become skilled,
independent readers. I'm pleased to provide copies of these reports to
the Committee. In addition, they are available online at our website:
www.psychologicalscience.org/journals. You should also know that NSF
has supported the development and dissemination of PSPI.
These are just two examples among a range of others that illustrate
how important the science of learning is when it comes to getting the
most out of education. We ask this Committee to monitor and support
NSF's efforts to bring the science of learning to bear on the nation's
educational needs. Congress has demonstrated that it understands the
importance of education research by introducing such legislation as HR
3801, which will provide for education research, and HR 3130, the
Technology Talent Bill. The expanded budget we recommend for fiscal
year 2003 will allow NSF to capitalize on the growing momentum
surrounding this issue both at NSF and in the field. Last year,
Congress passed the historic ESEA, promising to leave no child behind.
Using the science of learning and education research to develop
education will make sure that none are.
In closing, I want to note that building and sustaining the
capacity for innovation and discovery in the behavioral and social
sciences is a core goal of the National Science Foundation. We ask that
you encourage NSF's efforts in these areas, not just those activities
I've described here, but the full range of activities supported by the
SBE directorate and by NSF at large. Your support in fiscal year 2003
will help NSF lay the groundwork for this long-overdue emphasis on
these sciences.
Thank you again for the opportunity to appear before you to present
our recommendations. I would be pleased to answer questions or provide
additional information.
______
Prepared Statement of the Association of American Universities
Madam Chair and Members of the Subcommittee: My name is Nils
Hasselmo and I am president of the Association of American Universities
(AAU), which includes 63 of North America's most prominent public and
private research universities. These universities are among the main
recipients of research and education grants provided by the National
Science Foundation (NSF) and the National Aeronautics and Space
Administration (NASA).
While policymakers disagree over precisely the right mix of fiscal
and monetary policy to ensure a continuation of our nation's
prosperity, many now recognize that continued investment in basic
scientific research and in the people who do this research is an
essential catalyst for progress. A study released last year by the
prestigious Council on Competitiveness, which includes some of our
nation's leading chief executives in industry and academia, called for
an increasing commitment to innovation, particularly to Federal
investments in research and development funding. The study said these
investments were necessary ``just to maintain the position of the
United States, much less improve in relative terms.''
Basic research in each field of science expands the knowledge base
in that field and, increasingly, creates new opportunities and raises
new questions that can only be addressed by interdisciplinary research.
Thus, a thriving research base in many scientific disciplines is
important to the vitality of them all: research advances in the
physical sciences, mathematics and engineering are increasingly
interdependent. There is also growing interdependence between these
disciplines and the biological and medical sciences. Medical
technologies such as magnetic resonance imagery, ultrasound, and
genomic mapping could not have occurred without underlying knowledge in
biology, physics, mathematics, chemistry and engineering. Continuing
significant medical advances in our lifetime will require concomitant
advances in other sciences.
national science foundation
The National Science Foundation (NSF) is at the heart of the
Federal investment in basic scientific research. Since its founding in
1950, NSF has had an extraordinary impact on American scientific
discovery. Despite its small size, it is the only Federal agency with
responsibility for research and education in all major scientific and
engineering fields.
NSF is also widely recognized for excellence in the management of
Federal funds. Approximately 95 percent of the agency's total budget
goes directly to support the actual conduct of research and education,
while less than five percent is spent on administration and management
at NSF. NSF was the only agency in the entire Federal government to
receive a ``green light'' for Financial Management in a review
utilizing the ``traffic light'' grading system by the Treasury
Department, General Accounting Office and Office of Management and
Budget. The review was published in the Administration's fiscal year
2003 budget request. All other agencies were graded either with
``yellow'' or ``red'' lights.
Two years ago, congressmen and senators from both parties began to
pursue the objective of doubling the budget of NSF from its funding
level in fiscal year 2000 ($3.9 billion) to approximately $8 billion by
2005. This process began in the fiscal year 2001 appropriation with the
largest increase that Congress has provided NSF in a single year an
increase of $519 million, or 13.3 percent, over the fiscal year 2000
level. Last year, although President Bush had requested an increase of
only one percent for the Foundation above the fiscal year 2001
appropriation, the Congress provided an increase of $374 million, or
8.5 percent. You and Senator Bond played a critical role in securing
these increases, Madam Chair, and the university community is
enormously grateful for your support. This year, we believe it is
critical not to lose the opportunity to build on this strong start, and
we strongly hope the fiscal year 2003 appropriation will continue this
effort.
The Administration has requested $5.036 billion for NSF in the
fiscal year 2003 NSF budget request. AAU recommends $5.508 billion, an
increase of $718 million (or 15 percent) above the fiscal year 2002
appropriation. We suggest that the additional funds, above the fiscal
year 2002 appropriation, should be devoted to achieving the following
objectives:
Advance core programs for research and education.--Presently, 13
percent of highly rated proposals to NSF are not funded because of
inadequate resources. High quality NSF research contributes to the
development of new knowledge and the preparation of the next generation
of scientists and engineers. NSF education programs contribute to
improved student learning at all levels in science, engineering and
mathematics. The proposed increase would provide $220 million to enable
more highly rated proposals to be funded and to strengthen NSF's
important education programs.
Continue supporting key initiatives.--Nanotechnology;
biocomplexity; information technology research; workforce development
(including math and science partnerships); mathematics research; and
social and behavioral sciences have all been identified as fields ripe
for advances. An increase of $220 million would continue progress in
these critical areas.
Increase grant size and duration.--The average NSF grant in the
year 2001 was for $93,000 and lasted for just under three years. By
comparison, the average NIH grant in 2000 was for $338,000 and lasted
for just over four years. Increasing the size and time period of grants
will enable researchers to concentrate on discovery rather than
paperwork. Of the proposed increase, $135 million would be devoted to
increasing grant size and duration.
Add funding for Major Research Equipment and Facilities
Construction and Major Research Instrumentation.--Several proposals are
pending for large-scale research resources that would provide benefits
not only to the institution or region where the research project is
located, but also to researchers throughout the United States and the
world. An increase of $50 million to the Major Research Equipment and
Facilities Construction program would hasten progress on these
important capital projects. In fiscal year 2001, the NSF Major Research
Instrumentation program awarded $75 million, but many worthy
applications could not be funded. NSF could easily and quickly award an
additional $50 million for needed research instrumentation in fiscal
year 2003. If additional funds were made available, this equipment
(virtually all of which is supplied by American companies) could be
purchased rapidly from American vendors. Not only would these purchases
advance important scientific research goals, but they would also
benefit the domestic economy.
Assist with Homeland Security and anti-terrorism efforts.--The
September 11 calamity has greatly increased recognition of the role of
science and engineering in preventing and/or mitigating future
disasters. Working closely with other Federal agencies, NSF can enhance
support for groundbreaking research into information security,
detection of airborne hazards, structural studies to improve building
safety, psychological effects of living with terrorism, wireless
communications, and a broad range of other relevant issues. Of the
proposed increase, $25 million would support grants in critical areas
related to the War on Terrorism.
Increase graduate student stipends.--Providing better compensation
to graduate students will attract more qualified Americans to science
and engineering careers, thereby addressing long-term workforce needs.
With an additional $23 million above the fiscal year 2002
appropriation, NSF can increase these stipends from $21,500 per year in
fiscal year 2002 to $25,000 in fiscal year 2003.
international traffic in arms regulation (itar)
Universities engaged in space science research have been concerned
over the past 2 years by Executive Branch and space contractors
interpretations of the International Traffic in Arms Regulation (ITAR)
that place increasingly strict restrictions on unclassified, civilian
research collaborations with foreign-born scientists. Science is an
international activity, and space science, in particular, has thrived
through such interactions. Indeed, Congress has encouraged such
partnerships in the past. Although we recognize that security
considerations have changed dramatically since September 11, we
continue to believe that scientists carrying out unclassified research
on civilian spacecraft do not pose a threat to national security.
In both the fiscal year 2001 and fiscal year 2002 conference
reports, the VA-HUD-Independent Agencies Appropriations Subcommittees
directed the Office of Science and Technology Policy (OSTP) to work
jointly with other government agencies, including the National Security
Council, NASA, and the State Department, to expeditiously issue
clarification of ITAR in order to allow important university
collaborations and personnel exchanges to continue. A report was issued
on March 18, and while we have not yet had time to determine whether
this will adequately address the universities' concerns, we appreciate
the Subcommittee's support in this area.
national aeronautics and space administration
Both the current and former NASA Administrators have publicly
expressed concern on NASA's ability to continue to attract and retain
qualified scientists and engineers. Within the next 5 years, one third
of NASA's workforce will be eligible for retirement. At the same time,
the pipeline of the next generation of space scientists and engineers
is declining. The consequence could be an inability to ensure success
in any challenging future NASA program. In some fields the problem is
acute, with the major scientists all in their sixties, and limited
enrollments of graduate students to follow them. In other areas, there
is expected growth major new initiatives to be undertaken and yet no
certainty that the required educated workforce will be available.
The workforce problem is seen in another area as well. Over the
last decade there has been a growing recognition of the need for
infusion of new technology to execute the space program, and
considerable funds to pursue this new technology have been applied. And
yet new and better technology is only one part of the problem. Unless
there is an adequate workforce that is well trained, with imagination
and vigor, the space program cannot succeed. However, NASA's investment
in producing the required workforce has been minimal.
The nation's security also depends on a space program, both for
surveillance and active defense, and the economic impact of space
communications and remote sensing is large. An educated workforce can
be seamlessly applied to any and all space applications, for defense or
for economic growth. Undergraduate education is often not sufficient,
however. Graduate education, at the Master's and Doctoral level is
required, and for the graduate training to be most effective, the
students must participate in forefront research during their graduate
studies.
At the inception of the space program, NASA recognized that the
talent necessary to pursue the science and engineering for the space
program resided in the universities, and that in universities the
required future workforce would be developed. NASA invested heavily, in
infrastructure and capabilities, in research and education, and
virtually every success that the nation has enjoyed in space can be
traced back to this investment. This includes scientific discoveries,
new instrumentation, or simply the graduate student support that
allowed individuals who have devoted their careers to the pursuit of
space to be trained.
These initial investments have run their course. The current aging
workforce benefited greatly from it, as did the nation, but it is time
for a new generation to be developed. It is time to invest again in the
capabilities of the nation's universities to pursue forefront research,
to have faculty who are leaders in space science and engineering, to
have students who are well- supported, well-trained, and determined to
continue this nation's exploration and utilization of space.
The Administration has requested $8.918 billion for NASA's Science,
Aeronautics and Technology (SA&T) account in fiscal year 2003. The AAU
recommends $9.054 billion for these activities. Within the SA&T
account, the following items are of particular interest to research
universities.
Space Science.--AAU supports the Administration's request of
$3,428.3 billion for the Office of Space Science (OSS). This represents
a 19 percent increase over fiscal year 2002, although since $210
million of this is due to the transfer of the Deep Space Network to
OSS, the net increase is 11.7 percent. Space science missions produce
basic knowledge about our environment, the solar system, and the
universe. This information gives us a deeper understanding of the
history and condition of our world that enables us to make better
decisions about how to sustain and improve it.
The most substantial proposed changes in NASA's budget concern
planetary exploration. The Administration has proposed an unprecedented
long-term plan for planetary science and exploration. For the first
time in a decade, the budget provides a real, albeit small, increase in
Research and Analysis funds. This line has long been a priority of the
space science community. The request also maintains a vigorous program
to explore Mars, adds a line (New Frontiers) for moderate-size
missions, and supports the development of nuclear power and propulsion
technologies to allow longer-lived landers and more capable space
missions. The Explorer and Discovery programs, both of which have
strong university components, would receive increases as well. We
applaud these developments that augur well for future solar system
exploration.
The New Frontiers activity will be competitively selected and,
according to current guidelines, are restricted to missions concerned
with origins and the outer solar system. We appreciate the focus on
competitive selection but suggest that the scientific priorities being
established by the ongoing National Research Council planetary decadal
survey be used to guide selections. This program will re-invigorate our
exploration of the solar system.
The development of nuclear capabilities should revolutionize the
type of planetary missions that can be flown a decade hence. We are
enthusiastic about this revitalization and believe that the support of
other technologies may also yield significant benefits to the planetary
program. We caution that these improvements, however, will not be
available for a decade or more.
Biological and Physical Research.--Last year, significant cost
overruns were identified in the International Space Station (ISS). In a
report released last November, the ISS Management and Cost Evaluation
Task Force reaffirmed the importance of research as a primary rationale
for the ISS and emphasized the indispensable role of the ISS life
science centrifuge facility.
The quality of the ISS research facilities is a crucial factor in
determining the value of its scientific program. There is already a
queue of over one hundred flight investigations waiting their turn for
access to these on-orbit facilities. These investigations encompass
five disciplines in the physical sciences in addition to biological and
biomedical research. Although NASA emphasizes the biomedical research
associated with crew health maintenance and preservation, a large
number of investigations address cutting-edge scientific problems of
fundamental importance, but also with direct application to Earth-based
technological, industrial, and health issues. Advances in the
scientific understanding of these issues can be significantly advanced
through low-gravity experiments.
Ground-based research is also essential for developing the
knowledge base and for validating experimental approaches for
spaceflight experiments. NASA currently funds approximately five
ground-based investigations for each flight investigation, and hopes to
eventually reach an eight to ten-to-one ratio to guarantee that the
highest quality research goes on for further testing on a flight
platform.
NASA's Office of Biological and Physical Research (OBPR) currently
provides multi-year grant support to approximately 450 investigators.
Last year, OBPR received roughly 430 investigator-initiated grant
applications. Of this amount, over one-third were judged as meritorious
and worthy of funding by the peer-review system. However, due to budget
constraints, less than 20 percent of the submitted proposals were
funded. Increased funding for OBPR extramural research would permit
grants to be funded at higher levels for longer periods of time and
would allow a second review cycle to be added. AAU recommends an
increase of $100 million to enhance these research opportunities.
AAU also recommends that the National Space Biomedical Research
Institute receive $25 million in fiscal year 2003, a $2.5 million
increase over fiscal year 2002. These two recommended augmentations to
the budget would increase overall funding for OBPR to $953.8 million.
Earth Science.--AAU urges that the Earth Science Enterprise (ESE)
receive an increase equal to inflation. The Administration requested
$1.64 billion, which is $14 million, or 0.9 percent below the fiscal
year 2002 level. A 2 percent inflationary increase would be $29.5
million, raising the total for the office to $1.67 billion. ESE is in
the midst of deployment of the Earth Observing System (EOS), a set of
spacecraft and associated interdisciplinary science investigations to
initiate a long-term data set of key parameters required for the study
of global climate change. A number of academic institutions and other
partners are also working with ESE to develop the next generation of
new instruments and smaller, more capable spacecraft. Increased funding
would help achieve these goals.
Space Grant.--The Space Grant College system continues to play an
important and successful role in workforce development through its
university programs and its K-12 outreach. Its matching funds result in
a highly leveraged program. AAU urges Congress to fund the Space Grant
program at its authorized level of $28 million. The Administration has
requested $19.1 million for this program in fiscal year 2003, while
Congress appropriated $24.1 million for it last year.
Competitive Merit Review.--Finally, NASA's numerous scientific
achievements are due both to the hard work of agency and university
scientists and to the agency's use of merit review for allocating
research funding. We believe that merit review should continue to be
the method NASA uses to allocate research funds, since this system has
helped produce the discoveries and advances from which the nation has
benefited.
Thank you for your attention to these matters, and for the
opportunity to provide this testimony.
______
Prepared Statement of the Association of Minority Health Professions
Schools
Mr. Chairman and members of the subcommittee, thank you for the
opportunity to express the views of the Association of Minority Health
Professions Schools (AMHPS).
I am Dr. John E. Maupin, Jr, President of Meharry Medical College,
and President of the Association of Minority Health Professions
Schools. AMHPS is an organization which represents twelve (12)
historically black health professions schools in the country. Combined,
our institutions have graduated 50 percent of African-American
physicians and dentists, 60 percent of all the nation's African-
American pharmacists, and 75 percent of the African-American
veterinarians.
AMHPS has two major goals (1) to improve the health status of all
Americans, especially African-Americans and other minorities; and (2)
to improve the representation of African-Americans and other minorities
in the health professions. We are working toward achieving this goal by
seeking to strengthen our institutions and fortify other programs
throughout the nation that will improve the role of minorities in the
provision of health care and research.
agency for toxic substances and disease registry
Congress created the Agency for Toxic Substances and Disease
Registry (ATSDR) to implement the health-related sections of law that
protect the public from hazardous wastes and environmental spills of
hazardous substances. The mission of ATSDR is to prevent exposure and
adverse human health effects and diminished quality of life associated
with exposure to hazardous substances from waste sites, unplanned
releases, and other sources of pollution. ATSDR works in partnership
with Environmental Protection Agency, the Centers for Disease Control
and Prevention, and the National Institute of Environmental Health
Sciences to carry out its public health activities.
ATSDR is performing critical work in the field of environmental and
toxicological studies that has a profound impact on public health. In
order to carry out the level of activity that is called for in its
mission statement, AMHPS recommends an appropriation of $85,000,000 for
ATSDR in fiscal year 2002, an increase of $6,765,000 over fiscal year
2002.
the atsdr/amhps cooperative agreement on environmental health and
toxicology research
In 1992, ATSDR identified a need for enhanced information on 38
hazardous substances. Through a cooperative agreement between ATSDR and
the Minority Health Professions Foundation (MHPF), the historically
black health professions schools that I represent are engaged in
research on twelve of these priority hazardous substances. They
include: Lead; Mercury; Benzene; Cadmium; Benzo (a) pyrene;
Flouranthene; Trichlorocthylene; Toluene; Zinc; Manganese; Chlordane;
and Di-n-butylphthalate.
Mr. Chairman, I would like to express my appreciation to the
subcommittee for its support again last year of the ATSDR/MHPF
Cooperative Agreement. The productivity of this research program is
evidenced by the number of publication and scientific presentations
made by the funded investigators. To date, more that 55 manuscripts
reporting the finding of the various research projects have been
published in peer-reviewed and prestigious scientific journals. These
journals include: Brain Research, Neurotoxicology, Journal of
Neurochemistry, and Environmental Health Prospectives.
Moreover, investigators have made more than 120 presentations at
national and international scientific meetings, including the annual
meeting of the Society of Toxicology, the Experimental Biology meeting,
the International Congress of Toxicology meeting, and the International
Society of Psyschoneuropharmacology meeting. Finally, the ATSDR/MHPF
Cooperative Agreement has contributed significantly to the training of
students in toxicology and environmental health. Annually, more than 30
students, both graduate and undergraduate, are actively involved in the
research program.
Mr. Chairman, MHPF and ATSDR are completing 10 years of successful
research. We expect to continue with a new cooperative agreement in
fiscal year 2003, to not only conduct toxicological research, but to
also engage in health services and health disparity research. For
fiscal year 2003, we ask that the subcommittee provide $4 million for
this important research collaboration.
Thank you very much for the opportunity to present the views of the
Association of Minority Health Professions Schools. I would be pleased
to answer any questions that you may have.
______
Prepared Statement of the Aerospace Engineering Division, American
Society of Mechanical Engineers; Aerospace Industries Association;
American Association of Engineering Societies; American Helicopter
Society; American Institute of Aeronautics and Astronautics; American
Society of Civil Engineers; General Aviation Manufacturers Association;
Institute of Electrical and Electronics Engineers-U.S.A.; NASA
Aeronautics Support Team; and NASA Alumni League
In 1947, the American Institute of Biological Sciences was
federally chartered as a non-profit scientific organization to advance
research and education in the biological sciences. Today the American
Institute of Biological Sciences comprises 86 scientific societies with
a collective membership of over 240,000 scientists in disciplines
spanning all of biology--from basic to applied, from molecular to
landscape ecology, from agronomy to zoology. AIBS facilitates
communication and interactions among biologists, biological societies,
and biological disciplines in order to serve and advance the interests
of organismal and integrative biology in the broader scientific
community and other components of society on issues related to
research, education, and public policy.
We appreciate the opportunity to provide testimony on these
important matters. If we may be of further assistance, please do not
hesitate to contact Dr. Adrienne Froelich at the AIBS Public Policy for
further assistance ([email protected] or 202-628-1500 x232).
The need for biological science funding from NSF
Much has been said about the need for more balance in funding
between the various scientific disciplines. At a recent House Science
committee hearing on the future of the NSF budget, several witnesses
presented charts documenting funding in physical sciences and
engineering, as compared to the life sciences. While funding for a
portion of the life sciences, that related to human health, has
steadily increased in recent years due to increased funding for the
NIH, funding for the biology of the natural world has not matched that
pace. The NSF remains the principal federal supporter of academic, non-
medical research in biology and ecology. In the fiscal year 2002
appropriations, most of NSF's research directorates received increases
(over fiscal year 2001 appropriations) greater than 8 percent, except
for the Biology Directorate, which increased by only 4.9 percent from
fiscal year 2001 to $509 million.
In many cases, the link between hot issues like West Nile Virus and
pesticides, and work funded by the biological sciences directorate at
NSF, may not be immediately obvious. For instance, we have seen
ridicule of NSF funding for research into the sexual behavior of
insects, which can lead to the development of non-chemical pest
control. In fact, one of the earliest Golden Fleece awards targeted a
research grant entitled ``The Sexual Behavior of the Screw-worm Fly.''
Former NSF deputy director Richard Atkinson, in a 1999 talk at UC
Berkeley, recalled that Sen. William Proxmire, who created the Golden
Fleece award, got tremendous attention for this particular award.
However, Atkinson recalled, Proxmire later admitted that the study of
the sex life of the screw-worm fly had been of major importance in the
field of non-chemical pest control. (Colloquium Series on the History
of Science and Technology, University of California at Berkeley, 10
November 1997, and published in the Proceedings of the American
Philosophical Society, Vol. 143, No. 3, September 1999).
Similarly, in 1996 The Conference of the Parties to the Convention
on Biodiversity (COP) requested a report from the Subsidiary Body on
Scientific, Technical and Technological Advice (SBSTTA) on ways to
overcome the shortage of taxonomists available to inventory and
characterize the world's biodiversity a word that is now in everyday
usage by the general public. Yet, the Association for Systematics
Collections (now the Natural Science Collections Alliance) says
taxonomy is largely outside the world economy. It and reliable
knowledge about the natural world are taken for granted as a free good
by governments, resource managers, drug and seed companies, and even by
many scientists. People want taxonomy, but do not see the connection
between that need and the need for increased funding at the National
Science Foundation.
In our testimony, we address funding levels for NSF's Research and
Related Activities, with particular emphasis on the Biological Sciences
directorate and the Geological Sciences directorate. A summary of
funding requests is below, followed by a detailed explanation of each
request.
Summary of budget requests
The American Institute of Biological Sciences requests the
following items:
--$5.2 billion for NSF, $4.0 billion of which would be for ``Research
and Related Activities,'' as included in the House Budget
Resolution;
--$550 million for the Biology Directorate;
--$15 million for the National Ecological Observatory Network;
--$79.2 million for the Biocomplexity in the Environment initiative;
--$37 million to increase the annual stipend for graduate students
from $21,500 to $25,000;
--$200 million for the Math and Science Partnership program;
--$185 million for the Learning for the 21st Century Workforce
program.
--Funding for the core programs of the GeoSciences Directorate should
be increased at the same rate as other directorates of NSF,
independent of any funds that may be transferred from other
agencies.
--AIBS does not support the transfer of programs from NOAA, USGS or
EPA. However, should the transfer of Sea Grant to NSF remain in
place, we request that it be funded at a minimum of the fiscal
year 2002 appropriation of $62.4 million. Likewise, we request
the fiscal year 2002 appropriated level for the USGS Toxic
Substances Hydrology program, which would be downsized to $10
million under the President's budget.
Overall funding for the National Science Foundation
At the March 2002 House Science Committee hearing on the NSF
budget, Dr. Stephen Director of the University of Michigan told the
committee that of the NSF proposals receiving ``Very good'' to
``Excellent'' reviews, only 56 percent are actually funded. Even more
disturbing, 14 percent of the proposals receiving an evaluation of
``Excellent'' were not funded. Dr. Director noted that low funding
rates ``discourage faculty from submitting good ideas because of the
low probability of success Success rates below one-third are generally
viewed as detrimental to encouraging the submission of best ideas, and
the NSF rate is now below this level.'' He also told the committee that
one impact of low NSF funding is that researchers are tailoring their
research programs to meet the needs of more ``mission-oriented''
research agencies such as the Department of Defense. In the long-term,
low funding rates are also influencing career decisions of future young
scientists. Dr. Irwin Feller from Pennsylvania State University told
the committee that:
``students with talents and aptitudes for research perceive
research as life on a treadmill, one that constantly requires them to
run in place to stand still, much less progress. Being at a formative
period of their career, graduate students are apt to focus on those
aspects of academic life that involve constantly writing proposals
rather than the challenge and excitement of finding answers to
intrinsically and extrinsically rewarding questions. Talented and
flexible as they are, they opt out of academic careers and indeed
careers in research in other settings, becoming in many ways productive
members of society, but also failing to replenish or add to the
nation's pool of scientific and engineering personnel.''
While we support the move to double the research budget at NSF, we
acknowledge that initiating a 5-year doubling effort under the current
budget scenario may not be possible. However, we believe that a
substantial increase in funding for core NSF programs is long overdue.
We support the House Budget Resolution funding levels for the National
Science Foundation, which would provide $5.2 billion for the agency,
$4.0 billion of which would be for NSF's ``Research and Related
Activities''. This represents an 11.1 percent increase in the major
grant programs, but assumes the inclusion of the programmatic transfers
included in the President's budget. AIBS does not support the transfer
of these programs and respectfully requests that the entire 11.1
percent increase in funding for NSF's grant programs be distributed
equally among the existing, core programs for each directorate.
Biological Sciences Directorate
Advances in understanding the biology of the natural world are
dependent on advances in each of the disciplines represented by our
member societies. To provide an example, the field of parasitology is a
classic example of the interaction of the many disciplines of biology
it draws from taxonomy, epidemiology, ecology, wildlife biology,
genetics, molecular biology, physiology, biochemistry and other
disciplines and has a wide range of applications. The various
disciplines of biology are not mutually exclusive and increased funding
for one sector of the field should not come at the expense of other
disciplines.
Advances in ecology and interdisciplinary programs such as
biocomplexity depend on a foundation of biological studies at the
organismal level, as well as taxonomy and systematics. Ecological
theory and large-scale projects enable managers to evaluate impacts of
various activities on a system, and thus enhances their ability to
provide useful recommendations regarding policy.
Traditional, single-organism zoological and botanical studies are
essential not only to investigators working at larger scales, but to
natural resource managers who must make decisions with the data that is
available. While managers use ecological theories to predict impacts of
human activities, management of threatened and endangered species is
first dependent on basic biological information for those species
(e.g., range of occurrence, life span, food habits, reproductive rate).
Having a foundation of rigorous, peer-reviewed studies on the basic
biology of those species is essential for agencies tasked with
determining critical habitat and imposing regulations on activities in
that area. Unfortunately, managers must make decisions with or without
quality science to guide their decisions. Decisions made without
adequate scientific information have proven to be extremely costly, and
could have been avoided with a better investment in the biological
research programs funded by the National Science Foundation.
A high-profile controversy regarding an endangered species
highlights this point. In late 2000, a lawsuit by environmental groups
prompted the National Marine Fisheries Service (NMFS) to issue strict
fishing regulations in habitat used by steller sea lions, an endangered
species of marine mammal. Acting on the assumption that Alaskan pollock
was the preferred food source of the mammals, NMFS issued strict
regulations that severely threatened the nearly $1 billion pollock
fishery. In March 2002, the Anchorage Daily news reported that
approximately $80 million of federal funding is being spent to study
the sea lions to determine the cause of their decline. Hundreds of
scientists from at least 25 institutions have initiated over 150
studies on the sea lions in the past 2 years. In one such study,
scientists have discovered that even where pollock is abundant, sea
lions forage only on a different species of fish, herring. Thus,
harvest restrictions on pollock would not aid recovery of steller sea
lions. This instance highlights that even basic biological studies on
the feeding habits of a single species are of extremely high value.
Having that information available before controversies erupt could save
American taxpayers a substantial amount of money spent on lawsuits.
In addition to the societal benefit to funding research at the
organismal level, studies of this type are ideal for smaller
universities and undergraduate research projects. Organismal studies
are typically of a shorter duration and smaller spatial scale than
ecological studies. To attract top talent into the pool of U.S.
scientists, students must have first-hand experience with what
scientists do. For students to be involved in all aspects of conducting
research (hypothesis formation, study design, data collection and
analysis), there must be funding available for small, short-term
projects.
In the fiscal year 2002 appropriations, most of NSF's research
directorates received increases (over fiscal year 2001 appropriations)
greater than 8 percent, except for the Biology Directorate (BIO; up 4.9
percent from fiscal year 2001 to $509 million). It is difficult to
determine how much funding is necessary for research in the various
disciplines. However, given the immediate relevance of studies funded
by NSF-BIO to natural resource management, we believe that BIO should
receive an increase of at least that received by other directorates in
fiscal year 2002. Therefore, we request an 8 percent increase in
funding for the Biology Directorate in fiscal year 2003 to a level of
approximately $550 million.
Transfer of programs from NOAA, EPA and USGS
Whatever the merits of the proposed transfers, we are concerned
that the probable costs have not been adequately considered. These
changes may have dire effects on these programs. In some cases, the
effect may be tantamount to termination and valuable research efforts
will be lost. It can be difficult and costly to rebuild strong
scientific research programs, if it can be done at all, so it is
important to assess carefully the costs and benefits of major
structural changes such as those under consideration by OMB.
We appreciate the fact that this administration values competitive
research, and we also agree with Mr. Daniel's view that the National
Science Foundation has an excellent record of supporting the Nation's
research. We whole-heartedly support NSF. However, NSF is legislatively
mandated to fund basic research. Therefore, we question whether NSF is
the best place for the USGS and Sea Grant. Sea Grant's research agenda
is based on the needs of marine industry, government, resource managers
and the public. We question whether NSF can and will fund this kind of
research. The National Research Program of the USGS Water Resources
Division, as well as the entire USGS research program, are commonly
characterized as ``applied'' research. Indeed, it is the very research
that is needed for management of the quality and quantity of the
natural resource that is vital to our very existence. We are concerned
that NSF cannot and will not fund much of the research underway at
USGS, not because it is not valuable or of high-quality, but because it
is of a different nature from that typically funded at NSF. Therefore,
AIBS does not support the transfer of these programs.
Within the transferred programs, we note that Sea Grant only
receives $55.8, a 10 percent decrease from its fiscal year 2002
appropriation. Should the transfer of Sea Grant to NSF remain in place,
we request that it be funded at a minimum of the fiscal year 2002
appropriation of $62.4 million. Likewise, we request the fiscal year
2002 appropriated level for the USGS Toxic Substances Hydrology
program, which would be downsized to $10 million under the
administration's budget.
GeoSciences Directorate (GEO) and Ocean Research Funding
While it appears that GEO will receive a 13.4 percent increase of
approximately $82 million in fiscal year 2003, $74.0 million of that
increase is due to the transfer of programs from NOAA, EPA and USGS.
The remaining $8.0 million represents a mere 1 percent increase in
funding. We are particularly concerned about the funding level for the
Ocean Sciences Division, which is slated for an approximate decrease of
2 percent in funding, notwithstanding transfers of programs from other
agencies. Combined with the decrease in funding for the Sea Grant
Program, total funding for ocean science and research would decrease by
3.5 percent. The decreases in ocean research funding for NSF and Sea
Grant proposed in the President's budget are in stark contrast to the
testimony presented before the President's Commission on Ocean Policy,
which was created through the Oceans Act of 2000. While the Commission
will not issue its recommendations until next year, numerous credible
witnesses have testified before the Commission that funding for ocean
research and education is sorely inadequate. Therefore, we oppose the
administration's decrease in ocean research funding and respectfully
request that funding for the core programs of the GeoSciences
Directorate be increased at the same rate as other directorates of NSF,
independent of any funds that may be transferred from other agencies.
National Ecological Observatory Network (NEON)
With NEON, NSF hopes to improve scientific understanding of complex
ecosystem dynamics and to enhance the ability to predict the effects of
changes from such trends as climate change. Because of its ultimately
wide network across the nation, NEON would have the potential to detect
threats ranging from invasive species to chemical or biological
terrorist activities. NEON has gone through peer review, with the
National Science Board recommending its funding. Through its Major
Research Equipment budget area, NSF is requesting $12 million to launch
to NEON prototype sites. An additional $3 million for operational
support of the two prototype sites is included in the Biological
Sciences Directorate under Biological Infrastructure. AIBS strongly
supports the administration's total request of $15 million for NEON-
related expenses.
Biocomplexity in the Environment
The Biocomplexity initiative is designed to respond to the demand
for new approaches to investigating the interactivity of biota and the
environment. It will result in more complete understanding of natural
processes, of human behaviors and decisions in the natural world. The
Biocomplexity initiative encourages collaboration among investigators
in multiple fields of science, extending questions of sustainability
beyond biology to include, among others, mathematicians, social
scientists and economists. AIBS supports the administration's request
of $79.2 million for the Biocomplexity in the Environment initiative.
Investing in the future U.S. scientific workforce
Graduate Student Stipends.--The average starting salary for
students holding a Bachelor's degree in science or engineering are
nearly twice the level of current stipends for graduate students. The
amount of debt incurred by U.S. undergraduates has more than doubled in
the 1990's. The low level of stipends, combined with the increasing
burden of debt, acts as a deterrent, limiting the number of students
choosing to pursue advanced studies. A student's time in graduate
school will be much more effective if they are not constantly worrying
about making ends meet. Therefore, we support the administration's
request for $37 million to increase the annual stipend for graduate
students from $21,500 to $25,000.
Math and Science Partnership and Learning for the 21st Century
Workforce
AIBS believes that safeguarding the biosphere and promoting
sustainable global development increasingly depends upon understanding
the earth's biological interactions. Maintaining the integrity of the
biosphere therefore depends upon a strong research, education, and
outreach program with resources adequate to support the increasing
demand for biological scientists and students, as well as a
scientifically-literate public. NSF's programs, Math and Science
Partnership and Learning for the 21st Century Workforce, will result in
a more scientifically- literate public and will increase the number of
talented young people entering the U.S. scientific workforce.
Therefore, we support the administration's request for $200 million for
the Math and Science Partnership program and $185 million for the
Learning for the 21st Century Workforce program.
______
Prepared Statement of the Aviation Research and Technology
the crisis in u.s aviation research and technology
We are deeply concerned about the lack of a national commitment to
sustain U.S. leadership in aviation research and technology. While
public demand for aviation transportation services is expanding,
federal funding for civil and military aviation research is declining.
Since 1998, the combined NASA and DOD investment in aeronautics
research and technology programs has been reduced by one-third, and
this trend is continuing. Advanced technologies are needed to assure
public safety and on-time flight schedules. Without continued
investment in aviation R&T, U.S. market share in aviation products and
services will decline, as will employment in the nation's aviation
industry.
The NASA and DOD aeronautics R&T budgets have been cut dramatically
over more than a decade, and tens of thousands of skilled workers have
left the industry. U.S. graduates at the bachelor and master degree
levels in aerospace engineering and related disciplines have dropped by
57 percent and 39 percent, and Electronics respectively, since 1990.
These facts, combined with the fact that the average age of those
employed in the aerospace industry is in the mid-to-upper 40s and
climbing, suggest a potentially catastrophic loss of one of the
nation's most important sources of societalbenefits.
NASA and DOD have taken the first steps toward clearly articulated
visions for aviation research and technology. These visions must now be
supported by national aviation research and technology strategy that
maintains and builds U.S. market share in aviation products and
services, ensures our national security, provides a continuing supply
of qualified people to meet the nation's future aviation workforce
needs and creates an environment conducive to a healthy U.S. aviation
industry.
While U.S. government support for aviation research is declining,
foreign government funding is increasing. European and Asian countries
recognize the value of the aviation industry and its quality jobs to
their economies. National will, available capital, and investments in
leading edge technology are determining winners in this global
competition.
According to a 1999 National Research Council report, ``Recent
Trends in U.S. Aeronautics Research and Technology,'' the U.S. aviation
and rotorcraft industries (Boeing, Pratt & Whitney, General Electric,
General Dynamics, Lockheed Martin, Textron, and others) contribute
approximately $436 billion per year of total output to the U.S.
economy. Of this amount, air transportation and aircraft manufacturing
account for approximately $339 billion, accounting for over half a
million manufacturing and engineering jobs. If the American public
expects the U.S. aviation industry to continue to be the largest
positive contributor to U.S. balance of trade, then we must have the
ability to develop the next generation of aircraft that will enable
them to compete internationally.
The future of U.S. aviation, with respect to both global
competition and societal benefits, depends on new technology and new
concepts. Government research establishments have conducted essential
fundamental and applied research, which were high risk, high cost, and
long term. The uncertainty and risk inherent in revolutionary concepts
cannot be undertaken solely by the private sector. The future demands a
clear statement of national policy, establishing U.S. leadership both
in aircraft and rotorcraft technology development that assures national
security with additional societal benefits, such as:
--Advanced vehicle technologies for innovative applications;
--Increased safety;
--Efficient air traffic management systems to reduce delays;
--Reduced air transportation cost and travel time;
--Increased fuel efficiency; and
--More environmentally friendly aircraft.
Historically, the government's support of aeronautics and
rotorcraft research and technology (in collaboration with industry and
universities) has been indispensable in for attracting highly talented
people whose contributions have made possible the societal benefits
that we have seen to date. If America fails to support aviation R&T, it
may well fail to provide an essential nucleus of next generation
professionals for the nation's aviation future.
Recommended Actions:
--Adequate funding for NASA and DOD aviation R&T must be addressed,
not only with respect to the fiscal year 2001 budget, but
also--and even more significantly--with respect to the
preservation of U.S. capability and leadership in long term
aeronautics research and technology, as required by law.
--As the fiscal year 2000 federal budget has generally subsumed
aeronautical research and technology programs within an all-
encompassing category termed ``Aerospace Research and
Technology,'' it is essential that the aeronautics R&T programs
at the key mission agencies (NASA, DOD and FAA) be clearly
identified and adequately funded within this category.
--The establishment of a National Aviation R&T policy to plan and
provide adequate resources that will ensure sustained U.S.
world leadership in civil and military aviation.
As we approach the centennial of the Wright Brothers' first flight,
it is more important than ever that America renews our national
commitment to leadership in aviation. In order to do so, we must ensure
the strength and stability of the nation's aviation infrastructure by
formulating and committing to a national aviation research and
technology policy that incorporates adequate federalfunding for long-
term aviation research.
______
Prepared Statement of Babyland Family Services, Inc.
Mr. Chairman: Thank you for giving me an opportunity to submit
written testimony on behalf of Babyland Family Services, Inc. about two
economic development initiatives: (1) Project NET-TO-WORK: A
Neighborhood Employment and Technology Initiative for Healthy Children
and Self-Sufficient Families and (2) the Babyland Pediatric Health
Center.
project net-to-work
Babyland Family Services seeks $1 million through the Department of
Housing and Urban Development (HUD) and the Economic Development
Initiative (EDI).
Project NET-TO-WORK is a 1-year capital and program start-up
request in which federal funding will enable the agency to complete the
construction or renovation of a major facility (approximately 36,000
square feet) that will thereafter offer the ongoing employment
training, placement and support services necessary to promote economic
development. It will also provide the necessary seed funds for program
operations, which will be sustained through the generation of program
income, local and state government contracts and grants from
foundations.
Project NET-TO-WORK will provide a comprehensive safety net and
partnership--one-stop employment and self-sufficiency services that
eliminate common barriers to employment for TANF recipients and low to
very low-income families in Newark and surrounding areas. Babyland's
current service area includes those portions of Newark (Central, West
and North Wards) and East Orange that are still economically
distressed. The project will target low-income African-American and
Latino families who are receiving or at risk of receiving public
assistance. In particular the initiative will be addressing the needs
of single mothers, teenage parents and males involved in or at risk of
involvement in the criminal justice system.
The project will create 50 new child care jobs and will provide
employment training and placement services for 150 residents. In
addition, the project will address multiple barriers to job training
and employment retention, including: (1) Full-day, year-round child
care, especially for infants; (2) Pediatric health care services,
including asthma management and preventive health education; (3) Family
counseling, especially substance abuse and mental health services and
(4) Quality of life and violence issues, especially family violence,
crime and dilapidated housing.
The main components of the project include the following:
--Employment training, placement and follow-up support services--
which includes individualized assessment, planning, basic
skills development including literacy and computer skills,
mentorship, peer counseling, support service referrals,
classroom instruction, internship placements, job placements
and ongoing mentorship after placement.
--Child care and early childhood education services for 198 children,
from infant to 5 years old, and their families through center-
based and family child care options.
--Preventive health services will be provided onsite at the facility,
including assessment, screening and examination, education,
referral and follow-up for children and families.
--Access to Computer Technology for community residents through the
creation of computer labs and training programs.
--Family counseling to prevent and address family violence and child
abuse issues, with an emphasis on parent education, substance
abuse counseling and mental health counseling.
--Neighborhood safety and quality of life initiative that trains and
empowers residents to develop a five-block safety zone around
their neighborhood through the creation and development of
block associations, community policing, local business
associations and other community organizing efforts.
The goal of Project NET-TO-WORK is to help eliminate physical and
economic distress in the communities that the agency serves. Through
this project, Babyland expects to create at least 200 new jobs,
especially in the areas of education, security, medical child care,
human services and food preparation. The agency also expects to create
a facility that will serve as a stabilizing force in an economically
distressed neighborhood. A child care component will promote the
healthy development of 198 children as well as serve as a job-
supporting service for 198 parents.
A health component will directly benefit over 1,500 at-risk
children in the Babyland service area through the prevention and
management of childhood illnesses, thereby further preventing parent
absenteeism from work. A computer technology component will provide
over 300 low-income residents with access to basic and individualized
computer technology knowledge that is essential to their long-term
success at work. Finally, a grass-roots neighborhood violence reduction
component will promote partnerships among residents, law enforcement,
churches, businesses and other stakeholders and achieve the following:
the reduction of physical blight (graffiti and dilapidated housing),
prostitution, drug dealing, car jacking, domestic violence and various
forms of crime.
There is widespread support for this very important initiative.
Babyland Family Services, Inc. expects to receive funding for the
project from the following sources:
--The Annie E. Casey Foundation Families Count Award--$166,000
unrestricted funds
--The Newark Public Schools--approximately $1 million for early
childhood education
--Private lending institutions--$1 million for capital support
--Local government (City and County)--$250,000 for employment
training and employment support services.
--Local Foundations--$70,000 for health and community organizing
projects.
--United Way--$200,000 for program operations
--Other potential funders include The Healthcare Foundation of New
Jersey and the Prudential Foundation.
the babyland pediatric health center
Babyland Family Services seeks $1 million as an Economic
Development Initiative (EDI) through the Department of Housing and
Urban Development (HUD). The project is a 1-year capital and program
start-up request that will enable the construction or renovation of a
facility that will offer direct family health services and employment
training in the pediatric health care field. Federal funding will also
provide the seed funds for program operation which will be sustained
through local and state government contracts, third-party affiliations
and foundations.
