[Senate Hearing 107-435]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-435

        NOMINATION HEARING FOR WILLIAM T. HAWKS AND ERIC M. BOST

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                              MAY 16, 2001

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry


  Available via the World Wide Web: http://www.agriculture.senate.gov


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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                  RICHARD G. LUGAR, Indiana, Chairman

JESSE HELMS, North Carolina          TOM HARKIN, Iowa
THAD COCHRAN, Mississippi            PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            KENT CONRAD, North Dakota
PAT ROBERTS, Kansas                  THOMAS A. DASCHLE, South Dakota
PETER G. FITZGERALD, Illinois        MAX BAUCUS, Montana
CRAIG THOMAS, Wyoming                BLANCHE L. LINCOLN, Arkansas
WAYNE ALLARD, Colorado               ZELL MILLER, Georgia
TIM HUTCHINSON, Arkansas             DEBBIE A. STABENOW, Michigan
MICHEAL D. CRAPO, Idaho              BEN NELSON, Nebraska
                                     MARK DAYTON, Minnesota

                       Keith Luse, Staff Director

                    David L. Johnson, Chief Counsel

                      Robert E. Sturm, Chief Clerk

            Mark Halverson, Staff Director for the Minority

                                  (ii)

  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

Nomination Hearing for William T. Hawks and Eric M. Bost.........    01

                              ----------                              

                        Wednesday, May 16, 2001
                    STATEMENTS PRESENTED BY SENATORS

Lugar, Hon. Richard G., a U.S. Senator from Indiana, Chairman, 
  Committee on Agriculture, Nutrition, and Forestry..............    01
Cochran, Hon. Thad, a U.S. Senator from Mississippi..............    05
Thomas, Hon. Craig, a U.S. Senator from Wyoming..................    02
                              ----------                              

                               WITNESSES

Bost, Eric M., of Austin, Texas, to be Under Secretary for Food, 
  Nutrition, and Consumer Services, U.S. Department of 
  Agriculture....................................................    04
Hawks, William T., of Hernando, Mississippi, to Under Secretary 
  for
  Marketing and Regulatory Programs, U.S. Department of 
  Agriculture....................................................    03
                              ----------                              

                                APPENDIX

Prepared Statements:
    Bost, Eric M.................................................    27
    Hawks, William T.............................................    24
Document(s) Submitted for the Record:
    Bost, Eric M., Biography.....................................    53
    Hawks, William T., Biography.................................    34
Questions and Answers:
    Harkin, Hon. Tom.............................................    74
    Conrad, Hon. Kent............................................    76
    Dayton, Hon. Mark............................................    77
    Baucus, Hon. Max.............................................    84

                              ----------                              


 
           NOMINATION HEARING: WILLIAM T. HAWKS AND ERIC BOST

                              ----------                              


                        WEDNESDAY, MAY 16, 2001

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:03 a.m., in 
room SR-328A, Russell Senate Office Building, Hon. Richard G. 
Lugar,
    [Chairman of the Committee], presiding.
    Present or submitting a statement: Senators Lugar, Cochran, 
Thomas, Hutchinson, Harkin, Conrad, and Stabenow.

    STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM 
  INDIANA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND 
                            FORESTRY

    The Chairman. This meeting of the Senate Agriculture 
Committee is called to order.
    This morning, it is our privilege to consider the 
nominations of Mr. William Hawks for Under Secretary of 
Marketing and Regulatory Programs at the United States 
Department of Agriculture, and Mr. Eric Bost, for Under 
Secretary of Food, Nutrition, and Consumer Services at USDA.
    Our committee continues its commitment to consider 
nominations of the administration in a timely manner, and we 
look forward to hearing from these qualified individuals before 
us today, hearing their testimony and raising questions of 
them.
    We will then turn to hear testimony regarding the state of 
agricultural credit in the United States, one of the chapters 
of the Farm bill that we are considering. The committee will 
explore whether changes in the 1996 Farm bill and elsewhere 
have improved the financial health of this sector and whether 
additional changes are necessary in the upcoming Farm bill.
    Credit, as we would all agree, is the life blood of 
farming, providing the necessary capital for land purchases, 
farming operations, and for emergency loans when disaster 
strikes. In surrounding towns and communities, credit serves as 
the primary vehicle for investments in job-producing 
businesses. Rural communities rely heavily on adequate sources 
of credit in order to survive and prosper.
    Today our committee reviews its commitment of ensuring that 
creditworthy farmers and others living in rural America have 
abundant and competitive sources of credit available.
    Today's total farm debt in the United States stands at 
around $182 billion. Commercial banks remain the largest 
agricultural lender with 41 percent of the market share, having 
overtaken the Farm Credit System in 1987. Nevertheless, the 
Farm Credit System remains a healthy competitor, holding a 
consistent 26 percent of the Nation's total farm debt. With its 
guaranteed, direct, and emergency loan programs, the role of 
the United States Department of Agriculture is critical, 
especially for those farmers on the margins financially.
    We will hear testimony from all three of these groups to 
determine whether there are trends or danger signs that we 
should be aware of that could harm agricultural lending, and if 
so, what preventive steps can be taken to ensure that rural 
lending remains vibrant and financially sound.
    Our first panel will consist of two witnesses from the 
Department of Agriculture, and I will introduce them when we 
come to that portion of our hearing, but for now, we welcome 
immediately our guests and our distinguished nominees.
    First of all, before I call upon them, I will ask Senator 
Thomas if he has an opening comment or statement about the 
nominees or our credit hearing this morning.