Background.--Babyland provides child care and early childhood
education services for 750 children (0 to 5 years old) at eight child
care centers and provides emergency shelter and family support services
to 750 other at-risk and low-income children and families. Babyland is
currently Newark's Early Head Start grantee (serving children 0 to 3
years old, pregnant teenagers, young fathers and families living with
HIV/AIDS) and has a partnership with the Newark and East Orange Public
Schools to provide Abbott preschool services to over 250 children. The
agency has an extensive partnership with the New Jersey Department of
Human Services for the provision of child welfare, family violence and
child care services.
Babyland is a lead agency for the United Way's Success By 6
Initiative and the State's Family and Children Early Education Services
(FACES) Initiative which, combined, provides early childhood support
services to 2,000 children and over 30 other child care agencies and
schools. The agency provides employment training and placements in the
areas of child care and medical day care for TANF recipients as well as
accreditation support for local teachers and child care centers.
Babyland is implementing the Open Airways Asthma Education Program at
eight elementary schools through a grant from the Centers for Disease
Control. Finally, the agency's newly established Technology Initiative
is providing early computer education to preschool children, a
Technology Center for computer-related employment skills to local
residents and an agency intranet that will develop an outcome and
service-based model for family support services.
Project Description
Babyland is in a unique position, as the lead agency for several
collaborative initiatives that promote the development of young
children under 6 years old, to launch a pediatric health initiative
that will prevent and manage childhood illnesses in Newark. In
partnership with over 30 child care agencies, elementary schools and
local health care providers, Babyland will develop a coordinated
community-based approach for residents to gain access to health care
services. As part of the agency's new multipurpose building, this grant
will enable the agency to include a pediatric and family health center
that will directly provide basic health services to over 1,000 families
and provide health education, assessments, screening and follow-up
services to 2,000 families with children under 6 years old.
In addition to the pediatric and family health center, the new
multipurpose building will include a child care center for 198 children
(0 to 5 years old), a computer technology center, an employment
training and placement center and family resource center. The new
health center will particularly focus on increasing immunizations,
screening for lead poisoning, asthma management, preventive dental care
services, nutrition, prenatal care, home safety, parent education and
child development, HIV/AIDS prevention and other preventive health
education.
Increased access to health care services will be achieved through
the following methods: training and placing 45 low income residents in
the medical day care/special needs field; training for over 50 Abbott
Family Workers who provide case management services for 2,000
preschoolers; parent-to-parent workshops that will be part of a series
of parent and health education workshops; and creative grass-roots
efforts that will encourage families to utilize the health center's
resources. Community outreach workers, parents, nurses and a team of
other health professionals will provide health outreach, education and
services. Services will be coordinated with existing partners that
include the Newark Department of Health, the Newark Public Schools,
child care agencies and other local health care service providers.
In conclusion, the project will also eliminate physical distress by
developing a facility that will serve as a stabilizing center that will
help revitalize a distressed neighborhood. The health center will
prevent illnesses and provide health maintenance support for young,
sick, low-income children. In addition, the center will serve as an
onsite employment-training center for TANF recipients who will enter
the health-related field for children with special needs. The project's
health services will reduce the need for emergency services and lost
time and wages for working parents.
Matching Funds.--$1 million capital funding from the following: The
Annie E. Casey Foundation ($166,000 unrestricted award) and $500,000
from a lender. Operating funds will come from the United Way, Essex
County and the State of New Jersey. Other potential funders could
include previous health-related supporters such as the Robert Wood
Johnson Foundation, the Johnson and Johnson Company and the Healthcare
Foundation of New Jersey.
We hope the Subcommittee will support these two critically
important economic development initiatives as the appropriations
process gets underway.
Thank you for your consideration.
______
Prepared Statement of the California Industry and Government Central
California Ozone Study (CCOS) Coalition
Mr. Chairman and Members of the Subcommittee: On behalf of the
California Industry and Government Central California Ozone Study
(CCOS) Coalition, we are pleased to submit this statement for the
record in support of our fiscal year 2003 funding request of $2.5
million from the Environmental Protection Agency (EPA) for CCOS as part
of a Federal match for the $8.7 million already contributed by
California State and local agencies and the private sector.
Most of central California does not attain federal health-based
standards for ozone and particulate matter. The San Joaquin Valley is
developing new State Implementation Plans (SIPs) for the federal ozone
and particulate matter standards in the 2002 to 2004 timeframe. The San
Francisco Bay Area has committed to update their ozone SIP in 2004
based on new technical data. In addition, none of these areas attain
the new federal 18-hour ozone standard. SIPs for the 8-hour standard
will be due in the 2007 timeframe and must include an evaluation of the
impact of transported air pollution on downwind areas such as the
Mountain Counties. Photochemical air quality modeling will be necessary
to prepare SIPs that are approvable by the U.S. Environmental
Protection Agency.
The Central California Ozone Study (CCOS) is designed to enable
central California to meet Clean Air Act requirements for ozone State
Implementation Plans (SIPs), as well as advance fundamental science for
use nationwide. The CCOS field measurement program was conducted during
the summer of 2000 in conjunction with the California Regional PM10/
PM2.5 Air Quality Study (CRPAQS), a major study of the origin, nature,
and extent of excessive levels of fine particles in central California.
CCOS includes an ozone field study, a deposition study, data analysis,
modeling performance evaluations, and a retrospective look at previous
SIP modeling. The CCOS study area extends over central and most of
northern California. The goal of the CCOS is to better understand the
nature of the ozone problem across the region, providing a strong
scientific foundation for preparing the next round of State and Federal
attainment plans.
The study includes six main components:
--Developed the design of the field study
--Conducted an intensive field monitoring study from June 1 to
September 30, 2000
--Developing an emission inventory to support modeling
--Developing and evaluating a photochemical model for the region
--Designing and conducting a deposition field study
--Evaluating emission control strategies for upcoming ozone
attainment plans
The CCOS is directed by Policy and Technical Committees consisting
of representatives from Federal, State and local governments, as well
as private industry. These committees, which managed the San Joaquin
Valley Ozone Study and are currently managing the California Regional
Particulate Air Quality Study, are landmark examples of collaborative
environmental management. The proven methods and established teamwork
provide a solid foundation for CCOS. The sponsors of CCOS, representing
state, local government and industry, have contributed approximately
$8.7 million for the field study. The federal government has
contributed $2,150,000 to support some data analysis and modeling. In
addition, the CCOS sponsors are providing $2 million of in-kind
support. The Policy Committee is seeking federal co-funding of an
additional $6.75 million to complete the remaining data analysis and
modeling portions of the study and for a future deposition study.
California is an ideal natural laboratory for studying deposition given
the scale and diversity of the various ground surfaces in the region
(crops, woodlands, forests, urban and suburban areas).
There also exists a need to address national data gaps, and
California should not bear the entire cost of addressing these gaps.
National data gaps include issues relating to the integration of
particulate matter and ozone control strategies. The CCOS field study
took place concurrently with the California Regional Particulate Matter
Study previously jointly funded through Federal, State, local and
private sector funds. Thus, CCOS was timed to enable leveraging the
efforts of the particulate matter study. Some equipment and personnel
served dual functions to reduce the net cost. From a technical
standpoint, carrying out both studies concurrently was a unique
opportunity to address the integration of particulate matter and ozone
control efforts. CCOS was cost-effective since it builds on other
successful efforts including the 1990 San Joaquin Valley Ozone Study.
Federal assistance is needed to address these issues effectively.
For fiscal year 2003, our Coalition is seeking funding of $500,000
from the Department of Energy (DOE) Fossil Program.--The California
Energy Commission is a key participant, having contributed $3 million.
Consistent with the memorandum of understanding between the California
Energy Commission and the DOE, joint participation in the CCOS will
result in: (1) enhanced public interest in programs on energy research,
development, and demonstration; (2) increased competitiveness and
economic prosperity in the United States; and (3) further protection of
the environment through the efficient production, distribution, and use
of energy.
The CCOS program coincides with DOE's initiative to develop the
Federal Government's oil technology program. In fact, the oil industry
in California has been working for several years with DOE to identify
innovative partnerships and programs that address how changes in those
sectors can cost-effectively reduce particulate matter and ozone-
related emissions. This approach will likely result in new ideas for
technologies to improve oil recovery technologies, as well as improve
environmental protection in oil production and processing operations.
The overlap of CCOS and the California Regional Particulate Matter Air
Quality Study provides a unique opportunity to perform research related
to petroleum-based VOC and particulate matter emissions as well as
methods to characterize these categories of emissions. The CCOS program
is utilizing modeling, instrumentation, and measurement to obtain
results that can be used to better understand the impact of oil and gas
exploration and production operations on air quality. CCOS program
results might also be applied to identify the most efficient and cost-
effective methods of reducing emissions from oil and gas operations.
The Department of Energy has been a key participant in many
programs with the oil and agricultural sectors. By becoming a partner
in this program, DOE will be furthering its own goals of ``Initiatives
for Energy Security'' by aiding domestic oil producers to enhance their
environmental compliance while reducing their costs. DOE will also be
building upon an established and effective partnership between state
and local governments, industry, and institutional organizations.
For fiscal year 2003, our Coalition is also seeking funding of
$250,000 from the National Park Service (NPS) and $250,000 from the
Forest Service.--The National Park Service and Forest Service conduct
prescribed burns that contribute to both ozone and particulate matter
pollution. Prescribed burns are needed for forest health or to reduce
fuel loads, and must be carefully managed to minimize public health and
visibility impacts.
Improving the fundamental science related to emissions,
meteorological forecasting, and air quality modeling will help in
designing effective smoke management programs. In addition, attainment
of air quality standards is an important goal for protecting national
parks and forests. Ozone damage to trees and vegetation in national
parks and forests is well documented in California and nationwide. The
National Park Service and Forest Service are key stakeholders relying
on the success of SIPs in achieving the emission reductions needed to
attain air quality standards. The participants in the CCOS have been
partners in regional study efforts addressing visibility and haze
impacts on national parks and forests in the West. The results of this
study will provide valuable information that will further those efforts
on a regional basis.
Scientists at the University of Nevada, Desert Research Institute
(DRI) are involved with the CCOS. To expedite research studies related
to biomass burning and smoke management for CCOS, it is requested that
funds provided by the National Park Service and Forest Service be
allocated directly to DRI.
Thank you very much your consideration of our requests.
______
Prepared Statement of the City of Gainesville, Florida
Mr. Chairman: On behalf of the City of Gainesville, Florida, I
appreciate the opportunity to present this written testimony to you
today. The City of Gainesville is seeking Federal funds in the fiscal
year 2003 HUD Appropriations bill to assist with the following two
innovative projects the City is undertaking:
--The Depot Regional Stormwater Park, to provide stormwater treatment
for approximately 125 acres of the Downtown and allow the
redevelopment of existing buildings and parking lots within
Downtown into mixed residential, commercial, and office uses.
This project will serve as a mechanism not only to further the
revitalization of Downtown but also to treat the stormwater
runoff prior to discharging to Sweetwater Branch and ultimately
Paynes Prairie and the Floridan Aquifer, and
--The Underserved Neighborhood Improvement Project, to upgrade the
public infrastructure in particular older neighborhoods in east
Gainesville. Specifically, the City has identified the
neighborhoods that are encompassed in the newly designated
Eastside Redevelopment District and the Porter's Neighborhood,
which is included in the Downtown Redevelopment District
Expansion Area. The Eastside Redevelopment District is
primarily residential in nature but includes commercial
sections along NE Waldo Road, East University Avenue and SE
Hawthorne Road. Except for a few businesses on the periphery,
the Porter's Neighborhood is strictly residential.
Depot Regional Stormwater Park
The Depot Regional Stormwater Project is a U.S. Environmental
Protection Agency (USEPA) and Florida Department of Environmental
Protection (FDEP) designated Brownfield pilot project. The project
includes the cleanup of contaminated soils, construction of the
regional stormwater management facilities, installation of reuse water
system for irrigation, and development of the recreational components
of the park.
The Depot Regional Stormwater Project is located on the southern
boundary of Downtown. The Downtown area is located within the
Sweetwater Branch watershed, which contains approximately 3 square
miles of Gainesville. The Sweetwater Branch drains into Paynes Prairie
Preserve, which is part of the State of Florida Park System and has
been designated as an Outstanding Florida Water. An earthen levee
segregates creek flow to a small area of the prairie before discharging
into Alachua Sink, a natural sinkhole located on the northeast boundary
of the prairie. Alachua Sink is an active sink with direct hydraulic
connection to the Floridan aquifer.
Urbanization of the watershed has resulted in significant pollution
loads entering the creek from non-point sources. Land use within the
urban sections of the Sweetwater Branch watershed includes commercial,
industrial and residential types. Most of the surfacewater runoff is
discharged directly to the creek without receiving treatment or
attenuation. The urbanization of eastern Gainesville took place prior
to implementation of regulations requiring on site treatment of
surfacewater. The Saint Johns River Water Management District's
(SJRWMD) non-point source-screening model indicates that the non-point
pollution load to Sweetwater Branch is significant. The water quality
within Sweetwater Branch adversely impacts the Paynes Prairie ecosystem
and contributes to the degradation of the Floridan aquifer.
The Paynes Prairie Preserve provides habitat to a variety of
wildlife, including threatened species and species of special concern
including the, bald eagle, white ibis, roseate spoonbill, and Florida
sandhill crane. It is believed that the degraded water quality within
Sweetwater Branch has had an adverse impact on vegetative communities
in Paynes Prairie. A diagnostic study is currently underway to
determine the extent of this problem.
Water quality within Sweetwater Branch is described as fair
according to the Water Quality Index (WQI) presented in the State of
Florida Department of Environmental Protection's (FDEP) 1996 305(b)
Report, see Appendix E. The WQI is the arithmetic mean of anywhere from
1 to 6 water quality index categories (water clarity, dissolved oxygen,
oxygen demanding substances, nutrients, bacteria, and biological
diversity).
The Depot Regional Stormwater Park will provide stormwater
treatment for approximately 125 acres of the Downtown and allow the
redevelopment of existing buildings and parking lots within Downtown
into mixed residential, commercial, and office uses. This project will
serve as a mechanism not only to further the revitalization of Downtown
but also to treat the stormwater runoff prior to discharging to
Sweetwater Branch and ultimately Paynes Prairie and the Floridan
Aquifer.
The regional stormwater management facility is being planned as a
landmark stormwater park that will not only serve as a functional
stormwater management facility, but will return unusable brownfield
property into an active land use. The project is located on the
southern boundary of Downtown adjacent to the City's Historic Train
Depot (built in 1907) and the City's Electric Utility's historic Kelly
Power Plant, which has recently been repowered. The Historic Train
Depot was purchased by the City and is in the process of being
renovated in accordance with Federal and State Historic requirements
and using Transportation Enhancement Program and State Historic
Preservation funding. The Historic Train Depot will be a vital
component of the regional stormwater park to allow a center of activity
that is complementary of the overall goals of the Depot Regional
Stormwater Management Project and the Revitalization of Downtown.
The Stormwater Park will also function as a Rail Trail Hub to
provide linkage of four primary existing and proposed rail trail
systems. From the south the existing Gainesville Hawthorne Rail Trail
provides a linkage to the Historic Boulware Springs facility and
proposed park owned by the City, the State Payne's Prairie Preserve and
further out to the City of Hawthorne. The proposed Downtown Connector
will connect the Gainesville Hawthorne Rail Trail through the
Stormwater Park and is being implemented with funding through the
Transportation Enhancement Program. From the east the existing Waldo
Road Beautification Trail connects the Stormwater Park with the City's
recently completed Martin Luther King Multipurpose Center, a community
sports complex that provides much needed community meeting space and
recreational programs. In addition, the Waldo Trail provides a linkage
to many predominately African American neighborhoods including the
City-developed Cedar Grove residential affordable housing neighborhood.
The proposed 6th Street Rail Trail will provide access to the north and
west through three historic, and predominantly African American
communities: the Porters, Pleasant Street, and Grove Street
Neighborhoods. The 6th Street Trail will be constructed using a
combination of local, State and Federal dollars. The existing Depot
Avenue Rail Trail connects these trails along the borders of the
Stormwater Park and Depot Avenue. The trail and enhanced roadway will
provide a primary multi-modal transportation corridor connecting the
University of Florida and Shands Medical Complexes to Downtown.
The Depot Regional Stormwater Park component will provide
stormwater treatment for Depot Avenue, the proposed Rail Trails, as
well as the Downtown portion of the Sweetwater Branch watershed located
upstream of the park. The site of the proposed Park served as the rail
transportation hub linking Fernandina Beach on the east coast of
Florida to Cedar Key on the west coast in the mid-1800's. The Historic
Train Depot's under-roof, otherwise open loading docks will provide
open vistas to the proposed Sweetwater Urban Stormwater Park. The
historic Depot building's unique character and location will serve to
make it both a lively destination hub for the neighborhood and a
catalyst for further redevelopment of Downtown. The building is a
standing testament to and a significant visual emblem of Gainesville's
rich history. The restoration of this building in conjunction with the
restoration of the 22-acre Sweetwater Urban Stormwater Park is expected
to provide a major community destination and regional ``eco-tourism''
attraction for the community.
The remaining unfunded costs of the Depot Regional Stormwater Park
are estimated at $10,700,000.00. The City of Gainesville has acquired
approximately 25 acres for the project and anticipates completing
acquisition of the balance of the property by summer of 2002. The City
has set aside $1 million of the Stormwater Management Utility revenues
for construction of the stormwater management components. Grant funding
from a variety of Federal, State and local sources totals
$3,111,365.00. Among these are a Florida Communities Trust grant to
assist with acquisition costs, State and Federal Brownfield grants for
site investigation and design activities currently underway, and an EPA
grant for $500,000 for preliminary engineering and environmental work
for a portion of the stormwater component of the project. The City's
Federal funding request is for $10,700,000.00 to complete the Depot
Regional Stormwater Park.
The Underserved Neighborhood Improvement Project
The City of Gainesville is pursuing a strategy to assist in
upgrading the public infrastructure in its older neighborhoods.
Gainesville has a significant number of older, predominantly low- and
moderate-income neighborhoods that lack adequately paved roadways,
curbs and gutters, and sidewalks. The population of these neighborhoods
tends to include a disproportionately large percentage of children and
youth, single-parent families and the elderly. Due to income
limitations of the residents, it is not feasible to utilize special
assessment districts as a funding mechanism for upgrading the
infrastructure in these neighborhoods.
The City currently allocates 15 percent of its annual Community
Development Block Grant (CDBG) entitlement for upgrading public
infrastructure in eligible neighborhoods. This year (fiscal year 2001-
02), that amounted to about $230,000. However, due to the significant
numbers of neighborhoods that need assistance, this funding strategy is
inadequate to meet the demand.
To make a meaningful impact on the problem, the City is requesting
$1 million to upgrade the public infrastructure in particular older
neighborhoods in Gainesville. Specifically, the City has identified the
neighborhoods that are encompassed in the newly designated Eastside
Redevelopment District and the Porter's Neighborhood, which is included
in the Downtown Redevelopment District Expansion Area. The Eastside
Redevelopment District is primarily residential in nature but includes
commercial sections along NE Waldo Road, East University Avenue and SE
Hawthorne Road. Except for a few businesses on the periphery, the
Porter's Neighborhood is strictly residential.
According to the 1990 Census, the Eastside Redevelopment District
had a total population of 4,043 persons, with 71 percent qualifying as
low- and moderate-income under HUD's definition (80 percent of median
family income). The Porter's Neighborhood had a total population of 441
persons in 1990, with 87 percent low- and moderate-income. This
compares with about 49 percent low- and moderate-income for the city as
a whole in 1990.
As part of the City's November 2000 Finding of Necessity for the
4th Redevelopment District (now known as the Eastside Redevelopment
District), the City Public Works Department identified approximately 11
miles of semi-paved local streets and seven miles of local streets with
pavement only meaning no sidewalks or storm drainage facilities in the
District. The total cost to repave or reconstruct all of these semi-
paved streets and streets with pavement alone, including providing
sidewalks where needed, was estimated to be $9 million. The Department
estimated that it would cost another $1 million to repave the
approximately 6.5 miles of streets with curb and gutter in the
District.
Similarly, the Porter's Neighborhood has numerous deficiencies in
its public infrastructure. The December 2000 Assessment of Need Study
prepared for the Downtown Redevelopment District Expansion Area noted a
general lack of sidewalks in the neighborhood, narrow streets with
deteriorated pavement surfaces and a widespread absence of stormwater
management and pollution control facilities. While the cost to upgrade
the infrastructure in the broader Downtown Redevelopment District
Expansion Area is estimated at upwards of $4.4 million, a sizable
portion of this cost (approximately $1 million) can be attributed to
just the Porter's Neighborhood.
Street and structure (mainly residences) flooding is known to occur
at several locations in the Eastside Redevelopment District and the
Porter's Neighborhood due to inadequate and non-existent storm drainage
facilities. This results in unsafe and unsanitary conditions. None of
the semi-paved streets in either area have curbs and gutters, as most
of these neighborhoods pre-date local government requirements for
stormwater management and treatment.
In order to address these critical needs in the Eastside
Redevelopment District and the Porter's Neighborhood, the City proposes
to replace open drainage swales with closed drainage systems, build
sidewalks in locations where they are needed, and continue work on
master stormwater management systems. An infusion of $1,000,000.00
additional capital would allow the City to make a significant impact in
both areas.
Prepared Statement of the City of Miami Beach, Florida
Mr. Chairman: On behalf of the City of Miami Beach, Florida, I
appreciate the opportunity to submit this written testimony to you
today on three extremely important initiatives, currently underway
within our city, for which we are requesting Federal assistance.
HUD Requests
Initiative on the Homeless.--Miami Beach seeks $1 million in
assistance for the development of a Homeless Assistance program under
the sole jurisdiction of the City of Miami Beach. (Priority #1)
North Beach Cultural Center.--The City seeks $5 million for the
rehabilitation of a large downtown theater to serve as a cultural and
community center. (Priority #3)
EPA Request
Stormwater Infrastructure Improvements.--The City is seeking a 90
percent-10 percent local/Federal split of the total cost through the
wastewater account within the EPA, with the total Federal share for
this project being $9 million. (Priority #2)
The Homeless Issue on Miami Beach
Every day, by some accounts, many Miami Beach residents are
homeless. Homeless individuals and families live in substandard
conditions in places usually not suitable from human habitation, and
face violence, sickness and despair; as well as the attendant issues
resulting from abject poverty. Public health and safety are affected,
and community concerns spur the City to undertake service enhancements
such as additional police, fire, rescue, parks and street maintenance,
sanitation services, and others. Within the Miami-Dade County area, the
City of Miami Beach is singularly attractive to homeless migration.
Routinely, the City receives a number of homeless that have left
neighborhood municipalities in search for a place to sleep. With its
tropical climate and beautiful beaches, the City provides a comfortable
environment for encampments to take root. To address this continuing
challenge, the City of Miami Beach provides funds to local nonprofit
organizations and service providers, who attempt to serve the needs of
the homeless population. The City also funds the enhancements that
result from this activity.
In 1994, homeless individuals in Miami settled a historic lawsuit
with the City of Miami. Although not a party to this lawsuit, the City
of Miami Beach is, however, directly affected by it. City of Miami
Beach homeless individuals and families were left out of the zoning for
the Homeless Assistance Center built by the Miami-Dade County Homeless
Trust. In practical terms, this means that on any given day, homeless
found in Miami Beach will only have access to a limited amount of
shelter beds, which are shared by all other municipalities in the
County. In 1999, the City Administration, the City of Miami Beach
Police Department and the Committee on the Homeless developed a 3-year
pilot program to further address the needs of homeless individuals and
families on Miami Beach.
The program tied into the City's adopted ``Continuum of Care''
Plan, which is a part of the City's Consolidated Plan for Federal
Funds. Services included outreach and emergency shelter for homeless
individuals identified by the Police Department and local service
providers. The program served a total of 185 individuals and families.
At the end of the first 3 years of the program, several obstacles have
been identified that have an impact on the ability of the City of Miami
Beach to meet the needs of its homeless population.
First and foremost is the lack of funds. Current Federal programs
for the homeless are allocated on a competitive basis rather than to
each community. This has benefited the Miami-Dade County community;
however, there are still significant needs that are not being addressed
in Miami Beach. The County allocates funds received under the
SuperNOFA, to address countywide priorities that may not coincide with
local, municipal priorities, such as the need for emergency shelter and
transitional housing. It is estimated that approximately $1,000,000
will be needed over the next 3 years to fund a sufficient amount of
emergency shelter beds in available facilities, to address the needs of
the Miami Beach homeless population. An additional amount of $1,300,000
will be needed to fund transitional housing over the next 3 years. To
complete the Continuum of Care System for Miami Beach, permanent
housing must also be funded, at an estimated amount of $1,500,000 over
the next 3 years.
The second largest obstacle is the need for coordination of housing
and supportive services, regardless of funding source. In addition to
its funding of homeless activities, the City also expends approximately
$2 million each year in Federal funds for affordable housing
initiatives for very low, low and moderate-income residents. The City
funds approximately $500,000 each year in social services for low and
moderate-income residents, which includes homeless individuals.
Although the City of Miami Beach's homeless individuals and families
are currently participating and benefiting, in part, by the countywide
Continuum of Care system, better linkages and coordination between the
City's Federally-funded affordable housing, social services and
homeless activities--and the SuperNOFA-funded programs at the County
level needs to take place. The City estimates that the development of
such service coordinators and the establishment of an intake facility
will represent an expenditure of approximately $900,000 over the next 3
years.
The third and final obstacle is the lack of data on the homeless
population in Miami Beach and its treatment needs. The information is
key to tracking the progress or failure of the homeless person after a
shelter intake; report on and evaluate results; and recommend program
changes, treatment gaps, and funding needs. The development and
implementation of an information tracking system is estimated at
approximately $300,000 over the next 3 years.
A total of $1,560,173 is currently being targeted from diverse
sources to assist the homeless in Miami Beach. The County applies for,
and receives the City's Pro-Rata share from the HUD-funded SuperNOFA
each year. This amounted to $766,963 last year. Additionally, the City
has set aside approximately $752,750 for activities that include
homeless prevention activities, outreach, emergency shelter and
transitional housing for homeless individuals. Approximately $40,500 of
City of Miami Beach Police Department funds are used to support these
activities.
The City of Miami Beach has identified that need exists for
$1,000,000 for emergency shelter beds, $1,300,000 for transitional
treatment beds, $1,500,000 for permanent housing for formerly homeless
individuals and families; $900,000 for the development of intake and
outreach facility and staffing for the City; and finally $300,000 for
an information system. This cost of this program is estimated at
$5,000,000 over the next 3 years.
The City of Miami Beach requests Federal assistance in the amount
of $3,439,000 for the development of a 3-year Homeless Assistance
Program on Miami Beach, beginning with an appropriation of $1 million
in the 2003 VA, HUD and Independent Agencies Appropriations Bill.
Stormwater Infrastructure Improvements
The City of Miami Beach is facing a significant financial challenge
in its attempts to provide adequate potable water and stormwater
treatment/protection to its citizens. The City Commission has approved
a local expenditure of $60,000,000 for the water and stormwater
improvements, which has resulted in water and sewer rate increases to
126 percent of national averages in fiscal year 2000 with approved
increases bringing rates to 144 percent by fiscal year 2006.
Unfortunately, the estimated cost to complete construction of these
water and stormwater improvements is $90,000,000. The City does not
have the ability to fund this entire amount. We are here today to ask
for supplemental funding of $9,000,000 from U.S. EPA's State and Tribal
Assistance Grant Account. This figure represents 10 percent of the
project cost. The funds will be spent in the most socio-economic
disadvantaged neighborhoods in the City.
The City is responsible for distribution of potable water and
providing stormwater conveyance, treatment and disposal to a diverse
permanent population of 87,933 people, and a seasonal population of
approximately 140,000 people. During the mid to late 1990s, the City of
Miami Beach commissioned the preparation of a Water Master Plan, Sewer
Master Plan and Comprehensive Stormwater Management Master Plan. These
planning efforts evaluated the existing infrastructure and recommended
improvements to meet the needs created by changes in land use and aging
infrastructure. These Master Plans led to the creation of the City of
Miami Beach Neighborhood Right-of-Way Infrastructure Program
(``Program''), the funded portions of which the City anticipates to
complete in late 2006. The City is reconstructing aged watermain and
stormwater infrastructure in existing neighborhoods to maintain safe
and reliable potable water service, improve water quality in the
Biscayne Bay aquatic preserve and minimize stormwater flooding damage
to public and private property. Individual neighborhoods will benefit
from infrastructure upgrade projects relating to watermain replacement,
sanitary sewer rehabilitation, and stormwater collection, treatment and
disposal facility improvements.
The majority of existing watermains in the City were installed
anywhere from 50 to 80 years ago, and have reached the end of their
useful life. Planned enhancements will replace corroded galvanized
pipes and pipes installed with lead joints and will improve safety
issues related to potable water distribution. Some water mains have
become almost ``blocked'' by a process called tuberculation, where
deterioration of a pipe's interior wall lining has occurred as result
of chemical reactions with potable water. Excessive tuberculation has
significantly decreased the effective pipe diameter, thereby affecting
public safety through inadequate fire flows and by decreasing water
pressure at the household tap, or more drastically, causing pipe
collapse or failure. The new or rehabilitated watermains will improve
water pressure and provide appropriate internal pressure to safeguard
against backflow contamination during fire flows or other peak use
situations.
With regard to the City's stormwater system, the Master Plan
identified over 160 drainage basins throughout the City of Miami Beach.
Approximately 34 basins were identified as a priority based upon
pollutant loading, pollutant concentration, flooding potential, citizen
complaints and City operational staff rankings. The City experiences
various levels of flooding, depending on the extremity of the rain
event. With many of the City's priority drainage basins barely above
sea level, and the system not being capable of handling a 5-year storm
event, flooding occurs in many of the basins during a regular rain
event, with higher flooding levels occurring during high tide or a
major storm. Due to high groundwater elevations, drainage is slow,
requiring extensive periods of time to dissipate. Continuous excessive
ponding over the long term causes the deterioration, and ultimately
failure, of paved roads, and can lead to mosquito breeding areas. When
the proposed improvements are completed, these priority basins will
dispose of a 7.2-inch rainfall (5-year storm) event over a period of 24
hours.
All of the City's stormwater runoff is drained into Biscayne Bay, a
nationally recognized aquatic preserve. Biscayne Bay was identified as
one of Florida's highest priority water bodies and was the subject of a
specific plan developed to help protect and enhance it. This plan is
referred to as the Biscayne Bay Surface Water Improvement and
Management (SWIM) Plan. One of the main goals of the plan is to
maintain and improve water quality to protect and restore natural
ecosystems and compatible human uses of Biscayne Bay. The City's plan
to construct and/or enhance existing systems for stormwater conveyance,
treatment and disposal facilities helps achieve that goal. As a
municipality within Miami-Dade County, the City is a National Pollutant
Discharge Elimination System (NPDES) Phase I permittee, and is required
to eliminate pollutants to the maximum extent practical. The proposed
stormwater improvements will enhance treatment of runoff prior to
discharge, minimizing pollutant loadings into the Bay and help the City
fulfill its requirement.
While the majority of the Program is currently locally funded,
requesting Federal cost sharing is reasonable. The City is one of the
few large Dade County communities to embark on such a program before
regulatory pressures require it. Typically, municipalities have waited
to make such improvements until either State or Federal officials used
regulatory reform or enforcement actions to force the issue through a
consent degree, administrative order or court judgments. In contrast,
the City has already bonded $60,000,000 for these improvements from
local resources, which represents two-thirds of the total Program cost.
The City is considered a major vacation spot in the County, as well as
the nation. Regular flooding impedes the commercial uses of the City
and detracts from the City's reputation as a tourist destination. The
City's system is not even capable of expelling stormwater at a 5-year
storm level, whereas most places in the nation are able to expel
stormwater at that level.
The City has limited its Funding Request to four neighborhoods that
comprise the City's North Beach area. These neighborhoods, including
Biscayne Point, North Shore, Normandy Shores and Normandy Isle, have
very low Median Household Incomes (MHI). The targeted neighborhoods'
average MHI is approximately $18,000, or 70 percent of the State of
Florida average. These neighborhoods include a variety of land uses,
including highly urban commercial, residential, recreational and multi-
family areas, with some pockets of single-family residential, and are
eligible for such Federal funding as the US Department of Housing and
Urban Development (HUD) Community Development Block Grant and Section
108 funds.
As discussed earlier, the City seeks to have funding in the amount
of $9,000,000 for this Program approved in the fiscal year 2003 VA,
HUD, and Independent Agencies Appropriations Act's STAG Account by
having the following language included:
``A $9,000,000 grant to the City of Miami Beach, Florida for the
watermain reconstruction and stormwater improvements in the
neighborhoods of Biscayne Point, North Shore, Normandy Shores and
Normandy Isle.''
The City is in a position to accept the traditional local match
share requirement of 45 percent and will make the $7,000,000 in local
funds available upon approval of the funding. However, without the
approval of this grant, portions of the Program will be in jeopardy of
not being constructed because of lack of local financing.
To date, this Appropriations Act has granted $4,894,812,625 in
``special needs'' water related grants between fiscal year 1992 and
fiscal year 2002 to similar projects in municipalities across the
nation. During this same time frame, Florida has received $117,945,000
of the total monies granted. This is the City of Miami Beach's first
request for funding from this source. This Program truly impacts the
health and safety of City residents by replacing deteriorated
watermains that will improve fire flows and prevent backflow
contamination during peak use. In addition, enhanced stormwater
collection, treatment and disposal will provide residents and property
with adequate storm protection, facilitate the dissipation of standing
water, and remove pollutants from stormwater runoff flows prior to
disposal to the Biscayne Bay, a nationally recognized aquatic preserve.
North Beach Cultural Center
The Byron Carlyle Theater was an abandoned 7-screen movie theater
that is located in the central business district of Miami Beach's North
Beach area. The theater was closed by Regal Cinemas in 1999, and was
vacant until the City purchased it and leased a small portion to four
local non-profits in late 2001. The City of Miami Beach has begun the
implementation of a strategic plan for the revitalization of the North
Beach area, which includes approximately $124 million in capital
improvement projects that will be implemented during the next 6 years.
The redevelopment of vacant buildings such as the theater is crucial to
the economic and business development components of the North Beach
Strategic Plan. However, due to the unique layout and structural nature
of older movie theaters, such as this, redevelopment options are
limited and expensive.
There are two reasons that Miami Beach is transforming this
building into the North Beach Cultural Center. First, the redevelopment
of this theater is an integral component of the Strategic Plan for the
economic revitalization of the North Beach area of Miami Beach. While
other areas of Miami Beach have enjoyed tremendous economic success
over the last 10 years, the North Beach area has lagged in its growth
and continues to evidence a concentration of low-income households and
a lack of private sector investment. The emergence of cultural
institutions during the beginnings of the economic revitalization of
South Beach's Art Deco District directly contributed to the area's
continued success. Secondly, the success that cultural organizations
helped create in South Beach is also a reason for the creation of a
cultural facility in North Beach. As South Beach boomed, local cultural
institutions became self sufficient and successful, area market trends
began to improve and property values appreciated significantly. In
1993, the primary cultural area in South Beach was on Lincoln Road,
where rental rates averaged $12 per foot. In 2000, rental rates reached
$75 per square foot, and many small businesses and cultural
organizations were forced to either relocate or dissolve. Additionally,
many cultural organizations currently housed in City-owned facilities
will soon have to relocate as the City expands to meet the ever-
increasing service levels expected by the citizens. A central facility
that accomplishes both goals is critical to the economic revitalization
of North Beach. To date, the City has completed the Phase I renovation
of the former lobby area, and has leased this new office space to three
cultural organizations that were displaced from South Beach. The City
has leased additional space in the facility to the North Beach
Development Corporation.
The development of the North Beach Cultural Center will also help
transform the entire City of Miami Beach into a world-renowned center
for the creation and consumption of culture. Miami Beach is home to
many internationally acclaimed cultural organizations, such as the New
World Symphony, the Miami City Ballet, and the Bass Museum. These
organizations, however, are located in a small concentrated area of
South Beach. The City also has over 75 smaller cultural groups that are
the true cultural heart of Miami Beach. Organizations such as the
Concert Association of Florida, Ballet Flamenco La Rosa, and the
Performing Arts Network continue to struggle for their economic
survival. The ability to provide a facility that allows these groups to
remain in Miami Beach will provide a venue where many emerging small
organizations can continue to grow and prosper and at the same time
provide a catalytic cultural component to the revitalization effort in
North Beach.
In 1999, in an economic impact report to the City of Miami Beach's
Mayor's Economic Council, Florida International University identified
that investment in the cultural arts has the highest economic output
multiplier of all local industries. The challenge for cities such as
Miami Beach, however, is, providing the level of Cultural Arts
investment that is required to generate this ``biggest bang for the
buck.''
The City of Miami Beach purchased the facility for $1.7 million,
and spent an additional $500,000 on the Phase I renovations. Phases II
and III are much more extensive and costly, and projected costs are
approximately $6 million. These phases will include renovation of two
of the former movie theater spaces into a single use space capable of
accommodating 250 people. The City has applied to the State of Florida
for a $460,000 grant for this project, and the North Beach Development
Corporation, the Miami Beach Community Development Corporation, and
Miami-Dade County have committed a total of $750,000 to the Phase II
renovations. The City has also identified funding sources that will be
committed to the annual operation of the facility once it opens. When
completed, the Facility will interact with the nearby North Beach Youth
Center, a $6 million project that is currently under development one
block away. The City of Miami Beach requests an appropriation of $5
million for the North Beach Cultural Center in the 2003 VA, HUD and
Independent Agencies Appropriations Bill.
______
Prepared Statement of the City of Newark, New Jersey
The City of Newark, NJ hereby submits for the record, testimony
regarding three projects that are of great importance to the State of
New Jersey's largest City. The projects described below each address an
aspect of the needs of Newark's low income population. The third oldest
major city in America, Newark is also one of the most densely
populated. The provision of educational, cultural and recreational
opportunities for our residents continues to be critical to the
economic and social growth of the City. Through partnerships with other
levels of government and the non-profit and private sectors, Newark is
involved in expansive change. Your assistance is sought on the three
projects described below.
newark public library
The Newark Public Library system is one of the unsung foundations
of the City. It has serviced every segment of the Newark community for
over 100 years. Located in the heart of the city's James Street
Historic District, the Newark Public Library has since 1888 served as a
major influence in the intellectual and cultural life of this great
American city. The Newark Public Library system, anchored by the Main
Library on Washington Park, includes 10 branches one in every
neighborhood of the city. The library system offers service to 270,000
city residents, to 175,000 people who commute to Newark every day to
work or attend college and university classes, and to many individuals
and libraries from the surrounding region and throughout the state.
The Newark Public Library's mission is to be Newark's premier
center for education and learning. Fulfilling this mission, it serves
as an education and learning support center, a reference and research
library, a popular materials library, and a community center. The
Library offers encouragement and support to all people in the
achievement of their educational goals and their pursuit of lifelong
learning. It provides people of all ages with abundant opportunities
for enrichment and supports them in the discovery of the joy of
reading.
During the past several years, the Newark Public Library has
systematically improved and modernized each of its ten branches, which
serve as homework centers and Internet access sites, in addition to
more traditional library functions. Indeed, the City's $5 million
capital allocation has enabled the Library to completely renovate one
branch in each of the City's five wards.
With an operating budget of approximately $12 million dollars, the
Library still relies upon foundation, corporate, individual and State/
Federal grants to meet the increasingly diverse needs of the patrons.
With grants from funders like the Prudential Foundation, the Victoria
Foundation, Lucent, MCI, and the Turrell Fund, the Library is able to
augment its operating budget by approximately $2 million dollars per
annum.
Now the Library, recognizing that Newark requires and deserves a
first rate downtown facility, will undertake a major renovation of its
landmark main building. The Library needs to add environmentally
controlled collection space, accessible reader areas, parking
facilities, and upgraded systems to support expanding technology
capabilities. A comprehensive fundraising campaign has been planned and
adopted by Library leadership to reach out to private donors,
corporations, foundations and government sources. The Library's current
donor base, including the 13-year old organization, Friends of the
Library, will also be asked to make significant pledges over a 5-year
period. The Library has hired professional fundraising counsel, a
feasibility study has been completed and the leadership gift phase of
the campaign is underway with its first gift of $1 million.
In addition to the lead gift from The Prudential Foundation, the
Library has received $289,733 from the Public Library Construction Bond
Fund, and $90,000 in project support from the Victoria Foundation.
Federal funds are sought to support the renovation initiatives and to
act as a critical incentive for private source giving.
An investment in the Main Library facility is also an investment in
its services and programs. For decades, the Newark Public Library has
provided significant programming for its entire community. The
Library's summer educational program for children is a model for the
nation. That program provides unique weekly activities for thousands of
children throughout the summer. During the academic year, the Library,
together with the Newark School District, provides daily educational
services for children in grades K-12.
Evening cultural programs include lectures by significant authors
and other educational and cultural figures. Performances conducted in
Library facilities encompass the full spectrum of the arts including,
dance, theater, film, and music. Adults have been attending in record
numbers in recent years.
Classes for adults include English as a Second Language, literacy,
and computer skills training. The Library is, appropriately, the city's
primary source for Hispanic collections and translation services. Sign
language classes are also conducted on a regular basis to assist the
deaf community. The Library's facilities are a significant resource for
local organizations. The Main Library provides free meeting rooms and
program space for many local organizations.
fiscal year 2003 request
An appropriation of $5 million is sought to assist in the
implementation of the Newark Public Library renovation and
modernization.
nat turner field development
Nat Turner Field is an undeveloped tract of land that the City of
Newark acquired with NJ Green Acres funding so that it would be
preserved as parkland rather than undergo development. It is surrounded
by newer housing developments on the west, a City pool/recreation
center and elementary school on the east, and an elementary school to
the south. To the north was a large abandoned factory, which was a
troublesome brownfield site for many years. It has recently been
demolished, and has been selected by the Newark Public Schools as the
site of a new high school, to be built through the State Abbott
District program. This activity presents a unique opportunity for
partnership between the Schools and the City.
It is proposed that Nat Turner Field be developed into a
recreational facility that will jointly serve the needs of the two
elementary schools and the new high school, as well as the community
at-large beyond school hours. The existing pool and recreation center
could be renovated to be part of a larger, more comprehensive complex,
and serve the schools as well. The schools will educate approximately
1,800 students. The summer recreation program will serve over 2,000 low
to moderate income families from the neighborhood.
fiscal year 2003 request
The City of Newark is seeking $3,000,000 in order to take the
conceptual design to an implementable plan, and construct the Nat
Turner Field. It will serve as the recreation focus for thousands of
students and families in a redeveloping neighborhood, as part of a
comprehensive revitalization plan.
john f. kennedy recreation center modernization
The JFK Recreation Center was built in the 1960's, and serviced the
population of several high-rise public housing projects. The Newark
Housing Authority has proceeded with the demolition of those failed
projects, and has recently received $35,000,000 for its HOPE VI
Redevelopment plan. The 45 acre site is being completely renovated,
with 755 new townhouse and low-rise public housing units, which will
become a part of the fabric of the City. The State of New Jersey is
committed to building new schools in the neighborhood through its
Abbott District program, and new commercial facilities are planned
nearby.
The City of Newark proposes to modernize and improve its
neighborhood recreation facility so that it can serve as the
neighborhood center for the newly rehabilitated area. The JFK
Recreation Center has, in two buildings, a full sized gymnasium, and an
Olympic-sized swimming pool under a retractable roof. But the buildings
are not connected children must walk outside to get from the pool to
the gym. This causes difficulty in programming and management, as well
as potential health problems for young, as well as elderly, program
participants. In addition, the buildings present fortress-like brick
walls to the street; rather than being a neighborhood beacon, the
facility appears forbidding. There is no green space or outdoor play
areas, and no parking facilities. Equipment modernization is also
needed for the pool filtration and air systems, so that activities can
go on 365 days a year. To date, the City of Newark has allocated
Capital Budget funds of $6,731,173 to this project.
fiscal year 2003 request
The City of Newark is seeking $3,000,000 in order to upgrade
mechanical systems, construct a new entryway, and make other
improvements to make the JFK, Jr. Recreation Center a full-service
community facility for the HOPE VI neighborhood.
The consideration of this committee will be greatly appreciated by
the citizens of the City of Newark.
______
Prepared Statement of the Coalition for Indian Housing and Development
On behalf of the members and Board of Directors of the Coalition
for Indian Housing and Development, I would like to thank Chairwoman
Mikulski, Ranking Member Bond and other distinguished members of the
Subcommittee for the opportunity to submit public witness testimony.
hud's budget request
As Chairman of the Coalition for Indian Housing and Development and
the National American Indian Housing Council, and Executive Director of
the Navajo Housing Authority, I come to you representing Americans who
daily endure the most deplorable housing conditions in the country.
These are people within America's borders who commonly live 15 to 20
people in one small house. These are people for whom proper sewage
facilities, roads, and indoor plumbing is often a luxury, rather than a
standard. These are people who, like many other Americans, dream of
owning their own homes.
Indian housing is at a crucial stage. Many of the housing problems
that have long plagued Indian communities remain unresolved. The
passage of the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA) has given tribes and Tribally
Designated Housing Entities (TDHEs) incredible new opportunities, and
with adequate funding, NAHASDA can be the most important tool in
building sustainable, healthy communities in Indian Country.
President Bush has requested roughly $646 million for the NAHASDA
block grant for fiscal year 2003. This is four million dollars less
than was proposed in fiscal year 2002, and roughly two million less
than appropriated for fiscal year 2002. In light of current events, the
Coalition recognizes the new priorities of the Federal government in
terms of homeland security; however, it is important intrinsic needs
like housing for Americans are not sacrificed for the wartime effort.
In times of peace or conflict, homeland security begins with a home,
and it is only through steady increases in the NAHASDA block grant that
the Native American population may begin to realize a home life outside
of third-world-like destitution.
funding needs for indian housing
CIHD believes Indian housing could be in more need of federal
support than any other housing program in this country. The lack of
significant private investment and the dire conditions faced in many
communities mean that federal dollars make up a larger portion of the
total housing resources than in other areas. NAHASDA has been one key
to housing improvement and homeownership in Indian country. By direct
application of NAHASDA funds, or by leveraging their tribe's NAHASDA
allocation for large-scale projects, tribal housing authorities have
been able to use NAHASDA to dramatically improve the severe living
conditions on their reservations.
CIHD supports NAHASDA and believes it has been effective in
providing better housing for American Indians and Alaska Natives.
Housing production under NAHASDA has more than tripled since its
passage in 1996. Before NAHASDA, there were only around 2000 homes
being built per year, now more than 25,000 homes are complete or under
construction.
For NAHASDA to continue to be effective, however, an increase in
funding is necessary to meet existing housing shortages. CIHD estimates
71,000 units need renovation or replacement, with an average cost of
$26,000 each. New housing needs are at least 4,500 new units per year
at an average cost of $96,000 per unit. Finally, existing housing
operation and program operating costs are expected to be over $300
million.
The Coalition for Indian Housing and Development estimates that, to
meet the suitable housing shortage as presented to us now, we need at
least $1.0752 billion in funding for the NAHASDA block grant.
Increasing the size of the block grant given to the office of Housing
and Urban Development through the Native American Housing Assistance
and Self-Determination Act (NAHASDA) from $650 million per year to $1
billion per year is necessary to provide the nearly 200,000 housing
units currently needed in Indian Country.
Native communities are in dire need of improved housing. The
Coalition for Indian Housing and Development and the National American
Indian Housing Council estimate more than 40 percent of the Native
American population lives in over-crowded or physically inadequate
housing. For the Navajo Nation alone, the immediate need is between
20,000 and 30,000 housing units. Spanning over 18 million acres of
land, the Navajo Nation suffers from chronic unemployment and massive
housing need. Over 56 percent of Navajos live below the poverty level.
As for many other tribes across the nation, this is a situation that
requires drastically increased federal assistance to remedy.
Indian housing needs are many and varied. Basic infrastructure,
low-rent housing, homeownership and housing counseling services are all
crucial. The NAHASDA block grant allows tribes to determine their own
needs and their own course of action. In this respect, NAHASDA is a
model program and should be supported. In supporting NAHASDA, however,
the Congress must also support improved technical assistance for tribes
seeking to efficiently and effectively utilize NAHASDA's unique
features.
Although fully funding NAHASDA to meet the existing needs would
require an increase in funds of $350 million, Native Americans would be
well served if the Congress chose to increase the program incrementally
over the next 5 years. For fiscal year 2003, $700 million, for fiscal
year 2004 $775 million, for fiscal year 2005 $850 million, for fiscal
year 2006 $925 million and for fiscal year 2007 $1 billion.
Without an increase in funding, tribes and tribally designated
housing entities will not be able to provide housing for the 1.6
million Native Americans and Alaskan Natives who live without proper
shelter. CIHD urges you to support an increase in NAHASDA block grant
funding to at least $1 billion over the next five fiscal years.
the effect of new census data
Recently released census data for 2000 confirm a major increase in
the Native American population. Data show a doubling of the number of
Native Americans and Alaska Natives from 1.96 million to 4.1 million,
including Americans of mixed-race Native descent. For Native Americans
and Alaska Natives that are not of mixed-race, data show an increase of
over 28 percent for a total of 2.5 million.
For a population struggling intensely to provide adequate shelter
for its families, an increase of this magnitude puts an incredible
strain on the restricted funds tribes rely on. These census figures
only confirm what tribal leaders and tribal housing administrators have
known for some time--housing needs on reservations have outgrown
available funding. While not all Native Americans live on reservations
where housing needs are the most severe, tribal leaders attest to
population increases across the board, including on reservations.
In light of this new data, it is the Coalition's hope that Native
communities will receive the funding increases outlined to offset
hardship brought on by rapidly growing need.
toxic black mold
The growth of black mold in tribal homes has been linked to health
risks ranging from flu-like symptoms, skin rashes, fever, and headaches
to inflammation of the respiratory tract, neurological problems and
suppression of the immune-system. In more recent years, black mold is
also suspected to blame for several deaths, particularly of children.
As of August 1, 2001, HUD compiled a list of over 20 tribal areas
experiencing mold problems, including 320 federally-subsidized homes on
the Turtle Mountain Indian Reservation. Other areas affected are
concentrated in the northeast, northwest, and northern plains where wet
seasons and flooding have exacerbated the mold growth. Tribal housing
officials say black mold is ravaging their homes, putting a terrible
strain on already tight housing funds, since many homes with black mold
must be remodeled or completely destroyed to remedy the situation.
No specific funding currently exists for addressing black mold in
tribal homes, but estimates are that $20 million is needed to fix the
situation at Turtle Mountain alone. Tribes have been trying to address
the problem with their NAHASDA block grant funds (approximately $650
million for fiscal year 2002), but this block grant was not created for
disaster relief. It was created for new construction and normal
rehabilitation of aging homes. Under objection from CIHD, $5 million
was taken from NAHASDA in fiscal year 2001 specifically for Turtle
Mountain for black mold. NAHASDA is not large enough to support this
sort of set-aside, particularly since so many other tribes across the
country are experiencing the same problem.
Black mold is not only a problem for tribes, however. It has also
be causing problems for the rest of America, but to date, no particular
agency or program has been able to fill in the gaps.
Recently, HUD Secretary Mel Marinez authorized the use of a new
weapon for tribes and other affected groups to battle Black Mold.
Secretary Martinez is opening up the Lead Based Paint Hazard Control
Grant Program and Healthy Homes Initiative to those homes and families
being harmed by Black Mold. Having been highly successful program in
dealing with the lead based paint crisis, the Coalition is excited by
the prospect of a new awareness and remedy of Black Mold on
reservations; with adequate funding, the incorporation of Black mold
into the accepted uses of the Lead Based Paint Hazard Control Grant
Program could mean its eradication. The Coalition for Indian Housing
and Development supports budget increases for HUD's Lead Based Paint
Hazard Control Grant Program and Healthy Homes Initiative to a total
allocation of $30 million.
public and indian housing drug elimination program
Eliminating funding for the Public and Indian Housing Drug
Elimination Program (PIHDEP) would abruptly halt successful efforts by
tribes around the country to combat drug abuse and its resulting
effects on tribal communities. The President has put an end to this
important program with a redistribution of funds to increase operating
subsidies for public housing authorities in hopes that PHAs will use
the funds for more effective anti-drug activities or for other
priorities.
Tribes and TDHEs do not participate in public housing programs and
therefore receive no public housing operating subsidies. The
Administration claims the program should be eliminated because of
general misuse of funds and ineffective anti-drug activities, but in
Indian Country, these programs have seen remarkable success.
According to an eleven-month study conducted by NAIHC in 1999 and
2000, the PIHDEP has created an opportunity for TDHEs to develop
innovative, creative, unique solutions to crime reduction in Native
communities. A National American Indian Housing Council study noted
that, prior to the Public and Indian Housing Drug Elimination Programs,
tribes reported feeling overwhelmed with the burden of having to
address these problems on their own, without knowledge of how to solve
the problems or money with which to build an infrastructure of programs
and services designed to address these community issues.
HUD Secretary Mel Martinez has said that the PIHDEP is too open-
ended and that HUD has no business being involved in such a program.
While it is not possible at this point to come to quantitative
conclusions about the percentage of improvement in these communities in
regard to any decrease in crime or substance abuse, the NAIHC study
indicates that the PIHDEP is having a positive effect in tribal
communities. Decreased crime and improvements in community values can
do much to support sustainable housing conditions on reservations.
The Coalition for Indian Housing and Development feels it was an
oversight on the part of the Administration to end this program without
arranging for supplemental funding for tribes elsewhere. A blanket
verdict on the Drug Elimination Program does not take into account
several successful programs around the country, including Indian Drug
Elimination activities. If this is the direction the Department chooses
to go, providing operating subsidies to take the place of PIHDEP, then
the tribes must be compensated with an increase in the NAHASDA block
grant to support drug elimination programs on reservations.
rural housing and economic development program
CIHD is also concerned with the elimination of the Rural Housing
and Economic Development Program from the President's budget for the
second year in a row. We are grateful to the Senate Appropriations
Committee for insuring that the program was funded in fiscal year 2002
despite it being left out of the President's budget and the House
appropriations bill.
Although funded at only $25 million for the past 2 years, a large
portion of RHED grant recipients have been tribes and TDHEs.
Furthermore, although RHED has been said to duplicate USDA programs, on
the contrary, this program has been able to fill in for tribes where
other programs have not. It has been a new and useful tool in capacity
building and for supporting innovative housing and economic development
activities. Taking into consideration the limited resources available
in Indian Country, removing useful programs is counter-productive. If
the goal is to increase the capacity of tribes and other rural
communities in order to make them self-sustaining, this is just the
sort of program that ought to be supported by the Congress and
Administration.
funding for native hawaiian housing
In 2000, Congress enacted the Native Hawaiian Housing Assistance
program (Title II, Public Law 106-568). This is the first such effort
to provide aid for Native Hawaiians since the Hawaiian Homes Commission
Act of 1920. Modeled after the NAHASDA, the new Native Hawaiian Housing
Assistance program provides tools desperately needed to improve Native
Hawaiian housing.
Although housing conditions for the greater Native American
population are appalling, Native Hawaiians continue to have the
greatest unmet need and the highest rates of overcrowding in the United
States. Overcrowding is seen in Native Hawaiian homes at a rate of 36
percent as opposed to 3 percent for all other homes in the United
States. While housing problems are seen in 44 percent of American
Indian and Alaska Natives homes, the number is actually higher at 49
percent for Native Hawaiians, and only 27 percent for other homes in
the United States. Right now there are 13,000 Native Hawaiians, or 95
percent of those eligible to live on the Hawaiian Home Lands, who are
in need of housing.
In light of these desperate conditions in Hawaii, the President has
authorized $10 million in fiscal year 2003 for the Native Hawaiian
Housing Block Grant. The Coalition for Indian Housing and Development
supports this request, and is encouraged by the Administration's
support of this new program.
community development block grants
The Community Development Block Grant (ICDBG) program is a crucial
tool in the development of infrastructure and economic opportunities in
tribal communities. The Indian set-aside under the CDBG program has
been 1.5 percent of the total appropriation for several years. The
Coalition for Indian Housing and Development believes that to both
develop effective housing strategies and to stimulate economic
development needed to support homeownership and necessary to job
creation, this ICDBG amount should be expanded. The President's budget
reflects an increase of $2.5 million to the Indian Community
Development Block Grant program. While CIHD is encouraged by the
President's recognition of the need to increase ICDBG, the Coalition
feels that to adequately meet the basic needs of tribes, the fiscal
year 2003 increase should be boosted to reflect at least 3 percent of
the total CDBG program allocation, or $144 million.
conclusion
In closing, I would again like to thank all the members of this
subcommittee, in particular Chairwoman Mikulski and Ranking Member Bond
for their continuing support for Indian housing programs and the
tribes. CIHD looks forward to working with each of you in this and
future sessions of Congress and I am happy to answer any questions you
may have.
______
Prepared Statement of College Partners, Inc.
Madame Chairwoman and members of the subcommittee, thank you for
opportunity to submit testimony on behalf of College Partners, Inc
(CPI) regarding fiscal year 2003 appropriations for the Department of
Housing and Urban Development. CPI is a not-for-profit organization
comprised of Spelman College, Morehouse College, and the Morehouse
School of Medicine in Atlanta, Georgia.
CPI evolved out of a shared commitment to enhance the
revitalization of Atlanta's West End community which sits at the
boundary of the Atlanta University Center (AUC), and is less than three
miles from downtown. Our principal objective is to acquire and
revitalize an eleven acre plot of land in Atlanta's West End which
holds tremendous potential for our institutions and the surrounding
community. With the acquisition of this property we will blend the
colleges with the community and create sustainable development through
activities focused on quality housing, youth and adult education, job
training, health services, and public awareness.
We would like to express our appreciation for the $200,000 that was
provided for this important initiative in the fiscal year 2002 VA-HUD
appropriations conference report. With respect to fiscal year 2003, we
request that the subcommittee provide $5 million from the Economic
Development Initiatives account to support this innovate project.
We would now like to discuss in greater detail the CPI partnership,
and what we are trying to accomplish for our institutions and the West
End community.
The West End Community
The immediate West End includes the now-demolished Harris Homes
public housing project, minor retail and commercial properties, an
insurance field office, and a MARTA rail and bus line. Moving outward,
the property is three miles southwest of prime commercial developments
such as Phillips Arena, the Georgia Dome, and the World Congress
Center. Despite the West End community's strategic location, however,
the area has been unable to significantly capitalize on the current
renewed interest in ``in town'' residential and commercial development.
Recent reports profile the West End as a community with high
unemployment, low educational attainment, deteriorating and/or vacant
housing, and a preponderance of families that live at, or below, the
federal poverty level. According to the 1990 U.S. Census data,
statistics show that this community suffers from an unemployment rate
of over 25 percent, while the median income of the Harris Homes
community in particular was a staggering $5,912. Moreover, while 61
percent of the families are living below the poverty level, over 70
percent of the female-headed households are similarly situated.
Additionally, these and other statistics significantly affect the
health and mortality rates of city residents. Subsequently, the overall
mortality rate of Atlanta African American residents, which are the
overwhelming majority in the West End community, is almost one and one-
half times that of white residents.
The Vision
Our vision includes transforming the under-developed property in
the Lee Street Corridor into an inviting entrance to a vibrant learning
and living environment. The development will integrate the colleges
with the surrounding neighborhoods to create an educational corridor or
``College Town'' and will provide an improved physical linkage between
the neighborhoods and adjacent college campuses. Ashby Street,
traditionally a dividing line between the Colleges and neighborhoods
west of the campuses, will be redesigned with a fabric of public
spaces, landscaping and local-serving retail uses. Ashby Street will
become a ``seam'' joining the neighborhoods and the Colleges, as
opposed to the divider it has been in the past.
CPI is working in partnership with the Atlanta Housing Authority
(AHA) to acquire the 11-acre tract of land in a value-for-value land
swap. As part of an agreement signed in May 1999, CPI agrees to
purchase real estate in other parts of southwest Atlanta in exchange
for the 11-acre tract held by AHA. Acquisition of this property is
critical to our efforts to expand the campuses for future growth. Such
expansion is currently curtailed by Interstate Highway 20 and the 2,700
public housing units that are within a one-mile radius of our campuses.
The requested land will enable the surrounding community development
process to continue and remain on target with the objectives of the
city's Empowerment Zone, which already has improved the neighborhoods
east and north of the campuses.
With the acquisition of the requested land, the Colleges will be in
a stronger position to expand their capabilities and establish and/or
expand programs in our institutional areas of expertise and experience.
For example;
Spelman College, through its Education department, plans to provide
local residents with training in early childhood development and
childcare while simultaneously providing a hands-on laboratory for
student education majors. Through the College's Continuing education
program, Spelman would be able to work with single heads-of-households
to transition from welfare to work. Additionally, Spelman would be able
to expand it's Entrepreneurial Business Development Program, which
already has provided nearly 200 local community residents with training
on how to establish, maintain, and expand a home- based or micro-
enterprise in retail, service, and manufacturing industries.
Morehouse College anticipates expanding its partnership with the
Fannie Mae Foundation and HUD to provide leadership training to
community organizers, local nonprofit organizations, and the members of
the Neighborhood Planning Units (NPUs). The Fannie Mae project is
designed to establish mutually beneficial relationships with adjacent
communities that will result in sustained economic and social
improvement and provide students with service- learning opportunities
that cultivate civic growth and development. Additionally,
Morehouse, in partnership with each of the other AUC institutions,
has already taken the lead to work with the Atlanta Public Schools in
the development of an application to establish a charter school, which
will have an emphasis on mathematics and science and will provide
clinical experiences for aspiring teachers from each of the AUC
institutions.
The Morehouse School of Medicine has made health services an
integral part of its focus in developing primary care physicians and
anticipates expanding its Community Health and Preventive Medicine
Programs. Several components of the program include a Health Promotion
Resource Center, a Center for Public Health Practice, and a Preventive
Medicine Residency Program. Each of these programs is designed to
partner with communities to provide services to assist with health
related issues. Additionally, the School would like to expand its
Benjamin Carson Science Academy, an initiative to introduce minority
elementary and middle school students to health and science careers
early in their education. The program, which has worked aggressively
with youth from Harris Homes, consists of a Saturday academy and a
four-week summer component.
Additionally, the acquisition of the property will allow all three
CPI institutions to expand their campuses, helping to alleviate
problems associated with projected student enrollment increases and
limited space within the AUC generally. The combined student enrollment
for all six AUC institutions is approximately 12,700, up from 8,400 in
1990, an increase of over fifty percent. Moreover, combined enrollment
is expected to grow by approximately 2,000 students over the next
twenty years. All six AUC institutions are in full support of CPI and
this initiative.
A study conducted by real estate appraisers Pritchett, Ball, & Wise
comments on the West End community that, ``within the life cycle of a
neighborhood, including growth, stability, decline, and revitalization,
we place this neighborhood in the early stages of revitalization.'' The
West End's geographic proximity to the downtown epicenter, coupled with
its balanced set of land uses, lends the area to reap secondary
benefits from housing to entertainment to small-, mid- and large-scale
commercial development. CPI acknowledges and appreciates the academic,
community, and municipal support that it has received from the City of
Atlanta generally and the West End community specifically. By acquiring
this land and utilizing it, CPI will be able to give back to the West
End community and assist it in its development efforts.
Madame Chairwoman, thank you for the opportunity to submit
testimony to the subcommittee and for your support of this important
initiative. If you have any questions or need additional information,
please do not hesitate to contact us.
______
Prepared Statement of the Consortium of Social Science Associations
(COSSA)
The Consortium of Social Science Associations (COSSA) represents
over 100 professional associations, scientific societies, universities
and research institutes concerned with the promotion of and funding for
research in the social, behavioral and economic sciences (SBE). COSSA
functions as a bridge between the research world and the Washington
community. A list of COSSA's Members, Affiliates, and Contributors is
attached.
COSSA appreciates the Subcommittee's past strong support for NSF,
particularly last year's substantial increase over the President's
proposed budget. We are well aware that every year the Subcommittee
confronts difficult choices among competing agencies under its
jurisdiction in a budget constrained by the desires of some to limit
Federal spending. COSSA hopes that NSF will remain an important
priority for the Subcommittee.
COSSA strongly believes that investing in NSF's research and
education efforts will help ensure this country's future economic well-
being and national security. Therefore, COSSA finds the
administration's proposal for a 5 percent increase for NSF in fiscal
year 2003 inadequate. In agreement with Coalition for National Science
Funding (CNSF), recommends a fiscal year 2003 budget for NSF of $5.5
billion. COSSA strongly endorses this recommendation. This budget
enhancement will return many-fold its value in economic growth, help
save lives, promote prosperity, improve society, and provide more
excellent science from more excellent scientists.
Over the past half century science has been the engine that has
driven the nation's economic success and quality of life improvements.
Fundamental university-based science has clearly delivered the great
technological advances that provided new methods and products that have
advanced our nation forward. These include: geographic information
systems, World Wide Web search engines, automatic heart defibrillators,
product bar codes, computer aided modeling, retinal implants, optical
fibers, magnetic resonance imaging, and composite materials used in
aircraft.
A substantial increase for NSF in fiscal year 2003 will help
prepare us for the great advances in the 21st Century. It would provide
NSF a much-needed boost for the size and duration of its research and
education grants. It would also lead to improving the scientific
literacy of the nation's students and general population. As our
business leaders continually point out, without improvements in
education and training and new innovations and scientific findings,
economic growth stagnates. NSF needs a significant influx of new funds.
The Fiscal Year 2003 Budget and the Social, Behavioral, and Economic
Sciences (SBE)
COSSA supports a substantial increase for the Research and Related
Activities account, so that SBE and the other directorates can continue
to fund important research seeking scientific breakthroughs to help
secure a better life for people and society. A significant increase
will also provide enhanced support of the fundamental research that
social, behavioral, and economic scientists conduct to understand
economic, social, and political behavior.
COSSA is delighted with the substantial percentage increase in the
President's proposed budget for the SBE directorate. However, because
of its small base, the absolute dollar increase remains smaller than
the research opportunities in the areas this directorate supports. In
addition, for Fiscal 2003, NSF has designated the SBE directorate a
``priority area,'' and provided it with a down-payment on significant
increases in the future. As Norman Bradburn, the Assistant Director for
SBE, told COSSA's 20th Anniversary symposium, new tools will enable the
social and behavioral sciences to expand their research and produce new
breakthroughs. These tools include: neuroimaging, collaboratories,
wireless computers, web-based surveys, geographic information systems,
and statistical techniques like data mining and hierarchical analysis.
In particular, the importance of data mining techniques grows more
important as the quantity and complexity of data grows immense.
SBE Research and Technological Change
SBE will support research with the use of these new tools to study
how technology and society advance through continual interactions.
Rapid technological change impacts all areas of our lives. We need to
know how this alters our economic, political and social systems. It has
clearly led to the growth of new businesses in areas of biotechnology,
geographic information systems, and now nanotechnology. Social and
behavioral scientists continue to study how these new tools have
impacted business organizations and the SBE's Innovation and
Organizational Change program is at the forefront of supporting this
research.
As members of Congress know, the new technologies have changed how
we communicate with our decision-makers, and have also raised the
possibilities of voting through the Internet. We have also tragically
learned that these tools also create opportunities for anti-government
groups to communicate and plan acts of destruction. They also raise
questions of how governmental policies regarding intellectual property
and privacy can be sustained in the face of all this change. SBE
continues to support research in all of these areas.
Our educational system has been overwhelmed by the introduction of
technologies in the classroom and their use as a pedagogical tool. Yet,
we still know little about its impact on learning. The social
consequences of the Internet and other new forms of interpersonal
communication also need investigation. How individuals interact with
each other and with their society are also being affected by
technology. Robert Putnam in Bowling Alone suggests that Americans have
become less community oriented. September 11 may have changed that.
However, we need to study the manifestations of that change and whether
it has staying power.
SBE stands ready to support studies on the social, political, and
economic consequences of all of these changes and needs a significant
influx of funds to do it. We urge you to support the SBE priority with
a substantial increase for the SBE directorate.
SBE Research and Terrorism
The tragic events of September 11 have certainly changed how
Americans look at the world and their country. Utilizing hypotheses and
tools derived from research on reactions to earlier disasters, natural
and man-made, SBE investigators have studied the reactions of people to
the World Trade Center and Pentagon bombings.
Using Small Grants for Exploratory Research (SGER), NSF's SBE
directorate was able to rapidly fund post-September 11 research in
Social Psychology, studying such issues as: predicting affective
reactions to collective loss; how individuals respond to a salient and
pervasive health threat such as anthrax; resiliency and coping in the
wake of the attacks and ongoing threats. SGER awards were also made in
other SBE programs: Human Cognition and Perception, Geography,
Sociology, and Political Science. The sociology awards included one for
a supplement to the General Social Survey for field work starting on
September 13 to assess attitudes towards a number of issues, including
confidence in government, civil liberties, and health issues. Another
award was for a post-crisis analysis of attitudes and values of the
Islamic public in Egypt, Iran and Morocco.
The SBE directorate's long-term approach to research on terrorism
includes the expectation of increased funding for basic research in a
number of areas, including: the communication of risk; decision-making
and responses of institutions, governments, organizations and social
groups to extreme events including terrorism, natural and human-
generated disasters; the structure, formation, and behavior of social
groups and networks; formation, mobilization, trajectories and
consequences of social protest; social identities of immigrant, racial,
and ethnic groups; experimental studies on the formation of status
beliefs, trust and cooperation; fundamental research on
democratization; multi-linguality (basic linguistic research on the
structure of languages underlying natural language understanding,
speech recognition and automatic translation); corpus linguistics, the
statistical and linguistic analysis of bodies of text, including
written documents e-mail correspondence to discover patterns and
regularities that can be used for analysis, including source
attribution; developmental research, including research on adolescence,
to examine attitude formation, group behavior and the effects of
mediators of learning, transfer of learning and environmental factors
on behavior, emotion, cognition, and perception.
Since terrorists are people, and terrorism is behavior, SBE
scientists are participating in the National Academy of Sciences'
efforts to help understand terrorism, terrorists, and how to stop
further destructive actions. There is a sub-panel, chaired by Neil
Smelser, of the Branscomb-Klausner committee, that is investigating the
social/behavorial aspects of terrorism. In addition, the National
Research Council's Committee on Law and Justice has instituted a
roundtable chaired by Assistant Attorney General Michael Chertoff and
former Deputy Attorney General Philip Heymann, which explored many
issues at its first meeting on March 18. One of these used basic
research on adolescent behavior to examine how young men are recruited
into terrorist groups. The other focused on criminal deterrence
research to look at disincentives for participating in terrorist
activity. Also at the meeting Martha Crenshaw, a political scientist
presented a history of terrorist activities in the past 30 years, that
puts September 11 into perspective.
NSF has also funded a workshop that helped geographers develop a
research agenda on terrorism. Geographers were instrumental in helping
New York City respond to the attacks on September 11 by using
geographic information systems to dispatch rescue teams and disaster
response units. The geographers will employ their experience in
researching hazards and natural disasters, regional and international
activities, and the tools of geospatial data and technologies to
examine all aspects of terrorism. In the past few weeks, psychologists,
political scientists and others have met with the FBI Behavioral
Science Unit at Quantico, VA to their expertise from their research
experiences to combating terrorism in the U.S. Much of the basic
research that contributes to these activities has been supported by
NSF's SBE directorate.
Social and Behavioral Science Research Contributions to Public Policy
As part of the Consortium's 20th Anniversary, late last year we
published Fostering Human Progress: Social and Behavioral Contributions
to Public Policy. In the book, COSSA discussed how social and
behavioral research has impacted six societal goals: Creating A Safer
World; Increasing Prosperity, Improving Health, Educating the Nation,
Promoting Fairness, and Protecting the Environment. Many of the
research studies cited either had initial NSF support or grew out of
the basic research supported by the Foundation. This includes the
training of researchers and policy makers.
One example of the NSF supported research under Creating A Safer
World focuses on the difficulties nations have had with their
transitions to democracy. Research conducted by James Gibson of
Washington University, St. Louis, Donna Bahry of Vanderbilt, and Brian
Silver of Michigan State have examined the struggles in Russia, while
Gibson has also looked at South Africa.
Another aspect of Creating A Safer World deals with reductions in
personal violence. The NSF-supported National Consortium on Violence
Research continues to research into the causes and correlates of crime
and the impacts of various policies on big city crime reduction in
recent years.
Nobel Prizes validate research that helped Increase Prosperity. The
2001 award went to three NSF supported economists--George Ackerlof,
Michael Spence, and Joseph Stiglitz--for their fundamental
contributions to the understanding of asymmetric markets. These are
markets in which one side has more information than the other. The film
and book ``A Beautiful Mind,'' illustrated that game theory and its
applications have also played a significant part in our understanding
of prosperity and markets. Robert Solow's Nobel winning work on
economic growth and the importance of technology to that growth is
still studied and refined today. Another Nobel prize winner, Robert
Mundell, researched exchange rates, which helped lay the intellectual
groundwork for Europe's common currency.
Improving Health is not just a biomedical research endeavor, nor
does it just result from discoveries in the physical sciences and
engineering. Basic research in the social/behavioral sciences has
examined the importance of lifestyle and behavior to good health.
Interventions to change behavior stem from basic research in social
psychology and other behavioral sciences. Studies of aging also utilize
research in linguistics to examine how older people communicate and use
language.
Enormous contributions from the social and behavioral sciences
influence how we Educate the Nation. The discoveries in basic cognitive
science have determined how children learn. Research on childhood
development focuses on the importance of early social relationships as
a source of either support and adaptation or risk and dysfunction. The
NSF support for Science of Learning Centers, Research on Learning and
Education (ROLE), and the Interagency Education Research Initiative
(IERI) carry on this research and merits support. In addition, the
Children's Research Initiative deserves enhanced funding.
In Promoting Fairness, the study of how our legal system works has
been a province of NSF's Law and Social Science program for many years.
Support for research of the jury system has resulted in landmark
studies on how those bodies make their decisions. Research into police
investigation practices has also discovered the difficulties of using
eyewitness identifications and line-ups as evidence in criminal trials.
In studies associated with Promoting the Environment, social
scientists have played a significant role in researching various
responses to environmental degradation. Economists, such as William
Nordhaus of Yale, have developed models to examine the economics of
global climate change. Geographers have demonstrated the importance of
mitigation and adaptation strategies. The NSF-supported Center for
Integrative Assessment at Carnegie Mellon University discovered that
slowly changing environmental conditions did not tend to motivate
adaptation and mitigation strategies. Other scientists have looked at
societal responses to environmental challenges. Economists have
developed cost/benefit analysis that has been an important tool in
regulatory responses to environmental problems. Elinor Ostrom and her
colleagues at Indiana's Center for the Study of Institutions,
Population and Environmental Change have had NSF support to devise ways
for institutions to equitably manage common pool resources such as
fisheries, grazing grounds, and water supplies.
On all these issues of public policy and others, NSF support for
basic research in the social, behavioral and economic sciences has been
vital. COSSA urges the Subcommittee to enhance that support.
Other Issues
COSSA also supports increased funding for the Graduate Research
Fellows program. It is time to provide the funds to increase the
stipends to make them competitive with other Federal agencies' graduate
fellows. Increasing the stipends should not occur as a trade off with
the number of fellowships available. The stipends should be increased
without a corresponding reduction in the number of these prestigious,
portable, student controlled support for graduate training.
The SBE directorates' Science, Resources and Statistics division is
slated for a significant increase. This boost would allow for the once-
per-decade incorporation of the results of the decennial census to
redesign the samples and surveys used to collect data on the scientific
and engineering workforce. We urge the Subcommittee to support this
increase.
COSSA is concerned that the proposed project for neutrino research
for the Homestake Mine in South Dakota, if funded without peer review
and National Science Board approval, would create a dangerous precedent
for NSF. The NSF budget must remain free of directed spending to a
specific project that has not been through the merit review process. We
are also concerned that the indemnification and liability costs, if
incurred by NSF without large infusions of new funds, would dwarf NSF's
other programs. We urge the Subcommittee to examine this project and
ensure that NSF's integrity and budget are protected.
Conclusion
The National Science Foundation remains the key funding agency for
fundamental research in the social and behavioral sciences. Indeed, it
is the premier funding agency in the world for basic research across
all the sciences and engineering. The SBE community joins with the rest
of the science community and the business and industrial community in
supporting a substantial increase for NSF. We urge the Subcommittee to
be as generous as it can in providing NSF with the support it needs to
keep the U.S. on top in science and engineering to provide this nation
and the world with the scientific and technological advances that will,
as John Kennedy said, ``light the world,'' and bring us back from the
darkness of September 11.
Thank you for the opportunity to present COSSA's views on the
fiscal year 2003 budget for the National Science Foundation and its
Social, Behavioral, and Economic Sciences directorate.
______
Prepared Statement of the Doris Day Animal League
Mrs. Chairwoman and members of the Subcommittee, thank you for the
opportunity to present testimony relevant to the fiscal year 2003
budget request for the U.S. Environmental Protection Agency's (EPA)
Office of Research and Development (ORD) and the Endocrine Disruptor
Screening Program (EDSP). I hope the Subcommittee willconsider the
concerns of the 300,000 members and supporters of the Doris Day Animal
League and take steps to ensure the EPA recognizes the necessity of
sound science approaches in its research, development and validation of
non-animal, alternative toxicological test methods. These methods can
significantly reduce the numbers of, and ultimately replace, animals in
its testing programs.
Research, Development and Validation of Non-Animal, Alternative Test
Methods
In recent fiscal years, the enacted budget for the ORD has hovered
at approximately $500 million, comprising just 9 percent of EPA's total
budget. In a report filed by the agency's own Science Advisory Board,
fiscal year 2002 Presidential Science and Technology Budget Request for
the Environmental Protection Agency: An SAB Review, the SAB urged
Congress to increase the proportion to 12 percent by 2004. However,
within these appropriations, we have found it difficult, if not
impossible, to track funding by ORD for specific non-animal,
alternative test methods to meet the EPA's needs in new testing
programs. It is our contention that many emerging technologies, which
often prove to be faster to run, less expensive and at least as
predictive as current animal tests used for hazard and risk assessment,
would benefit from research and development dollars.
Thanks to the leadership of Chairman James Walsh, House
Subcommittee on VA, HUD and Independent Agencies Appropriations, the
House inserted a $4 million directive for the EPA to research, develop
and validate non-animal, alternative test methods in the fiscal year
2002 bill. Ultimately, the conference committee for the VA, HUD and
Independent Agencies fiscal year 2002 bill agreed to the request.
The animal advocacy community is greatly appreciative of this
first-ever directive to the EPA. However, we have had significant
difficulty in obtaining concrete information from the agency on the
expenditure of funds to date and the plans for the rest of the fiscal
year. Should this committee decide to champion a request for a
directive for fiscal year 2003, I strongly urge you to include a
reporting requirement in the language.
I request that $10 million, from the current budget request, be set
aside for research, development and validation for regulatory
acceptance of non-animal, alternative test methods. Activities funded
by these allocations shall be designed in consultation with the Office
of Pollution Prevention and Toxic Substances. It is our preference that
these test methods have direct relevance to new EPA testing programs,
including the High Production Volume chemical testing program, EDSP and
Children's Health initiative. Our request for $10 million represents
just 2 percent of the total ORD budget and would be perceived by all
stakeholders as a genuine commitment by EPA to new non-animal,
alternative test methods.
I also request that the Subcommittee require the EPA report to the
Subcommittee by March 30, 2003 regarding expenditures and plans for
additional expenditures for fiscal year 2003 funds.
Endocrine Disruptor Screening Program (EDSP)
The Environmental Protection Agency has been mandated, under the
Food Quality Protection Act and the Safe Drinking Water Act Amendments
of 1996, ``to determine whether certain substances may have an effect
in humans that is similar to an effect produced by a naturally
occurring estrogen, or such other endocrine effects as EPA may
designate.'' This statutory requirement was in response to concerns
about abnormal reproductive and developmental effects in wildlife
exposed to various chemicals in their natural environments. The EDSP is
an effort to primarily assess the health effects to humans, with
wildlife concerns a component of the program. On its face, it is a
worthy endeavor.
However, as currently proposed by the agency, thousands of
chemicals may be tested by a protocol comprised of 16 test methods,
most which are animal tests. It has been estimated that as many as 1.2
million animals will be killed per every 1,000 chemicals tested under
the current structure of the EDSP. These projections make this proposed
program the largest use of animals in toxicological testing by a
federal agency. For this reason, it is being carefully scrutinized by
concerned animal protection organizations wanting to ensure that all
concrete steps are taken with this new science to protect animals both
wildlife and animals in the laboratories.
The very language in the FQPA on which the EDSP is based can
strongly address one of the concerns of the animal protection
community. To my knowledge, this is the first time that the word
``validation'' has been used as a requirement for sound science in
developing test methods for a federal toxicological program. The
statutory language required the screens and tests used in the EDSP to
be validated to ensure appropriately relevant, reliable and
reproducible tests and screens for the best science. The EPA, as co-
chair of the Interagency Coordinating Committee for the Validation of
Alternative Methods, supports the following definition of validation:
the process by which the reliability and relevance of a procedure are
established for a specific purpose. (``Validation and Regulatory
Acceptance of Toxicological Test Methods,'' NIH Report 97-3981).
In 1996, when the Acts were passed, the Interagency Coordinating
Committee for the Validation of Alternative Methods (ICCVAM) was in its
infancy. Since then, federal regulatory and research agencies,
including the EPA, have benefited from the effective assessment of
validity of new screens and tests afforded by ICCVAM. The ICCVAM
assesses the validity of new and revised test methods, including
alternatives, that have cross-agency application. In light of the
interagency agreements between EPA and the Food and Drug
Administration's National Center for Toxicological Research and the
National Institute of Environmental Health Sciences and the fact that
the proposed test methods for the EDSP are new or revised for new
endpoints, the ICCVAM could clearly provide a uniform assessment of the
validity of all EDSP test methods. Indeed, the ICCVAM was permanently
authorized by Congress in recognition of the continuing crucial role it
can play to facilitate assessment of test methods that have cross-
agency application, while giving a level of confidence in the
scientific assessment to various stakeholders.
The Advisory Committee on Alternative Toxicological Methods for the
National Toxicology Program, comprised of scientists from the public
and private sectors, passed unanimous resolutions on two occasions
strongly supporting the ICCVAM assessment. However, EPA continues to
assert that the non-animal, alternative test methods can be reviewed by
ICCVAM, while the animal test methods will solely be reviewed by the
agency's Science Advisory Board/Scientific Advisory Panel (SAP/SAB).
This approach gives animal protection advocates and other stakeholders
cause to believe that two different standards of scientific validity
may be applied. And while the agency claims it will use the same
criteria for assessment of validation as the ICCVAM, the level of
confidence in the ICCVAM is stronger. Also, any claim made by the
agency that ICCVAM assessment may slow down implementation of the EDSP
is simply hyperbole.
I urge the Subcommittee to support the assessment of validation of
tests and screens for the EDSP by the ICCVAM with appropriate fiscal
support from the EPA. This interagency process can provide appropriate
peer review of new tests and screens proposed for the EDSP. The ICCVAM
should work with the EPA's SAB/SAP to avoid unnecessary delay in the
program. Among other things, ICCVAM's assessment can serve to ensure
due consideration is given for the replacement, reduction and
refinement of the use of animals in these new tests and screens. This
request should in no way be perceived as calling for a reduction of the
President's request for activities in the Science and Technology
account addressing endocrine disruption.
I would also request that the Subcommittee require the Agency
provide a report to the Subcommittee by March 30, 2003 regarding
expenditures and plans for additional expenditures for fiscal year 2003
funds under the EDSP.
Conclusion
I respectfully request that the Subcommittee direct the EPA provide
$10 million for the ORD to research, develop and validate non-animal,
alternative toxicological test methods for regulatory acceptance.
I also respectfully request that the Subcommittee direct the EPA to
provide appropriate fiscal support to the ICCVAM for assessment of
validation of all tests and screens to be incorporated into the EDSP.
______
Prepared Statement of the Federation of American Societies for
Experimental Biology
Madam Chair and distinguished Members of the Subcommittee, I am
Robert R. Rich, M.D., President of the Federation of American Societies
for Experimental Biology (FASEB) and Executive Associate Dean at Emory
University School of Medicine in Atlanta, GA.
FASEB is the largest coalition of biomedical research associations
in the United States and is comprised of 21 societies with more than
60,000 scientist-members. FASEB's mission is to enhance the ability of
biomedical and life scientists to improve, through, their research, the
health, well-being and productivity of all people.
It is my privilege to join my colleagues in other fields of science
and engineering in thanking you for the Subcommittee's strong support
for the National Science Foundation over the past years. Your
commitment, Madam Chair, and that of Ranking Member Bond to a doubling
of the NSF budget has inspired the research community to join with you
in advocating such a worthy goal.
We join with you, Madam Chair, and Senator Bond in urging the
Subcommittee to recognize the vital contribution of NSF basic science
research to our economy and our national security by increasing funding
for NSF by at least $718 million, or 15 percent, over the $4.8 billion
appropriated in Fiscal 2002.
mission
NSF supports the ideas, people and tools necessary to maintain our
leadership in science and engineering, which in turn significantly
contribute to improvements in the nation's health, prosperity and
welfare. NSF support has been central to the development of new
technologies, promotion of national economic growth and establishment
of the world's premier graduate research and education system. Although
NSF's share of the federal research and development budget is less than
4 percent, NSF provides nearly a quarter of all Federal support for
basic research at academic institutions.
recent accomplishments
Since its establishment in 1950, the NSF has served the nation by
investing in the core disciplines of science, mathematics and
engineering. Over the years, NSF's investments in research and
education have helped the nation achieve an unmatched capability in
scientific and technical fields. From 1960 to the present, a total of
117 NSF-funded scientists have won the Nobel Prize. This prestigious
group includes three physicists, three economists, a chemist and a
biologist. One of the physicists, Eric Cornell, was awarded the NSF
Alan T. Waterman Award for Outstanding Young Scientists in 1997. The
biologist, yeast geneticist Leland Hartwell, was awarded the Nobel
Prize in Physiology or Medicine for his contributions toward the
discovery and understanding of genes that regulate cell division in all
living organisms. This seminal research that began in the 1960s, paved
the way for understanding how healthy cells divide and how errors in a
cell division may lead to cancer and related diseases.