  STATEMENT OF HON. CRAIG THOMAS, A U.S. SENATOR FROM WYOMING

    Senator Thomas. Thank you, Mr. Chairman.
    I am anxious to hear from the nominees, and I am glad to be 
here. I am going to have a leave a little later, but just a 
comment or two on the credit hearing.
    I think it is very important to have that hearing. The Farm 
Credit System seems to be pretty healthy right now in terms of 
repayments and all those things, and I wonder how much that is 
dependent on the kinds of payments that were made during the 
last year in Federal money in order to keep that happening. In 
other words, how would the Farm Credit System be doing if we 
were not paying out these payments again or had a different 
kind of farm program? I think that is an interesting question.
    Then, I am always interested in what people believe the 
role of farm credit is vis-a-vis the private sector. Are they 
out there to do it for less? Are they out there to be 
competitive? Are they out there to serve people who do not 
otherwise have an opportunity in the private sector?
    So these are some broad questions, Mr. Chairman, that I am 
anxious to hear about.
    Thank you.
    The Chairman. Thank you very much, Senator Thomas. We 
appreciate your attendance, and likewise, any questions that 
you wish to raise in writing, the witnesses will be asked to 
consider.
    Senator Thomas. Thank you, Mr. Chairman.
    The Chairman. At this point, would you both please stand 
and raise your right hand?
    Do you swear or affirm that the testimony you are about to 
provide is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Mr. Hawks. Yes.
    Mr. Bost. Yes.
    The Chairman. Thank you for that affirmation.
    It is a privilege to have both of you before the committee. 
First of all let me ask whether members of your family or 
others who are important to you have accompanied you.
    Mr. Hawks.
    Mr. Hawks. Yes, Senator, I certainly do. I have my wife, 
Diane; my daughter, Jennifer; and our son, T.A., with me today.
    The Chairman. We welcome each of you to this important 
moment.
    Mr. Bost, do you have anyone with you today?
    Mr. Bost. Yes, Mr. Chairman. My wife Rose Mary is with me 
today.
    The Chairman. It is very good to have you here today; we 
appreciate your coming.
    First of all, I am going to ask each of you to offer 
testimony that may be helpful in our understanding of who you 
are and your objectives; then, following your testimony, I will 
raise questions as will other Senators as they appear.
    Mr. Hawks.

          STATEMENT OF WILLIAM T. HAWKS, OF HERNANDO,
MISSISSIPPI, TO BE UNDER SECRETARY FOR MARKETING AND REGULATORY 
                 PROGRAMS, U.S. DEPARTMENT OF 
                          AGRICULTURE

    Mr. Hawks. Thank you, Chairman Lugar, members of the 
committee.
    I am honored to be here today as the nominee for Under 
Secretary of Agriculture for Marketing and Regulatory Programs. 
I would like to thank President George W. Bush for nominating 
me for this position of public service.
    I would also like to thank Senator Thad Cochran and 
Majority Leader Trent Lott for supporting my nomination. I 
would like to extend special appreciation to my wife, Diane, 
for all of her assistance throughout this nomination process.
    I was born on a dairy and row crop farm in northern 
Mississippi. I worked my way through college, receiving a 
master's degree in agricultural economics from Mississippi 
State University. I returned home in 1970 to serve in the Army 
Reserve and to start my family farm. In the past, I have spent 
many long hours milking dairy cows, growing cotton, corn, 
wheat, soybeans, and vegetables. During adverse times, I did 
custom harvesting to supplement my farm income. So you can see 
that I have experienced both the good and the bad in farming.
    While operating our farm, I took the time to participate in 
farm committees. I served for a number of years as chairman of 
the local FSA committee, as a commissioner on the Soil and 
Water Conservation District. It was through my involvement in 
these committees that I learned the very important workings of 
USDA agencies.
    I was actively engaged in numerous farm organizations and 
commodity organizations, and if confirmed, I will utilize the 
skills that I have learned in these organizations to uphold the 
high standards of USDA.
    Most recently, I have served the people of Mississippi in 
the Mississippi State Senate. While in the Mississippi Senate, 
I served on both the Agriculture Committee and the 
Environmental Committee. If confirmed, my knowledge of the 
legislative process will be beneficial as USDA deals with and 
interacts with the Congress and other interested parties.
    The United States Department of Agriculture serves as an 
advocate for rural America, and especially to production 
agriculture. If confirmed, I pledge to work with members of 
this committee and their staff, as well as leaders in the 
agriculture community. I am confident that my educational and 
professional experiences have prepared me for this position at 
USDA.
    Mr. Chairman, with that, I look forward to answering any 
questions that you or members of this committee may have.
    The Chairman. Thank you very much, Mr. Hawks.
    [The prepared statement of Mr. Hawks can be found in the 
appendix on page 24.]
    The Chairman. Mr. Bost.

   TESTIMONY OF ERIC M. BOST, OF AUSTIN, TEXAS, TO BE UNDER 
              SECRETARY FOR FOOD, NUTRITION, AND 
       CONSUMER SERVICES, U.S. DEPARTMENT OF AGRICULTURE

    Mr. Bost. Thank you. Good morning, Mr. Chairman and members 
of the committee.
    I am Eric M. Bost. I am honored to appear before the 
committee today as President Bush's nominee for the position of 
Under Secretary for Food, Nutrition, and Consumer Services in 
the United States Department of Agriculture. I thank the 
President and Secretary Veneman for their support and trust in 
nominating me for this position.
    I would also like to take a minute to thank my wife for her 
unwavering support in this process.
    I also wish to thank you, Mr. Chairman, for the unwavering 
leadership that you and this committee have given to our food 
and nutrition assistance programs over the years. I look 
forward to working with a committee that has always been 
committed to helping America's children, families, and the 
elderly.
    I have provided written testimony for the committee's 
consideration, and I will try to keep my remarks brief.
    Mr. Chairman, I believe that I am ready to take on this 
important and challenging position. I am clear on the 
responsibility I would assume. The 15 programs administered by 
Food, Nutrition, and Consumer Services touch one in every five 
Americans. They are essential in fighting hunger and improving 
nutrition for children and low-income Americans. This is a very 
humbling opportunity, but one for which I have prepared.
    For more than 20 years, my career has been devoted to the 
management of human services agencies and the people served by 
those agencies. In August 1997, then Governor George W. Bush 
appointed me Commissioner of the Texas Department of Human 
Services, one of the Nation's largest human services agencies, 
overseeing the administration of State and Federal programs, 
including food stamps, special nutrition programs for more than 
2 million needy, aged, and disabled Texans each month.
    My Texas experience includes implementation of a 
significant food stamp outreach and nutrition program; enhanced 
Federal funds for three years in a row because of our high 
accuracy rate in determining food stamp benefits; recognition 
of our Texas EBT system by the General Accounting Office as a 
national leader in detecting fraud in the food stamp program by 
using EBT transaction data; implementation of the second 
generation of the EBT system using a pioneer multi-vendor 
approach.
    From the very beginning, my goal was to make the Texas 
Department of Human Services the premier human services agency 
in the country. I am very proud of the staff. If confirmed, I 
plan to set the same goal for Food, Nutrition, and Consumer 
Services.
    Mr. Chairman, I believe that an agency like FNCS needs to 
focus on customer service in all areas, including improving 
access to services, fostering community involvement, developing 
innovative ways to provide services, ensuring accuracy in 
providing services, and improving services through automation. 
It is my intent, if confirmed, to work hard on establishing and 
strengthening these efforts.
    In closing, I want to say that I rely on the dedication and 
professionalism of my employees for effective service deliver. 
I understand that the employees of the agency are among the 
best in the Federal Government, and I look forward to the 
support of their expertise and assistance. I also look forward 
to working with this committee and all Members of Congress in 
achieving what is best for those we serve.
    I commit to you today that if confirmed, I will be an 
administrator who will be available to you and your staff; will 
answer your questions thoroughly and straightforwardly, even 
when the answer is difficult; and will ensure that you will be 
informed in a manner which allows you to make the best possible 
decisions for the citizens of our great country.
    Mr. Chairman, that concludes my testimony. I will be happy 
to answer any questions that you or other members of the 
committee may have.
    [The prepared statement of Mr. Bost can be found in the 
appendix on page 27.]
    The Chairman. Thank you very much, Mr. Bost.
    Let me make two comments for the record. First, the full 
statements that both of you have prepared will be made a part 
of the record in full, in addition to your oral testimony this 
morning; and second, that the FBI has made available to me its 
reports, and I have read them carefully. I simply note that 
because it is the responsibility of the chairman and ranking 
member to receive those reports and take them into 
consideration as we conduct the hearings.
    We have been joined by three more distinguished Senators. 
Let me first call upon the Senator from Mississippi, because I 
suspect he will have a comment; a very nice comment has already 
been made about him.
    Senator Cochran.

STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM MISSISSIPPI

    Senator Cochran. Thank you, Mr. Chairman.
    I am pleased to be here this morning to welcome my good 
friend and fellow Mississippian, Bill Hawks, and Mr. Bost as 
well. I think we are very fortunate to have the Secretary of 
Agriculture and the administration selecting such outstanding 
people to serve in this administration, particularly at the 
Department of Agriculture. I think the operation and 
administration of that department is going to be in very good 
hands indeed.
    I have known Bill Hawks, for example, for a long time. He 
has been a leader in our State not only in agriculture, where 
he served on the State Farm Service Agency Committee, and at 
the local level in positions of responsibility, but also in our 
State government as a very well-respected member of our State 
Senate. He was a leader there, and he is looked to for 
leadership in our State on a wide range of issues and subjects. 
He is very well-respected. He was an outstanding student at 
Mississippi State University where he earned bachelor's and 
master's degrees. He has taken an active role in the political 
life of our State and our Nation. He has been a leader of farm 
groups in Presidential election campaigns. He is someone who is 
very civic-minded and gives a lot of his time and effort to 
helping make our State a better place to live and the country 
as well.
    I think we are fortunate to have Bill Hawks serving in this 
position. I am confident that he will be well-received by our 
committee because of his experience and his good judgment and 
his past performance in everything he has ever undertaken.
    On top of all that, he is a farmer, and he really knows 
what he is going to be doing. He knows something about the 
subject from first-hand experience. He and his wife, Diane, who 
is an active partner in the farming operation, have several 
thousand acres of land that they farm in DeSoto County, 
Mississippi, just south of Memphis, and they have been very 
successful. Even when times are tough, Bill figures out a way 
to manage--kind of like our chairman. You all can talk to each 
other and help explain it to everybody else, I guess.
    [Laughter.]
    It is a pleasure for me, Mr. Chairman, to welcome Bill, and 
I wish him well in this new undertaking.
    The Chairman. Indeed, I have visited with Mr. Hawks, and 
his holdings are several multiples of my own; but nevertheless, 
we shared some experiences together.
    Thank you very much, Senator Cochran.
    Senator Conrad.
    Senator Conrad. Thank you, Mr. Chairman.
    We want to welcome the nominees here today.
    I just have one question for Mr. Hawks--have you supported 
Senator Cochran?
    [Laughter.]
    Mr. Hawks. Senator, I think that should be intuitively 
obvious. I know a leader when I see one.
    [Laughter.]
    Senator Conrad. Well, that does raise some serious 
questions.
    [Laughter.]
    Senator Conrad. We are pleased to have both of you here.
    The Chairman. Senator Hutchinson, do you have an opening 
comment?
    Senator Hutchinson. No, Mr. Chairman. I have looked at both 
of our nominees' backgrounds. They are very impressive 
individuals. I am delighted, even though neither of them is 
from Arkansas, Texas and Mississippi get close, and DeSoto 
County gets real close. So we are delighted to welcome them 
today.
    The Chairman. Very well.
    Let me commence the questioning, and we will question both 
witnesses in this particular round, whichever is your 
preference, or both.
    Mr. Hawks, let me ask first of all a question we ask of 
each of our nominees. Do you agree that you will appear before 
any duly constituted committee of Congress if asked to appear?
    Mr. Hawks. Yes, sir, I will.
    The Chairman. I thank you for that affirmative response.
    As has been pointed out, you have a very successful record 
as a farmer and businessman and public servant in Mississippi. 
Can you describe to the committee the steps that you have taken 
or intend to take to ensure that there will be no conflicts of 
interest or appearances of impropriety?
    Mr. Hawks. Yes, I would be delighted to, Mr. Chairman.
    We have, in conjunction with the attorneys and the 
accountants--as you well know, it can be a little complex--but 
if confirmed, we will be divesting ourselves of all interest in 
the farming operation. We farm with three corporations; it is 
owned currently by myself, my wife, and my two grown children 
here. All of those will be going to our grown children; I just 
hope they can keep the farm alive, and I am confident that they 
will. I will be drawing a cash rent that is commensurate with 
other cash rents in the area, to be certain that there is no 
conflict associated with my service in this administration.
    The Chairman. I appreciate that public response. This is a 
part of the record that has been submitted. As all of us know, 
the financial forms and obligations are tremendous for our 
nominees. I appreciate your explaining that in detail. For 
anybody in farming, it is a wrenching experience. The word 