Included below are a few examples of the bold and practical
initiatives funded in the last year. These illustrate NSF's
accomplishments in the generation, communication and translation of
science in the United States.
--An NSF-funded biomedical engineer at the University of Illinois at
Chicago has developed an implantable capsule that releases a
steady supply of insulin into the bloodstream of diabetics. The
capsule contains insulin-secreting cells that are protected
from the immune system by a silicon membrane containing
nanoscale pores that allow insulin to flow out while preventing
antibody access to the pancreatic cells.
--The NSF investment in plant genomics has yielded a wealth of new
information about the genomes of economically important crop
plants, including corn, barley, soybean and tomato. Newly
funded projects focus on the complex gene networks that
regulate plant responses to drought, disease and changing
climate conditions.
--Training professionals to handle cyber-threats that have the
potential to breach internet security is a national priority.
This year the NSF announced the establishment of the
Scholarships for Service Program to educate college students in
information assurance.
--The program will offer Federal internships and will require a
commitment of working for the Federal Government for 1 year for
each year of scholarship received upon graduation.
--Building on its longstanding sponsorship of basic research in
engineering, robotics, and social sciences, NSF was able to
respond promptly to the events of September 11, 2001.
Immediately after the terrorist attacks, NSF issued grants for
studies of structural failures, search robots and social
responses to the terrorist attacks.
scientific opportunities
Recent investments in science, engineering and mathematics have
given us revolutionary new products and technologies that will enhance
our quality of life. The potential to create, improve and harness
technology for the betterment of humankind has never been greater. We
must continue our investments in basic research, instrumentation and
education in order to ensure continued improvement in our quality of
life.
Research and Related Activities
The NSF Research and Related Activities budget supports fundamental
research in science, engineering and mathematics through research
grants awarded to scientists from research institutions across the
nation on the basis of competition. NSF grants provide support for
research in core disciplines as well as for interdisciplinary projects.
Currently, the budget of the NSF is insufficient to support all of the
meritorious proposals submitted. These unfunded proposals represent
lost opportunities for advancing our knowledge in important fields of
research. In order to maximize the number of proposals funded, NSF is
forced to make smaller awards. Adjusting for inflation, the average
size of an NSF grant is now worth less than it was 40 years ago. NSF
grants are also shorter than those awarded by many other research
sponsors. This means that NSF-supported scientists must apply for
funding frequently, spending a higher fraction of their time seeking
support and less time in the laboratory and classroom.
Research Instrumentation as Science Infrastructure
Cutting edge technology and instrumentation have become far too
expensive for many individual laboratories. Examples of such advanced
instrumentation include mass spectrometers, DNA sequencers, and the
computers and software for the analysis of data derived from use of
this instrumentation. Extensive training in the use of this technology
is necessary and costly. Complicated, state-of-the-art instrumentation
also requires expensive maintenance and operation.
The continued progress of science and engineering in the U.S. is
dependent on the availability of advanced research equipment. NSF
provides support to more than 2,000 colleges, universities and other
research and education institutions for multi-user instrumentation, the
development of new instrumentation and the improvement of research
facilities at biological field stations and marine laboratories. NSF
also invests in internet-based and other computer resources that
advance research capabilities, allowing the U.S. to remain at the
forefront of research.
Human Resources as Science Infrastructure
At NSF, research and science education go hand in hand. Over 100
U.S. Nobel laureates have had research funded by NSF and future Nobel
laureates benefit from the many science education programs it sponsors.
NSF provides educational support for almost 200,000 individuals,
including teachers, students in primary and secondary schools,
undergraduates, graduates and post-doctorates. NSF is a leader in
reforming the science curriculum, and its innovative efforts are a key
ingredient in the recipe for sustained progress in biomedical science.
NSF support for science education programs is also critical for the
general citizenry. Only a scientifically knowledgeable public will
understand the social and cultural changes resulting from advances in
science and technology. NSF continues its commitment to bring the best
in science education to the general public, reaching over 150 million
people through its programs.
recommendations
FASEB supports a significant increase in the NSF budget to allow
this agency to provide greater support for the fundamental research and
interdisciplinary workforce training that has been its hallmark. Such
an investment will allow larger and longer grants resulting in
increased productivity and reduced administrative expenses. In
addition, more proposals should be funded.
To address these pressing needs, provide access to major research
instrumentation and continue to educate Americans in the crucial fields
of science, engineering and mathematics, we recommend that the NSF
budget be increased by $718 million (15 percent) in fiscal year 2003.
FASEB recommends a return to the commitment to double the NSF
budget, in 5 years and therefore FASEB recommends that the NSF budget
for fiscal year 2003 be increased by at least 15 percent, to $5.5
billion.
______
Prepared Statement of the Fleet Reserve Association (FRA)
Madame Chairman: The Fleet Reserve Association (FRA) is grateful to
have been invited to submit a statement on its request for funding the
Department of Veterans Affairs for fiscal year 2003. On behalf of more
than 140,000 shipmates, I extend gratitude for the concern and active
interest generated by the Subcommittee in protecting, improving, and
enhancing benefits that are richly deserved by our Nation's veterans.
FRA was established in 1924 and its name is derived from the Navy's
program for personnel transferring to the Fleet Reserve or Fleet Marine
Reserve for the Marine Corps after 20 or more years of active duty but
not 30 years to fully retire. During the required period of service in
the Fleet Reserve, assigned personnel earn retainer pay and are subject
to recall by the Secretary of the Navy.
FRA is the oldest and largest professional military enlisted
association exclusively serving and representing men and women of the
three Sea Services. It continues to seek protection and equity for
those who serve in or have retired from the United States Navy, Marine
Corps, and Coast Guard, plus those veterans requesting assistance. The
Association has been active over the past 78 years in pursuing
Congressional and the respective Administration's support for enlisted
quality of life and veterans' programs for Sea Services' personnel. FRA
is also the leading enlisted association in The Military Coalition,
which is compromised of thirty-two military and veterans' organizations
representing 5.5 million Active Duty, Reserve, Guard, Retired, and
Veterans, their families and survivors.
legislative goals in brief
FRA's membership has an average age of 68 years, all veterans of as
many as three wars, mostly retired and from the Sea Services. They have
tasked the Association to seek Congressional action to authorize and
fund the following:
--Expand health care benefits for all veterans to include Medicare
Subvention.
--Funds for the construction and leasing of additional nursing and
long-term care facilities.
--Appropriate funds for the repeal of the statute requiring the
repayment of separation pay if the service member becomes
entitled to VA compensation.
--Enhance educational programs and provide voluntary open enrollment
in the GI Bill for all current active duty military personnel,
including military personnel who never enrolled in VEAP or
MGIB.
department of veterans affairs fiscal year 2003 budget
Fiscal Year 2003 Budget
FRA continues its quest for a DVA budget that will provide adequate
funding to care for the Nation's veterans, their families and
survivors. Although the fiscal year 2003 budget is the largest increase
ever for the DVA, FRA has listed the following veterans' programs it
believes should be authorized and funded in full. The Association urges
their consideration and adoption to assure America's veterans they will
be fully compensated for their sacrifices while in the uniform of the
Armed Forces of the United States, and that their families and
survivors will be cared for as prescribed in the mission of the
Department of Veterans Affairs.
veterans health administration
Expand Access to Veterans Health Care
VA treatment facilities should be accessible to military retirees'
use at no cost to the veteran. The Veterans Millennium Heath Care and
Benefits Act (Public Law 106-117) Section 113 authorizes the Department
of Defense (DOD) to reimburse the Department of Veterans Affairs (VA)
for medical care provided to eligible military retirees. However,
recent benefit changes under Public Law 106-398 with regard to TRICARE
and Medicare eligible retirees have delayed retirees' who are enrolled
as Priority Category 7 from utilizing the VA facilities without cost.
This especially affects non-disabled military retirees under 65 years
old, who do not have access to military treatment facilities (MTF).
Eligibility Reform and the Uniform Benefits Package are appealing
concepts offering our veterans a comprehensive health care plan that
provides the care they need. However, the annual enroll ment
requirement is of concern in addition to the uncertainty about what
priority levels will be enrolled each year. FRA believes the Veterans
Health Administration (VHA) medical treatment and care centers should
be open to all veterans regardless of their ability to pay. The
Association agrees there must be a system granting priority access for
certain veterans; i.e., service-connected disabled at 30 percent or
more; however, all veterans rated 20 percent or less, or non-rated,
should be granted access on an equal basis first come, first served.
FRA commends Secretary Principi for retaining Category 7 veterans in
the VA Health system. Unfortunately, FRA strongly disagrees with the
Department's proposal to change its policy to include a $1,500 yearly
deductible for higher income, non-service-connected veterans. This
would mandate forced choice between the VA and DOD Health systems. FRA
opposes the forced choice proposal. Military retirees shouldn't have to
choose, if they are eligible for both systems. The mission of these two
systems is dissimilar in many ways, and focused on serving different
populations with diverse needs.
The Association supports continued collaborative efforts between
the DOD and VA, to enhance the Defense Health System and provide the
necessary care for a very deserving population. The Conference Report
for the National Defense Authorization Act for fiscal year 2002 (H.R.
2620), requests both the Secretaries of VA and DOD to submit to the
Committees on Appropriations a credible plan to fully integrate
facilities at three demonstration sites. FRA is opposed to a complete
integration of these two Health systems, (per H.R. 2667). Before
Congress considers this issue any further, it should wait until the
President's Task Force to Improve Health Care for Our Nation's Veterans
(PTF) issues its findings. (Please note that a copy of FRA's testimony
to the PTF is available upon request.)
Medicare Subvention
FRA is concerned about dwindling access to health care. When
military retirees made decisions to retire in certain areas of our
country, they did so with the thought of being close to a military
installation or military treatment facility. Now because of BRAC
actions, many of those military installations and MTF's are no longer
available.
In recent years, the House and Senate have passed VA Subvention in
separate sessions of Congress, but have not been able to agree on a
plan to test the use of Medicare funds in VA facilities. Medicare
Subvention could prove beneficial to the government and stakeholders.
For veterans, VA Subvention would mean improved access to care, as
nearly 60 percent of enrolled veterans are Medicare eligible. These
beneficiaries have paid into Medicare throughout their working lives.
One important question that needs to be evaluated is whether the VA can
deliver Medicare-sponsored services more efficiently than Medicare in
the private sector.
FRA recommends a demonstration project for the VA to test the
feasibility of establishing Medicare Subvention programs within its
health care facilities. FRA believes that VA Subvention could enhance
older veterans' access to VA health care and determine whether
government resources can be used more efficiently to pay for the care
of growing numbers of older Medicare-eligible veterans. FRA also
believes with Medicare Subvention, the VA can withdrawal its proposal
for a $1,500 deductible for Category 7 veterans a proposal the
Association strongly opposes.
Nursing Homes, Long Term Care, and other Health Care Programs
FRA believes Public Law 106-117, Section 101, The Veterans
Millennium Health Care Act makes great strides in providing the long-
term care our veterans deserve. However, this program is only
authorized for a period of 4 years, and only for veterans who need care
for a service-connected disability, and/or those with service-connected
disability ratings of 70 percent or more. The Association urges the
extension of this program and expansion to include veterans with
service-connected disability ratings of 50 percent or more.
Veterans of World War II and Korea are in their 60s or older, as
are some Viet Nam veterans, and many require a greater level of long-
term care. As our veterans are aging, more will become dependent upon
the VA to provide the necessary care in nursing homes, domiciles, state
home facilities, and its underused hospital beds.
The methodology used in collecting funds for the Millennium Act and
then transferring the money over to the Treasury is flawed. VA's
rationale for this practice is to allow more discretionary VA spending
under the current caps set in the Balanced Budget Act. This is slight
of hand rather than a reliable business practice and FRA firmly
believes any money collected from veterans for veteran's health care
should remain within the VHA.
Tobacco-related Illnesses
In 1998, Congress changed the law prohibiting service-connection
for disabilities related to smoking. Many veterans began using tobacco
during their military service. It was a way of life and information on
health risks associated with tobacco use and nicotine addiction was
nonexistent. In earlier years it could be said that the Armed Services
facilitated smoking by including cigarettes in meal rations, and
selling cigarettes at discounted prices in military exchanges. FRA
recommends that the Subcommittee urge the oversight panel to repeal the
1998 decision not to review tobacco-related claims and, if adopted, to
provide the necessary appropriations.
Medical and Prosthetic Research
VA is widely recognized for its effective research program. FRA
continues to support adequate funding for medical research and for the
needs of the disabled veteran. In particular, FRA supports the fiscal
year 2002 Senate Appropriations Committee report language that states,
``Prostate cancer research has not kept pace with scientific
opportunities and the proportion of the male population who are
afflicted with the disease.'' FRA urges Congress to fund new research
opportunities through inter-institutional collaboration.
TRICARE
The VA's role as a TRICARE network provider is a potential source
for increased access to quality health care for all DOD beneficiaries.
If VA's capacity allows, and its core mission is not compromised, then
the VA should play a vital role in offering primary and specialized
care to TRICARE beneficiaries as a network provider.
In a June 1995 Memorandum of Understanding, TRICARE contractors
were authorized to include VA medical centers (VAMCs) in provider
networks and, therefore, TRICARE contrac tors were encouraged to use VA
facilities. Due to persistent billing and reimbursement problems, VA's
potential as a network provider has not been fully realized. Despite 80
percent of VAMC's currently being considered TRICARE network providers,
three-quarters of the activity occurs in only 26 facilities and the
total level-of-effort was miniscule according to the GAO (May 2000).
Current TRICARE contracts will begin to expire over the next few
years, and FRA is pleased that the VA is represented in the new
contract development. TRICARE Management Activity (TMA) has
acknowledged the importance of considering the VA in the next
generation of contracts. In light of the growth of VA's Community Based
Outpatient Clinics (CBOCs), the VA could be a service delivery
alternative for TRICARE beneficiaries where capacity exists.
The Association supports greater utilization of VA networks in
partnership with TRICARE. Although many VA providers are also TRICARE
network providers, actual usage has been marginal. Some reasons why
this partnership has not been fully realized include:
--VA providers are not qualified in specialties most in demand by DOD
beneficiaries. I.e. pediatrics and obstetrics and gynecology.
--VA providers often cannot meet TRICARE Prime access standards.
--Business practices in the areas of claims processing, IM/IT
systems' incompatibility, conflicts over pricing of services,
various administrative limitations and a lack of aligned
incentives impede use of VA providers by TRICARE Managed Care
Support Contractors.
Expanding the use of VA providers as TRICARE-authorized providers
to care for all TRICARE beneficiaries may improve active duty and
retirees' access to care in areas where TRICARE Prime is not available.
veterans benefits administration
Separation Pays
Under current law, service members released from active duty who
fail to qualify for veterans' disability payments and are not accepted
by the National Guard or Reserve, never have to repay any portion of
separation pay. If, however, qualified for either, it's time for
payback. FRA can not understand why an individual awarded service-
connected disability compensation should have to repay the Federal
government for that privilege.
FRA is totally opposed to the repayment requirement. The
Association recommends the Subcom mittee to seek repeal of the
applicable provisions in Chapters 51 and 53, 38 USC, to terminate the
requirement to repay the subject benefits and, if necessary, to provide
the required funding.
Court-Ordered Division of Veterans Compensation
Service-connected disability payments are intended to financially
assist a veteran whose disability may restrict his or her physical or
mental capacity to earn a greater income from employment. FRA believes
this payment is exclusively that of the veteran and should not be a
point at issue in any States' Civil Actions. If a Civil Court finds the
veteran must contribute financially to the support of his or her
family, let the court set the amount allowing the veteran to choose the
method of contribution. If the veteran chooses to make payments from
the VA compensation award, then so be it. The Federal government,
however, should not be involved in enforcing collections ordered by the
states. Let the states bear the costs of their own decisions. FRA
recommends the Subcommittee seek the adoption of stronger language
offsetting the provisions in 10 USC, now authorizing Federal
enforcement of state court ordered divisions of veterans' compensation
payments.
Montgomery GI Bill (GI Bill)
The Montgomery GI Bill is one of the major enticements for
enlisting in the United States Armed Forces. FRA believes that
continued improvements to the GI Bill are necessary in order to
continuously attract new recruits per congressionally mandated
recruitment levels each year.
The Association is grateful for the passage of Public Law 106-419
during the first session of the 107th Congress, which included the
enhancement of MGIB benefits. However, FRA believes Congress should
increase MGIB annually based on a benchmark of the current average cost
of a 4-year state run college education.
Would be participants in the MGIB are not permitted to enroll into
the new MGIB because they never enrolled in the VEAP program. During
the VEAP era, that program was considered to be insufficient in
providing adequate funding for a college education. Therefore, current
active-duty military personnel that never enrolled in VEAP or MGIB
should be given an opportunity to participate. FRA recommends that if
authorized, the Subcommittee provide the necessary funding.
The Association continues to believe that veterans who take
advantage of the GI bill will eventually return more money to the U.S.
Treasury than was spent by the Federal government for their education.
A concept once offered by the Treasury Department.
Disability Compensation Claims Processing
Among veterans, VA's inability to process claims in a timely,
accurate fashion continues to be one of its most serious problems and a
primary source of dissatisfaction with the Federal government.
The Veterans Benefits Administration (VBA) reports the average
processing time for initial claims is 225 days. If that claim is
appealed to the Board of Veterans Appeals (BVA), as many are, the
average time for a decision is 620-plus days. Speed is an issue. More
important is accuracy, a component of processing ignored for years and
the cause of many delays in finalizing claims.
As then Chairmen of the VA Claims Processing Task Force, Daniel L.
Cooper stated on 8 November 2001, ``I must say that I think the VA has
the necessary resources right now to do the job the Agency can't
justify asking for more people right now.'' To improve quality, VBA
must devote adequate resources for training personnel. It needs
additional staff to conduct quality reviews of the work of each of its
claims adjudicators in order to assess performance, impose
accountability, and remedy deficiencies on the individual employee
level. FRA believes the recommendations and changes proposed by the
Task Force should be implemented and funded in order to improve the way
VA does business.
national cemetery administration (nca)
Cemetery Systems
The NCA has undergone many changes since its inception. Currently,
the administration maintains more than 13,850 acres of developed and
undeveloped land containing more than 2.3 million grave sites as well
as 33 soldier's lots and monument sites. That equates to 120 cemeteries
throughout 39 states, the District of Columbia, and Puerto Rico. One
quarter of the nation's 26 million veterans alive today are over the
age of 65. Rapidly aging veteran populations coupled with the death
rate of World War I, World War II, and Korean veterans create resource
chal lenges within the NCA. It was estimated that the number of deaths
in 2001 were 674,400 veterans, and by 2006 that number will increase to
687,000 annually, or an average of 1,900 funerals a day. During this
time period, the interment rate will continue to rise thereby placing
even greater strain on NCA's workforce and equipment.
FRA is grateful to Congress for its increased funding for the new
construction of future cemeter ies. The NCA is doing much to meet
resource challenges and the demand for burial spaces for aging
veterans. It could do more, but without sustained additional funding,
the system will never meet the demand. FRA urges increased funding, so
the NCA has exclusive rights for the purchase of land, preparation,
construction and operation of new cemeteries, the maintenance of
existing cemeteries, and the expansion of grants to states to construct
and operate their own cemeteries.
As part of the Veterans Education and Benefits Act of 2001, the
government also will provide grave markers for veterans whenever
requested, even if there is another marker on the grave. However, as it
stands the law only applies to new burials, FRA believes the grave
marker rule should be amended and funds appropriated to include the
thousands of families denied grave markers in the past decade.
other recommendations for consideration
The following miscellaneous goals are offered for your support.
--Continue to monitor implementation and ensure adequate funding of
military health care program enhancements.
--Amend SBP to increase the annuity to 55 percent and shift the paid
up coverage effective date from 2008 to 2003.
--USFSPA Support legislation eliminating inequities in the Uniformed
Services Former Spouses Protection Act (USFSPA).
--Increase military manpower commensurate with demanding operational
commitments.
--Improve compensation for career noncommissioned and petty officers
of the U.S. Armed Forces.
--Provide adequate funding for military commissaries and continue
supporting its exchange systems.
--Support equity in cost-of-living adjustments for all beneficiaries.
--Protect personnel benefits for retirees and families residing at or
near BRAC sites.
--Authorize and fund construction and maintenance of family and
bachelor housing, child care centers, and MWR facilities.
--Support permanent change of station (PCS) process reform.
--Support full funding for the Impact Aid Program for schools
enrolling children of military personnel.
--Ensure parity for Coast Guard personnel with DOD pay and benefits.
--Amend the tax code to exclude taxation on residential sales for
active duty members returning from overseas assignments.
--Support enactment of a Flag desecration statute.
conclusion
Madame Chairman. In closing, allow me to again express the sincere
appreciation of the Association's membership for all that you, the
Subcommittee, have done for our Nation's veterans over these many
years.
FRA is grateful to address its recommendations for funding of the
Department of Veterans Affairs. Granted, not all veterans' issues are
cited in this statement; however, the Subcommittee does have the
Association's support for the improvement or enhancement of any
veterans programs not addressed herein.
______
Prepared Statement of the Friends of VA Medical Care and Health
Research
The Friends of VA Medical Care and Health Research (FOVA), a
coalition of 78 medical research, specialty, physician, academic,
patient advocacy and industry organizations committed to quality care
for veterans, is pleased to provide recommendations regarding fiscal
year 2003 funding for the Department of Veterans Affairs (VA) medical
and prosthetics research program. FOVA strongly encourages the Senate
Subcommittee on Veterans, Housing and Urban Development to support VA
research by recommending an fiscal year 2003 appropriation of at least
$460 million.
FOVA's fiscal year 2003 recommendations build on the $20 million
increase provided for the current year. The Administration's fiscal
year 2003 budget request for a $38 million (10 percent) increase in
research program dollars is notable for being the first time in many
years that an administration has proposed funding sufficient to
maintain VA's current level of effort in advancing treatments for
conditions particularly prevalent in the veteran population including
prostate cancer, diabetes, heart diseases, Parkinson's disease, mental
illnesses, spinal cord injury and aging related conditions. We applaud
the Administration and Department of Veterans Affairs Secretary Anthony
J. Principi for recognizing the invaluable contribution VA research
makes to delivering high quality care for veterans and toward improving
the health of veterans and the nation.
Please note that the Administration's budget request for a $38
million increase for VA research includes a shift from OPM to VA of $15
million in accrued government health and retirement benefit funds.
Consequently, the Administration's budget proposes a $23 million (6
percent) increase in research program funds plus $15 million in federal
employee benefit expenses previously paid by an OPM account, for a
total increase of $38 million (10 percent) over current year funding of
$371 million. FOVA strongly recommends that the entire $38 million
increase be allocated to VA research's programmatic needs and that
accrued benefits continue to be paid out of the OPM trust fund.
However, even a $38 million increase would not allow VA to address
all of the opportunities it has to improve care for veterans, nor to
meet the new challenges presented by the tragedies of September 11 and
subsequent events. FOVA strongly encourages the VA-HUD Subcommittee to
recommend an fiscal year 2003 appropriation of at least $460 million
for the VA medical and prosthetics research program. This represents
growth in program dollars of $89 million (24 percent).
Four core needs justify the FOVA recommendation of $460 million:
Investments in investigator-initiated research projects at the VA
have led to an explosion of knowledge that promises to advance our
knowledge of disease and unlock new strategies for prevention,
treatment and cures. Attachment 1 is a list of just a few of VA's
recent achievements and initiatives. However, many health challenges
still confront the veteran community. Additional funding is needed to
take advantage of the burgeoning scientific opportunities and to
improve quality of life for our nation's veterans as well as the
general public. FOVA urges the Committee to support additional funding
for the following research priority areas identified by the VA for
fiscal year 2003:
--Quality of Care.--Additional funding for the Quality Enhancement
Research Initiative (QUERI) program would be used to fund
centers in prostate cancer and dementia/Alzheimer's.
--Special Populations.--VA would expand research in quality of care,
community access and restoration of function to achieve greater
understanding of existing racial, ethnic and gender disparities
in health care.
--Diseases of the Brain.--Additional studies are needed on the impact
of different classes of psychiatric drugs on cognitive and
behavioral function.
--Treatment Strategies in Chronic Progressive Multiple Sclerosis.--
Recent studies have shown that immunotherapy of acute MS can
reduce disability. More studies are needed to determine the
optimal therapy for patients.
--Micro Technology.--In the area of low vision, work in retinal
prostheses is an emerging science and may restore sight lost as
a result of a variety of disorders including age-related
macular degeneration and retinal pigmentosa.
--Patient Outcomes in Rehabilitative Care.--Specific areas of
emphasis include long-term care strategies to enhance patients'
independence and activities of daily life, consequences of
community reintegration and the impact of assistive technology
on quality and functionality of life.
--Chronic Disease Management.--VA is proposing two major initiatives
in comparing clinical efficacy of (1) vascular surgery
conducted on and off cardiopulmonary bypass machines, and (2)
open versus endovascular surgery for abdominal aortic
aneurysms.
The complexity of research combined with biomedical research
inflation has increased the costs of research. The average cost of each
VA research project is now $150,000, a 9 percent increase in just 2
years. As a result, VA requires an increase of at least $15 million
just to maintain a stable number of programs.
In response to the events of September 11, VA seeks to establish a
research portfolio to address the threats of bio-terrorism. This
objective is consistent with VA's statutory obligation to provide
medical back-up services in times of national emergencies. VA has an
established history of research accomplishments in the areas of
infectious diseases and immunology, including vaccine development. The
laboratories of VA research scientists are disseminated nationwide, and
are affiliated with top-flight universities. VA research provides a
unique national resource that can be readily adapted and quickly
mobilized in response to diverse biological threats.
To meet this emerging challenge, consistent with H.R. 3253, the
National Medical Emergency Medical Preparedness Act of 2001, FOVA
strongly supports VA's proposal to establish four new centers of
research excellence focusing on fundamental issues critical for
responding to chemical, biological and radiological threats to public
safety. The targeted research portfolio would include pathogen
detection, disease diagnosis and treatment, protection, and vaccine
development. The mission of these centers would also encompass the
evaluation and management of illnesses consequent to military service,
especially in our current conflict.
VA's career development programs are a national resource for
training the next generation of clinician scientists, those doctors who
treat patients and address questions that have a direct impact on
patient care. Additional funding is needed to expand this program in
order to address the growing national shortage of clinician-
investigators.
Separate from its recommendations for the VA research
appropriation, FOVA strongly encourages the Committee to address the
increasingly urgent need for improvements in VA's research facilities.
In 1997, NIH conducted site visits of six VA research facilities
and concluded that, ``VA has had increasing difficulty in providing
sufficient resources via its congressional appropriation to
satisfactorily fund the infrastructure necessary to support research at
the VAMCs.'' It is FOVA's understanding that VA has made no
significant, centrally administered investment in its existing research
facilities since this finding. Ventilation, electrical supply and
plumbing appear frequently on lists of needed upgrades along with space
reconfiguration. Substandard facilities make VA a less attractive
partner in research collaborations with affiliated universities; reduce
VA's ability to leverage the R&D appropriation with other federal and
private sector funding; and make it difficult to attract cutting edge
researchers, both clinician investigators and laboratory scientists, to
careers in VA. Facility R&D Committees regularly disapprove projects
for funding consideration because the facility does not have the
necessary infrastructure and has little prospect of acquiring it.
Under the current system, research must compete with other medical
facility and clinical needs for basic infrastructure and physical plant
support. Unfortunately, the minor construction appropriation is
chronically inadequate to meet facility needs for clinical improvements
much less research upgrades, and year after year the list of urgently
needed research repairs and upgrades grows longer. VA has identified 18
sites in urgent need of minor construction funding to upgrade their
research facilities. These sites plus the many facilities with smaller,
but no less important needs, provide more than sufficient justification
for an appropriation of $45 million specifically for research facility
improvements.
FOVA recommends that a new funding mechanism, such as a minor
construction appropriation specifically for research facilities, be
developed to provide a permanent, steady stream of resources dedicated
to upgrading and renovating existing research facilities. State-of-the-
art research requires state-of-the-art facilities.
FOVA thanks the Committee for consideration of its views. For
questions or additional information, please contact any member of the
FOVA executive committee listed on this letterhead. Thank you for your
consideration.
Organizations that have endorsed FOVA's fiscal year 2003
recommendations: Administrators of Internal Medicine; Alliance for
Aging Research; Alzheimer's Association; American Academy of Child and
Adolescent Psychiatry; American Academy of Neurology; American Academy
of Opthalmology; American Academy of Orthopaedic Surgeons; American
Association of Colleges of Osteopathic Medicine; American Association
of Colleges of Pharmacy; American Association of Neurological Surgeons;
American Association of Spinal Cord Injury Nurses; American Association
of Spinal Cord Injury Psychologists and Social Workers; American
College of Clinical Pharmacology; American College of Physicians-
American Society of Internal Medicine; American College of
Rheumatology; American Dental Education Association; American
Federation for Medical Research; American Gastroenterological
Association; American Geriatrics Society; American Gold Star Mothers of
America; American Heart Association; American Lung Association;
American Military Retirees Association; American Nurses Association;
American Optometric Association; American Osteopathic Association;
American Paraplegia Society; American Physiological Society; American
Psychiatric Association; American Psychological Association; American
Society for Pharmacology and Experimental Therapeutics; American
Society of Hematology; American Society of Nephrology; American
Thoracic Society; American War Mothers; Association for Assessment and
Accreditation of Laboratory Animal Care International; Association for
Research in Vision and Ophthalmology; Association of Academic Health
Centers; Association of American Medical Colleges; Association of
Pathology Chairs; Association of Professors of Medicine; Association of
Program Directors in Internal Medicine; Association of Schools and
Colleges of Optometry; Association of Subspecialty Professors;
Association of VA Chiefs of Medicine; Blinded Veterans Association;
Blue Star Mothers of America; Clerkship Directors in Internal Medicine;
Coalition for American Trauma Care; Coalition for Heath Services
Research; Congress of Neurological Surgeons; Digestive Disease National
Coalition; Gerontological Society of America; Independence Technology,
Inc.; Johnson & Johnson; Juvenile Diabetes Research Foundation
International; Legion of Valor; Medicine-Pediatrics Program Directors
Association; National Alliance for the Mentally Ill; National
Association for Biomedical Research; National Association for the
Advancement of Orthotics and Prosthetics; National Association for
Uniformed Services; National Association of State Universities and Land
Grant Colleges; National Association of VA Dermatologists; National
Association of VA Physicians and Dentists; National Association of
Veterans' Research and Education Foundations; National Mental Health
Association; National Multiple Sclerosis Society; National Organization
of Rare Disorders; Nurses Organization of Veterans Affairs; Paralyzed
Veterans of America; Partnership Foundation for Optometric Education;
Research Society on Alcoholism; Research!America; Society for
Investigative Dermatology; Society for Neuroscience; Society of General
Internal Medicine; Veterans Affairs Physician Assistant Association;
and Veterans of the Vietnam War.
Attachment 1--VA Research--Recent Achievements and Initiatives
Promise for TB Vaccine.--Researchers at the Portland VA have found
a unique mechanism by which human T cells recognize cells infected with
Mycobacterium tuberculosis, the bacteria that cause TB. They have found
that the molecule HLA-E can present TB antigens to cytotoxic T cells. A
further understanding of this mechanism may facilitate the development
of an improved TB vaccine. Worldwide, over 2 million people die each
year from TB. Advancement towards an effective TB vaccine has
significant potential to improve both national and global health.
New Centers to Study Parkinson's Disease.--VA created six new
centers specializing in research, education and clinical care for
Parkinson's disease. The centers--in Houston, Philadelphia, Portland
(Ore.), Richmond (Va.), San Francisco and West Los Angeles--will
conduct research covering basic biomedicine, clinical trials,
rehabilitation, and health services. In addition, each center will take
part in a major VA clinical trial to assess the effectiveness of
surgical implantation of deep brain stimulators to reduce symptoms.
(Feb. 2001)
Key to Wasting Syndrome Discovered.--Researchers at the San Diego
VA Medical Center have unraveled the biological chain of events that
causes wasting syndrome in mice, and identified the same process in
liver and tissue from cancer patients. Wasting syndrome or cachexia,
affects about half of all cancer and HIV/AIDS patients, as well as
those with bacterial and parasitic diseases, rheumatoid arthritis, and
chronic diseases of the bowel, liver, lungs and heart. By noting the
similarities between animal and human models, researchers hope to
expedite the development of treatments to help patients. (Dec. 2001)
VA Evaluating Robotic Walker for Vision-Impaired.--VA researchers
in Pittsburgh and Atlanta are testing a new high-tech walking frame
designed to promote mobility and independence for the vision-impaired
frail elderly. Using laser range finders, sonar sensors, steering
motors and a motion controller, the Personal Adaptive Mobility Aid
(PAM-AID) seeks to build the functionality of a guide dog into a robust
walking frame. (Oct. 2001)
VA Establishes New HIV Research Center.--VA is the nation's largest
single provider of health care to HIV-infected persons. A new Center of
HIV Research Resources at the Palo Alto VA Health Care System seeks to
improve health care for veterans by assessing research and clinical
trials throughout VA and other agencies and determining their potential
for further research and clinical application. (Oct. 2001)
Rehab Researchers Collaborate in Artificial Retina Trials.--VA
researchers from the Rehabilitation Research and Development Service
have recently collaborated with colleagues at the Louisiana State
University Medical Center on studies to implant silicon-chip retinas in
the eyes of patients blinded by retinal disease. About the size of a
pinhead, the artificial silicon retinas are completely self-contained
and require no wires or batteries. They contain 3,500 microscopic solar
cells that generate electrical current in response to light. The
implants stimulate healthy retinal cells underneath the retina in a
pattern that resembles the light images focused on the chips. These
images are then transmitted to the brain via the optic nerve. The
implants are designed to treat retinitis pigmentosa and macular
degeneration. (Sept. 2001)
New Blood Test Speeds Diagnosis of Heart Attacks.--Researchers at
the San Diego VA Medical Center have developed a simple, inexpensive
blood test to increase the speed at which heart attacks are diagnosed
in hospital emergency rooms. The new blood tests can rule out a heart
attack with 100 percent accuracy within 90 minutes by looking for three
cardiac enzymes released by distressed heart tissue during an attack.
Ruling out a heart attack by traditional methods usually takes 6 to 24
hours. As a result, critical care admissions dropped 40 percent and
overall hospital admissions dropped 20 percent. (Sept. 2001)
Chronic Lymphocytic Leukemia May Be Underestimated.--VA researchers
at the Central Arkansas Veterans Healthcare System have found that the
true incidence of Chronic Lymphocytic Leukemia (CLL) is substantially
higher than estimated from the tumor registry database. Researchers
credited the VA's Computerized Patient Record System (CPRS) as making
the study possible by allowing researchers to review data from a large
patient population without handling paper records. Revision in the data
may show CLL to be the most common lymphoid malignancy in the United
States. (Sept. 2001)
Friendly Virus May Slow Replication of HIV.--VA researchers at the
University of Iowa have shown that a form of the hepatitis virus called
GPV-C may prolong the life of patients with HIV by preventing the HIV
from replicating. GPV-C does not appear to cause any symptoms and may
provide future therapy options for HIV. Specifically, the VA team
showed that infecting human blood cells with GPV-C in the laboratory
slowed the rate at which HIV multiplies. (Sept. 2001)
Higher Estrogen Doses May Enhance Memory for Alzheimer's
Patients.--VA researchers have found that higher doses of estrogen may
enhance memory and attention for post-menopausal women with Alzheimer's
Disease. Building on previous research showing the positive effects of
estrogen administered by a skin patch, the researchers showed that a
short-term administration of a higher dose of estrogen was found to
significantly improve verbal and visual memory as well as attention in
post-menopausal women. Although estrogen therapy does not show improved
brain function for patients with mild to moderate Alzheimer's, it may
slow the progression or prevent the disease. (Aug. 2001)
Diet and Exercise Reduce Risk and Delay Onset of Type 2 Diabetes.--
As part of the Diabetes Prevention Program (DPP), researchers at the VA
Puget Sound Health Care System and the University of Washington have
collaborated in a major clinical trial that showed at least 10 million
Americans can reduce their risk of contracting Type 2 diabetes with a
regimen of diet and exercise. Funded by a wide group of federal
agencies, private associations, pharmaceutical companies and product
manufacturers, the DPP was ended a year early because the data had
clearly answered the major research questions. (Aug. 2001)
VA Researcher Identifies Breast Cancer Gene.--A VA researcher at
the San Francisco VA Medical Center and the University of California at
San Francisco led a study that showed that women who have a specific
sequence of a transforming growth-factor gene have a 60 percent lower
risk of developing breast cancer. (June 2001)
Increased ``Good'' Cholesterol Reduces Rate of Strokes.--A VA
Cooperative Study at 20 VA Medical Centers has found that treatment
aimed at raising levels of high-density lipoproteins (HDL), commonly
called ``good'' cholesterol, substantially reduces the incidence of
strokes in some patients. Patients who received the drug Gemfibrozil
had a 31 percent lower incidence of stroke. The result is part of a
larger study aimed at showing that higher HDL levels reduce the risk of
major cardiovascular events. (June 2001)
Brain Development Continues into Late 40's.--An inter-agency study
led by a VA researcher at the Central Arkansas Veterans Healthcare
System has shown that the brain continues to develop in late 40-year
olds. This view contradicts the current view that brain maturation ends
before age 20 and may shed light on brain ailments such as Alzheimer's
Disease, schizophrenia and drug addiction. Using magnetic resonance
imaging (MRI) to measure brain development, the study showed that so-
called white matter--where memory, higher reasoning, and impulse
functions take place--continues to develop until the age of 48, on
average. (May 2001)
Reduced Opiate Treatment May Increase Efficacy of Chronic Pain
Treatment.--Researchers at the Tampa VA Medical Center have found that
patients taking opiates for chronic pain conditions reported no greater
pain intensity than those not taking the drugs. Those receiving opiate
treatment did report increased impairment. The program gradually phased
out opiate use and those who remained off the drugs reported less pain
and increased functionality and reduced depression. (May 2001)
New Technique to Evaluate Corneal Tissue for Implants.--Researchers
at the Central Arkansas Veterans Healthcare System and the Jones Eye
Institute at the University of Arkansas for Medical Sciences have
developed a new technique to evaluate the surface of a cornea to
determine suitability for transplantation. The new technique allows for
evaluation of the entire surface of the cornea; current inspection is
done visually or by methods that detect only large lesions. (May 2001)
Old Drug Resists Pull of Cocaine.--Researchers at the Philadelphia
VA Medical Center and the University of Pennsylvania report that
Propranolol, a drug currently used to treat high blood pressure, helps
addicts remain in treatment when the withdrawal effects of cocaine are
especially high and treatment dropout rates are otherwise high. The
research suggests that the drug reduces withdrawal symptoms by lowering
the anxiety causing effects of adrenaline. (April 2001)
New Method to Treat Osteoporosis, Grow Bone Tissue.--By using a
synthetic form of estrogen that promotes bone growth without affecting
the reproductive system, researchers at the Central Arkansas Veterans
Healthcare System and the University of Arkansas for Medical Sciences
may have discovered a new way to treat osteoporosis. Existing estrogen
replacement therapy for osteoporosis is associated with several side
effects including uterine cancer. This conceptual breakthrough could
lead to a new generation of drugs and hormone therapies. (March 2001)
Natural Recovery from Spinal Cord Injury Shown in Rats.--
Researchers at the San Diego VA Medical Center have found that rats
with spinal cord injuries develop some spontaneous re-growth of nerves
leading to increased motor function. In rats where 97 percent of the
spinal cord connections are severed, rats were able to regain function
within four weeks of surgery. Further research in continuing to
determine how this process of ``sprouting'' can be enhanced. (March
2001)
Flu Vaccines Could Save the Nation $1.3 Billion Annually.--Routine
influenza vaccinations of all working adults could save the nation as
much as $1.3 billion each year according to a study led by researchers
at the Minneapolis VA Medical Center and the University of Minnesota
Medical School. By examining both the direct and indirect costs
associated with influenza, researchers estimated that health care costs
could be reduced by an average of $13.66 per person vaccinated. (March
2001)
Implanted Electrodes Help Stroke Patients Walk.--Using a technique
known as Functional Neuromuscular Stimulation (FNS), VA scientists
implanted electrodes in the leg muscles of stroke patients and used
sophisticated software to electrically stimulate the muscles over a 6-
month course of treatment. The patients experienced significant
improvements in gait and other abilities, with no adverse effects. The
research was described in the Journal of Rehabilitation Research and
Development and other journals. (Feb. 2001)
______
Prepared Statement of the Great Lakes Indian Fish & Wildlife Commission
Environmental Protection Agency Appropriations.--GLIFWC seeks
$310,000 from various EPA programs for its ceded territory treaty
rights environmental protection program:
Ceded Territory/Crandon Mine Assessment Project.--$160,000 for
hydrological modeling, contaminant transport analysis, baseline
biomonitoring studies, and participation as a ``cooperating agency'' in
the preparation of a Federal EIS by the Army Corps of Engineers for a
proposed zinc and copper mine near Crandon, Wisconsin.
Lake Superior Bi-National Program, Great Lakes Strategy for 2002,
and Lake Superior LaMP.--$80,000 for continued GLIFWC participation in
the Bi-National Program, in the recently announced U.S. Policy
Committee's Great Lakes Strategy for 2002 A Plan for the New
Millennium, in the preparation and implementation of the Lake Superior
LaMP, and in IJC, SOLEC and other Great Lakes forums.
Habitat and Human Health Research.--$70,000 for research projects
on invasive species, including zebra mussels, on potentially
contaminated whitefish and lake trout spawning grounds in Lake
Superior, and on contaminant levels in Lake Superior lake trout.
EPA Budget Categories and Priorities.--Over the past 7 years,
Congress and EPA have funded GLIFWC's treaty rights environmental
protection program under a variety of budget categories, including:
wetlands (Section 104(b)(3) funds), coastal environmental management
(CEM), the Great Lakes National Program Office (GLNPO), the Office of
Pollution Prevention and Toxics, and environmental justice grants.\1\
The Clean Water Act (33 U.S.C. Sec. 1268) requires the EPA and GLNPO to
integrate tribal agencies in the development and implementation of
action plans to carry out the United States' responsibilities under the
Great Lakes Water Quality Agreement. In addition, GLIFWC and its member
tribes are among the partners that will be implementing the Great Lakes
Strategy for 2002 A--Plan for the New Millennium.
---------------------------------------------------------------------------
\1\ The Administration casts its proposed fiscal year 2003 budget
in terms of the EPA strategic plan's goals. For GLIFWC's ceded
territory purposes, the relevant goals and related funding categories
appear to be: Goal 2: Clean and Safe Water; Goal 4: Preventing
Pollution and Reducing Risk in Communities, Homes, Workplaces and
Ecosystems; Goal 6: Reduction of Global and Cross-Border Environmental
Risks; Goal 7: Quality Environmental Information; and Goal 8: Sound
Science, Improved Understanding of Environmental Risk and Greater
Innovation to Address Environmental Problems.