``divest'' means, as you say, giving this farm to your 
children. I appreciate your response.
    Mr. Hawks. Thank you.
    The Chairman. Let me say that this committee has spent a 
lot of time crafting legislation to provide livestock mandatory 
price reporting. Most of us on this committee, including the 
chairman, strongly supported that legislation.
    The Department of Agriculture's Agricultural Marketing 
Services has been in the process for some time of implementing 
this and refining the law, and the program began on April 2. As 
is often the case with a new program, there are criticisms and 
difficulties.
    Are you aware of the program, and can you make a comment as 
to how we can get on track in a steady way here?
    Mr. Hawks. Yes, Mr. Chairman. I have had the opportunity, 
because this is obviously of major interest to all of 
production agriculture, particularly the Midwest and Western 
States, and I certainly appreciate that. The Congress saw fit 
to implement mandatory price reporting, and it is my goal as 
Under Secretary for Marketing and Regulatory Programs to see 
that it works. I would like to go a little bit further on that 
and say that it is my understanding that this report is 
attempting to deliver 91 reports a day, some 40 more reports 
than have ever been reported under the voluntary system.
    I will make a commitment to you and members of this 
committee today that it is my intent to fix the mandatory price 
reporting system.
    The Chairman. Well, this is good news, and as you can 
anticipate, we will be calling upon you for reports on your 
progress, because this is of great urgency to our livestock 
people.
    Mr. Hawks. In fixing this process, I would like to have 
interaction with members of this committee as we go forward.
    The Chairman. That would be very helpful.
    One of the responsibilities that you will inherit right 
away is the problems of the Animal and Plant Health and 
Inspection Services, APHIS. That has been a prominent agency 
given these violent and difficult diseases that have afflicted 
livestock throughout the world and which we are trying to stave 
off here, namely, foot and mouth disease.
    Have you studied the APHIS situation, and are you confident 
that all is being done that can be done, and have you have 
worked with the Secretary and understood her strategy?
    Mr. Hawks. Yes, Senator, I have. I have had the opportunity 
to look at that also. As you are probably familiar, the 
Secretary brought in a leading veterinarian early on in this 
new administration to help with that. Dr. Brightmeyer from 
California came in to lead that effort early on, and he is back 
in California and is still on a consulting basis with APHIS in 
that process.
    It is my belief that, of course, the Secretary is 
committed, and I understand the budget has an increase for the 
number of inspectors at ports around the country, I believe 
some 350 additional inspectors, to exclude the foot and mouth 
disease and BSE.
    I think that efforts are being made, but I also think that 
there are some plans being made in the event we should have 
that unfortunate event to enter this country. There is being 
looked at the compensation package, the response package. So 
there is a lot of effort going into that, but my first effort 
and APHIS' first effort will be to keep it out of this country.
    The Chairman. Thank you.
    Mr. Bost, let me ask you the question I asked originally of 
Mr. Hawks. Do you agree that you will appear before any duly 
constituted committee of Congress if asked to appear?
    Mr. Bost. Yes, sir.
    The Chairman. I thank you for that affirmative response.
    One of the major responsibilities of the committee will be 
the reauthorization of the food stamp program. Can you give us 
any early indications from your experience in Texas in 
particular, where you have had comprehensive program 
administration, of what recommendations you may make, or any 
other comments as you have studied that in preparation for this 
hearing?
    Mr. Bost. Thank you, Mr. Chairman, for asking that 
question. This is a very, very important program affecting the 
lives of about 1.2 million people in Texas, and nationally, 
about 17 million people.
    Our approach in Texas and my approach in Texas has been to 
receive input from advocates, from providers, and also from 
consumers in terms of what we can do to make this program much 
more efficient, improve access, and improve service delivery.
    In my discussions with the Secretary, essentially, those 
are things that we hope to carry forward. At this point, the 
administration has not taken a position in terms of developing 
the process. I know that we are working on the process, but no 
final decision has been made in terms of what that process will 
look like. But believe me, it is my position, and I believe it 
is the Secretary's, that we will be very inclusive in terms of 
getting input to strengthen and improve this program, which is 
a very important program.
    The Chairman. I will have additional questions for you and 
Mr. Hawks on the second round, but I want to engage the rest of 
my colleagues now in this process.
    Senator Cochran.
    Senator Cochran. Mr. Chairman, thank you.
    I was going to ask about the BSE and the foot and mouth 
disease problem, and get your reaction to the steps and whether 
they are being taken aggressively in this administration, and 
if you can assure the committee that everything will be done 
that can be done to help protect this very important industry 
in our country.
    Mr. Hawks. Yes, Senator, I fully intend to do that. I do 
not know if you have had the opportunity to read the papers 
this morning, but there was some German equipment turned back 
at the port in Texas because it was not clean. So every effort 
is being made, and I intend to maintain that vigilance.
    Senator Cochran. Part of the marketing responsibility is to 
try to identify ways to increase our exports and sales and grow 
the markets that we have in other countries. What do your plans 
include? What are your ideas about some of the steps that you 
plan to take to increase our opportunities to sell more of what 
we produce in overseas markets?
    Mr. Hawks. Senator, my particular areas are, of course, 
with APHIS, and Marketing and Regulatory, and GPSA. I think 
that where my particular agencies are concerned--I have some 
broad opinions about other areas, but I will address just those 
that will be relevant to mine--are sanitary and phytosanitary 
issues, where we will have APHIS people involved to try to 
mitigate any concerns and complaints that we have from our 
trading partners. I think that the marketing arm that I will 
have direct responsibility for will have the opportunity to 
help create and work with producers in identifying niche 
markets, if you will. I think we have some particular ways that 
we can address those concerns in my area, and the Secretary and 
this administration are committed to opening those markets up.
    Senator Cochran. Mr. Bost, I assume you have 
responsibilities in this new job for feeding programs 
generally, lunch programs, breakfast programs, in the schools--
does that come under your jurisdiction as well?
    Mr. Bost. Yes, Senator.
    Senator Cochran. I think those are important programs. We 
had a pilot breakfast program in the schools, and I do not know 
whether you have had an opportunity in Texas to have had any 
experience with that program, but do you know what your 
recommendations might be with respect to how we can improve and 
strengthen those programs to be sure they are meeting their 
goals?
    Mr. Bost. Yes, Senator. We have very similar programs in 
Texas, and the feedback that I am getting from our sponsors is 
that for the most part, it is working very well. The issue that 
they constantly talk with me about in Texas is the bureaucratic 
requirements that we impose on them to actually implement the 
program. If confirmed, that is one of the things that I would 
want to look at and further explore in terms of how can we 
ensure not only that we are holding our entities accountable, 
but concurrently, making it as easy as possible to ensure that 
the services are being provided.
    I think that is where the issues are, and that would be one 
thing that I would look at if I am confirmed in this position.
    Senator Cochran. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Cochran.
    Senator Thomas.
    Senator Thomas. Thank you, Mr. Chairman.
    Let me just comment a bit on the chairman's first questions 
on packers and stockyards. I hope that you will also take a 
look at the concentration and ownership of livestock and how it 
impacts it.
    On APHIS, we are also interested in predator control and 
wildlife management. I have a sticker on the back of my car 
that says ``Eat Lamb--50,000 Coyotes Can't be Wrong.''
    More specifically--and I know this is not easy--as you 
enter your job, what would be your highest priority?
    Mr. Hawks. Right now, I think anyone looking at this area 
would say that foot and mouth disease, BSE, would be the No. 1 
priority. We must maintain our vigilance there, we must keep 
that out. I will be candid with you--it has been very 
overwhelming to go into a situation like this and try to look 
at the whole area at one time. We have a lot of issues there--
foot and mouth disease, price reporting, the concentration 
issue that I know you are very concerned about--but I would 
have to say the foot and mouth disease and BSE would be the No. 
1 priority, Senator.
    Senator Thomas. I have to leave to go to another hearing, 
Mr. Chairman. Thank you so much.
    I appreciate having these two gentlemen here.
    The Chairman. Thank you very much.
    Senator Hutchinson.
    Senator Hutchinson. Thank you, Mr. Chairman. I will be 
brief.
    Mr. Hawks, you mentioned niche markets. Do you have any 
specific ideas on how we can promote those?
    Mr. Hawks. Of course, as you know, the organic rules were 
created in the 1990 Farm bill, and it took quite a while to get 
those rules finally promulgated. I think that that is an 
example of a way that we can find niche markets--anything that 