---------------------------------------------------------------------------
Ceded Territory Treaty Rights and GLIFWC's Role.--GLIFWC was
established in 1984 as a ``tribal organization'' within the meaning of
the Indian Self-Determination Act (Public Law 93-638). It exercises
authority delegated by its member tribes to implement Federal court
orders and various interjurisdictional agreements related to their
treaty rights. GLIFWC assists its member tribes in:
--securing and implementing treaty guaranteed rights to hunt, fish,
and gather in Chippewa treaty ceded territories; and
--cooperatively managing and protecting ceded territory natural
resources and their habitats.
For the past 15 years, Congress and Administrations have funded
GLIFWC through the BIA, EPA and other agencies to meet specific Federal
obligations under: (a) a number of U.S./Chippewa treaties; (b) the
Federal trust responsibility; (c) the Indian Self-Determination Act,
the Clean Water Act, and other legislation; and (d) various court
decisions, including a 1999 U.S. Supreme Court case, affirming the
treaty rights of GLIFWC's member Tribes. GLIFWC serves as a cost
efficient agency to conserve natural resources, to effectively regulate
harvests of natural resources shared among treaty signatory tribes, to
develop cooperative partnerships with other government agencies,
educational institutions, and non-governmental organizations, and to
work with its member tribes to protect and conserve ceded territory
natural resources.
Under the direction of its member tribes, GLIFWC operates a ceded
territory hunting, fishing, and gathering rights protection/
implementation program through its staff of biologists, scientists,
technicians, conservation enforcement officers, and public information
specialists. Its activities include: natural resource population
assessments and studies; harvest monitoring and reporting; enforcement
of tribal conservation codes into tribal courts; funding for tribal
courts and tribal registration/permit stations; development of natural
resource management plans and tribal regulations; negotiation and
implementation of agreements with State, Federal and local agencies;
invasive species eradication and control projects; biological and
scientific research; and development and dissemination of public
information materials.
Tribal members rely upon fish, wildlife, and plants for religious,
cultural, medicinal, subsistence, and economic purposes. Their treaty
rights mean little if contamination of these resources threatens the
health, safety, and economy of tribal members, or if the habitats
supporting these resources are degraded.
GLIFWC Programs Currently Funded by EPA.--GLIFWC currently
administers EPA funding for a variety of ceded territory environmental
protection programs and studies.
--Study of Proposed Crandon Mine in Wisconsin.--GLIFWC's work related
to the proposed mine includes hydrological modeling,
contaminant transport analysis, and baseline biomonitoring
studies. In fiscal year 2002, GLIFWC will administer $68,700 in
EPA wetlands (Section 104(b)(3)) funds to continue its
technical studies and assessments.
--Participation in the Lake Superior Bi-National Program.--Since
fiscal year 1996, EPA has provided CEM funds for a 1 FTE
equivalent to facilitate GLIFWC's participation in the Bi-
National Program to Restore and Protect Lake Superior,
including preparation of the Lake Superior LaMP and
participation in various International Joint Commission (IJC)
and State of the Lake Ecosystem Conference (SOLEC) forums. In
fiscal year 2002, GLIFWC will administer $76,800 in EPA CEM
funds to facilitate participation in these forums as well as in
the implementation of the Great Lakes Strategy for 2002 A Plan
for the New Millennium.
--Research and Special Projects.--Since fiscal year 1997, EPA has
provided a combination of CEM, GLNPO, and Environmental Justice
funds for GLIFWC to conduct scientific research to produce data
relevant to the Bi-National Program/Lake Superior LaMP and to
human health. In fiscal year 2002, GLIFWC will administer
$62,400 from EPA's Pollution Prevention and Toxics program to
test several Lake Superior fish species for dioxin.
Fiscal year 2003 Funding Needs/Rationale.--GLIFWC would use fiscal
year 2003 funds for these same purposes.
--Work on the Proposed Crandon Mine.--$160,000 for GLIFWC's review,
analysis and GIS mapping related to the mine, particularly as
to completion of an ongoing baseline biomonitoring project,
participation as a ``cooperating agency'' in the preparation of
the Federal EIS, and maintenance of hydrological and
contaminant transport expertise.
--Rationale.--The mine will impact ceded territory natural
resources that are subject to the tribes' treaty rights to
hunt, fish, and gather. State and Federal permit processes
are moving toward Environmental Impact Statements (EIS),
with the State EIS expected within a year and the Federal
EIS about 6 months later. GLIFWC needs to be ready to fully
participate both in the State and Federal EIS processes and
in the permit hearings that will follow. With the requested
fiscal year 2003 funds, GLIFWC will:
--Complete Baseline Biomonitoring Studies ($53,000).--GLIFWC
must complete the final year of its 3-year study to
establish baseline data for contaminants found in surface
water, plants and animals near the proposed mine site.
GLIFWC used EPA funds provided pursuant to Congress' fiscal
year 2001 $168,000 Crandon mine appropriation and EPA
wetlands (Section 104(b)(3)) funds to collect data in the
study's first 2 years. It does not have funding for the
third year.
--Serve as a ``Cooperating Agency'' in the Federal EIS Process
($67,000).--GLIFWC is participating as a ``cooperating
agency'' from the ceded territory perspective for its
member tribes in the preparation of the Federal EIS under
Sec. 404 of the Clean Water Act. As such, GLIFWC has the
opportunity to develop and present independent analyses of
a variety of potential mine impacts for inclusion in the
Federal draft EIS. This will require a substantial amount
of staff time for computer modeling and analysis,
preparation of written comments and assessments, and
attendance at various meetings.
--Maintain Hydrological and Contaminant Transport Expertise
($40,000).--Through Congress' fiscal year 2001 Crandon Mine
appropriations, GLIFWC received funds to enlist the help of
outside experts in specific technical areas, including: (1)
The hydrology of water flowing through the mine and methods
(such as grouting) to slow down that flow; (2) The
uncertainty associated with various impact predictions and
monitoring programs proposed by the mining company; (3)
Contaminant transport issues related to water flowing
through the mine and potential contamination of the
groundwater; and (4) Mercury contamination that may result
from wetlands drying up. This initial funding is not
sufficient to cover the costs of the much more in-depth
analyses that will be necessary as the mine's design and
engineering proposals are finalized and fully scrutinized
during the EIS processes and permit hearings.
--Participation in the Lake Superior Bi-National Program.--$80,000
for continued funding of GLIFWC staff (1 FTE equivalent, and
related travel and other expenses) who will participate in the
Bi-National Program, in the preparation and implementation of
the Lake Superior LaMP, in IJC and SOLEC forums, and in the
implementation of the recently announced Great Lakes Strategy
for 2002 A Plan for the New Millennium.
--Rationale.--GLIFWC has been actively involved in the Bi-National
Program since 1993. However, it was not able to adequately
participate until EPA first provided CEM funds for this
purpose in fiscal year 1996. As a result, GLIFWC currently
serves on the Bi-National Program's Task Force and
Workgroup, and on the Workgroup's chemical, terrestrial and
habitat committees. It is participating in the preparation
of the LaMP 2002. It also helps to liaison with other
relevant Great Lakes institutions, such as the Great Lakes
Fishery Commission, on issues of mutual concern between
environmental and natural resource managers.
As for IJC forums, GLIFWC staff regularly attend the biennial
IJC meetings and provide periodic comments when issues
arise in the interim, such as on the matter of Great Lakes
water diversions. As for SOLEC, GLIFWC staff addressed the
2000 plenary session on the topic of wild rice and
organized a breakout session on wild rice.
This funding is necessary for GLIFWC to live up to its
partnership responsibilities under the Great Lakes Strategy
for 2002 A Plan for the New Millennium.
--Continuing Research and Special Projects.--$70,000 for Lake
Superior habitat and human health research projects related to
the Bi-National Program and the Great Lakes Strategy for 2002 A
Plan for the New Millennium.
--Rationale.--GLIFWC has undertaken a number of studies over the
years related to the Lake Superior ecosystem. For example,
with GLNPO and CEM funds, GLIFWC is preparing a report on
the threat of wetland and terrestrial exotic plants to Lake
Superior, has studied sturgeon in the Lake Superior basin,
and has prepared GIS maps of fish spawning and nursery
locations for both native and exotic species. In addition,
as part of its ongoing natural resource contaminant/human
health research, GLIFWC used Environmental Justice grants
to update its fish consumption advisory database and to
undertake wild rice contaminant research for heavy metals.
For fiscal year 2003, GLIFWC would explore EPA funding for four
projects:
--Assess impacts from mining waste (stamp sands) dumped into Lake
Superior during the late 1800s, map an important whitefish and
lake trout spawning reef in Keweenaw Bay, and determine the
distribution of stamp sands in relation to the spawning reef.
--Assess whether seed mixtures currently used in northern upland
forest re-vegetation projects contain exotic invasive species,
and identify and recommend native plant species that would be
appropriate substitutes.
--Inventory zebra mussels in Chequamegon Bay and establish an
interagency workgroup to inventory, monitor, and develop
strategies to minimize the spread of zebra mussels in Lake
Superior and inland waters.
--Assess mercury, PCB and organochlorine levels in lake trout
harvested by tribes in the 1842 ceded territory waters of Lake
Superior, and evaluate how the new data compares to the
advisories currently being issued by the States of Wisconsin,
Minnesota and Michigan.
______
Prepared Statement of The Humane Society of the United States
On behalf of our 7 million members and constituents, The Humane
Society of the United States (HSUS) appreciates the opportunity to
submit testimony regarding fiscal year 2003 appropriations for the
Environmental Protection Agency (EPA). We wish to thank the
Subcommittee for directing the EPA to spend $4,000,000 for the
research, development, and validation of non-animal, alternative
chemical screening and prioritization methods. Prioritizing funding for
non-animal test methods is a critical step, encouraging the EPA to
promote and support these more humane, often faster, less expensive,
and more scientifically sophisticated procedures. We wish to commend
the Subcommittee for improving federal regulatory decision-making
processes on chemical safety and for helping to reduce needless animal
suffering. Our testimony for fiscal year 2003 focuses on the EPA's
Office of Research and Development (ORD) and the agency's Endocrine
Disruptor Screening Program (EDSP).
The EDSP is the largest of several chemical testing programs
administered by the EPA. These programs will collectively subject
millions of animals to suffering and death in painful toxicity tests.
Indeed, the EDSP itself is perhaps the largest government-sponsored
animal testing program in history. Yet without the Subcommittee's
intervention, the EPA's ORD budget has no identifiable program to
develop alternative tests that can replace, reduce, or refine existing
animal-based tests. Eli Lilly and Company eliminated its cat test for
glucagon, replacing it with an alternative test, and calculated that it
was saving $1 million a year as a result of the new test. However,
there may need to be some up-front investment--it cost Eli Lilly $2
million to develop and validate the alternative. We are still not
seeing sufficient commitment from EPA to provide the initial
investments needed to produce alternatives (or batteries of
alternatives) to address issues such as the Endocrine Disruptors.
The EPA, moreover, is not taking full advantage of an existing
interagency committee with expertise in assessing new testing methods
to evaluate their acceptability for regulatory use. The Interagency
Coordinating Committee on the Validation of Alternative Methods
(ICCVAM) is the federal government's focal point for assessing the
validation and regulatory acceptability of new test methods. The EPA is
a participating member of ICCVAM and was very involved in developing
and approving the ICCVAM structure. Yet the EPA is bypassing the
ICCVAM's review mechanism for many of the new tests in its EDSP,
instead relying on in-house assessments. This move has worried many
animal protectionists as well as other stakeholders.
The HSUS respectfully urges this Subcommittee to request that the
ORD establish a substantial program to research and develop alternative
methods (as it already committed to do for the High Production Volume
chemical testing program but has not yet pursued), and that the EPA
take full advantage of ICCVAM's expertise in evaluating new testing
methods of multi-agency interest.
research and development of alternative testing methods at epa's ord
The ORD budget in recent years has been approximately $500 million.
Within these appropriations, it has been nearly impossible to identify
funding by the ORD for non-animal alternative testing methods to meet
EPA's specific needs in new testing programs. We believe that
innovative non-animal alternative testing technologies would benefit
from research and development funding. Therefore, we respectfully
request that at least $10 million either from the existing budget or
over and above the President's budget request be appropriated for
research, development and validation of non-animal, alternative testing
methods. Given the potential long-term benefits of such investment in
alternatives development, it is surprising to us that the EPA is not
already actively pursuing this approach. Activities funded by these
allotments should be designed in consultation with the Office of
Pollution Prevention and Toxic Substances.
It would be appropriate for this funding to be targeted at testing
methods with direct application to recent and new EPA testing programs,
which include the EDSP, High Production Volume (HPV) chemical testing
program, and the Voluntary Children's Chemical Evaluation Program
(VCCEP). For example, there is a specific rat neurological development
test that is widely regarded as inadequate but is still being proposed
as one of the battery of tests under the VCCEP.
The HSUS also asks that the Subcommittee require the EPA to submit
a report to the Subcommittee by March 30, 2003 regarding expenditures
and plans for additional expenditures for fiscal year 2003 funds under
the EDSP.
The request for $10 million represents approximately 2 percent of
ORD's total budget, a modest but nonetheless significant commitment by
EPA to alternative test methods. The HSUS would like to emphasize that,
in making this request, we believe this course of action would also be
in the best interests of human and environmental safety.
the endocrine disruptor screening program (edsp)
Under the 1996 Food Quality Protection Act (FQPA) and the Safe
Drinking Water Act Amendments, Congress mandated that EPA determine
whether certain substances may have an effect in humans that is similar
to an effect produced by a naturally occurring estrogen, or such other
endocrine effects as EPA may designate. The congressional mandate came
as a response to public concern that exposures to synthetic chemicals
in the everyday environment may be adversely affecting the endocrine
systems of wildlife and humans, thereby causing reproductive and
developmental anomalies.
In response to Congress' mandate, the EPA formed the Endocrine
Disruptor Screening and Testing Advisory Committee at the close of
1996. This entity devised the testing framework for the EDSP.
Currently, the proposed EDSP testing scheme consists of a battery of 16
tests designed to assess the toxicity of up to 80,000 chemicals. These
tests are largely animal-based. Some scientific estimates have
projected that between 600,000 and 1.2 million animals will be killed
for every 1,000 chemicals tested.
Animal protection organizations and members of the public have
serious concerns about the process by which the proposed EDSP tests
will be evaluated. The FQPA stated that all screens and tests used in
the EDSP should be properly validated, to ensure the their relevance
and reliability for assessing endocrine disruption. The proposed EDSP
testing methods are all either new or revised for new endpoints, and
therefore each should be evaluated for the EDSP as a matter of sound
science. The natural entity to conduct this evaluation is the ICCVAM.
Since its creation in 1994, the ICCVAM has benefited EPA and many other
federal agencies, as well as research entities, by successfully
evaluating the validity of new and revised testing methods
(alternatives included) that have cross-agency relevance.
In December of 2000, Congress upgraded ICCVAM from an ad hoc
committee to a standing body, thereby solidifying its crucial role. It
is clear that ICCVAM can provide a standardized assessment of the
validity and regulatory acceptability of all EDSP tests and screens.
This would be particularly appropriate given the level of interest in
these methods by other federal agencies such as the Food and Drug
Administration and other national and international organizations,
including the Organization for Economic Cooperation and Development.
However, EPA has developed a bifurcated validation plan for the
EDSP that calls upon its own Science Advisory Board (SAB)/Science
Advisory Panel (SAP) to review all the animal-based tests and screens,
while asking the ICCVAM to review only the non-animal testing methods.
This approach has many observers worried that the animal-based methods
will be evaluated using lower standards than the non-animal methods. In
addition to qualms voiced by animal protection advocates, the Advisory
Committee on Alternative Toxicological Methods (ACATM) for the National
Toxicology Program passed two unanimous resolutions questioning the
EPA's plan and supporting the mission of ICCVAM. The Committee's
primary concern is that both in vitro and in vivo methods be subjected
to the same rigorous peer review and validation process to ensure the
highest likelihood of acceptance by the regulatory agencies, the
scientific community and the public.
The HSUS strongly urges the Subcommittee to call on the EPA to use
ICCVAM's expertise to assess the validity and regulatory acceptability
of all EDSP tests and screens, with appropriate fiscal support from the
EPA. Furthermore, ICCVAM should collaborate with EPA's SAB/SAP to avoid
any unnecessary delay in the program. Among other things, ICCVAM's
review of the EDSP testing methods can serve to ensure that proper
consideration is granted for the replacement, reduction, and refinement
of the use of animals in these proposed tests and screens.
conclusion
The HSUS respectfully requests that the VA-HUD Appropriations
Subcommittee provide funding to the EPA with the direction that the ORD
expand its research and development activities to include alternative
methods. We also urge the Subcommittee to ensure that any new or
revised testing methods with multi-agency or international interest be
evaluated through the Congressionally-established ICCVAM for sound
science and consistency with the replacement, reduction, or refinement
of animal use.
______
Prepared Statement of the Joslin Diabetes Center
introduction
Mr. Chairman, thank you for this opportunity to provide a status
report on the Diabetes Project conducted jointly by the Joslin Diabetes
Center in Boston, MA and the Department of Veterans Affairs (Medical
Care account), for which you provided $5 million each in the fiscal
year 2001 and the fiscal year 2002 Appropriations Acts.
Our request for fiscal year 2003 to continue this project with the
VA is $5 million in the Medical Care account, of which the VA's costs
represent approximately 50 percent.
I am Dr. Sven Bursell, Principal Investigator of the project and
Associate Professor of Medicine at the Harvard Medical School.
background
Joslin Diabetes Center has been involved with the Department of
Defense and the Department of Veterans Affairs in a pilot demonstration
project for the advanced detection, prevention, and care of diabetes.
The Joslin Vision Network (JVN) has been deployed in VA sites in VISN
21 in Hawaii (Honolulu, Hilo and Maui), VISN 1 in New England (Boston,
Brockton in Massachusetts, and Togus, Maine) and VISN 19/20 (Seattle
and Tricities in Washington, Anchorage in Alaska and Billings in
Montana). The JVN employs telemedicine technology to image the retina,
through an undilated pupil, of patients with diabetes, and produces a
digital video image that is readable in multiple formats.
This project was funded initially through the Department of Defense
Appropriations Act. The Department of Veterans Affairs medical staff
was eager to expedite the deployment of this advanced diabetes
technology beyond the limited resources available through participation
in the DOD funded project. We petitioned this Subcommittee for
additional resources to be made available to the VA for discretionary
diabetes detection and care.
This Committee provided $2 million in fiscal year 2000 and $5
million each in fiscal year 2001 and fiscal year 2002 for expansion of
this project within the VA. The VA has indicated a desire to continue
expansion, citing the JVN as the model of the future telemedicine in a
recent conference of the Association of Military Surgeons-General of
the U.S. (AMSUS). We are seeking $5 million to continue this expansion,
and are supported by the VA medical policy staff.
The leadership shown by this Subcommittee has enabled the VA to
provide its patient population the best diabetes care, prevention, and
detection in the world. We extend our sincere appreciation to you for
your response to that request.
fiscal year 2002 activities
The policy and program officials of the VA have established the
appropriate contracts and statements of work that resulted in consensus
with respect to deployment of the Joslin Vision Network (JVN)
technology to three sites: Anchorage, Alaska, TriCities, Washington,
and Billings, Montana. A Reading Center will be created and utilized in
Seattle, Washington. In addition, the refinement of JVN technology,
both hardware and software, will move toward developing a scalable
system that is capable of widespread deployment agency-wide. This
system was completed and it is anticipated that this next generation of
the system will be completely integrated into the VA's VISTA Medical
Records System and the VA communications infrastructure.
Results from our various demonstration installations have shown
that appropriate clinical resources can be efficiently allocated with
respect to appropriate ophthalmology referral. For example, the
installation in Togus Maine where there is no ophthalmology resources
on site has shown that the use of the JVN system can effectively
prioritize patients that need to be seen by the opthalmologist at the
time when the ophthalmologist plans to visit that clinic. This site is
imaging approximately 10 patients per day and they find the JVN program
extremely resource efficient in providing the appropriate eye care to
their patients.
The same experience was noted from the VA clinics in Hilo and Maui
where the Optometrist from the Honolulu VA visits these island clinics
once a month and was able to effectively focus his time on the patients
that really needed his expertise for managing their diabetes eye
complications.
An equally important concentration of resources in fiscal year
2001-2002 was focused on refining the technical core using outcomes
based medical and case management scenarios to develop a diabetes
healthcare model that is modular, customizable and that can be
seamlessly integrated into the existing VA telemedicine systems. This
is the stated goal of the medical leadership in the VA, DOD and HIS
health care systems. The overarching vision for the VA/JVN project is a
web-based comprehensive diabetes health care system that can be
interactively used by both patients and providers, that incorporates
diagnosis specific education and training modules for patients and
providers and that incorporates software applications that allow
outcome measures to be statistically assessed and individual treatment
programs to be interactively adjusted based on these outcome measures.
The JVN Eye Health care system exists as a component of a comprehensive
diabetes management system, incorporating other clinical disciplines
such as endocrinology, vascular surgery and internal medicine.
The effort for fiscal year 2002 will result in the development of
modular applications associated with different aspects of total
diabetes disease management such as clinical risk assessment, outcomes
assessments, behavior modification in an interactive electronic
environment, and education programs. These applications will be
designed in collaboration with participating VA sites to provide an
ultimate product that appropriately assesses the clinical diabetes risk
and provides treatment plans and behavior modifications that are
tailored to any particular patients needs. The programs will also be
designed so that they can realize a significant cost and resource
efficiency with respect to support and maintenance of the JVN component
and the diabetes management programs that will facilitate an
accelerated deployment in the future.
Technologically, we will be providing an application that
automatically detects retinal pathology from the JVN images. Using this
first step approach it is anticipated that we can reduce the load on
the reading center by as much as 50 percent. This is achieved through
the use of a computer application that scans the images and detects any
abnormalities that may be associated with the development of diabetic
retinopathy. In those cases where the computer detects pathology a
reader will be notified to perform the appropriate reading for
retinopathy assessment. In the case where the computer does not detect
any pathology the patient can be assigned to a low risk priority where
the computer findings can be rapidly confirmed by the reader and the
patient asked to return for repeat JVN imaging in a year.
fiscal year 2003 request
For fiscal year 2003, we request that in the VA Medical Account $5
million be allocated to continue and expand this project. The positive
response within the VA system indicates that with sufficient resources,
the JVN technology would be deployed in a number of sites with the
ultimate goal of incorporating the JVN technology throughout the VA
Medical Care system. The VA Budget Request by the fiscal year 2004
cycle will include provisions for full deployment for the JVN
throughout the VA Medical Care system. As the technology, systems and
production of equipment are standardized to off the shelf
specifications, the expense per site will decrease.
The specific goals for fiscal year 2003 include the following:
--Establish specific medical codes that will allow the VA to track
performance with respect to these JVN examinations and to ensure that
it conforms with VA performance criteria in multiple remote VA
outpatient settings;
--Improve adherence to scientifically proven standards of diabetes
eye care and diabetes care;
--Improve/promote access to diabetes eye care;
--Increase number/percentage of patients with Diabetes Mellitus
obtaining eye care;
--Provide education patients and providers in the clinical setting.
The use of the JVN equipment and expansion of screening
opportunities are a continuing major focus for fiscal year 2003
activities. The actual number of sites deployed to will be determined
on the locales with the greatest need for diabetes care in conjunction
with the telecommunications infrastructure at the identified sites and
the ease and costs associated with interfacing the JVN technology into
the existing infrastructure.
We have expended considerable effort in migrating the JVN
demonstration technology platform into an application that is totally
compliant with existing medical informatics infrastructures and the
existing VISTA infrastructure of the VA system. This will encompass the
integration of hardware and software in close collaboration with
available resources from the VA VISTA program that will allow a highly
scaleable transparent integration of the JVN Diabetes Eye Health Care
system into the existing health informatics infrastructures of the VA
system.
For the fiscal year 2002-2003 project phase, we have established
the following tasks, targets, and activities:
--Deployment of a viable, sustainable, and refined operating JVN
Diabetes Eye Health Care model and Comprehensive Diabetes Management
program.
--Develop a modularized medical outcomes based telemedicine
diabetes management program in continued collaboration with the VA with
outcome measures incorporated into software based on clinical results
and research experiences of the fiscal year 2001 efforts.
--Develop curriculum based patient and provider educational
modules.
--Integrate internet based portals that are accessed by patients
for reporting of glucose values and receiving feedback with respect to
goals for self management of their diabetes and adjustments of their
treatment plans based on these goals. These portals will also provide
regular education modules for the patients that are customized to their
particular needs and clinical diabetes risk assessment.
conclusion
We request continuation and maintenance of this Committee's policy
of support for the improvement of the diabetes care in the VA medical
system. Through funding of
This $5 million request, the benefits by the close of fiscal year
2003 will include:
--Deployment of JVN detection and care at 5 different VA centers
where each center will provide services for 6 different remote sites
for a total 35 sites;
--JVN accessibility to increase VA capability to achieve patient
compliance to eye examinations to at least 95 percent of the diabetic
patient population in any area being serviced. From an estimate of the
VA diabetic patient population we would estimate that the JVN would be
accessing an estimated patient population of 196,000, or an estimated
11 percent of the total VA Diabetic population after completing
anticipated 2002 deployments.
--The model for VA's deployment of the JVN as a diabetes detection
and Disease management platform for expansion to availability for the
entire VA Patient population.
Thank you for this opportunity to present this request for $5
million for fiscal year 2003 and status report for fiscal year 2002 on
a medical technology breakthrough for the patients and health care
system within the Department of Veterans Affairs.
______
Prepared Statement of the Metropolitan Water District of Southern
California
The Metropolitan Water District of Southern California (MWD) is
pleased to submit comments for the record regarding programs contained
in the U.S. Environmental Protection Agency's (EPA) fiscal year 2003
budget for your Subcommittee's hearing.
MWD is responsible for meeting the supplemental water requirements
of 17 million people living in the Southern California coastal plain
and the economy which supports them. Our sources of water supply are
the Colorado River and surface waters from Northern California. Of
particular interest to MWD and our 26 member agencies are those federal
programs that provide assistance and facilitate partnerships for
addressing critical water resources issues.
One of the most challenging water resource issues in Southern
California is ensuring adequate supply of high quality water. To
increase our ability to achieve these goals, we strongly urge that you
designate $2 million of funding appropriated for State and Tribal
Assistance Grants (STAG) to ensure the continuation of the Desalination
Research and Innovation Partnership (DRIP). DRIP is a major applied
research program which seeks to develop and demonstrate next-generation
desalination and disinfection technologies to economically treat large
volumes of water for potable and non-potable uses.
MWD also asks that you support adequate funding for another STAG
program, the Drinking Water State Revolving Fund (DWSRF). The
President's budget request of $850.0 million falls short of the $1
billion authorized by Congress in the 1996 Amendments to the Safe
Drinking Water Act. We urge that you support funding at the authorized
level. Water supplies, treatment facilities, and distribution systems
also require adequate protection from terrorist activities. We strongly
urge you to support the President's request of $5.0 million for
homeland security for public water systems.
We further ask that you fully support the $49.5 million request for
safe drinking water research in the President's budget. Lastly, we ask
that you designate $7 million for the American Water Works Association
Research Foundation (AWWARF) for research and studies, including those
related to the protection of drinking water supplies from terrorist
acts. These and several other requests to support funding are discussed
in more detail below.
State and Tribal Assistance Grants (STAG)
Desalination Research and Innovation Partnership (DRIP) Funding.--
Water quantity and quality are priority issues in Southern California
where approximately half of the water used is imported. Much of our
imported supply is from the Colorado River, a source that is high in
salinity (i.e., mineral content). Although not a health concern, high
salinity can cause scaling and corrosion of plumbing fixtures,
adversely affect salt-sensitive agricultural crops, and limit the
ability to recycle water. Local groundwater supplies cannot always be
utilized, in part because of high salinity.
Several years ago, MWD and its partners embarked on a public-
private partnership (DRIP) to develop innovative technologies for cost-
effectively reducing salinity in Colorado River and other non-
traditional sources such as brackish groundwater, municipal wastewater
and agricultural drainage water. The program was subsequently expanded
to evaluate new technologies for the inactivation of pathogens
resistant to commonly used disinfectants. In its first 5 years, DRIP
has investigated pretreatment to optimize the performance of reverse
osmosis for reducing salinity in Colorado River water and municipal
wastewater, the use of ultra-low pressure membrane technologies to
improve the economics of salinity removal from a variety of water
sources, brine minimization and disposal strategies, and the
effectiveness of ultraviolet light as a disinfectant for resistant
pathogens like Cryptosporidium. In part because of these early
successes and to address the statewide concern with high salinity, the
partnership now includes water utilities from Northern California. MWD
asks that you identify $2 million of the STAG appropriation to support
the continuation of DRIP. This funding will leverage the financial
commitments made by the DRIP partners and support near-term activities
aimed at demonstrating large-scale desalination and ultra-violet light
technologies for Colorado River water and municipal wastewater,
increasing the amount of water recovered from RO processes, and
improving methods for concentrating brine.
Drinking Water State Revolving Fund.--STAG funding is also critical
for the DWSRF. In California, water suppliers have identified drinking
water infrastructure projects totaling in excess of $17.5 billion that
could benefit from low-cost DWSRF financing. This amount likely
understates the true needs since these estimates do not take into
account the infrastructure costs of complying with a maximum
contaminant standard nor the costs of other drinking water standards
likely to be promulgated over the next several years. Low-cost
financing for projects which ensure safe drinking water supplies is
critical for protecting the health of the more than 240 million
Americans served by public water systems, and MWD strongly urges that
you provide $1 billion, the amount authorized by Congress for fiscal
year 2003. This amount, while greater than the amount requested in the
President's budget, is still only a small fraction of the funding
needed by drinking water suppliers to meet existing Safe Drinking Water
Act requirements.
Clean Water State Revolving Fund.--Significant investments are
needed to repair and replace aging municipal wastewater infrastructure
and combined sewer systems. Low-cost financing is necessary to support
substantial municipal water quality infrastructure needs over the next
20 years. The President has requested $850.0 million for fiscal year
2003 for the CWSRF to support these activities, many of which are vital
for ensuring protection of drinking water sources. MWD asks that you
support funding at least at the level in the President's budget.
Non-point Source Grants.--Another critical source of funding for
source water protection projects is grants under the Clean Water Act's
Section 319 Non-point Source Program (NPS). The President has requested
$180.4 million for NPS grants for fiscal year 2003 and MWD requests
your support at the level in the President's budget. Non-point source
pollution is the primary cause of impairment of our nation's waterways.
Homeland Security
We are pleased that the President's budget provides for funding to
protect public water systems from terrorist attacks through support of
a public-private partnership to safeguard the nation's water supplies
and wastewater systems. We urge you to support funding at least at the
$5 million level requested in the President's budget.
Safe Drinking Water Research
Scientifically sound research provides the underpinnings for
effective drinking water quality programs. EPA's fiscal year 2003
budget, under its strategic goal of clean and safe water, includes
$49.5 million for safe drinking water research. Of particular interest
to Metropolitan is EPA's research on emerging pathogens, including the
development of dose-response relationships and evaluation of cost-
effective treatment technologies for removal and inactivation. Several
pathogens are on the Contaminant Candidate List (CCL), and further
research is needed to support decisions of whether or not to proceed
with the rulemaking process. We ask that you fully support the
President's request of $49.5 million.
Drinking Water--Public Water Systems Supervision Program Grants
EPA's 2003 budget allocates $93.1 million for Public Water Systems
Supervision Program grants. This funding is necessary for states with
primary enforcement responsibilities to carry out their duties,
including implementation of the 1996 SDWA regulations, and we ask that
you support this funding level.
Designation of Funding for AWWARF
EPA has an opportunity to leverage its research budget through
designating part of EPA's appropriation for AWWARF. Any EPA funding
will be matched up to 100 percent from AWWARF and participating public
water suppliers. We ask that you designate $7 million for AWWARF for
research, including research that will lead to better protection of
public drinking water supplies from acts of terrorism.
We look forward to working with you and your Subcommittee. Please
contact Brad Hiltscher, MWD's Legislative Representative in Washington,
D.C. at (202) 296-3551, if we can answer any questions or provide
additional information.
______
Prepared Statement of the National Council for Science and the
Environment
summary
The National Council for Science and the Environment (NCSE)
strongly supports bipartisan efforts to double the budget of the
National Science Foundation (NSF). To that end, we encourage Congress
to appropriate at least $5.5 billion for NSF in fiscal year 2003, an
increase of $718 million or 15 percent relative to the fiscal year 2002
level.
We encourage Congress to strongly support full and effective
implementation of the National Science Board (NSB) report,
Environmental Science and Engineering for the 21st Century: The Role of
the National Science Foundation, within the context of efforts to
double the budget of the NSF. The NSB report calls for significant
improvements in the way that NSF supports environmental research,
assessment and education, and proposes that the Foundation invest an
additional $1 billion per year in these areas, to be phased in over
five years. NSF has begun to implement the NSB report and deserves full
support from Congress. We also emphasize the need for increased funding
for NSF's priority area on Biocomplexity and the Environment. In
addition, we recommend full funding for two large projects the National
Ecological Observatory Network (NEON) and EarthScope which are included
in NSF's budget request for Major Research Equipment and Facilities
Construction. These projects would create unprecedented opportunities
for environmental research.
We urge Congress to restore full funding for the Environmental
Protection Agency's (EPA) Science to Achieve Results (STAR) graduate
fellowship program. EPA's budget request for fiscal year 2003 would
eliminate funding for new STAR fellowships.
introduction
The National Council for Science and the Environment thanks the
Senate Appropriations Subcommittee on VA, HUD and Independent Agencies
for the opportunity to provide testimony on the National Science
Foundation's budget request for fiscal year 2003.
NCSE is a nonprofit, nonpartisan organization that has been working
since 1990 to improve the scientific basis for environmental
decisionmaking. Our work is endorsed by nearly 500 organizations,
ranging from the U.S. Chamber of Commerce to the Sierra Club, including
the National Association of Attorneys General, National Association of
Counties, some 300 colleges and universities, and more than 80
scientific and professional societies. As a neutral science-based
organization, NCSE promotes science and its relationship with
decisionmaking but does not take positions on environmental issues
themselves.
We greatly appreciate the Subcommittee's sustained support for the
National Science Foundation. We are especially grateful for the
Subcommittee's support over the past six years for NCSE's efforts to
encourage the NSF to expand scientific activities that can help to
improve environmental decisionmaking.
federal investments in environmental r&d
Federal investments in R&D and science education are essential to
the future well-being and prosperity of the nation and deserve the
highest priority of the Congress. The long-term prosperity of the
nation and the maintenance of our quality of life depend on a steady
and growing commitment of Federal resources to science and technology.
Environmental R&D is a critical component of the nation's R&D
portfolio. Based on NCSE's Handbook of Federal Funding for
Environmental R&D, we estimate that Federal funding for environmental
R&D in fiscal year 2002 is approximately $7.5 billion, an increase of
$315 million or 4.4 percent relative to fiscal year 2001 (Table 1).
Federal funding for environmental R&D grew at less than one-third the
rate of total R&D, which increased by 13.5 percent to $103.7 billion in
fiscal year 2002.
Appended to our testimony is a letter signed by more than 120
university and college presidents, as well as business, scientific and
environmental leaders calling for significantly increased funding for
scientific programs about the environment at the National Science
Foundation, EPA, NASA, and other Federal agencies. We encourage
Congress to support this initiative.
TABLE 1.--ENVIRONMENTAL R&D BY FEDERAL AGENCY
----------------------------------------------------------------------------------------------------------------
Environmental R&D (millions of dollars) Change from fiscal
-------------------------------------------- year 2001 (percent)
---------------------
Agency Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
year 2000 year 2001 year 2002 year 2002 year 2002 year 2002
actual estimate request enacted request enacted
----------------------------------------------------------------------------------------------------------------
National Aeronautics and Space Admin.......... $1,690 $1,716 $1,515 $1,573 -11.7 -8.3
Department of Energy.......................... 1,502 1,774 1,398 1,862 -21.2 5.0
National Science Foundation \1\............... 671 752 829 829 10.2 10.2
Environmental Protection Agency............... 558 609 569 702 -6.5 15.4
Department of Defense......................... 399 450 382 410 -15.1 -9.0
Department of Commerce--NOAA.................. 643 726 772 836 6.4 15.3
Department of the Interior.................... 618 631 593 673 -6.1 6.5
U.S. Department of Agriculture................ 370 410 411 451 0.2 9.9
National Institutes of Health................. 60 63 70 81 11.7 28.4
Department of Transportation.................. 37 41 61 71 47.0 72.2
Smithsonian Institution....................... 14 14 14 14 1.4 1.4
Corps of Engineers............................ 11 10 11 11 1.4 1.4
-----------------------------------------------------------------
Total................................... 6,573 7,197 6,624 7,512 -8.0 4.4
----------------------------------------------------------------------------------------------------------------
\1\ NSF Environmental R&D provided by NSF.
Source: AAAS/NCSE estimates of environmental R&D based on enacted appropriations bills, OMB R&D data, Budget of
the United States Government, agency budget documents, and information from agencies.
national science foundation budget request for fiscal year 2003
The National Council for Science and the Environment strongly
supports bipartisan efforts to double the budget of the National
Science Foundation. We commend the Chair and Ranking Minority Member of
the Subcommittee for their leadership. We encourage Congress to
appropriate at least $5.508 billion for NSF in fiscal year 2003, an
increase of $718 million or 15 percent relative to the fiscal year 2002
level. This level of support is recommended by the Coalition for
National Science Funding, which includes NCSE and 70 other scientific
organizations and academic institutions.
Biocomplexity in the Environment Priority Area.--NCSE is
particularly supportive of NSF's priority area on Biocomplexity in the
Environment. This initiative provides a focal point for investigators
from different disciplines to work together to understand complex
environmental systems, including the roles of humans in shaping these
systems. The resolution of many important environmental and societal
problems is lagging, in part, because of insufficient scientific
understanding of complex issues that span the boundaries of traditional
scientific disciplines.
NSF is already a leading Federal sponsor of peer-reviewed research
regarding the environment, with a portfolio exceeding $700 million.
Most of this investment is directed at scientific advances within
particular disciplines. An interdisciplinary approach is needed to
build on this base to truly understand the environment and the
relationships between people and the environment. The Biocomplexity in
Environment priority area is an important step towards a comprehensive
understanding.
NSF proposes to increase funding for its priority area on
Biocomplexity in the Environment by 35.6 percent to $79 million. This
priority area would be expanded to include research in two new areas
this year microbial genome sequencing and ecology of infectious
diseases to help develop strategies to assess and manage the risks of
infectious diseases, invasive species, and biological weapons. We urge
Congress to support this critical initiative and to consider funding it
at a level of $136 million, as proposed in fiscal year 2000 budget
request for NSF.
Major Research Equipment.--The NSF budget request includes initial
funding for two large projects, the National Ecological Observatory
Network (NEON) and EarthScope, under its account for Major Research
Equipment and Facilities Construction (MRE). These projects would
provide major new opportunities for environmental research.
--National Ecological Observatory Network.--NEON would be a
continental scale research instrument consisting of 10
geographically distributed observatories, networked via state-
of-the-art communications, for integrated studies to obtain a
predictive understanding of the nation's environments. In
addition, NEON would serve as a ``biological early detection
system'' that is designed to provide an invaluable resource and
a front line of homeland defense both for its scientific
potential and for enabling rapid detection of chemical and
biological terrorist threats. NSF is requesting $12 million in
initial funding for this project for proof of concept
prototyping and for construction and networking of two initial
sites.
--EarthScope.--EarthScope would be a distributed, multi-purpose
geophysical instrument array that is designed to make major
advances in our knowledge and understanding of the structure
and dynamics of the North American continent. Three components
of the project would be the United States Seismic Array
(USArray), the San Andreas Fault Observatory at Depth, and the
Plate Boundary Observatory. NSF is requesting $35 million for
initial funding of this project.
Both NEON and EarthScope were included in NSF's budget request for
fiscal year 2001 but funding for the projects was not included in the
enacted appropriations bill. NSF's budget request for fiscal year 2002
did not contain any new starts for the MRE account. We urge Congress to
provide full funding for NEON and EarthScope.
national science board report on environmental science and engineering
The National Council for Science and the Environment is the primary
proponent of an effort to expand, improve and enhance the relevancy of
the scientific efforts of the National Science Foundation regarding the
environment. We believe that NSF as an independent, non- regulatory
science-funding agency is an important source of credible scientific
knowledge about the environment.
NCSE's efforts have had considerable support from Congress. The
House Appropriations Committee report accompany the fiscal year 1998
appropriations bill directed NSF to study how it would establish and
operate a National Institute for the Environment that, ``provides a
major role for stakeholders in defining questions needing scientific
attention and which funds ongoing knowledge assessments, extramural
research, on-line information dissemination, and education and training
through a competitive peer reviewed process.''
The National Science Board responded to Congress by unanimously
approving a report, Environmental Science and Engineering for the 21st
Century: The Role of the National Science Foundation, on February 2,
2000. The NSB report sets out a bold, ambitious set of recommendations
that could dramatically improve the scientific basis for environmental
decisionmaking. The first keystone recommendation is as follows:
``Environmental research, education, and scientific assessment
should be one of NSF's highest priorities. The current environmental
portfolio represents an expenditure of approximately $600 million per
year. In view of the overwhelming importance of, and exciting
opportunities for, progress in the environmental arena, and because
existing resources are fully and appropriately utilized, new funding
will be required. We recommend that support for environmental research,
education, and scientific assessment at NSF be increased by an
additional $1 billion, phased in over the next 5 years, to reach an
annual expenditure of approximately $1.6 billion.''
The National Council for Science and the Environment encourages
Congress to support full and effective implementation of the National
Science Board's report, Environmental Science and Engineering for the
21st Century: The Role of the National Science Foundation, within the
context of a doubling of the budget for the NSF.
NSF has begun to implement the recommendations of the NSB. It has
appointed an environmental coordinator and created a new position in
the Office of the Director. NSF has formed an Advisory Committee on
Environmental Research and Education. It has established a priority
area on Biocomplexity and the Environment that provides new
opportunities for multidisciplinary research on the interactivity of
biota and the environment.
The NSB recommendations are consistent with the direction provided
by the Appropriations Committee. Full implementation of the NSB report
will require strong support from Congress and a significant increase in
funding for NSF's portfolio of environmental science, engineering and
education.
epa's star program
NCSE urges Congress to restore full funding for the Environmental
Protection Agency's Science to Achieve Results (STAR) graduate
fellowship program. EPA's budget request for fiscal year 2003 budget
request for EPA would eliminate funding for new STAR fellowships. This
is the only Federally supported fellowship program specifically aimed
at graduate students in the environmental sciences and policy areas.
From 1995 to 2001, EPA funded over 800 STAR fellows at 168 colleges and
universities, including 28 STAR fellows in Maryland and 8 STAR fellows
in Missouri. The STAR program is highly competitive, with a success
rate of only 10 percent. Like the environmental programs at NSF, the
STAR fellowship program suffers from a serious imbalance between
resources and highly qualified applicants. Investment in environmental
scientists, engineers, policymakers and professionals is essential for
the nation to reap the benefits of scientific advances.
homeland security and environmental r&d
Environmental R&D is a critical component of homeland security. For
example, understanding the dispersal of toxic substances in water and
air is directly relevant to counterterrorism. NSF has supported
research in these areas for many years. NSF is requesting funding for
new environmental projects that could strengthen homeland security. For
example, NSF Director Rita Colwell said that NSF's proposed National
Ecological Observatory Network (NEON) could detect abrupt changes or
long-term trends in the environment and could also serve as ``an early
warning and detection system for a wide array of chemical and
biological warfare agents.'' We encourage Congress to explore the role
of environmental R&D in homeland security and counterterrorism and to
recommend actions that would improve the nation's capacity in this
area. Thank you very much for your interest in improving the scientific
basis for environmental decisionmaking.