I see that we can do, or if any of you have ideas about ways 
that we can enhance the value of the products of our 
producers--but that is just one example, the organics, working 
with them.
    The farmers' markets--I understand we have a farmers' 
market at USDA. The AMS is involved with the initial concept 
and design of farmers' markets throughout the country.
    So there are opportunities there.
    Senator Hutchinson. Mr. Bost, in your comments, you 
mentioned--I think this was on the school lunch and breakfast 
programs that Senator Cochran was asking about--that you had 
heard complaints about bureaucratic requirements and the need 
to provide bureaucratic relief. Do you have specific ideas--or, 
particularly on the complaints that you have heard, of what 
nature are they, and how do you go about trying to cut some of 
that red tape that is unnecessary to provide the accountability 
that we all want?
    Mr. Bost. Mr. Chairman and Senator, almost all of the 
feedback that I have gotten in terms of criticism of our 
program is in regard to the overwhelming level of paperwork 
that is required. If confirmed, what I would hope to do would 
be to look at the requirements that we are asking for and see 
if it is possible for us to look at streamlining our requests, 
along with ensuring a high level of accountability.
    Like I said, all of our sponsors think that the pilot 
programs--and I believe the chairman actually passed a law that 
has a pilot that will start in Texas this summer, and we have 
also seen a significant increase in the number of sponsors 
interested in participating in that pilot--but almost all of 
the comments that we receive are that the paperwork 
requirements are just overwhelming in terms of what we are 
asking for. I believe that that is where I would start my 
review in terms of looking to see what we can do or, more 
importantly, what we can do differently.
    Let me provide to you a real specific example of what we 
did in another program in Texas. About a year to 18 months ago, 
our application process, or the actual application form to 
receive food stamps, Temporary Assistance to Needy Families, 
and Medicaid was essentially on one form, but it was as long as 
18 pages. I brought in a group of clients, consumers, advocacy 
organizations, and our staff to look at it and essentially say 
there has got to be a better way. Right now, front and back, 
that form is down to about five pages. We are getting the same 
information, it is easier, it is much more customer-friendly.
    I would be interested in looking at a process that would 
afford us the opportunity to do that.
    Senator Hutchinson. Is any of that kind of reporting being 
done electronically, or is it all still paper and forms?
    Mr. Bost. I believe it is a combination of both. Here again 
is another option for us to look at, becoming much more 
automated.
    Senator Hutchinson. Well, I endorse those efforts. I hope 
that you will. That is usually the complaint that we hear about 
not only the Department of Agriculture but across the Federal 
Government, that there is too much paperwork involved. I hope 
that you will make that a priority and try to provide some 
relief there. I think that is a good goal.
    To both of you, I would like to pose this question: Do you 
anticipate any specific changes that you are going to make, 
that you have already thought about, areas where you feel that 
you are going to initiate some different policies?
    Mr. Hawks.
    Mr. Hawks. Senator, it is a little difficult to evaluate--I 
have been here in a consulting capacity for about 10 days--but 
I would be very candid with you and say that in my past 
experiences, there is always an opportunity, after thoroughly 
evaluating things, to see ways to streamline them, and like Mr. 
Bost, anything that we can do to eliminate some of the 
bureaucratic red tape, I will certainly be looking toward that.
    Senator Hutchinson. Mr. Bost.
    Mr. Bost. Senator, I do not know if I would say anything at 
this point specifically that I would want to change, but I am 
always in the position of looking at how we can improve our 
efficiency in terms of how we do things. At this point, I have 
not been here long enough to make a determination of how some 
things are done. I am not interested in changing it just for 
the sake of changing it; I am only interested in looking at 
making some recommendations or possibly changing some things 
that we can do better, if they can be improved.
    So at this point, it is too premature and too presumptuous, 
I believe, at this juncture for me to say anything, because I 
do not know enough.
    Senator Hutchinson. Those are probably prudent answers.
    Thank you. We wish you the best.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Hutchinson.
    We have been joined by the distinguished ranking member, 
Senator Harkin, but I will give him a breathing space of a few 
minutes while I commence questions, and then I will ask Senator 
Harkin for his opening statement, either on the nominees or the 
credit situation and questions thereof, and then we will 