Attachment
Letter calling for significant funding increases for environmental
science, engineering, and education programs signed by more than 120
national leaders of academic, scientific, environmental, and business
organizations.
National Council for Science & the Environment,
Washington, DC, March 8, 2001.
President George W. Bush
The White House, 1600 Pennsylvania Avenue NW, Washington, DC 20500.
Dear President Bush: During your recent election campaign, you
talked about the importance of basing environmental decisions on
science. We, as a diverse coalition of academic, business,
environmental, governmental and community leaders, working with the
National Council for Science and the Environment agree with you in this
regard.
We are writing to urge you to implement your campaign commitment by
making investment in science for environmental decisionmaking a
priority in your administration. In particular, we are asking you to
provide significantly increased funding for scientific programs to:
--Assess what is known about the environment;
--Better understand the environment;
--Provide scientific information about the environment; and
--Support science-based education about the environment.
These programs include:
--National Science Foundation's biocomplexity in the environment
initiative and portfolio of environmental science, engineering
and education programs
--U.S. Geological Survey's biological, geological, hydrological, and
mapping divisions
--U.S. Environmental Protection Agency's Office of Research and
Development, especially the Science To Achieve Results (STAR)
research and fellowship programs
--National Oceanographic and Atmospheric Administration
--U.S. Department of Agriculture's environmental research programs
through CSREES and the Agricultural Research Service,
particularly the Natural Resource Initiative
--U.S. Forest Service forestry research
--Department of Energy's environmental science programs
--National Aeronautics and Space Administration earth exploration
programs.
--National Institute of Environmental Health Sciences
We hope that your initial budget will support science as an
investment that will lead to a stronger economy, healthy people, and a
healthy environment.
Sincerely,
Peter D. Saundry, Ph.D.,
Executive Director, National Council for Science & the Environment.
______
Prepared Statement of the National Emergency Management Association
introduction
Thank you Chair Mikulski, Ranking Member Bond, and distinguished
members of the Committee for allowing me the opportunity to provide you
with testimony on the Federal Emergency Management Agency (FEMA) fiscal
year 2003 budget. I am Dale Shipley, the Director of the Ohio Emergency
Management Agency and I am here today representing the National
Emergency Management Association (NEMA). Currently, I am the Chairman
of the NEMA Legislative Committee and I come before you today to
represent the state emergency management directors in the 50 states and
the U.S. territories who are its core members. NEMA's members are
responsible to their governors for emergency preparedness, mitigation,
response and recovery activities.
The FEMA budget provides critical support to State and local
emergency management programs through actual dollars, grants, and
program support. This year, NEMA would like to address three main
issues with the proposed Federal budget for FEMA.
--The first is our concern for the lack of attention to building
emergency management capabilities through the Emergency
Management Performance Grant (EMPG) program and our request for
supplemental assistance;
--The second is our support for the First Responder Grant program and
the intention to coordinate these grants through the States;
and
--The third is our concern about the proposal to fold the Hazard
Mitigation Grant Program (HMGP) into the pre-disaster
competitive mitigation grant program.
supplemental appropriations and empg
The existing national emergency increases demands on State and
local governments to provide heightened preparedness and response for
domestic terrorism and has stretched or exhausted emergency management
functions in local jurisdictions. While States had been contributing
significantly more towards emergency management over the last decade,
the national emergency declaration and State and local budget demands
and deficits make that continued effort impossible.
Emergency management is heartened by the proposal to make $3.5
billion available to the nation's first responders, but we cannot wait
until Fall to address these immediate needs. Building a statewide
emergency management capability is key to ensuring national
preparedness. Resources for personnel both at the State and local level
to manage the programs are critical to completing the preparedness
mission.
NEMA and emergency management directors from the States and
territories respectfully request that Congress provide additional
funding for State and local emergency management programs through FEMA
in the Spring fiscal year 2002 supplemental appropriations bill. We ask
that $200 million be added to the Emergency Management Performance
Grant Program (EMPG) in the FEMA budget to address unmet needs and to
assist in capacity building.
A recent NEMA survey revealed total program support needs in the
amount of $2.1 billion. The $200 million urgent request specifically
represents a $117 million EMPG shortfall and $83 million to address
facilities and communications needs. NEMA's Report on Local Emergency
Management Program Capability Requirements and Shortfalls details the
survey results identifying shortfalls in emergency management. The $117
million shortfall identified represents data from 38 States. It will
likely increase as the remaining State data is received.
The current Emergency Management Performance Grant system of
funding State/territory and local governments has its history dating to
World War II Civil Defense programs and through the Cold War years. As
the threat was perceived we funded Civil Defense and Disaster Services
programs to the level needed to meet the threat. As the Cold War
diminished and the threat was perceived as lessening, the funding
system was kept in place, but the funding levels did not keep pace with
expanding programs and capability requirements.
Now the nation is faced with a new threat of terrorism and the
necessity for increased planning and coordination with public health,
law enforcement, agriculture and other State and local organizations
plus significant grants management responsibilities with all response
organizations cannot be accomplished effectively with current
capabilities. An additional $200 million in funding for EMPG in the
Spring supplemental appropriations package would essentially be a down
payment for addressing emergency management needs.
The Emergency Management Performance Grant (EMPG) are ``pass
through'' grants to State and local governments to provide a foundation
for basic emergency capabilities. EMPG is intended to be a 50/50
matching contribution program for Federal and State Governments.
Unfortunately, EMPG funds have been virtually the only area where FEMA
has not received an increase in the past 8 years, thus eroding State
and local emergency management capabilities. EMPG funding is the
lifeblood for State and local governments to prepare for, respond to,
recover from, and mitigate losses from future disasters.
first responder grant program
Long before September 11, 2001, NEMA had established itself as a
leader in providing input to Congress and Federal agencies on issues of
domestic preparedness. States have been in the forefront of preparing
for and responding to all types of disasters, both natural and man-
made. We take an all-hazards approach to disaster preparedness and have
integrated our domestic preparedness efforts into the proven systems we
already use for dealing with both man-made and natural disasters. We
also recognize clearly the value of prevention and mitigation in
minimizing the consequences of disasters and we incorporate those
considerations in all our efforts.
NEMA supports Federal efforts to increase emergency management
capacity building at the State, territory, and local level for
personnel, planning, training, equipment, coordination, and exercising.
A significant Federal commitment must be made to give State,
territorial, and local governments the tools to ensure adequate
preparedness. While States have significantly increased their
commitment to emergency management over the last decade, States are
struggling with budgetary issues and the increased investments
necessary to meet new demands.
There are five issues that we would like to bring to your attention
as you address the proposed First Responder Grant program:
--All efforts need to be coordinated through the States;
--State and local governments need funding to be flexible enough for
personnel to manage the program;
--Standards must be developed to ensure interoperability of
equipment, communications, and training;
--Mutual aid both intrastate and interstate--is a key component to
capacity building; and
--State and local government must be fully, directly and continuously
involved and consulted in the development of the National
Domestic Preparedness Strategy.
State Coordination
All efforts to increase emergency management capacity building must
be coordinated through the States to ensure harmonization with the
State emergency operations plan, ensure equitable distribution of
resources, and to synthesize resources for intra-state and inter-state
mutual aid. Also, the Stafford Act, which governs the way disaster
assistance is allocated, successfully uses States and Governors as the
managers of Federal disaster relief funds for local governments which
are over-taxed and need assistance when disasters occur. States
understand the need to get funding to the first responders and have
long coordinated statewide and regionally to ensure adequate State
assistance to local governments for emergency preparedness and
response. There is no question that most of the $3.5 billion proposed
first responder grant funds need to get to police, fire fighters,
emergency medical workers, and other front-line local responders after
all, disasters are local in nature. The health community must not be
forgotten and must be integrated into all planning, training, and
exercising under the State emergency operations plan. We can
effectively ensure this by working through the States to build on the
needs identified in the plans that FEMA, the Department of Justice, and
other agencies have required statewide.
Further, because this is a national emergency and States and local
governments are in difficult fiscal situations, we must we wary of
programs that would require significant matches. In fact, for local
governments to meet the match would be even more difficult given their
fiscal constraints. If a significant match is required, the application
of this initiative will only go to those agencies and governments that
can fiscally afford the match and not necessarily where the need is
greatest. If a match is necessary, we would suggest that the match be
non-fiscal or in the form of a deliverable as opposed to soft or hard
dollars.
Flexibility for Personnel to Manage the Program
State emergency managers need to have a commitment for sustained
Federal resources and the flexibility to insure the hiring and training
of sufficient professional personnel to manage the expanding
antiterrorism programs. We are concerned that an influx of funding
programs from the Federal Government could detract from the ``all
hazards'' approach and we will have to turn our focus away from natural
disaster preparedness and response and thereby actually reduce overall
preparedness and efficiency. Building a statewide emergency management
capability is key to ensuring preparedness across the board.
Flexibility to use some of the first responder grants for personnel
both at the State and local level to manage the programs is critical to
completing the preparedness mission.
NEMA has long advocated an increase in the only flexible source of
federal emergency management funding, the Emergency Management
Performance Grant (EMPG). EMPG is the only line item in the FEMA budget
that has not received an increase in the last decade, yet it is the
only consistent source of Federal funding for State and local capacity
building. As an existing funding stream, EMPG could be used to hire
State and local staff to manage critical programs and build the
incremental emergency management capacity to prepare for the first
responder grants and the coordination that will be required to
effectively execute the program. State and local government emergency
management is already over-stressed and working to capacity.
Standards
Standards must be developed to ensure interoperability of
equipment, communications, and training across state, regional, and
local jurisdictions. In terms of establishing voluntary minimum
standards for the terrorism preparedness programs of State and local
governments, NEMA offers itself as a resource in this area. Our
organization, along with other stakeholder groups such as the Federal
Emergency Management Agency, the International Association of Emergency
Managers, National Governors' Association, National League of Cities,
International Association of Fire Chiefs, and others, has developed and
is implementing an Emergency Management Accreditation Program (EMAP).
EMAP is a voluntary standards and accreditation program for State and
local emergency management that is based on NFPA (National Fire
Protection Association) 1600 Standard for Disaster/Emergency Management
and Business Continuity Operations (an ANSI or American National
Standards Institute approved standard) and FEMA's Capability Assessment
of Readiness (CAR). Consequence management preparedness, response and
recovery standards are being developed in conjunction with those for
the traditional emergency management functions. NEMA suggests that
these standards already being collaboratively developed through EMAP be
considered in the development of minimum standards for training,
exercises and equipment. Additionally, EMAP acceptance would provide
the natural mechanism for Federal and State agencies to meet the
requirements of the Government Performance Results Act (GPRA). EMAP has
already completed a pilot phase in North Carolina and North Dakota and
will begin receiving State program applications in April. Pilot
assessment of county and city programs will begin this Spring. Mutual
Aid Mutual aid is one key to capacity building. A proven system we need
to take advantage of for all domestic preparedness planning is the
Emergency Management Assistance Compact (EMAC). EMAC is an interstate
mutual aid agreement that allows States to assist one another in
responding to all kinds of natural and man-made disasters. EMAC offers
a quick and easy way for States to send personnel and equipment to help
disaster relief efforts in other States. There are times when State and
local resources are overwhelmed and Federal assistance is inadequate,
inappropriate, too far away or unavailable. Out-of-state aid through
EMAC helps fill such shortfalls. There are 46 States and two
territories that are members of EMAC and other States and territories
are planning to join. In response to the September 11 tragedy,
emergency managers from several States provided technical assistance
and personnel support to New York through EMAC. A system like this
enables experts and specialized equipment to be used across
jurisdictions and regions based on the nature of a particular event.
NEMA and FEMA are currently working together to standardize resource
typing. By having commonly understood descriptions of resource
packages, impacted jurisdictions will know just what they are going to
get when they request each standard package.
National Domestic Preparedness Strategy
NEMA has long requested for Congress to put in place an inclusive
national framework for developing a National Domestic Preparedness
Strategy and a single point of contact within the Federal Government
that is accountable to Congress to coordinate the Federal efforts in
implementation of that strategy. Please also note that we espouse a
collaboratively developed national strategy, not just a Federal one. We
now look forward to working with the Office of Homeland Security
towards the development and implementation of that strategy. In
addition to NEMA's ``Ten Principles for a National Domestic
Preparedness Strategy'' adopted in 2000, we also developed a White
Paper on Domestic Preparedness in the aftermath of 9/11 that is also
supported by the Adjutants General Association of the U.S., the Council
of State Governments, International Association of Emergency Managers,
and the National Guard Association of the U.S. A copy of this White
Paper is attached, along with NEMA's ``Ten Principles''.
In any way possible, the Federal Government needs to coordinate
efforts for domestic preparedness and avoid duplication of efforts and
programs. The Office of Homeland Security assured that State emergency
managers and first responders from the State and local level will be
invited to participate in development of the national preparedness
strategy.
hazard mitigation grant program & predisaster mitigation
The Administration's budget proposal includes a request to create a
new pre-disaster mitigation program that will combine the predisaster
mitigation program authorized by the Disaster Mitigation Act of 2000
and the post-disaster Hazard Mitigation Grant Program (HMGP). While
Federal costs towards disasters remain a concern, significant
commitments must be made towards both pre-disaster and post-disaster
mitigation in order to lower overall disaster costs in the long run.
Replacing the HMGP program, which may provide up to 20 percent of
total disaster costs towards post-disaster mitigation grants, would
prevent the lessons learned from disasters from being immediately
incorporated into mitigation projects to prevent losses of life and
destruction of property.
The HMGP was authorized under Section 404 of the Stafford Act, and
administered by FEMA. The program provides grants to States and local
governments to implement comprehensive and long-term hazard mitigation
measures after a major disaster. Examples of risk reduction measures
include: acquisition, relocation or elevation of flood damaged homes
and businesses; relocation and fortification of critical public
infrastructure; rebuilding at a higher building code level, for
purchasing repetitive loss properties, and for the development of local
mitigation plans, projects and strategies to make communities more
disaster resistant and resilient. The months immediately following
disasters provide unique opportunities to efficiently incorporate risk
reduction measures in a very cost-effective manner, in many cases
lowering the overall cost of the project by leveraging other funding
sources including insurance settlements.
The HMGP has proven to be a highly effective tool in steering
communities toward risk reduction measures, in many cases breaking
repetitive loss cycles that have cost other Federal disaster relief
programs multiple times. Cost-benefit analysis is currently a
requirement for predisaster mitigation programs.
In a purely competitive grant program, lower income communities,
often those most at risk to natural disaster will not effectively
compete with more prosperous cities. Also, disasters graphically and
vividly expose the need for and value of mitigation projects. We must
not lose these opportunities to initiate projects to enhance our
communities and reduce future disaster costs. Damage caused by
disasters would go largely unrepaired thereby further impacting the
economic and social recovery of particular areas. There are not enough
mitigation dollars available to address all of the vulnerabilities that
exist in this country.
Making mitigation funds available only in a predisaster competitive
environment will set this country's mitigation efforts back by removing
the prime motivation factor, the disaster itself, as the motivation.
The proposal is not a cost-savings initiative, as disaster costs to the
Federal Government would be expected to significantly increase. HMGP
could be modified to include performance measures, but HMGP should not
be rolled into the predisaster mitigation program.
Probably the best recent example of post-disaster hazard mitigation
in the recent years is the $836 million appropriated by the North
Carolina General Assembly after Hurricane Floyd. This funding was
nearly equal to the entire Federal contribution. Without State level
funding to provide all the non-Federal cost share for programs, and the
financing of innovative risk reduction programs to compliment Federal
programs, mitigation techniques would never have been incorporated into
the rebuilding process. In excess of $200 million in State funds was
committee to relocate over four thousand families, dozens of businesses
and agricultural operations from the floodplain, thus guaranteeing they
will not be devastated by future floods. In addition, North Carolina
and other States are now undertaking the task of updating Flood
Insurance Rate Maps, a traditional Federal responsibility and expense,
to ensure communities have the best available information on where
flood hazards exist.
By the same token, predisaster mitigation is also a key component
to effective disaster mitigation. Over the last 5 years, predisaster
mitigation programs and initiatives have proven their value in not only
saving lives and property in recent disasters, but also in many cases
have negated the need for any emergency response and recovery. Pre-
disaster mitigation is essential, but we need to ensure that pre-
disaster mitigation corresponds with the Disaster Mitigation Act of
2000 that was passed overwhelmingly by the House and Senate and signed
into law. NEMA worked with Congress to draft the Disaster Mitigation
Act of 2000 (DMA2K), which authorized predisaster mitigation; works
with small impoverished communities to lessen their vulnerability to
natural disasters; established a National Pre-disaster Mitigation Fund
in the Treasury of the United States; and provided for the development
of multi-hazard advisory maps. It took many years for Congress to agree
on language to amend the Stafford Act and we are so grateful that the
Disaster Mitigation Act was signed into law. As FEMA implements DMA2K,
we must not lose the opportunity to prevent the loss of life and
destruction of property prior to disasters.
NEMA calls on Congress to maximize the benefits of both HMGP and
predisaster mitigation, while including provisions for increased
accountability. NEMA supports increasing funding for predisaster
mitigation, but maintains that HMGP should be retained as a separate
and funded post-disaster program.
other issues
Congress should support funding for modernization of floodplain
mapping, since many of the flood plain maps are 15-30 years old and
considered out of date. Any updates to flood maps should be made with
the coordination of State and local governments. Flood maps play a key
role in disaster reduction, mitigation, and community planning and
development activities. Many of the flood maps in place do not reflect
recent development, and may contain inaccurate information about the
floodplains as a result. FEMA has estimated the cost of a comprehensive
multi-year map modernization plan at $750 million over a 7-year period.
Congress has recognized the need to update the floodplain maps in the
fiscal year 2002 budget and the commitment should continued in fiscal
year 2003 and beyond to insure currency in our mapping. NEMA supports
the proposed $300 million for flood mapping modernization included in
the President's Budget
NEMA is currently looking closely at the proposal in the
Administration's budget that would end State taxation of insurance
premiums to the National Flood Insurance Program. Current estimates
from FEMA anticipate that eliminating the tax would reduce State
revenue nationwide by $29 million. We would like to reserve the right
to report back to you with information on how this proposal may impact
the States as you consider the FEMA appropriations bill in the coming
months, but we see no rationale for the Federal Government to eliminate
this tax revenue to States.
conclusion
While emergency management has been the driving force in our
nation's preparedness, we must not forget the lessons learned on
September 11, 2001 that translate into the need for increased
preparedness and response capabilities. If in fact we want to truly
commit our nation to preparedness, we must tale advantage of the
memories still fresh in our mind of both man-made and natural
disasters. Retaining the ``all-hazards'' approach will prevent our
nation from losing focus on the daily perils that we face and translate
into double value in preparedness.
Whether it is a hurricane in Florida, earthquakes in the pacific
northwest, or tornadoes in Maryland, States need a Federal commitment
to recognize that each State and local government has unique disaster
preparedness and response needs that require flexible, predictable, and
adequate funding assistance that is coordinated with the State
emergency management plan.
While we cannot completely prevent events and natural disasters
from occurring we can be prepared for them and help our communities
minimize the impact of lives lost and destruction of our critical
infrastructure. I ask that you please consider our recommendations as
you consider difficult budget decisions this year.
I thank you for the opportunity to testify on behalf of NEMA and
welcome any questions that you might have. Only through a partnership
of Federal, State, and local governments, can our country prepare and
respond to emergencies and disasters. Thank you for your consideration.
White Paper on Domestic Preparedness--October 1, 2001
Background
Emergency management as a discipline has been shaped by historical
events, both nationally and internationally. During World War II, it
became apparent for the first time that our nation was susceptible to
enemy attack. As a result, the first organization and function of what
is called Civil Defense was established. The majority of civil
preparedness and disaster response capability at the local level had
its foundation in the Civil Defense program. Federal financial
assistance to State and local jurisdictions for civil defense programs
was begun in 1958 and provided Federal matching funds (50/50) for
personnel and administrative expenditures for civil defense
preparedness. Attack preparedness was mandated as a joint Federal-
State-local responsibility. This funding base provided the very
foundation upon which civil preparedness (what we now refer to as
emergency management) was built.
The recent terrorist attacks demonstrate the fact that the nation
needs to develop a capability reminiscent of the past when there
existed a robust State and local emergency management and response
capability. A strengthened national program incorporating today's all
hazards approach to emergency preparedness is imperative. Congress,
Federal agencies, governors, State and local emergency management
directors, other local officials and all disciplines of emergency
responders must work together to develop a strategy for standardized,
bottom-up national capabilities to effectively respond to catastrophic
disaster situations.
In addition to the States Principles for a National Domestic
Preparedness Strategy, adopted in February 2000, NEMA thinks it
critical that the following enhancements be incorporated into a
nationwide strategy for catastrophic disaster preparedness. Items are
listed by category and not necessarily by priority.
Emergency Preparedness and Response
Congress should provide to the States immediate Federal funding for
full-time catastrophic disaster coordinators in moderate and high-risk
local jurisdictions of the United States, including the 120 largest
cities where training and equipment was provided under the Nunn-Lugar-
Domenici domestic preparedness programs. These personnel will have
responsibility for developing and maintaining terrorism consequences
plans, procedures, exercises, and resources. For those states with
appropriate jurisdictional staffing levels already in place, the
flexibility to utilize Federal funds to enhance the overall emergency
preparedness program based on identified priorities is critical.
Measures should be implemented to ensure this funding does not supplant
existing State and local emergency management funding commitments.
States need financial assistance to improve catastrophic response
and Continuity of Operations Plans (COOP) and Continuity of Government
(COG) for States. FEMA should be provided additional funding to
develop, construct and/or retrofit Federal/State/local command and
control centers (Emergency Operating Centers) for NBC events. These
coordination centers must exist at each level of government. Alternate
EOC locations must be available should the primary center be damaged or
destroyed by the event.
Interstate and intrastate mutual aid assistance must be recognized
and supported by the Federal Government as an expedient, cost-effective
approach to disaster response and recovery. The Emergency Management
Assistance Compact (EMAC) has been adopted by 41 States and two
territories with additional States planning to join. EMAC is an
interstate mutual aid agreement ratified by Congress, passed by state
legislatures and signed into law by governors, and is well coordinated
with the Federal Response Plan. Other States utilize the existing
Interstate Civil Defense and Disaster Compact as well as regional
compacts that are similarly coordinated with existing plans. These
complementary operational systems should be linked as the framework and
procedures for all response and recovery activities.
The Emergency Management Accreditation Program (EMAP) should be
implemented and recognized by Federal agencies as a strategic tool to
build greater multi-discipline/all-hazards capabilities at the state
and local level, including domestic terrorism. EMAP is a voluntary,
national standards and accreditation program for state and local
emergency management programs. The initiative is being developed in
partnership by NEMA, FEMA and the International Association of
Emergency Managers and is currently in the pilot phase.
FEMA, State and local emergency managers must implement renewed
emphasis on family and community preparedness to ensure Americans have
necessary skills to survive a catastrophic disaster.
A standardized national donations management protocol is needed to
address the outpouring of food, clothing, supplies, and other items
that are commonly sent to impacted states and localities following a
disaster. If not handled properly, large amounts of unnecessary or
inappropriate donations can add another level of complication to the
disaster itself. We believe the shoring up of State and local emergency
management agencies will provide the necessary organization to improve
this system; however, additional planning and an information management
capability are desperately needed.
Health and Medical
The medical surge capacity must be strengthened. The emergency
management, medical and public health professions must work with
lawmakers to ensure each region of our nation has a certain minimum
surge capacity to deal with mass casualty events. Hospitals should
agree to provide defined and standardized levels of resources,
capabilities and assistance to handle mass casualties, especially those
contaminated by chemical/biological agents. Funding for equipment and
supplies to accomplish this mission should be provided to develop this
additional capability, in exchange for their agreeing to participate as
a local receiving hospital and as part of the U.S. Public Health
Service's National Disaster Medical System (NDMS). Funding for the
health care system for emergency planning and extraordinary operation
response costs that are not available from any other means must be
provided by the Federal Government. Additionally, the Federal
government needs to provide the equipment and supplies to accomplish
this mission and develop this additional capability; also, states need
assistance to complete the National Pharmaceutical Stockpile
distribution response plan.
State-Local Disaster Medical Assistance Teams should be developed
across the country with standardized equipment, personnel and training.
These teams would serve as the first line of response to support
impacted communities within impacted states, and could be required to
respond outside the state as a mutual aid resource upon request. Self-
contained capability to respond outside their jurisdiction should be
provided by military Reserve Component assets available in each state.
The current sixty U.S. Public Health Service NDMS Disaster Medical
Assistance Teams (DMAT) should be uniformly enhanced for Weapons of
Mass Destruction (WMD) response, including focus on personnel
protection and training for WMD. Currently only four of the teams have
been upgraded and equipped to serve as National Medical Response Teams
(NMRTS).
Additional WMD Recommendations
The Department of Justice should immediately release the fiscal
year 2000 and fiscal year 2001 equipment funds in order to begin
implementation of these recommendations, and then require a basic
statewide strategy in order to receive fiscal year 2002 funds; and
further, provide funding to states to administer the equipment program.
Also, allow greater flexibility with the approved equipment list in
order to accomplish any of these recommendations. Specifically, this
should include the use of funds for the purchase of necessary equipment
for hospitals and the health care industry, regardless of the private
sector ownership of these critical first receiver response system
components. In addition, Congress should increase funding to DOJ to
provide detection, personnel protection and decontamination equipment
for the nation's emergency response agencies. Lastly, Federal training
and maintenance money must be included in any national terrorism
response program.
Congress and the Department of Defense should authorize homeland
defense as a key Federal defense mission tasking for the National
Guard. By providing this authorization and removing restrictive
language and funding on utilization of National Guard assets and
personnel, the civil-military integrated response will be dramatically
improved. In addition, Congress should provide funding to DOD for full-
time staffing of state joint civil-military emergency operations
centers. Further, Congress should provide funding to National Guard
Bureau to complete fielding of National Guard Civil Support Teams in
additional states and territories.
State-Local Urban Search and Rescue capabilities should be
developed across the country with standardized equipment, personnel and
training. These teams would serve as the first line of response to
support impacted communities within impacted states, and may be
required to respond outside the state as a mutual aid resource upon
request. Self-contained capability to respond outside their
jurisdiction should be provided by National Guard assets available in
each state. Further, standardization of the national USAR format and
approach should be accomplished in such a way that there is a gradation
in the USAR response teams to enhance overall national capability.
The Department of Defense should undertake a review of the
distribution of aviation assets to the National Guard in each state,
territory and District of Columbia.
National interagency and intergovernmental information management
protocols are needed to support information sharing (ie. Damage/
Situation Reports, Warning/Intelligence Reports, Resource
Coordination). Further, an unclassified version of INTELINK needs to be
developed for use by the greater emergency response community.
Better Federal interagency coordination is needed to assist states
in identifying and accessing the full range of Federal resources and
assistance available to them. Currently, states are left on their own
to identify individual agency programs and then contact each agency to
determine programs and resources available.
Security clearances must be more standardized and reciprocal
between agencies and levels of government. Use of a compartmented,
need-to-know system would greatly facilitate secure sharing of critical
intelligence. Additionally, a critical need exists to enhance the
ability of local and state officials to receive Federal security
clearances more expediently.
FEMA's fire grant program should be expanded and modified to
strengthen regional and national, not just local, fire protection
capabilities to respond to catastrophic disasters. State level
involvement in the program would allow increased coordination and
prioritization of resource needs within each state. A comprehensive
national strategy would ensure best use of available funding provided
to local fire departments to enhance regional and national response
capabilities.
The National Warning System (NAWAS), maintained by FEMA, has been
downsized in recent years. This system was designed to provide rapid
communications and warning capabilities between Federal, State and
local emergency management agencies. The Congress should provide
funding to rapidly upgrade and expand a sustainable national
intergovernmental communication and warning system.
FEMA, in collaboration with state, local, private and other Federal
agency emergency response partners, should rapidly develop a
standardized emergency responder identification and accounting system
to improve personnel credentialing and accountability at scenes of
catastrophic disasters.
The Environmental Protection Agency should be provided funding to
develop additional guidance on shelter in-place strategies for nuclear/
biological/chemical (NBC) events, especially in urban centers.
There is a need for technology transfer from the Federal Government
and its contractors to state and local governments to support an
automated decision support system. Several Federal agencies have data
that is unclassified that could be used for planning, response and
recovery activities. These Federally developed systems would contribute
immensely to accomplishing many of the recommendations set forth in
this paper and do so in a cost effective manner.
Resolution on States Principles for a National Domestic Preparedness
Strategy
WHEREAS, The National Emergency Management Association (NEMA),
represents the state emergency management directors in the 50 states,
territories and District of Columbia who are responsible to their
governors for preparing for, responding to and recovering from natural
and manmade disasters, as well as consequence management for incidents
of domestic terrorism; and
WHEREAS, NEMA believes the following principles provide the
necessary framework for a National Domestic Preparedness Strategy:
1. The United States needs to have a viable national vision to
guide the development of a clear, comprehensive and integrated national
domestic preparedness strategy to prepare for and manage the
consequences of terrorism--one that utilizes the nation's existing all
hazards emergency management and response system. The strategy must
clearly define federal, state and local government roles and
responsibilities and articulate a clear direction for federal
priorities and programs to support state and local responders. The
strategy must be developed in coordination with state and local
entities, include measurable performance objectives, and address
sustainable infrastructure.
2. There must be increased and productive coordination of all
federal domestic preparedness programs and resources and improved
interface with governors and states. A single, visible point of
coordination is essential at the federal level with the appropriate
degree of authority to ensure that all federal agency resources,
programs, and policies are consistent with and supportive of the
national strategy. A mechanism must be provided to this coordination
point in order to influence federal agency budgets and program
authorizations to ensure consistency with the national strategy. This
entity must be codified in authorizing legislation rather than the
current practice of appropriations language, and the entity must be
appropriately resourced to fulfill its mission.
3. All federal resources, programs, and activities must be
coordinated through the nation's governors and their state emergency
management agencies to ensure a comprehensive state-wide domestic
preparedness strategy that reflects the unique characteristics and
needs of each individual state.
4. Government at all levels must ensure that the protection of
civil liberties and states' rights remain the highest priority within
the context of national security as the United States prepares for and
addresses the consequences of terrorism.
5. There are at least fifteen different Congressional committees
with jurisdiction over components of the domestic preparedness issue.
There should be a special committee on domestic preparedness to better
ensure the coordination of federal programs, coordination of funding,
avoid duplication of programs, and to provide centralized, coordinated
oversight.
6. Credible, timely threat information is needed by state and local
governments that is based upon solid research, analysis, and sound
science rather than worst-case scenarios.
7. The issue of increased tactical and strategic capabilities for
communication and information sharing between and among all levels and
disciplines of government is essential to effective domestic
preparedness. Information sharing by law enforcement must be addressed
to allow emergency responders at the state and local level the ability
to deter, interdict or respond to a potential terrorist incident.
8. The nation's public health and medical system capabilities,
including that of private hospitals, must be substantially enhanced and
fully integrated into the domestic preparedness program with increased
and improved coordination between emergency management, law enforcement
and the fire community.
9. National standards should be developed for responders at all
levels of government, particularly in the areas of planning, training,
equipment and communications, in order to ensure common approaches
between communities and states. In addition, a standardized approach to
preparing for and respond to terrorist events, including cyber
terrorism, is critical to local, state and the federal government's
ability to work effectively as a team and therefore NEMA recommends
that all states and all federal agencies adopt the incident command/
management system as a way to ensure an integrated and coordinated
local, state and Federal response.
10. The National Emergency Management Association offers to partner
with Congress and the federal government to develop the national
domestic preparedness strategy--one that can be implemented effectively
by all levels of government. NEMA has the ability to facilitate the
input of all state and local responder groups into the development of
such a strategy.
NOW THEREFORE BE IT RESOLVED, that NEMA encourages Congress and the
federal government to adopt these ten principles in developing a
National Domestic Preparedness Strategy.
MOVED: Keven Leuer (MN)
SECOND: Ed Gleason (WI)
DISPOSITION: Passed unamiously
Authenticated: Myra Thompson Lee, NEMA Secretary NEMA 2000 Annual
Conference, August 20-25, 2002, Palm Beach, Florida
______
Prepared Statement of the People for the Ethical Treatment of Animals
(PETA)
Chairwoman Mikulski and Members of the Subcommittee: People for the
Ethical Treatment of Animals (PETA) is the world's largest animal
rights organization, with more than 750,000 members and supporters. We
greatly appreciate this opportunity to submit testimony regarding
fiscal year 2003 appropriations for the Environmental Protection Agency
(EPA).
My testimony will focus on the EPA's use of animals in chemical
testing programs. We are grateful to the Subcommittee for providing the
first-ever appropriation for the development of non-animal test methods
by the EPA in fiscal year 2002. We cannot overstress the importance of
this initiative, as the EPA requires more chemical toxicity tests on
animals than any other federal agency. Each year thousands of animals
are subjected to painful procedures in which pesticides and industrial
chemicals are forced into their lungs, throats, or stomachs. These
animals include pigs, dogs, rabbits, rats, guinea pigs, hamsters, mice,
birds, turtles, frogs, and fish.
Frequently, non-animal test methods are more economical, more
reliable, and more relevant to human health than animal tests. They are
obviously more humane. Despite its rhetoric to the contrary, the EPA
has steadfastly refused to spend funds on the development of methods
that could replace the animal tests it currently requires. In the
international arena, the United States (as represented by the EPA) has
been a main obstacle to the acceptance of alternative methods by the
Organization for Economic Cooperation and Development.
In one example of needless animal testing, the EPA spent more than
$400,000 to fund studies in which pigs were fed toxins in an attempt to
estimate human exposures to arsenic and lead from the soil of sites of
former mines, mills, and smelter waste facilities. Non-animal test
methods utilize a simulated gastrointestinal tract in which
contaminated soils are ``incubated'' in acidic solutions that mimic
gastrointestinal fluids. The fraction of the metals that dissolve
represents the fraction capable of causing toxicity. These approaches
to the assessment of metal bioavailability have been available and in
widespread use since 1994, and can be conducted for a small fraction of
the cost of animal tests. Yet the EPA chooses to use animals.
The EPA's Office of Pesticide Programs requires at least 14
individual tests for pesticide active ingredients, some of which kill
thousands of animals at a time. The EPA's high production volume (HPV)
chemical testing program will kill more than 1 million animals. And the
agency's proposed Endocrine Disruptor Screening Program (EDSP) is the
largest animal-testing plan in U.S. history. Tens of thousands of
chemicals are slated to be included in the EDSP, and scientific
estimates are that between 600,000 and 1.2 million animals will be
killed for every 1,000 chemicals tested.
These programs require a variety of animal tests including assays
for genetic toxicity, acute toxicity, reproductive toxicity, and
hormone ``disruption.'' Amazingly, not one of these tests has ever been
formally validated for its relevance to human health effects.
There is tremendous potential for non-animal methods to replace
animal tests in these programs. Several non-animal test methods have
recently been formally validated as total replacements for animal
studies, including four skin corrosion assays, in vitro tests for skin
penetration and phototoxicity, and three in vitro/ex vivo tests for
embryotoxicity. Basic genetic toxicity can also be studied entirely
without the use of animals. Three methods in particular (the Bacterial
Reverse Mutation Test, In Vitro Cell Gene Mutation Test and In Vitro
Chromosomal Aberration Test) have been accepted by government
regulators worldwide as valid alternatives to using animals.
There is also a great deal of work under way to develop and
validate non-animal methods for assessing other health effects. For
example, acute toxicity can be studied using cell culture systems,
since the actions of toxic chemicals are often focused at the cellular
level. For example, a series of four cell culture tests can predict
toxicity in humans with nearly 85 percent accuracy (compared to an at
best 65 percent in acute toxicity studies using animals). This method
should, within several years, be able to replace the horrendously cruel
use of animals in acute lethal poisoning testing.
Reproductive toxicity studies, which are required under all of the
EPA's animal-testing programs, can kill anywhere from 800 to several
thousand animals per test. Computer models are currently the most
promising prospects for replacing animals in these studies. For
example, the MULTICASE expert system, which is currently undergoing
development and prevalidation by the Food and Drug Administration
(FDA), reduces a compound to all possible 2- to 10-atom fragments and
identifies ``structural alerts'' associated with chemical reactivity.
The model then applies a weight-of-evidence approach to evaluate the
toxic potency of structural alerts, both individually and collectively,
to determine the likelihood of toxic effects in a living system. The
results of FDA prevalidation studies have been promising, but
additional development, in collaboration with the EPA, will be needed
before this model is likely to achieve widespread regulatory
acceptance.
For estrogen, androgen, and thyroid hormones, receptor binding and
transcriptional activation assays are rapid, non-animal methods of
detecting and measuring chemical interactions with cellular receptors.
Many endocrine-disrupting chemicals function by binding to hormone
receptor sites on cells, often out-competing the body's naturally-
occurring hormones for access to these receptor sites. Receptor binding
assays model this activity in vitro. Transcriptional activation assays
measure the presence of ``gene products,'' which are created as a
result of receptor binding. Both types of assays are rapid, inexpensive
and highly effective in detecting chemicals that mimic estrogen and
androgens and interact with their receptors in the cell. In fact, one
receptor binding assay was found to be five orders of magnitude more
sensitive than the uterotrophic animal test currently proposed by the
EPA.
High throughput screens (HTPS) are automated systems capable of
rapid screening of thousands of chemicals. One particularly promising
example of an HTPS model is the CALUX (Chemically Activated Luciferase
Expression) assay. This method is based on a genetically engineered
cell line that responds to specific compounds by producing a chemical
called firefly luciferase. For example, when a target chemical enters
the cell, it binds to the cellular receptor, which turns on the
luciferase, lighting up like a firefly. This assay is currently being
adapted to screen for androgen and thyroid active hormones in addition
to estrogenic chemicals.
A HTPS could screen out many chemicals from further testing in the
EDSP. Without it, millions of animals will be killed to test chemicals
that would have been eliminated early on in the program. Congress
appropriated $4 million in fiscal year 1999 to develop and implement
the EDSP, including a HTPS. After spending only $70,000 and conducting
one feasibility study, the EPA is not applying the balance of the funds
to develop a HTPS. The EPA appears to have abandoned further
development of a HTPS, despite the ongoing progress being made on this
technology by researchers in Japan. Although the EPA claims it will use
structure activity relationship (SAR) modeling in place of a HTPS, the
agency fails to recognize that SAR models rely on data generated by a
HTPS.
Another area of research that the EPA ignores is the very valuable
discipline of epidemiology. Epidemiological studies do not involve
experiments or tests on people. They are observational studies of
people who have been (or are likely to have been) exposed to an agent
to see if they March 22, 2002 People for the Ethical Treatment of
Animals Page 4 have differential rates of a given outcome than people
who have not been exposed to the agent. There are generally two types
of studies: (1) prospective--when researchers know a population has
been exposed, and then they follow the population over time to see
whether the rates of an adverse outcome happen in the population that
has been exposed more than it happens to a population that has not been
exposed; and (2) retrospective--if researchers have a suspicion of the
kind of health problem associated with exposure to a particular agent,
they find a population with that problem, and compare its rate of
exposure to that agent with that of a population that does not have the
problem.
Epidemiological studies are the premiere method of gathering
medical information. It is through epidemiological studies that we have
learned most of what we know about public health--that smoking causes
cancer (contrary to many conclusions from animal experiments), that
cholesterol causes heart disease, that fruits and vegetables prevent
disease, that obesity leads to diabetes, that lead paint leads to
developmental problems in children, and that chromium in water causes
cancer, to cite just a few examples.
The irony is that animal experimentation often impedes the ready
acceptance of evidence found through epidemiology. The chemical
industry has long approved of the EPA's near-exclusive reliance on
animal testing, since the results of these tests are always subject to
interpretation. The controversy over arsenic is a perfect example of
how animal studies delayed regulation of a dangerous chemical. For
years, epidemiological studies have shown that arsenic in drinking
water causes cancer in humans. Yet the EPA dragged its feet for more
than 20 years while thousands of animals were killed in tests that
attempted to reproduce the effects already seen in humans.
As a case in point, take the fact that the EPA paid the National
Institute of Environmental Health Sciences (NIEHS) $400,000 to
immobilize rats in small bottle-like devices and conduct inhalation
studies with mercury vapor. Scientists have known the hazards of
mercury for decades and have seen reproductive effects illustrated in
epidemiological studies of dental hygienists exposed to mercury in
fillings.
Yet the EPA spent our tax dollars unsuccessfully attempting to
duplicate these effects that have already been seen in epidemiological
studies of humans by forcing rats into contraptions that resemble
medieval torture devices. As stated in the researchers' own words in a
feature article in NIEHS' publication Environmental Health Perspectives
(April 2000):
Says NIEHS toxicologist Dan Morgan, ``The first mercury study we
did was in response to studies . . . that showed that female dental
hygienists, who are exposed to mercury quite often in preparing
fillings, had more problems conceiving than women who were not exposed.
So in order to study the mechanism of this effect, we tried to
duplicate the results in animals.'' Of the results, Morgan says, ``We
weren't able to reproduce any of those effects in our animal model.''
(our emphasis)
What possible purpose did this experiment and gross waste of funds
serve?
In addition to the ethical and scientific problems associated with
animal tests, another issue is whether or not they are being
appropriately validated. At present, none of the animal tests planned
for the EDSP are being validated for their relevance to human health
effects. Therefore, the resulting data will not prompt any meaningful
regulatory action to protect human health. The same is true with
respect to ``ecotoxicity'' tests, which examine chemical effects in one
species of wildlife and extrapolate these observations to hundreds, or
perhaps thousands, of other species. Many scientists now agree that
such broad and sweeping generalizations are simply not credible or
valid scientifically (i.e. what is true in Mallard ducks may not be
relevant to other species of ducks, let alone to songbirds or birds of
prey).
It is also important to recognize that Congress' intent for the
EDSP, as articulated in the Food Quality Protection Act (FQPA), was for
the EPA to examine chemical effects on human health, not ecotoxicity.
Therefore, the EPA's inclusion of ecotoxicity effects in the EDSP
represents both an unnecessary and useless massive amount of additional
animal testing. Moreover, it is simply unrealistic to believe that the
detection of adverse health effects in wildlife will lead to the
regulation of a chemical where adverse health effects in humans have
not. Given the profound scientific and practical limitations associated
with ecotoxicity studies, and the lack of a Congressional mandate for
their inclusion in the EDSP, it is inappropriate for the EPA to
continue its development of such studies at this point in time.
The EPA does not plan to require the rigorous validation of the
animal tests that is required of all non-animal tests. Indeed, the
agency awarded a $34 million contract to a laboratory for the
development and validation of tests for the EDSP from a proposal in
which validation experience was barely even mentioned.
The Advisory Committee on Alternative Toxicological Methods (ACATM)
for the National Toxicology Program (NTP) has expressed ``grave
concern'' over the EPA's double standard in validation and has twice
unanimously recommended that all proposed test methods for the EDSP be
validated through the Interagency Coordinating Committee on the
Validation of Alternative Methods (ICCVAM).\1\ However, the EPA
rejected this recommendation. Although it does indeed require the
validation of all non-animal tests to be assessed through ICCVAM with
very rigorous and thorough standards, the EPA follows a dangerous
double standard by not requiring this same validation assessment of the
animal tests. Allowing quicker and less rigorous validation procedures
for animal tests not only creates a bias against non-animal tests, it
compromises the reliability of the resulting data as well.
---------------------------------------------------------------------------
\1\ National Toxicology Program Advisory Committee on Alternative
Toxicological Methods, resolution passed unanimously at its meeting on
28 November 2000.
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We were pleased to see that last year's appropriations for the EPA
included a $4 million earmark in the Science and Technology account for
the research, development, and validation of non-animal, alternative
chemical screening and prioritization methods. We respectfully make the
following requests for the EPA's fiscal year 2003 appropriations:
--that $10 million in the Office of Research and Development budget
be allocated for the research, development, and validation of
non-animal screens and tests;
--that the EPA be required to report to Congress on how the above
funds are utilized;\2\
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\2\ This reporting mechanism is critical due to the fact that the
EPA has repeatedly ignored requests from the animal protection
community regarding expenditures for non-animal methods. A coalition of
animal protection groups is identifying and prioritizing the non-animal
tests that are close to being ready for use and which desperately need
funding and other resources. We hope the Subcommittee will encourage
the EPA to meet with us to discuss the manner in which funds can best
be put to use to effect the most rapid and substantial reduction
possible in animal suffering and death at the EPA.
---------------------------------------------------------------------------
--that no funds for the EDSP be used for animal tests until the
development of a HTPS has been completed, and no funds be used
to conduct animal testing on a chemical until that chemical has
been analyzed by a HTPS;
--that because the current state of the science precludes
``appropriate validation,'' as required by the FQPA, for
ecotoxicity tests (which are not covered by the FQPA), no funds
be used for ecotoxicity test development at this point in time;
--that the EPA provide to Congress an analysis of the cost
requirements for the epidemiological studies recommended as
part of the EDSP by the National Academy of Sciences in its
1999 report ``Hormonally Active Agents in the Environment''
along with an explanation as to why the EPA decided on an
animal-testing program instead of epidemiological studies;
--that the EPA provide the necessary funds to ICCVAM for the
validation assessment of all screens and tests proposed for the
EDSP.
These steps will promote the sound scientific practices needed for
the tangible protection of human health and the environment, as well as
a significant reduction in the use of animals. Thank you for your
consideration of our request.
______
Prepared Statement of the Society for Neuroscience
Mr. Chairman and members of the Committee, I am Dr. Fred H. Gage,
the president of the Society for Neuroscience and a professor at the
Salk Institute for Biological Studies, a private, non-profit research
organization located in La Jolla, California. I am here today to
testify on behalf of the Society for Neuroscience, the largest
scientific organization in the world dedicated to the study of the
brain and nervous system. Neuroscience forms the fundamental basis of
the medical specialties of psychiatry, neurology, neurosurgery, and an
important portion of many other medical specialties.
The Society for Neuroscience is comprised of more than 29,000 basic
and clinical researchers affiliated with universities, hospitals and
scientific institutions throughout North America and in other
countries. The Society's primary goal is to promote the exchange of
information among researchers. We are also devoted to education about
the latest advances in brain research and the need to make neuroscience
research a funding priority.
Mr. Chairman, the Society appreciates this opportunity to testify
and to discuss some of the important VA and NSF-sponsored research
being conducted in the field of neuroscience. We thank the members of
this Subcommittee for their dedication to biomedical research at the
National Science Foundation (NSF) and the Veterans Administration (VA).
The Society for Neuroscience requests increased research funding
for the National Science Foundation and for the Department of Veterans
Affairs to facilitate the progress of research already being conducted
at these institutions.
National Science Foundation
As the Committee is aware, the President's fiscal year 2003 budget
request for the National Science Foundation is $5.036 billion. This is
an increase of $240 million, or 5 percent, over the fiscal year 2002
request. As our nation progresses, a more solid foundation of science
will be necessary to support growing technological advances including
those integral to conducting biomedical research. The Society for
Neuroscience endorses the Coalition for National Science Funding's
(CNSF) request for an increase of $718 million, or 15 percent, above
the fiscal year 2002 level. This would bring the agency's budget to
$5.508 billion.
Interdisciplinary research funded by NSF complements research
currently conducted by other federal agencies. The nature of
interdisciplinary scientific research has allowed investigators from
each of the separate scientific disciplines to benefit and expand upon
research conducted by colleagues in other fields. NSF-supported
research embodies a collaborative enterprise and the results have
provided immense benefits in our search for treatments and cures to
deadly diseases.
NSF-supported neuroscience research has played a major role in
improving our understanding of neurological and mental disorders. NSF
funds hundreds of studies in the area of basic neuroscience, and these
studies have contributed immensely to our knowledge of the brain and
central nervous system. The cross-disciplinary approach employed by NSF
is particularly beneficial to research on the brain and central nervous
system. New engineering advances, for example, have led to new and more
powerful imaging technologies, which have greatly aided researchers in
their study of the brain.
In the wake of the tragic events of September 11th, our nation has
become more aware of potential lapses in national security; such
concerns affect our mental well-being. In addition to research
conducted on bioterrorism, NSF can enhance support for research on the
psychological effects in the aftermath of terrorist attacks, anthrax
threats and living with terrorism.
As the Committee is aware, nearly all NSF-appropriated funds are
received through competitively awarded grants, with only 5 percent
going to salaries and expenses. NSF is unique in its ability to channel
the majority of its funding to the specific goal of acquiring knowledge
and conducting research. To promote this worthy endeavor, the Society
supports an increase in NSF grant size and duration. The average 2000
NSF award was $93,000 and lasted for just under 3 years, whereas the
average 2000 NIH award was $283,000 and lasted for just over 4 years.
By increasing the award duration, valuable time is spent conducting
actual research rather than submitting proposals. Lapse time in
research is reduced and a trained and knowledgeable staff can be more
easily retained. In addition, less NSF staff time is dedicated to
reviewing and approving research which has already been deemed
valuable.
We are pleased with the NSF request for $37 million to increase
graduate student stipends from $21,500 per year in fiscal year 2002 to
$25,000 in fiscal year 2003. We believe this is critical to ensuring
that the best students continue with graduate and postgraduate study in
the scientific fields. The Society for Neuroscience supports continued
funding for Nanoscale Science and Engineering. In its third year of
funding, this priority area holds great promise of discovery for the
future of neuroscience as well as other scientific endeavors.
Department of Veterans Affairs
As you know, the Veterans Administration (VA) is the nation's
largest direct provider of healthcare services and the nation's most
clinically focused setting for medical and prosthetics research. As a
result of the VA's ability to integrate clinical and basic research
application by research physicians, the nation's medical research
enterprise benefits our nation's veterans with rapid transfer of new
medical knowledge.
The President's budget request for VA health research is $409
million. This recommendation includes a $23 million increase in actual
research funding from the fiscal year 2002 level of $371 million. The
Society for Neuroscience supports the Friends of VA (FOVA) and the
Independent Budget for the Veteran's Administration request $460
million for the Medical and Prosthetic Research account for fiscal year
2003. This increase is necessary to offset the higher costs of
administration resulting from inflation and wage increases.
In order to continue to provide our nation's veterans with the best
possible care, the VA needs to attract highly qualified researchers and
clinicians. The VA Research and Development program, one of the
nation's premier research endeavors, was established to improve health
care for veterans and focus research on injuries and illnesses
specifically relevant to veterans. In keeping with progress on other
medical research initiatives through the National Institutes of Health,
the Society believes research focused specifically on improving the
health and quality of life for our nation's veterans is a worthwhile
investment.
The VA has delineated several areas of research which are funding
priorities for fiscal year 2003. Included in this list is the Quality
Enhancement Research Initiative (QUERI) program, a portion of which
would be used to fund centers in dementia/Alzheimer's and diseases of
the brain, where the VA has indicated additional studies are needed on
the impact of different classes of psychiatric drugs on cognitive and
behavioral function.
The Quality Enhancement Research Initiative (QUERI) was launched in
1998 by the Office of Research and Development to create and implement
a national system to translate research discoveries, and innovations of
known effective and efficient diagnostic and treatment strategies into
high-quality patient care and system-wide improvements. QUERI is a
multidisciplinary, data driven, outcomes-based quality improvement
program that promotes the use of evidence in the provision of
outpatient, inpatient, and long term care.
QUERI is based on a strategic framework that supports a
comprehensive process for translating research evidence into action.
The QUERI process includes the following six steps:
--Identify high-risk/high volume diseases or problems
--Identify best practices
--Define existing practice patterns and outcomes across VA and
current variation from best practices
--Identify and implement interventions to promote best practices
--Document that best practices improve outcomes
--Document that outcomes are associated with improved health related
quality of life
Conclusion
Mr. Chairman, the National Science Foundation and the VA medical
system serve a critically important role by providing our nation's
researchers the opportunity to learn more about the diseases and
conditions that affect our quality of life. With advanced research
performed collaboratively with NSF or with the VA, all Americans stand
to benefit. We would encourage the committee to include increased
funding within NSF and VA research programs among the Subcommittee's
highest priorities. We thank you for your interest and consideration.
______
Prepared Statement of the Upper Mississippi River Basin Association
The Upper Mississippi River Basin Association (UMRBA) is the
organization created in 1981 by the Governors of Illinois, Iowa,
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
the five States' river-related programs and policies and for
collaborating with Federal agencies on regional water resource issues.
As such, the UMRBA has an interest in the budget for both the U.S.
Environmental Protection Agency (EPA) and the Federal Emergency
Management Agency (FEMA).
environmental protection agency
State Pollution Control Grants (Section 106)
Funding for Section 106 State Pollution Control Grants would
decline by $12.1 million under the Administration's fiscal year 2003
budget request. This cut would translate into a loss of $1.482 million
to State water quality programs in the five Upper Mississippi River
Basin States. The Federal Section 106 funds, in combination with the
States' matching dollars, support the core State water quality
programs, including water quality assessment and monitoring, surface
and ground water standards, point source permitting, and training and
public information. Adequate funds are particularly critical to
supporting the States' development and implementation of total maximum
daily loads (TMDLs). The tasks associated with developing TMDLs for
impaired waters include watershed characterization, computer modeling
and related analyses, allocation of permissible loads, development of
TMDL reports and plans, and public outreach and stakeholder
development. These responsibilities have the potential to overwhelm
State agency resources that are in many cases already strained. At a
minimum, UMRBA supports maintaining Section 106 funding at the fiscal
year 2002 level of $192.5 million. To the extent possible, funding
should be enhanced to $200 million.
Clean Water State Revolving Funds
The UMRBA is deeply concerned about the lack of support in the
Administration's fiscal year 2003 budget proposal for the Clean Water
State Revolving Fund (CWSRF), which helps address wastewater
infrastructure needs. The CWSRF has made tremendous contributions to
improving the nation's water quality. In fiscal year 2002, the five
Upper Mississippi River Basin States received a total of $177 million
in CWSRF funding. However, the CWSRF is proposed to be cut by 10.2
percent in fiscal year 2003, funding it at $1.212 billion, rather than
at its authorized historical level of $1.35 billion. Given the
flexibility to redirect wastewater funds to the Drinking Water State
Revolving Fund (DWSRF), even less than $1.212 billion might well be
available for the wastewater SRFs. While the flexibility to shift among
these programs can help the States address their most pressing needs,
it is no substitute for adequate funding. Estimates of the nation's
wastewater infrastructure needs certainly vary, as evidenced in the
Congressional deliberations on new water infrastructure financing
legislation (H.R. 3930 and S. 1961). However, there is absolutely no
doubt there are substantial unmet needs. The high demand for these
funds underscores the need to reauthorize CWSRF funding and increase
annual Federal appropriations to $2 billion.
State Nonpoint Source Grants (Section 319)
The Administration has requested $238.5 million for the Section 319
State nonpoint source (NPS) grant program, a modest increase of $1
million above fiscal year 2001 and 02 funding levels. Nonpoint sources
are one of the major causes of water pollution in the Upper Mississippi
River Basin, which drains the nation's agricultural heartland. Adequate
funding for Section 319 and complementary efforts, including the USDA's
conservation programs, is essential to meeting the region's major water
quality challenges. While the UMRBA is pleased that the Administration
is seeking a slight increase in Section 319 funding, it should be
recognized that continued progress in addressing nonpoint pollution
will require significantly increased resources.
Watershed Initiative
The Administration has proposed $20 million in fiscal year 2003 for
a new targeted Watershed Initiative. While the details of how the
program will be implemented are not yet available, the intent is to
provide grants to approximately 20 local watershed efforts on a
competitive basis. Although UMRBA supports funding for watershed
planning and management, it should not come at the expense of well-
established programs such as Section 106 and Section 319. Redirecting
this funding to existing State grant programs would also obviate the
need to establish new bureaucratic mechanisms within EPA to administer
this new grant program. The fiscal year 2003 budget identifies $1
million and 10 additional FTEs to simply administer the new program.
These resources could be much more productively employed in existing
programs.
Environmental Monitoring and Assessment (EMAP)
EPA's fiscal year 2003 budget includes $38.26 million for its
Environmental Monitoring and Assessment Program (EMAP). Of this amount,
$4.875 million is proposed as a new initiative to extend the EMAP
approach to large rivers in the Mississippi River Basin (Central
Basin). Initially, under such an initiative, the scientific principles
developed by EMAP for regional scale assessment and monitoring will be
applied to the Missouri and Upper Mississippi Rivers. These rivers are
challenged by long term loadings of nutrients, 2 sediments, and toxic
chemicals, as well as extensive habitat alternatives. The Central Basin
EMAP initiative is intended to fill the scientific gaps (indicators,
sampling design, and sampling methodology) that currently limit our
ability to assess baseline conditions and measure the performance of
environmental protection activities. The resulting advancements in
monitoring technology and approaches could be potentially useful in
guiding the development of TMDLs on major rivers such as the Missouri
and Mississippi Rivers. UMRBA thus supports proposed funding of $4.875
million for the Central Basin EMAP.
Hypoxia Action Plan
The UMRBA is disappointed that the Administration's fiscal year
2003 budget proposal does not include additional new resources to
address the recommendations in the Hypoxia Action Plan, submitted by
the Mississippi River/Gulf of Mexico Watershed Nutrient Task Force in
January 2001. The States in the Upper Mississippi River Basin have
consistently said that reductions in nutrient inputs to the Gulf of
Mexico and monitoring to evaluate the effectiveness of these efforts
will only be possible if significant new budgetary resources are
provided by the Federal Government. While the States continue to
support the goals and strategies set forth in the Action Plan, little
progress will be made to reduce the Gulf hypoxic zone and improve water
quality conditions throughout the basin without a major Federal
financial commitment.
federal emergency management agency
Mitigation--Of particular interest to UMRBA is funding for
mitigation of future flood hazards. Mitigation, which is the on-going
effort to reduce or eliminate the impact of disasters like floods, can
include measures such as relocating homes or community facilities off
the floodplain, elevating structures, and practicing sound land use
planning. Mitigation planning and implementation measures are essential
to reducing the nation's future disaster assistance costs. Given the
importance of mitigation, UMRBA supports the new Pre-Disaster
Mitigation grant program proposed by FEMA and funded at $300 million in
the President's proposed fiscal year 2003 budget. Such a program would
significantly enhance communities' ability to prevent future damages,
particularly in areas that have not experienced a major disaster and
thus have not had access to postdisaster mitigation assistance through
the Disaster Relief Fund. In addition, pre-disaster mitigation
assistance is an effective means of meeting the on-going need in--all
communities to plan for future floods and reduce their vulnerability
before the next flood disaster.
Unfortunately, the Administration's proposal for a new Pre-Disaster
Mitigation Program is based on the premise that the existing post-
disaster Hazard Mitigation Grant Program (HMGP) will be eliminated. The
HMGP has been a particularly popular and enormously helpful program.
Authorized under Section 404 of the Stafford Act, the HMGP provides
grants to States and local governments to implement long-term hazard
mitigation measures after a major disaster declaration. Because grant
funds are made available during the immediate recovery from a disaster,
it offers a particularly attractive option for communities that may not
otherwise consider mitigation. It is critical to maintain this post-
disaster option, in addition to creating a new pre-disaster mitigation
option. Local communities need both. In addition, by retaining the
HMGP, mitigation assistance specifically for flood damages would
continue to be available to communities that experience disastrous
flooding. In contrast, flood mitigation projects under FEMA's new pre-
disaster program will need to compete for funding with mitigation
projects for a wide variety of other potential disasters, thus
diminishing the likelihood that flood mitigation needs will be met.
Therefore, UMRBA supports funding of $300 million for a new Pre-
Disaster Mitigation Program and urges Congress to reject the
Administration's proposal to eliminate the postdisaster HMGP.
Flood Map Modernization--UMRBA enthusiastically supports the
Administration's proposal to provide $300 million to modernize and
digitize flood maps. Among other things, flood maps are used to
determine risk-based NFIP premium rates and develop disaster response
plans for Federal, State, and local emergency management personnel.
However, most flood maps are over 15 years old and axe rapidly becoming
obsolete. Many flood maps are outdated by the effects of land use
changes in the watersheds. When out-dated maps underestimate flood
depths, it can often lead to floodplain development in high risk areas.
It is therefore important that flood maps be updated on an ongoing
basis and in a timely way.
The Corps of Engineers is currently conducting a Flow Frequency
Study that will update the discharge frequency relationships and water
surface profiles of approximately 2,000 river miles of the Upper
Mississippi, Lower Missouri, and Illinois Rivers. This data will have a
variety of uses, including updating Flood Insurance Rate Maps (FIRMs)
used by hundreds of flood prone communities along these rivers. The
Corps and FEMA have estimated that 4,237 map panels in the 130 counties
along these rivers will need to be revised at a cost of approximately
$30 million. Using data from the Corps study will be a far more cost-
effective way to update FIRMs than having FEMA independently study
flood hazards and update the maps. UMRBA therefore urges Congress to
designate funding specifically for the Upper Mississippi flood mapping
project and direct FEMA and the Corps to coordinate their efforts to
advance FIRM updates.
______
Prepared Statement of the University Corporation for Atmospheric
Research
On behalf of the University Corporation for Atmospheric Research
(UCAR) and the university community involved in weather and climate
research and related education, training and support activities, I
submit this written testimony for the record of the U.S. Senate
Committee on Appropriations, Subcommittee on VA, HUD and Independent
Agencies for the fiscal year 2003 budget.
university corporation for atmospheric research
UCAR is a consortium of 66 universities that manages and operates
the National Center for Atmospheric Research (NCAR) and additional
research, education, training, and research applications programs in
the atmospheric and related sciences. The UCAR mission is to support,
enhance, and extend the research and education capabilities of the
university community, nationally and internationally; to understand the
behavior of the atmosphere and related systems and the global
environment; and to foster the transfer of knowledge and technology for
the betterment of life on earth. In addition to its member
universities, UCAR has formal relationships with approximately 100
additional undergraduate and graduate schools including several
historically black and minority-serving institutions, and 40
international universities and laboratories. UCAR is supported by the
National Science Foundation (NSF) and other federal agencies including
the National Aeronautics and Space Administration (NASA).
introduction
Recent events that have shaken our nation's physical and economic
well-being, point unequivocally to the fact that we must depend now,
more than at any time in the country's history, on investments in
science and technology. In his remarks at his confirmation hearing, Dr.
John Marburger, the President's Science Advisor, stated that, ``More
than any other nation, we have used science and technology wisely to
create peace, advance democracy, and provide for the well-being of our
citizens Economists tell us that fully half of our economic growth in
the last half-century has come from technological innovation and the
science that supported it. . . The Federal role is crucial If we
sustain our investments in basic research, we can ensure that the
United States remains at the forefront of scientific capability,
thereby enhancing our ability to shape and improve the world's
future.'' The science agencies funded by the VA, HUD and Independent
Agencies budget have an enormous role to play in shaping that future. I
would like to comment on the budget requests for two of those agencies,
NSF and NASA.
national science foundation (nsf)
The President's fiscal year 2003 Budget Request of $5.02 billion
for NSF, a 4.9 percent increase from fiscal year 2002, includes $76.0
million in transfers from other agencies. Subtracting those transfers,
the real increase for NSF is $155.0 million, or 3.4 percent over fiscal
year 2002. When inflation is taken into consideration, this is
essentially a flat budget. Yet the President's NSF Budget Request
states that the established priorities, ``take into account both
growing needs and expanding opportunities for high-impact investments
to strengthen world leadership in science, engineering and technology.
They aim to keep the nation's science and engineering enterprise
healthy, dynamic and relevant.'' Last year, 54 U.S. Senators signed a
``Dear Colleague'' letter to the Senate leadership supporting doubling
the NSF budget over 5 years. If that formula is followed, then
addressing the priorities that have been established by the
Administration could be within reach. If the numbers in the Budget
Request prevail, then we will fail to address those priorities, as
critical as they are to the current and future health and security of
our nation. The productivity of the U.S. science and engineering
enterprise, and to some extent, the technology used for national
security applications, depend on NSF support of fundamental research. I
agree with the call from the American Association of Universities (AAU)
and the Coalition for National Science Funding (CNSF) to appropriate
for the agency a 15 percent increase thereby continuing the momentum of
the NSF doubling effort begun in fiscal year 2001 and continued at a
more constrained level in fiscal year 2002. However, I also understand
that these are extraordinary times with extraordinary fiscal pressures.
Therefore, I ask the Committee to continue in fiscal year 2003, to the
extent possible, the effort to double the NSF budget by supporting at
least a 10.0 percent increase for a total budget of at least $5.34
billion. (This figure includes the proposed transfers in addition to a
real 10.0 percent increase over fiscal year 2002.)
This is an increase that the science community has the capacity to
use immediately and well. A 10 percent increase can be productive in
terms of the NSF grant size and duration. The average grant size has
been falling in constant dollars over many years. According to the
CNSF, ``The average NSF grant in the year 2000 was for $93,000 and
lasted for just under 3 years. By comparison, the average NIH grant in
2000 was for $283,000, and lasted for just over 4 years. Increasing the
size and time period of grants will enable researchers to concentrate
on discovery rather than paperwork.'' Each year, NSF receives
approximately 30,000 proposals and has the resources to fund only one
third of them. Nearly $2.0 billion worth of proposals rated very good
to excellent through the merit review process go unfunded. Recent
national competitions have produced success rates as low as 7.0
percent, not because of a paucity of excellent proposals, but because
of lack of adequate funding. These low proposal success rates reflect a
capacity for progress in this country that is not being realized.
Within the NSF, I would like to comment on the following specific
initiatives and programs that are of great importance to the country's
global scientific leadership and to the advancement of the atmospheric
and related sciences:
Research and Related Activities (R&RA)
When the transfers mentioned above are subtracted from the fiscal
year 2003 budget request for NSF's R&RA, the heart of this nation's
non-medical basic research budget, the numbers are increased by only
3.0 percent over fiscal year 2002 levels. This amount, barely enough to
cover inflation, is then reflected in the budgets of most of the NSF
Research Directorates. The peer-reviewed work supported by these
directorates represents a major portion of the nation's scientific
research achievement and technological advancement. I urge the
Committee to allocate for Research and Related Activities an amount
that reflects an overall increase of at least 10.0 percent for NSF as
requested above.
Geosciences (GEO) Directorate.--The Budget Request for RRA's GEO
Directorate shows a 13.0 percent increase over fiscal year 2002. When
the proposed external agency transfers, all of which affect the GEO
budget, are removed from the request, the apparent real increase for
GEO is $4.0 million, or 0.65 percent much less than inflation. However,
when fiscal year 2003 mandated programs (these include the proposed
transfers and the Climate Change Research Initiative detailed below)
are subtracted from the GEO total, the Directorate's funding is
actually down by $22.0 million from the fiscal year 2002 Current Plan
total. This represents a significant decrease for core research that is
of direct importance to the physical safety of our citizens, our
economic health, and global issues of national security relevance, such
as climate change and the environmental health of the planet.
The GEO Directorate is this country's principal source of funding
for university-based research in the atmospheric, earth and ocean
sciences. As the Budget Request states, ``GEO plays a critical role in
addressing the nation's need to understand, predict and respond to
environmental events and changes and to use the Earth's resources
wisely.'' Through involvement in such interagency programs as the U.S.
Weather Research Program (USWRP), the National Space Weather Program
(NSWP), and the U.S. Global Change Research Program (USGCRP), GEO core
research advances our ability to predict natural phenomena of economic
and human significance such as severe storms, solar variability, and
climate patterns and change that affect food production, potable water
supplies, human migration, the survival of plant and animal species,
and the security of coastal zones. The fiscal year 2003 Budget Request
lists GEO involvement in a new program of the Administration, the
Climate Change Research Initiative (CCRI--see below for more detail),
at a total of $10.0 million. While the CCRI activities listed are of
importance to climate research, there appears to be no new money in the
request to cover this worthy, proposed work. The CCRI mandated research
is therefore part of the $22.0 million total in Administration-
requested programs that will negatively affect the funds available for
the core GEO program.
Both the Federal government and the private sector estimate that
over $2.0 trillion of the $10.0 trillion U.S. gross national product is
affected annually by weather and climate. Given the current struggles
within our energy sector and within the economy as a whole, this is an
unfortunate time to decrease research efforts that could help to
anticipate weather and climate variability more effectively. I urge the
Committee to allocate for the GEO Directorate an amount that reflects
an overall real increase of at least 10.0 percent for NSF as requested
above. I further urge the Committee to take into consideration in final
allocations, the impact of the proposed agency transfers on GEO. If the
language of the final bill allocates any increased RRA funding to NSF
scientific directorates in proportion to percentages in the original
request, but fails to include the amount of the proposed transfers if
they are not accomplished, then the academic community funded by the
GEO Directorate will be at a great disadvantage since its requested
real increase is the lowest of all the NSF directorates.
Atmospheric Sciences (ATM).--Within the GEO Directorate, the
Division of Atmospheric Sciences supports research that contributes new
understanding of the behavior of the Earth's atmosphere and its
interactions with the sun. The fiscal year 2002 Current Plan total is
$202.0 million. The Budget Request includes as ATM responsibilities two
of the agency transfers. Once those are subtracted from the total
request, ATM must still reduce its base by $7.4 million from fiscal
year 2002 Current Plan numbers in order to accommodate additional
requested mandates such as the new CCRI. Therefore, while it appears
that ATM's Atmospheric Sciences Research Support line receives an 11.3
percent increase (once $8.56 million in agency transfers is
subtracted), this amount is quickly eroded by the Administration's CCRI
new initiative. ATM funds fuel a major percentage of the country's
university research in weather, climate, and the solar-terrestrial
system. The ATM programs highlighted in the fiscal year 2003 request
include enhancing computer systems and numerical models; continuing to
evolve our understanding of the processes that control the atmospheric
distribution of carbon, water, and other nutrients; and continuing to
develop an upper atmospheric radar system to mitigate society's
vulnerability to space storms. I question whether these advances are
possible in the face of no real funding increase.
Also funded within ATM, the world-class National Center for
Atmospheric Research (NCAR) supports the country's entire atmospheric
and related sciences community through observational and computer
facilities, instrumented research aircraft, and an extensive visiting
scientist program. In fiscal year 2002, more than 1,500 researchers and
students will use the NCAR facilities and approximately 150 visiting
scientists will stay for extended periods. NCAR has just been given
excellent marks in a rigorous peer review conducted by NSF with heavy
involvement from the university community. The center's research spans
areas that are of great significance to the safety of our citizens, the
health of our economy, and the security of our communications
infrastructure, yet, apparently in order to accommodate the
Administration's mandated programs, the President's Budget Request for
fiscal year 2003 decreases the NCAR budget by 3.9 percent based on
Current Plan fiscal year 2002 amounts. This reduction, when combined
with the effects of inflation, will significantly reduce the productive
and highly valued programs of NCAR that support the national,
university-based atmospheric sciences community.
I urge the Committee to allocate for ATM an amount that reflects a
real overall increase of at least 10.0 percent for NSF as requested
above, in order to enable the agency to adequately fund the university
community involved in atmospheric sciences research and to provide a
super-inflationary increase for the National Center for Atmospheric
Research to preserve and enhance its highly valued, community-
supporting programs. I further urge the Committee to take into
consideration in final allocations, the effect of two proposed agency
transfers on ATM. If the language of the final bill allocates any
increased RRA funding to NSF scientific directorates and programs in
proportion to percentages in the original request, but fails to include
the amount of the proposed transfers if they are not accomplished, then
the academic community funded by ATM, including NCAR, will be at a
great disadvantage since its requested real increase is extremely low.
As a contribution within the GEO budget to the NSF Learning for the
21st Century overall NSF priority area, we appreciate the funding being
allocated for innovative approaches to education including the
continued development of the geosciences community's Digital Library
for Earth Systems Science (DLESE). We would also like to call your
attention to the UCAR program, Significant Opportunities in Atmospheric
Research and Science (SOARS), which is funded directly by ATM within
GEO. Recipient of a 2001 Presidential Award for Excellence in Science,
Mathematics, and Engineering Mentoring, SOARS is having a positive
impact on the number of ethnically diverse atmospheric sciences
graduate students through its model mentoring approach and research
orientation, and is an excellent example of NSF's efforts to produce a
diverse, internationally competitive workforce to meet the challenges
of this new century.
Major Research Equipment and Facilities Construction (MREFC) Programs
The Tools section of the NSF Budget Request states that, ``NSF
provides support for large, multi-user facilities which give
researchers access to essential state-of-the-art facilities. Support
for these unique national facilities is necessary to advance U.S.
capabilities required for world-class research.'' Yet NSF's MREFC
account, the major NSF resource for non-medical research facilities in
this country, is decreased by 9.3 percent from the fiscal year 2002
actual level. I urge the Committee to examine the Major Research
Equipment and Facilities Construction account cuts and to add funding
for programs that have been planned carefully, that have been partially
funded already, and that promise tremendous advances in this country's
research capabilities.
Terascale Computing Systems.--The multi-agency terascale effort is
a key component of this country's strategy to gain leading edge access
to computing capabilities. For years, this country has lagged behind
other developed nations in high-end computing, a situation that has
adversely affected the atmospheric science community's ability to run
the complex models necessary to understand and predict regional and
global climate change. Advances that accompany the completion of the
terascale effort will return significant scientific advancements in all
fields. I urge the Committee to support the President's fiscal year
2003 request of $20.0 million for Terascale Computing Systems that will
enable U.S. researchers to gain access to leading edge computing
capabilities, and to support the budget request for NSF's Directorate
for Computer and Information Science and Engineering (CISE) in its
oversight of the terascale project through the Advanced Computational
Infrastructure Subactivity.
High-performance Instrumented Airborne Platform for Environmental
Research (HIAPER).--While we support the great advances in science and
technology that all MREFC-funded programs represent, we are
disappointed as a community to see that HIAPER is not included in the
fiscal year 2003 Budget Request. Following approval of the program by
the National Science Board, funding for this modern research aircraft
was begun by Congress in fiscal year 2000 and continued in fiscal year
2001 and fiscal year 2002, for a total of $55.97 million of the $81.5
million project total. We sincerely hope that funding is completed in
fiscal year 2003 since NSF has just retired one other research aircraft
and all delays in instrumenting the already procured Gulfstream
airframe for HIAPER will result in higher completion costs. We look
forward to HIAPER's vital contribution to our understanding of how
severe weather and other weather and climate phenomena develop and
impact the nation and the globe.
Earthscope.--This multi-purpose geophysical instrument array will
allow scientists to make major advances in our knowledge and
understanding of the structure and dynamics of the North American
continent. The initial Earthscope activity, deployment of high-
capability seismometers throughout the United States, will improve our
resolution of the subsurface structure and lead to advances in
understanding fault conditions and the rupture processes of
earthquakes. I applaud the Administration's inclusion of Earthscope in
the fiscal year 2003 MREFC request and urge the Committee to support
this program.
Education and Human Resources (EHR)
Nothing is more important for the future of our nation than the
education of next generations of leaders, of a work force skilled in
uses of technology, and of citizens who can make informed decisions in
our democratic society. I applaud the long overdue request for
increased stipends (to $25,000 annually) to attract our best graduates
for research and teaching fellowships and ask the Committee to make
sure that this stipend increase is included in the final budget bill.
I support also the Administration's call to strengthen NSF's
ability to leverage institutional partnerships for the systemic
improvement of math and science education. However, I ask the Committee
to ensure that EHR existing programs are complemented and strengthened,
not compromised, by the expansion of the Math and Science Partnership
program. This EHR program receives an additional $40.0 million in this
year's request while all of EHR is increased by only $33.0 million, an
obvious and significant $7.0 million gap.
While the 3.8 percent requested overall increase for EHR may not
seem adequate to meet the country's needs, it is my belief that the NSF
science directorates and the MREFC account are in far greater need of
enhancements this year. Therefore, I urge the Committee to support the
President's request of $908.0 million in fiscal year 2002 for Education
and Human Resources, a 3.8 percent increase over fiscal year 2002.
National STEM Education Digital Library (NSDL).--The NSDL goal is
to produce a digital library of high-quality educational materials at
all levels in science, technology, engineering and mathematics (STEM,)
that enables the development of virtual learning communities. This
research, teaching and learning resource is being developed by a broad
range of universities and UCAR in response to needs articulated by the
academic community. NSDL presents a tremendous opportunity to improve
access to superior instructional materials and advanced classroom
technologies. The fiscal year 2003 NSDL request represents a cut of
$960,000, or 2.0 percent below fiscal year 2002 levels. This decrease
will cause a 10.0 percent reduction in collections supported. I urge
the Committee to support the National STEM Digital Library (NSDL) by
appropriating at least the President's fiscal year 2003 request of
$23.6 million, and ask that the momentum to fund this important
activity be resumed at a higher level in fiscal year 2004.
U.S. Global Change Research Program (USGCRP)
The President's request for USGCRP activities within NSF is $188.0
million for fiscal year 2003. This amount has been absolutely flat
since fiscal year 2000 and therefore represents the continued erosion
of NSF's contribution to this interagency program that addresses
interactions among physical, biological, ecological, and human systems
at various scales. Working with national and international research
institutions, this program allows the atmospheric sciences community to
improve prediction capabilities for climate fluctuations between
excessively wet and dry periods, and for long-term climate change. This
research is a critical investment for the future of this nation, its
economy, and the health and safety of its citizens.
In fiscal year 2003, the Administration will institute the Climate
Change Research Initiative (CCRI) as part of a new interagency effort.
CCRI deliverables will be targeted at information of strategic use to
policy-makers, such as advanced understanding of the carbon cycle,
improved ability to manage risk associated with climate change, more
and better measurements of greenhouse gases, and improvements of
climate models. It is critical, for both financial and scientific
reasons, that the CCRI build on the extensive knowledge already gained
under USGCRP activities, and that Initiative and Program activities be
coordinated and leveraged to the greatest extent possible. Therefore, I
urge the Committee to support the establishment of the Climate Change
Research Initiative with new funding so that this initiative does not
compromise existing core research programs, to enable to the fullest
extent possible CCRI enhancement of and collaboration with USGCRP
research, and to support the Initiative's and the Program's needed
growth in years to come in order to provide continuous knowledge and
guidance that contributes to the nation's security and well-being.
NSF Priority Areas
Information Technology Research (ITR).--The ongoing ITR investment
is enabling the development of tools to strengthen all-pervasive
information technology applications in science, commerce, education,
and government. Advances include the creation of new integrative
software for high-end computing, applications to provide security for
cyberinfrastructure in the academic, government, and business
communities; support for the creation of digital library collections;
and the strengthening of large-scale computer networks. The initiative
promises innovations that will provide efficiencies in the way
university researchers process and access data, communicate with
collaborators, and share research results. Given the enormous Earth
systems and solar-terrestrial data sets that are critical to
atmospheric sciences research, it is possible that the ITR
computational effort could advance our field of science through
innovative processing, archiving, and networking methods which we have
not yet imagined. I urge the Committee to support the President's
fiscal year 2003 request of $285.8 million, a 3 percent increase, for
Information Technology Research, to increase funding, if possible, for
this initiative that has direct applications to our national security
and economic well-being, and to support the NSF in its role as leader
of this multi-agency initiative.
Mathematical Sciences.--Mathematics is a basic and indispensable
tool for many scientific fields including the atmospheric sciences;
recent progress in climate science in particular has been made possible
by new mathematical and statistical tools and applications. One of the
great challenges to advancing climate change research, weather
prediction, and the study of solar-terrestrial interactions is the
incredible amount of data that must be captured, organized, and
analyzed. I applaud the Mathematical Sciences focus on investigating
the challenges posed by large data sets such as those generated by
today's sophisticated sensors and satellite observations systems. I
urge the Committee to support the Administration's scale-up efforts in
Mathematical Sciences by allocating the $6.0 million request, a 100.3
percent increase, for Mathematical Sciences.
Social, Behavioral and Economic (SBE) Sciences.--This new priority
area seems to take a creative approach toward achieving the goal of
enabling this country to take greater advantage of technology while
anticipating and preparing for the very real and significant
accompanying challenges and consequences. As part of the Climate Change
Research Initiative (CCRI) mentioned above, SBE priority area support
is requested by the Administration for research on decision-making
under uncertainty within the context of global change research. While
much is known about climate change and its potential societal impacts,
much is left to be discovered and much may remain unknowable given the
great difficulties inherent in attempting to reproduce the entire Earth
system in computer models. If the $10.0 million requested for this
priority area is new money to be added to the SBE Directorate, then I
urge the Committee to approve the request to establish the Social,
Behavioral and Economic Sciences priority area.
Learning for the 21st Century.--In order to remain a global leader
in most scientific fields and competitive in all areas, and to maintain
national security at the highest possible level, this country must
offer the opportunity for all of our citizens to increase their
understanding of science, mathematics, and technology and to meet the
challenges of the dramatic global transition to a technology-literate
workforce. The goals of this initiative in fiscal year 2003 are to
establish national centers to expand our understanding of the learning
process and demonstrate effective workforce preparation strategies, and
to explore the potential of information technology to strengthen links
between formal and informal education across all levels. I urge the
Committee to support the President's fiscal year 2003 request of $184.7
million, a 27.5 percent increase, for the Learning for the 21st Century
initiative.
Biocomplexity in the Environment (BE).--This interdisciplinary
initiative is rapidly advancing our ability to understand the complex
systems that are structured or influenced by living organisms and the
interactions within biological systems and physical processes. We are
confident that BE efforts will lead eventually to better understanding
of human impacts on the environment and enhanced predictability of
environmental systems, including climate, that will assist
environmental decision makers and contribute to society's ability to
adapt to natural hazards. I urge the Committee to support the
President's fiscal year 2003 request of $79.2 million, a 36.3 percent
increase, for Biocomplexity in the Environment.
Nanoscale Science and Engineering.--Nanotechnology promises to
revolutionize our control of matter in areas such as information
technology and to change the way in which most products are made. We
look forward to the manner in which it may advance research in the
field of the atmospheric sciences, particularly through possible major
breakthroughs in the development of technology such as computers,
radars, and satellites. I urge the Committee to support the President's
fiscal year 2003 request of $221.2 million, an 11.3 percent increase,
for Nanoscale Science and Engineering.
national aeronautics and space administration (nasa)
NASA supports science, technology, and exploration that enables us
to better understand the origin and evolution of the universe, better
comprehend Earth's climate and other environmental forces, study living
and physical systems in the environment of space, and improve aviation
safety and efficiency. The agency provides crucial support for research
and education by awarding, through the competitive selection of merit-
reviewed proposals, approximately $1.0 billion annually to colleges and
universities across the country.
The Administration's fiscal year 2003 overall request for NASA is
$15.1 billion, a 1.4 percent increase over fiscal year 2002 estimates.
(This includes pension expenses that NASA now may have to incur.) This
request reflects less, in real dollars, than the investment our country
made in NASA's science 10 years ago. While I understand that
significant budgetary issues exist, and that the nation's resources are
stretched during these extraordinary times, I believe that NASA's
current and potential contributions to the nation's security and
scientific knowledge are so great that the agency should be given some
budgetary flexibility and room for growth. I urge the Committee to
support NASA with a modest 5.0 percent increase, or a total of $15.7
billion, for fiscal year 2003.
NASA's Science, Aeronautics and Technology (SAT) appropriation
provides funding for all of the research and development activities of
NASA including the application of technologies critical to the
economic, scientific, and technical competitiveness of the nation. The
Budget Request for SAT is $8.84 billion. This appears to be a 9.9
percent increase over fiscal year 2002, however approximately half of
this amount consists of operations transfers formerly budgeted under
the Human Space Flight account. Therefore, I urge the Committee to
appropriate for the fiscal year 2003 Science, Aeronautics and
Technology budget a real 5.0 percent increase, or a total of $9.28
billion, an amount that reflects an overall increase of 5.0 percent for
NASA as requested above.
I would like to comment on the budgets of the following SAT
programs that contribute to the health and well-being of the nation, in
part through the achievements of the atmospheric and related sciences
community:
Earth Science Enterprise (ESE)
The goal of the Earth Science Enterprise is to understand Earth's
environmental system and its response to natural- and human-induced
changes, thus enabling improved prediction of climate, weather, and
natural hazards as well as responsible stewardship of the planet. NASA
ESE missions play a pivotal role for the entire national environmental
research community in providing critical data sets on key parameters
that describe the Earth system and the human influences on that system.
In the past 3 years, Earth Science has successfully launched 11
missions and six more are scheduled for launch this year. The fiscal
year 2003 Budget Request proposes a total of $1.62 billion for Earth
Science. This is a 0.17 percent increase over fiscal year 2002 that
does not even cover inflation and essentially mirrors increases to this
crucial NASA program in recent years. Therefore, I urge the Committee
to support the Earth Science Enterprise at $1.75 billion, a 5.0 percent
increase, in fiscal year 2003 so that NASA may have the flexibility to
enhance ESE programs that are crucial to understanding our planet's
environmental system.
ESE contains several programs that are of great benefit to society,
and are of particular importance to the atmospheric sciences community,
including the following:
Earth Observing System (EOS).--As part of NASA's contribution to
the interagency U.S. Global Change Research Program (please see details
below), the Earth Observing System (EOS) satellites have been deployed
to collect data on the major interactions of the land, oceans,
atmosphere, ice, and life that comprise the Earth system in order to
answer questions about how the Earth is changing and what the
consequences of those changes are for life. EOS data sets are used
broadly by scientists and are crucial for research in a number of
scientific fields. I urge the Committee to support the fiscal year 2003
request of $410.9 million, a 6.6 percent increase over fiscal year 2002
levels, for the next phase of EOS programming that includes the
following components:
--EOS Data and Information System (EOSDIS).--EOSDIS is operating the
EOS satellites now in orbit and retrieving flight data and
converting it into useful scientific information. Development
of EOSDIS is nearly complete with remaining activities timed to
support the upcoming launches of EOS missions through AURA in
2004, therefore the EOSDIS request is decreased appropriately
from that of past years. I urge the Committee to support the
President's request of $74.3 million for EOSDIS in fiscal year
2003.
--AURA (Mission of the EOS Common Spacecraft).--In the troposphere
and lower stratosphere (altitudes up to 20 km), the four
instruments of the AURA mission will measure ozone, aerosols,
and several other key atmospheric constituents that play an
important role in atmospheric chemistry, air quality, and
climate. Scheduled to launch in January 2004, this mission will
provide data to answer such critical questions as whether the
Earth's ozone layer is recovering and whether air quality is
deteriorating around the globe. These are issues that affect
environmental policies and international agreements. I urge the
Committee to support the fiscal year 2003 budget request of
$85.3 million, a necessary 21.0 percent increase over fiscal
year 2002 levels, for AURA instrument completion.
--EOS Follow-On.--As the first cycle of EOS missions comes to a
close, EOS Follow-On missions are being planned to continue to
meet the scientific needs of the NASA Earth science projects.
This next generation of missions will provide new technology
and space systems to continue global climate change
observations, extend the global land cover change data set, and
create improved observations of atmospheric phenomena such as
global precipitation, ocean wind vectors, and aerosol levels.
Much of the fiscal year 2003 EOS Follow-On requested increase
is directed to the NPOESS Preparatory Project (NPP), which will
fulfill NASA's commitment to obtain and make available a 15-
year data record for fundamental global climate change
observations. I urge the Committee to support the
Administration's fiscal year 2003 request of $238.5 million, a
117 percent increase, for EOS Follow-On programs.
Space Science Enterprise
The extraordinary mission of the Space Science Enterprise to chart
the evolution of the universe and understand its galaxies, stars,
planetary bodies, and life; to discover planets around other stars; and
to understand the behavior of the sun and its interaction with Earth,
is of great interest to the public as well as the academic community.
These challenges form the basis of the country's space science program
over the next several decades. While Space Science appears to receive a
19.1 percent increase in the Budget Request, $200.0 million of the
$547.0 million increase consists of the transfer from the Human Space
Flight account of the operations for the Deep Space Network and the
Mission Services for Space Science missions. This transfer results in
no significant budgetary impacts. I urge the Committee to support the
Administration's fiscal year 2003 request for the Space Science
Enterprise of $3.4 billion, a 10.0 percent increase over fiscal year
2002 once transfers are subtracted.
Sun Earth Connections (SEC).--The SEC program within the Space
Science Enterprise formulates missions to investigate the effects of
solar phenomena on Earth and on the space environment. Its overall goal
is to understand the changing sun and its effects on the Solar System,
life, and society. I urge the Committee to support the Administration's
request for growth within Sun Earth Connections by appropriating the
request of $117.8 million, a 107.0 percent increase over fiscal year
2002 levels.
SEC contains several missions within its Solar Terrestrial Probes
program that promise great benefit to society, and are of particular
importance to our community, including the following:
--Thermosphere, Ionosphere, Mesosphere Energetics and Dynamics
(TIMED), the first science mission of Solar Terrestrial Probes
within SEC, was successfully launched last December. Data are
being now collected for the first time on the composition of
the Mesosphere and Lower Thermosphere/Ionosphere (MLTI) region
of the Earth's atmosphere, the layer that is the fragile
gateway between the Earth's environment and space. Through data
analysis, TIMED will investigate the influences of the sun and
humans on this region of the atmosphere (60-180 km altitude) in
order to understand MLTI variability and the potential impact
of these changes on satellite tracking, spacecraft lifetimes,
degradation of spacecraft materials, and re-entry of piloted
vehicles. I urge the Committee to support the fiscal year 2003
request of $3.1 million for continued TIMED operations as well
as the $6.9 million request for TIMED mission data analysis.
--Solar-B, scheduled to launch in 2005, is a U.S./Japan collaboration
to investigate the interaction between the Sun's magnetic field
and its corona. The mission will provide space weather data to
help understand events such as solar mass ejections that can
endanger astronauts in orbit and impact Earth's atmosphere with
enough force to cause expensive communications disruptions.
Much of the instrument development phase of this mission is
complete, therefore the fiscal year 2003 request shows a
decline from fiscal year 2002. The amount requested may be
adequate for the current program phase, but reviews are
underway now to determine if the delay of another program (the
Astro-E Mechanical Thermal Model) has adversely affected Solar-
B. Given information available now, however, I urge the
Committee to support the fiscal year 2003 request for $16.2
million for the continued NASA development of the Solar B
mission's instrument subsystems.
Focused Technology Programs.--The Office of Space Science
Technology Program has as its goal the development of new technologies
to enable innovative and less expensive research and flight missions.
The Focused Programs component enables the most effective alignment of
technology development programs with future missions in order to ensure
that proposed mission studies are realistic and can be implemented.
Solar Probe, a mission that has the potential to unlock some of the
mysteries of the energetic solar coronal material, is an example of the
important future programs being evaluated by the Focused Technology
Program. I am concerned that funding for the Office of Science Focused
Technology Program is essentially flat and I urge the Committee to
provide better support for this crucial, mission-oriented function.
Office of Aerospace Technology
Aviation Safety Program Weather Safety Technologies.--While the
rate of commercial aviation accidents is very low worldwide, recent
dramatic increases in air traffic (with the exception of the months
following September 11) have resulted in an increase in the number of
accidents. If the recent rate of increase were to stay constant over
the next 15 years, the result will be an average of 50 catastrophic
accidents per year--almost one per week. According to the National
Transportation Safety Board, approximately 30 percent of all aviation
accidents, and 37 percent of the fatal accidents, are weather related.
The goal of NASA's Aviation Safety Program (AvSP), within the
Office of Aerospace Technology, is to develop and demonstrate
technologies that contribute to a reduction in the aviation fatal
accident rate by a factor of five (compared to the 1994 1996 average)
by the year 2007 and by a factor of ten by the year 2022. The Aviation
Safety Program encompasses three areas, one of which is Weather Safety
Technologies. In partnership with the FAA, the Department of Defense
and the aviation industry, this program develops and supports the
implementation of technologies to reduce fatal aviation accidents and
delays caused by weather hazards. I urge the Committee to uphold the
goal of reduced aviation accidents and fatalities by supporting the
fiscal year 2003 request for the Weather Safety Technologies program of
$20.9 million, a 17.0 percent increase over fiscal year 2002 levels.
U.S. Global Change Research Program (USGCRP)
NASA is a major contributor to the interagency USGCRP. NASA
research efforts in global change involve space-based, satellite
studies of the Earth as an integrated system with remotely-sensed
observations carried out as part of additional flight missions. With
USGCRP efforts concentrated within the Earth Science Enterprise, NASA
studies are expected to yield improved weather forecasts, tools for
managing agriculture and forests, information for fishermen and local
planners, and eventually, the ability to predict how the climate will
change. This research is a critical investment for the future of this
nation, its economy, and the health and safety of its citizens. I urge
the Committee to support the President's request of $1.09 billion, a
2.0 percent increase over fiscal year 2002 levels, for NASA U.S. Global
Change Research Program activities.
As stated above in the testimony presented for the NSF budget, the
Administration will institute in fiscal year 2003 the Climate Change
Research Initiative (CCRI) as part of a new interagency effort. The
President's fiscal year 2003 request for CCRI activities within NASA is
$3.0 million. As stated in the NSF testimony, it is critical for both
financial and scientific reasons, that the CCRI build on the extensive
knowledge already gained under USGCRP activities, and that Initiative
and Program activities be coordinated and leveraged to the greatest
extent possible. Therefore, I urge the Committee to support the
establishment of the Climate Change Research Initiative with new
funding, to enable to the fullest extent possible CCRI enhancement of
and collaboration with USGCRP research, and to support the Initiative's
and the Program's needed growth in years to come in order to provide
continuous knowledge and guidance that contributes to the nation's
security and well-being.
NASA Education Programs
Since the creation of NASA through the Space Act of 1958, the
agency has made a substantial commitment to education at all levels.
Because of NASA's inspiring mission, the agency's work is of great
interest to people of all ages. NASA is in a unique position to recruit
the education community to help leverage the agency's scientific
achievements, to interest students and citizens in the scientific
enterprise, and to motivate many to pursue scientific study and
careers. NASA's comprehensive portfolio of education programs includes
teacher/faculty preparation and enhancement, student support,
educational technology, support of systemic improvement, curriculum
support and dissemination, and research and development. I urge the
Committee to support NASA's continuing contributions to this country's
broad education interests by appropriating the education programs
imbedded throughout the strategic enterprises and offices delineated in
NASA's fiscal year 2003 Budget Request.
conclusion
I ask that the Committee continue the commitment made last year to
invest steadily in our country's future. During this extraordinary time
in our history, we must continue to support science in order to reap
the benefits that accrue from the best research the world has to offer.
History has shown that these investments will pay tremendous dividends
to the country in lives saved, technologies developed, the economic
health of the nation expanded, national security enhanced, and American
leadership sustained throughout the world.
On behalf of the UCAR community, I want to thank the Committee for
the important work you do for U.S. scientific research, education, and
training. We appreciate your attention to the recommendations of our
community concerning the fiscal year 2003 budget of the National
Science Foundation and the National Aeronautics and Space
Administration.
LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS
----------
Page
Aerospace:
Engineering Division, prepared statement..................... 629
Industries Association, prepared statement................... 629
Alachua County, Florida, prepared statement...................... 575
Allbaugh, Joe M., Director, Federal Emergency Management Agency.. 481
Prepared statement........................................... 487
Alliance to Save Energy, prepared statement...................... 578
American:
Association of Engineering Societies, prepared statement..... 629
Astronomical Society, prepared statement..................... 582
Geological Institute, prepared statement..................... 589
Helicopter Society, prepared statement....................... 629
Indian Higher Education Consortium, prepared statement....... 592
Institute of Aeronautics and Astronautics, prepared statement 629
Lung Association, prepared statement......................... 617
Psychological:
Association, prepared statement.......................... 598
Society, prepared statement.............................. 620
Rivers, prepared statement................................... 604
Society of:
Civil Engineers, prepared statement...................... 629
Mechanical Engineers, prepared statements..............609, 629
Thoracic Society, prepared statement......................... 617
Water Works Association, prepared statement.................. 606
Asrar, Dr. Ghassem, Associate Administrator for Earth Science,
National Aeronautics and Space Administration.................. 409
Association of:
American Universities, prepared statement,................... 624
Minority Health Professions Schools, prepared statement...... 628
Aviation Research and Technology, prepared statement............. 633
Ayres, Judith, Assistant Administrator, Office of International
Activities, Environmental Protection Agency.................... 177
Babyland Family Services, Inc., prepared statement............... 634
Barile, Vincent, Deputy Under Secretary for Management, NCA,
Department of Veterans Affairs................................. 1
Boesz, Tina, Inspector General, National Science Foundation...... 533
Prepared statement........................................... 548
Bohmbach, James W., Chief Financial Officer, Veterans Benefits
Administration, Department of Veterans Affairs................. 1
Bond, Senator Christopher S., U.S. Senator from Missouri:
Opening remarks.............................................. 16
Opening statement............................................ 178
Prepared statements....................................28, 342, 413
Questions submitted by..................86, 149, 235, 389, 404, 516
Statements of..........................112, 305, 340, 411, 482, 536
Bostock, Robert, Chief Senior Advisor to the Administrator,
Environmental Protection Agency................................ 177
Brown, Tony T., Director, Community Development Financial
Institutions Fund, Department of the Treasury.................. 354
Prepared statement........................................... 357
Bryson, Jeffrey, General Counsel, Neighborhood Reinvestment
Corporation.................................................... 337
California Industry and Government Central California Ozone Study
(CCOS) Coalition, prepared statement........................... 636
Cassidy, Sean G., General Deputy Assistant Secretary for Housing,
Deputy Federal Housing Commissioner, letter from............... 139
Catlett, D. Mark, Principal Deputy Assistant Secretary for
Management, Department of Veterans Affairs..................... 1
City of:
Gainesville, Florida, prepared statement..................... 638
Miami Beach, Florida, prepared statement..................... 643
Newark, New Jersey, prepared statement....................... 647
Clark, Eligah D., Chairman, Board of Veterans' Appeals,
Department of Veterans Affairs................................. 1
Coalition for Indian Housing and Development, prepared statement. 649
Cobb, Robert W., Inspector General, National Aeronautics and
Space Administration........................................... 409
College Partners, Inc., prepared statement....................... 652
Colwell, Dr. Rita, Director, National Science Foundation......... 533
Prepared statement........................................... 547
Statement of................................................. 545
Combs, Linda M., Chief Financial Officer, Environmental
Protection Agency.............................................. 177
Consortium of Social Science Associations (COSSA), prepared
statement...................................................... 654
Cragin, Maureen P., Assistant Secretary for Public and
Intergovernmental Affairs, Department of Veterans Affairs...... 1
Craig, Senator Larry E., U.S. Senator from Idaho:
Prepared statements.........................................27, 416
Questions submitted by................................104, 171, 477
Statements of..............................................114, 415
DeWine, Senator Mike, U.S. Senator from Ohio:
Prepared statement........................................... 417
Statement of................................................. 417
Dillon, Joseph L., Comptroller, Office of the Chief Financial
Officer, Environmental Protection Agency....................... 178
Domenici, Senator Pete V., U.S. Senator from New Mexico:
Prepared statement........................................... 30
Questions submitted by......................100, 174, 298, 478, 526
Statement of................................................. 180
Doris Day Animal League, prepared statement...................... 658
Duffy, Dennis, Principal Deputy Assistant Secretary for Policy
and Planning, Department of Veterans Affairs................... 1
Egan, Nora E., Chief of Staff, Department of Veterans Affairs.... 1
Fabricant, Robert, General Counsel, Office of General Counsel,
Environmental Protection Agency................................ 177
Federation of American Societies for Experimental Biology,
prepared statement............................................. 660
Feussner, John R., M.D., Chief Research and Development Officer,
Veterans Health Administration, Department of Veterans Affairs. 2
Fisher, Linda, Deputy Administrator, Environmental Protection
Agency......................................................... 177
Fleet Reserve Association (FRA), prepared statement.............. 662
Friends of VA Medical Care and Health Research, prepared
statement...................................................... 666
Gauss, John A., Assistant Secretary for Information and
Technology, Department of Veterans Affairs..................... 1
Gelb, Nanci E., Director, Annual Planning and Budget Division,
Environmental Protection Agency................................ 178
General Aviation Manufacturers Association, prepared statement... 629
Gibson, Thomas, Associate Administrator, Office of Policy,
Economics and Innovation, Environmental Protection Agency...... 178
Great Lakes Indian Fish & Wildlife Commission, prepared statement 671
Griffin, Richard J., Inspector General, Department of Veterans
Affairs........................................................ 2
Grumbles, Benjamin, Deputy Assistant Administrator, Office of
Water, Environmental Protection Agency......................... 177
Grunsfeld, Dr. John, Astronaut, National Aeronautics and Space
Administration................................................. 409
Harkin, Senator Tom, U.S. Senator from Iowa, questions submitted
by............................................................. 93
Hazen, Susie, Deputy Assistant Administrator, Office of
Prevention, Pesticides and Toxic Substances, Environmental
Protection Agency.............................................. 177
Higgins, Robin, Under Secretary for Memorial Affairs, Department
of Veterans Affairs............................................ 1
Holmstead, Jeffrey, Assistant Administrator, Office of Air and
Radiation, Environmental Protection Agency..................... 177
Horinko, Marianne, Assistant Administrator, Office of Solid Waste
and Emergency Response, Environmental Protection Agency........ 177
Humane Society of the United States, prepared statement.......... 674
Independent Budget, letter from.................................. 13
Institute of Electrical and Electronics Engineers-U.S.A.,
prepared statement............................................. 629
Isakowitz, Steve, Comptroller, National Aeronautics and Space
Administration................................................. 409
Johnson, Senator Tim, U.S. Senator from South Dakota:
Questions submitted by......................................98, 403
Statement of................................................. 540
Joslin Diabetes Center, prepared statement....................... 676
Kelly, Margo, Deputy Executive Director, Neighborhood
Reinvestment Corporation....................................... 337
Klein, Art, Director of Budget Office, Veterans Health
Administration, Department of Veterans Affairs................. 2
Kohl, Senator Herb, U.S. Senator from Wisconsin:
Questions submitted by....................................... 146
Statement of................................................. 200
Krenik, Edward D., Associate Administrator, Office of
Congressional and Intergovernmental Relations, Environmental
Protection Agency.............................................. 178
Lazar, Ellen, Executive Director, Neighborhood Reinvestment
Corporation.................................................... 337
Prepared statement........................................... 346
Leahy, Senator Patrick J., U.S. Senator from Vermont, questions
submitted by................................................... 515
Lenkowsky, Leslie, Chief Executive Officer, Corporation for
National and Community Service................................. 303
Prepared statement........................................... 309
Longest, Henry L., II, Acting Assistant Administrator, Office of
Research and Development, Environmental Protection Agency...... 177
Lowrance, Sylvia K., Acting Assistant Administrator, Office of
Enforcement and Compliance Assurance, Environmental Protection
Agency......................................................... 177
Mansfield, Gordon, Assistant Secretary for Congressional and
Legislative Affairs, Department of Veterans Affairs............ 2
Marburger, John H., III, Office of Science and Technology Policy,
Executive Office of the President:
Prepared statement........................................... 553
Statements of..............................................533, 551
Martinez, Hon. Mel, Secretary of Housing and Urban Development,
Department of Housing and Urban Development.................... 109
Prepared statement........................................... 119
Statement of................................................. 115
Martyak, Joseph, Acting Associate Administrator, Office of
Communications, Education and Media Relations, Environmental
Protection Agency.............................................. 178
McClain, Tim S., General Counsel, Department of Veterans Affairs. 1
McMichael, Guy H., III, Acting Under Secretary for Benefits,
Department of Veterans Affairs................................. 1
Metropolitan Water District of Southern California, prepared
statement...................................................... 678
Mikulski, Senator Barbara A., U.S. Senator from Maryland:
Opening statements.............2, 109, 187, 303, 337, 409, 481, 533
Prepared statements................................3, 111, 190, 339
Questions submitted by..................62, 136, 225, 379, 398, 452
Miller, Laura, Associate Under Secretary for Health, Veterans
Health Administration, Department of Veterans Affairs.......... 2
Murphy, Frances M., M.D., Acting Under Secretary for Health,
Department of Veterans Affairs................................. 1
Murray, Senator Patty, U.S. Senator from Washington, questions
submitted by................................................... 300
NASA:
Aeronautics Support Team, prepared statement................. 629
Alumni League, prepared statement............................ 629
National:
Congress of American Indians, prepared statement............. 595
Council for Science and the Environment, prepared statement.. 680
Emergency Management Association, prepared statement......... 684
Nelson, Kimberly T., Assistant Administrator, Office of
Environmental Information, Environmental Protection Agency..... 177
Norris, Jimmy, Chief Financial Officer, Veterans Health
Administration, Department of Veterans Affairs................. 2
O'Keefe, Sean, Administrator, National Aeronautics and Space
Administration................................................. 409
Prepared statement........................................... 422
Statement of................................................. 418
Ogden, John, Chief Consultant, Pharmacy Benefits Management
Strategic Health Group, Department of Veterans Affairs......... 1
Opfer, George, Inspector General................................. 481
People for the Ethical Treatment of Animals (PETA), prepared
statements.....................................................3, 693
Principi, Hon. Anthony J., Secretary of Veterans Affairs,
Department of Veterans Affairs................................. 1
Prepared statement........................................... 7
Statement of................................................. 4
Reed, Rita A., Deputy Assistant Secretary for Budget, Department
of Veterans Affairs............................................ 2
Regas, Diane, Acting Assistant Administrator, Office of Water,
Environmental Protection Agency................................ 177
Ryan, Michael W.S., Deputy Chief Financial Officer, Environmental
Protection Agency.............................................. 177
Shelby, Senator Richard C., U.S. Senator from Alabama, statement
of............................................................. 484
Snuggs, Clarence J., Deputy Executive Director/Treasurer,
Neighborhood Reinvestment Corporation.......................... 337
Society for Neuroscience:
Prepared statement........................................... 696
Statement of................................................. 417
Stevens, Senator Ted, U.S. Senator from Alaska:
Questions submitted by......................................97, 478
Statement of................................................. 414
Tinsley, Nikki, Inspector General, Environmental Protection
Agency......................................................... 177
Tucker, Daniel, Director, Budget and Planning Service, National
Cemetery Administration, Department of Veterans Affairs........ 1
University Corporation for Atmospheric Research, prepared
statement...................................................... 700
Upper Mississippi River Basin Association, prepared statement.... 698
Washington, Dr. Warren, Chair, National Science Board, National
Science Foundation............................................. 533
Prepared statement........................................... 543
Statement of................................................. 541
Weiler, Dr. Edward J., Associate Administrator for Space Science,
National Aeronautics and Space Administration.................. 409
Whitman, Christine Todd, Administrator, Environmental Protection
Agency......................................................... 177
Prepared statement........................................... 184
Winn, Morris X., Assistant Administrator, Office of
Administration and Resources Management, Environmental
Protection Agency.............................................. 177
SUBJECT INDEX
----------
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
Page
AmeriCorps, strengthening........................................ 311
Budget request, fiscal year 2003................................. 311
Challenge grants...............................................325, 331
Citizen Corps..................................................319, 328
Community service in rural areas................................. 332
Effective service-learning....................................... 314
Establishment of ECORPS.......................................... 332
Evaluation....................................................... 315
Freedom Corps.................................................... 317
Homeland security................................................ 328
Literacy and technology.......................................... 334
Management and administrative improvements....................... 315
National:
Programs..................................................... 323
Service trust fund........................................... 327
Service vs. National Guard................................... 329
Other budget requests............................................ 315
Part-time model for national service............................. 330
Principles for a Citizen Service Act of 2002..................... 310
Senior Corps..................................................... 318
Specifics of the President's budget.............................. 321
USA Freedom Corps................................................ 310
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Accelerated claims process....................................... 144
Additional committee questions................................... 136
Asset control area (ACA) partnership program...................139, 141
Budget highlights, fiscal year 2003.............................. 117
Chronic homelessness, elimination of............................. 147
Community development:
Block grants...............................................137, 174
Corporations................................................. 134
Comparison of per unit amount of operating subsidy............... 170
Confirmation of Inspector General................................ 125
Conventional home mortgages, default rate for.................... 169
Core HUD programs................................................ 121
D.C. SFPD fraud and abuse........................................ 167
Departmental grants management system............................ 146
Downpayment assistance program................................... 146
Elderly:
And disabled housing......................................... 145
Housing...................................................... 122
Emergency food and shelter program............................... 156
Empowerment zones and enterprise communities...................139, 175
Equal opportunity and access to housing.......................... 172
Fair housing initiatives program................................. 174
FHA:
Default rate................................................. 169
Multifamily premium reduction................................ 168
Single family property disposition program, report on
implementation of.......................................... 140
Home downpayment assistance initiative........................... 146
Homeless assistance.............................................. 155
Homelessness..................................................... 122
HOPE VI...................................................123, 144, 166
Housing counseling............................................... 145
Program...................................................... 171
HUD:
Assisted housing in foreclosure and in inventory............. 159
Integrated Information Processing Service (HIIPS)............ 168
Incremental vouchers............................................. 136
Interagency Council on the Homeless.............................. 133
Lack of affordable housing....................................... 167
Management infrastructure at public housing...................... 129
Market-to-market................................................. 132
Opt-outs..................................................... 156
Savings...................................................... 156
Millennium Commission............................................ 128
MMI reserves..................................................... 169
Multifamily accelerated processing............................... 168
Native American housing block grants fund........................ 166
Naturally occurring retirement communities....................... 134
Office of Federal Housing Enterprise Oversight................... 133
Opt-outs......................................................... 155
Predatory lending................................................ 134
Preservation of assisted units................................... 156
Project-based opt-outs........................................... 154
Public housing:
Authorities.................................................. 130
Capital funds................................................ 126
Reinvestment and financial reform............................ 149
Puerto Rico:
Housing Authority............................................ 170
Public Housing Authority, per unit amount of operating
subsidy for................................................ 170
Report requirement............................................... 140
Results.......................................................... 142
Rural housing.................................................... 171
Shelter Plus Care................................................ 138
Single family property disposition holding costs................. 170
601 Program...................................................... 169
Specific implementation steps.................................... 142
Staffing issues.................................................. 125
Status of implementation of:
Section 601.................................................. 140
Section 602.................................................. 141
Utilization of vouchers.......................................... 131
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Aditional committee questions.................................... 398
Aging............................................................ 387
Board of directors............................................... 384
Capacity building................................................ 382
CDC mergers...................................................... 397
CDFI fund programs............................................... 360
Certification of nonprofit organizations......................... 384
Community development financial institutions fund activities:
tracking rural outcomes........................................ 375
Elderly needs.................................................... 396
Federal programs, overlapping,................................... 393
George Knight Scholarship Program................................ 396
Land trusts...................................................... 397
Management and operations........................................ 360
Monitoring awardees.............................................. 406
Multifamily housing.............................................. 389
Native American:
Assistance for............................................... 390
CDFI technical assistance program..........................404, 406
NeighborWorks:
Affiliation of organizations................................. 382
Multifamily initiative....................................... 385
New markets tax credit program................................... 356
Overlapping Federal programs..................................... 405
Oversight........................................................ 394
Performance:
For rural and reservation communities........................ 404
Measures..................................................... 404
Of the CDFI fund: 2003 and beyond............................ 358
Predatory lending................................................ 379
President's fiscal year 2003 budget.............................. 359
Resident involvement............................................. 397
Rural communities and the BEA program............................ 403
Section 8 homeownership.......................................... 391
Option....................................................... 388
DEPARTMENT OF VETERANS AFFAIRS
$400 million budget shortfall....................................14, 62
$1,500 deductible proposal....................................... 5, 20
Alaska:
Housing Finance Corporation.................................. 17
Medical services in.......................................... 18
Veteran issues............................................... 17
Capital asset realignment for enhanced services (CARES).......... 9, 50
Funding for.................................................. 88
Next steps................................................... 87
Study........................................................ 51
VISN 12 implementation....................................... 87
Claims processing........................................24, 32, 75, 91
Clinic funding process........................................... 24
Collections......................................................72, 86
Construction funding............................................. 88
Discretionary funding needs...................................... 25
Enterprise architecture.......................................... 7
Federal bond rate, maximum....................................... 18
Fort Howard...................................................... 77
Geriatrics....................................................... 84
Homeland security................................................84, 93
Homelessness..................................................... 90
Hot Springs surgical unit........................................19, 20
Independent budget, letter from the.............................. 13
Intellectual property rights..................................... 93
Job training veterans............................................ 60
Kenosha, WI, clinic.............................................. 23
Legislative mandates............................................. 52
Long term care................................................... 76
Major:
And minor construction programs.............................. 9
Construction................................................. 79
Management improvements.......................................... 11
Medical:
And prosthetic research...................................... 9
Care......................................................... 7
Funding needs............................................ 16
Other funding options for................................ 21
Supplemental............................................. 19
Research..................................................... 85
Supply cost containment measures............................. 55
Minor construction............................................... 80
National Cemetery Administration................................. 7, 11
New veterans employment grants program........................... 11
Nursing shortage................................................. 70
Pharmaceutical costs.............................................54, 55
Physician for Pocatello, ID clinic............................... 31
Physicians pay and medical school affiliations................... 92
Prescription:
Benefit...................................................... 53
Drugs........................................................ 67
Priority 7:
Demographic profile.......................................... 35
Household income of enrollees................................ 65
Veterans..................................................... 32
$1,500 deductible........................................15, 63
Demographic profile of...................................33, 52
Income profile of........................................ 34
Procurement reform task force.................................... 6
Recruitment and retention........................................ 58
VA-DOD cost-sharing.............................................. 89
VA's Medical Care Program........................................ 4
Veterans:
Benefits Administration...................................... 6
Department and DOD coordination.............................. 101
Employment:
Grants for............................................... 6, 59
Opportunities............................................ 61
Equitable resource allocation (``VERA'')..................... 91
Veterans' benefits............................................... 10
Waiting times.................................................... 73
Wartime veterans, average age of................................. 27
ENVIRONMENTAL PROTECTION AGENCY
Additional committee questions................................... 225
Agency's response to incorrect data in TRI database.............. 271
Asbestos:
Broadening and changing the definition of.................... 302
Libby, Montana asbestos clean-up............................. 301
Assistance to small business with compliance to TRI lead rule.... 274
Brownfields:
Increase in funding for fiscal year 2003..................... 234
Questions raised concerning effective use of funding......... 234
Carbon dioxide emissions: voluntary vs. mandatory regulation..... 211
Chesapeake Bay research program: recruitment..................... 203
Clean:
Air Act/New Source Review Enforcement Activity............... 219
Water:
Funding.................................................. 194
Revolving loan program................................... 203
Clear skies initiative and new source review..................... 210
Climate change Kyoto Accord...................................... 289
Coeur d'Alene basin:
Final record of decision (ROD)............................... 300
National Academy of Science study of children's health....... 198
Superfund site............................................... 197
Compliance assistance:
Activity plan................................................ 238
Analysis of:
New regulatory requirements and compliance assistance
tools in fiscal year 2003.............................. 238
Prospective enforcement activities in fiscal year 2003... 239
Analysis in analytic blueprint for new regulations in fiscal
year 2003.................................................. 240
Cuts proposed by fiscal year 2003--President's budget for
compliance assistance and centers key program.............. 242
Documenting and measuring environmental improvements......... 239
Dollars and FTE for compliance assistance activities within
and outside of OECA........................................ 241
Estimate of cost to develop compliance assistance tools...... 236
List of rules for developing compliance assistance tools..... 235
Ranking of top ten compliance assistance needs............... 236
Resources for implementation and performance and assessments. 240
Status of total resources devoted to compliance assistance... 240
Targeting compliance assistance to constituencies in fiscal
year 2003.................................................. 241
Distinction between ``having no knowledge'' and ``not reporting''
under TRI lead rule............................................ 277
Enforcement:
Acceptance of multiple proposals from States for new
enforcement grants......................................... 246
Appropriate balance, roles, and responsibilities between
State and Federal enforcement agencies..................... 245
Civil enforcement activities to areas that pose the greatest
risk to human health or the environment in fiscal year 2003 244
Competitive grant program.................................... 224
Determining impact on environment by enforcement FTE cuts
from information from States............................... 247
EPA's Inherent conflict between desire to meet inspection and
case output performance goals and strategies............... 244
Federal inspections to areas that pose greatest risk to human
health or the environment in fiscal year 2003.............. 243
FTE ceiling and on-board levels as of October 1, January 1,
March 1, and July 1 for OECA............................... 242
FTE reduction................................................ 219
Geographic areas subject to decrease in Federal enforcement
FTE realize increase in State enforcement resources........ 246
Grant Programs............................................... 187
Impact of reduction of enforcement FTES and additional State
enforcement resources on:
Enforcement output....................................... 246
Environmental indicators................................. 246
Information obtained from States measuring outputs or
outcomes from usage of new enforcement grants.............. 247
New enforcement grant program grants award to States and/or
used by EPA................................................ 247
Of environmental laws:
Budget cuts affect on enforcing environmental laws....... 225
Budget proposal.......................................... 225
Consequences of budget reduction on catching prosecuting
polluters.............................................. 226
GAO report on State enforcement weaknesses............... 226
Monitoring States' use of funds.......................... 227
New State grant enforcement program...................... 226
Special or new authority legislation..................... 226
States' use of funds for enforcement activities vs other
activities............................................. 227
Work with States with poor records....................... 226
Process used to choose and employ the most effective
regulatory tool............................................ 245
Program...................................................... 218
State grant program.......................................... 193
Verification and validation of actual accomplishments from
enforcement activities..................................... 247
Environmental air quality:
Contribution to public health burden......................... 298
Effect of air pollutants and contaminants.................... 298
Incorporating national environmental respiratory center
research strategy into agency's assessment of public health
burden and future regulatory strategies.................... 299
National environmental respiratory center incorporated into
agency's strategy for understanding effects of complex air
pollutant mixtures......................................... 300
Research to understand health effects........................ 299
Environmental education:
Rationale for elimination of approximately $10M from K-12.... 233
Transfer to National Science Foundation...................... 202
Fox River cleanup project........................................ 200
Cost and public acceptance................................... 201
General awareness of reporting requirements among those required
to re-
port........................................................... 273
Global and cross-border environmental risks...................... 290
Grants:
Dollars of non-profit recipients of non-construction grant
awards in last three years................................. 248
Number of:
Bench reviews conducted of non-profit non-construction
grantees from fiscal year 2000 to fiscal year 2002--by
region................................................. 249
FTEs and on-board personnel conducting on-site reviews of
grantees in fiscal year 2002 and fiscal year 2003...... 250
Hours of paperwork burden imposed on businesses.......... 250
Non-profit recipients of non-construction grant awards in
last three years....................................... 248
On-site reviews conducted of non-profit non-construction
grantees in fiscal year 2000 to fiscal year 2002 by
region................................................. 249
OEI work with program offices to tailor new rules to impose
less paperwork burden...................................... 251
Program offices review of current paperwork requirements to
reduce burden on businesses in fiscal year 2002............ 251
Top twenty non-profit grant recipients by:
Number of awards in fiscal year 2002..................... 248
Total amount of funds awarded in fiscal year 2002........ 248
Guidelines for screening new rules for compliance assistance...237, 238
Homeland security................................................ 230
Anthrax decontamination:
Full reimbursement....................................... 231
Spending................................................. 231
Development of outcome-based measures and specific spending
plans...................................................... 230
Lessons learned from the anthrax decontamination at the Hart
Building................................................... 231
Progress:
For improving homeland security.......................... 229
Made assuring clarity of roles and safety................ 231
Status of funding for homeland security and activities
undertaken................................................. 228
Technologies and methodologies............................... 195
Homestake mines in South Dakota: indemnification................. 207
Hydraulic fracturing:
Landowners................................................... 284
Peer review:
Panel.................................................... 284
Process.................................................. 283
State oil and gas agencies................................... 284
Timetable.................................................... 283
Identification of business required to report under TRI lead rule 271
Inspector General draft report: pollution enforcement............ 206
IRIS/residual risk rulemaking.................................... 277
Lead:
Bio-availability of lead sulfides vs lead oxides............. 285
Lead sulfide in galena form vs lead in oxide form affect on
human body................................................. 285
Potential risk of different forms of lead to regulatory
decisions.................................................. 286
MACT standard setting..........................................279, 280
New source review..............................................206, 268
Agency relaxation of enforcement............................. 213
NPDES permitting:
Level of resources devoted to reduce NPDES backlog from
fiscal year 2002 and fiscal year 2003 request.............. 261
Status of efforts to reduce Federal and State NPDES permits
backlog.................................................... 252
Pesticides....................................................... 297
Pharmaceutical pollution of waterways............................ 231
President's directive for technical assistance to small business
regarding TRI lead rule........................................ 273
Program specifics................................................ 291
Reformulated gas price increase.................................. 200
Reinvention:
Environmental benefits of regulatory flexibility vs. status
quo regulatory schemes..................................... 263
Examples of directing program offices and OECA to reduce
barriers, transaction costs and approval time for
reinvention projects....................................... 262
Spreading the culture of reinvention by limiting its
application................................................ 262
Status of review of reinvention programs..................... 261
Report says many major polluters operate without required permits 208
Roles and responsibilities of EPA'S regional offices............. 235
Analysis performed to determine size of regional offices..... 235
Workforce analysis and projections........................... 234
Small and rural water systems vulnerabilities.................... 196
Small business:
Concerns with data TRI data quality.......................... 271
Ensure program offices' economic analysis of small business
impacts do not omit small business or industry sectors in
fiscal year 2003........................................... 268
Examples of program offices tailoring analysis and regulatory
proposals to realities of given industrial sectors......... 263
Increase knowledge of:
Delivery of information about regulatory requirements in
fiscal year 2003....................................... 266
Impact of regulatory requirements in fiscal year 2003.... 263
Increase knowledge of impact of rulemaking in fiscal year
2003....................................................... 264
Program offices considering rulemakings determining impact on
potential small business in fiscal year 2003............... 266
TRI reporting................................................ 274
Without computers........................................ 274
Unaware of reporting requirements............................ 272
Spokane River hot spots.......................................... 199
Standardizing data elements...................................... 251
Star fellowship.................................................. 234
Citation..................................................... 233
Graduate students completing fellowships?.................... 233
Rationale for shift from EPA to NSF.......................... 233
The Star program?............................................ 233
States with poor records......................................... 226
Superfund cleanup:
Adequate funding in fiscal year 2003 for Washington State
superfund cleanups......................................... 301
Adequate funds to continue superfund cleanups................ 289
Pace of superfund cleanup.................................... 288
Superfund tax: administration's opposition to tax chemical and
petroleum industries........................................... 301
Toxics release inventory (TRI) program and the TRI lead rule..... 269
TRI:
Assistance to small companies................................ 275
Burden of proof in an enforcement context.................... 277
How has the guidance document received by the small business
community.................................................. 275
Knowledge in:
An enforcement context................................... 277
Context of TRI reporting................................. 276
Lead rule data quality....................................... 271
Small business:
And the 100-pound threshold.............................. 276
Reporting responsibility in the case of ``no knowledge''. 276
Unusual aspects of the TRI lead rule......................... 275
U.S. Geological Survey: contaminents in water.................... 205
Wall Street Journal article:
Inspector General draft report............................... 208
Non-profit grants............................................ 207
Water infrastructure funding:
Prioritizing funding needs................................... 287
Reasonable level of funding to preserve existing
infrastructure............................................. 286
Infrastructure funding....................................... 227
Methods for detecting security violations.................... 228
Watery security improvement.................................. 227
EXECUTIVE OFFICE OF THE PRESIDENT
Federal:
Coordination of nano-technology.............................. 568
R&D support.................................................. 559
Funding physical sciences........................................ 560
Homestake mine and neutrino research............................. 567
Physical sciences support........................................ 569
FEDERAL EMERGENCY MANAGEMENT AGENCY
Additional committee questions................................... 515
Buyouts.......................................................... 517
Cerro Grande:
Assistance................................................... 518
Audits....................................................... 507
Fire......................................................... 504
Chemical stockpile emergency preparedness program (CSEPP)........ 498
Citizen Corps.............................................490, 496, 511
And volunteers............................................... 513
Delivery of assistance........................................... 495
Disaster assistance:
Criteria..................................................... 525
Relief fund.................................................. 492
Response & recovery.......................................... 493
Emergency food and shelter program.............................493, 522
FEMA:
Concern for.................................................. 515
Disaster relief fund......................................... 517
Role in CSEPP................................................ 500
Team......................................................... 487
Fire:
Act grants................................................... 524
Fighter grants............................................... 513
Grant program................................................ 501
Management assistance........................................ 510
First responder:
Grant process................................................ 506
Grant program................................................ 509
Initiative................................................... 485
Training budgets............................................. 514
Fiscal year:
2001 independent auditor's report............................ 523
2003 request................................................. 488
Flood:
Fund......................................................... 491
Insurance participation...................................... 514
Insurance program............................................ 520
Map modernization..........................................486, 519
Mapping...................................................... 511
Goals for assisting disaster victims............................. 517
Hazard mitigation grant program.................................. 497
Independent auditor's report, fiscal year 2001................... 493
Inter-agency fire center......................................... 501
Interoperability and mutual aid.................................. 503
La Plata, Maryland, disaster..................................... 495
Legislation...................................................... 525
Missouri, tornado damage in...................................... 498
National:
Flood insurance program...................................... 492
Preparedness--Homeland security responsibilities............. 488
New pre-disaster mitigation grant program........................ 491
New York:
City 9/11 losses from terrorism.............................. 519
Investigations............................................... 507
ODP transfer..................................................... 485
Office for Domestic Preparedness to FEMA, transfer of the........ 489
Pre-disaster mitigation.......................................... 486
Prevention and consequence management............................ 514
Prevention vs. homeland security................................. 523
Project impact................................................... 500
QHMGP plans...................................................... 516
Supplemental:
Appropriation request........................................ 486
Request, fiscal year 2002.................................... 494
Training programs, merger of..................................... 508
U.S. Fire Administration......................................... 490
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
Additional committee questions................................... 451
Aeronautics:
Blueprint.................................................... 452
Industry, mergers in the..................................... 466
Research..................................................... 464
Air Force/space launch initiative................................ 444
Beyond core complete configuration............................... 433
Civil service reform............................................. 444
Contract management/integrated financial management program...... 460
Core completion--crew size....................................... 431
Dreamtime........................................................ 472
Earth science:
Enterprise................................................... 470
Missions..................................................... 450
Environmental community--nuclear power........................... 438
Gilmore Creek tracking station................................... 478
Hubble:
Mission...................................................... 429
Space telescope.............................................. 417
Images................................................... 427
Human capital.................................................... 443
Integrated financial management program.......................... 442
International space station...................................... 454
Prioritizing research for the................................ 434
Management:
Effectiveness................................................ 479
Reforms of the station....................................... 429
National security issues......................................... 445
Next generation:
Of space telescopes.......................................... 449
Space telescope.............................................. 464
Non-proliferation................................................ 446
Nuclear propulsion.............................................466, 478
Nuclear systems initiative.....................................435, 477
Program/Energy Department.................................... 436
Orbital debris................................................... 471
Orbiter major modifications...................................... 468
Pluto mission.................................................... 447
Radiation exposure............................................... 469
Re-examining head centers........................................ 437
Reliability of the shuttle....................................... 439
Reusable launch vehicle.......................................... 472
Russian commitments, status of................................... 467
Science research, prioritizing................................... 432
Scientists, attracting and retaining............................. 479
Shuttle privatization............................................ 440
Space launch initiative...................................436, 452, 459
Nuclear propulsion program................................... 441
Reserves..................................................... 460
Space shuttle.................................................... 457
Safety/astronauts............................................ 465
Space station cost overruns...................................... 430
Workforce issues................................................. 462
NATIONAL SCIENCE FOUNDATION
Contact information.............................................. 551
Core sciences.................................................... 558
Federal investment in science and engineering.................... 544
Fiscal year 2003:
Additional NSF funding in.................................... 571
Funds, additional............................................ 562
Homestake mine and neutrino research............................. 567
Large facilities:
Management plan.............................................. 550
Prioritization............................................... 571
Maize sequencing project......................................... 573
National:
Academy of Sciences.......................................... 572
Science Board activities on science and engineering education
and workforce.............................................. 563
Workforce policies for science and engineering............... 545
NSB:
Meetings..................................................... 572
Recommendations.............................................. 563
Response to IG report........................................ 567
NSF:
IG report.................................................... 565
Response to.............................................. 566
Proposed fiscal year 2003 budget increase.................... 558
Transferred programs to...................................... 557
Plant genome..................................................... 573
Post-award management............................................ 548
U.S.:
Government role in international science and engineering..... 544
Science and engineering infrastructure....................... 545
Undergraduate and minority programs.............................. 561
Very large array (VLA)........................................... 569
Workforce planning............................................... 549
NEIGHBORHOOD REINVESTMENT CORPORATION
Additional committee questions................................... 379
Community development laboratory................................. 349
Solutions to a range of challenges............................... 351
Stewardship of Federal resources...............................344, 347
NeighborWorks system................................... 346
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