complete this portion of our hearing and proceed on to the 
credit hearing.
    Mr. Hawks, let me ask you about one additional program for 
which you have responsibility. We have had an investigation and 
then, a fairly large and well-attended hearing about eight USDA 
fruit and vegetable inspectors who were arrested for bribery at 
the Hunt's Point Terminal produce market in the Bronx, New 
York. We have had before the committee a good number of people 
explaining what happened there and what is supposed to happen.
    Have you had a chance to look into that predicament, and do 
you have any comment about it?
    Mr. Hawks. Mr. Chairman, I do have a comment about that. 
Having looked briefly at what transpired there--and I would say 
that it was a very unfortunate situation--I do understand that 
there have been some prosecutions and some convictions as they 
relate to that incident. I also know that we are improving the 
facilities there to train inspectors.
    But one thing that I would like to say to this committee is 
that I will uphold the highest level of honesty and integrity 
in this entire department, administration, where I have any 
influence whatsoever. That is my intent.
    The Chairman. I appreciate that intent and likewise your 
keeping track of this. It seems to be an ongoing investigation 
that will probably consume some of your early time.
    Mr. Bost, annually, we have oversight hearings on food 
stamp administration, and I would say that over the course of 
the year, if I can draw any conclusions from that, the waste, 
fraud, and abuse question has been addressed, but likewise, 
improvements have been made, and sometimes substantial 
improvements.
    In the State of Texas, you have had an Electronic Benefits 
Transfer system which has been recommended for food stamp 
programs in all of our States, and likewise, a decreasing 
number of violations of any sort, and your quality control 
seems to have been excellent, and Texas has been cited for 
that.
    On both of these situations, can you make a comment as to 
the difficulty for a State as large as Texas to adopt the 
Electronic Benefits Transfer system. How did you get the error 
rate under control and come to an exemplary solution, and what 
will these mean for the other 49 States as you come into a 
responsibility for this?
    Mr. Bost. Mr. Chairman, first of all, let me say that the 
staff in the Texas Department of Human Services has done an 
outstanding job in terms of implementing both of those 
programs. There has been a real commitment on their part to 
ensure that we are the premier human services agency in the 
country in terms of the implementation of those specific 
programs.
    In our EBT program, we were among the first in the country 
to start in 1995. We are now into our second generation--I just 
signed a contract this past February--and we took a little bit 
of a different approach where, instead of using one vendor, we 
took a multi-vendor approach. It works 99.99 percent of the 
time. During the course of the last 18 months, it has only been 
down three times, and each of those three times, it was down 
because of problems with the telephone companies, not with the 
system itself.
    I think that our success with that program has been 
primarily for two reasons--one, the partnership that we had 
with Transactive; and two, the infrastructure. We spent a great 
deal of time making sure that the infrastructure would support 
what we want to accomplish.
    In terms of our accuracy rate, it was one of the things 
that I first established as a goal for the department when I 
became commissioner in 1997. We had a high error rate hovering 
around 12 percent. This last year, our error rate was down to 
about 4.14 percent. We received enhanced funding in the amount 
of $28.6 million, the most earned by any State in the history 
of the food stamp program.
    If I have to look for how we were able to accomplish that, 
there are several reasons. No. 1, I think there is a real 
commitment on the part of the staff. No. 2, I invested a lot of 
time and energy in ensuring that we trained our staff. No. 3, I 
built in a quality assurance review system to ensure that staff 
were following the guidelines that we had established. I also 
established call centers. We have call centers around the State 
whereby clients are able to call and report changes and do not 
necessarily have to come in to the offices. The clients love 
that, because it is easy to pick up a telephone and call, as 
opposed to in some places, getting on a bus and transferring 
with children three or four times and actually coming into an 
office.
    In addition to that, I had an automated system that was a 
part of that process that I also believe has contributed to our 
success.
    I believe that all of those reasons have contributed to our 
success and also contribute to our ability to detect fraud and 
abuse early on in our system. The General Accounting Office 
essentially cited our program as being one of the leaders in 
the country, and that is one thing that I am real proud of, 
because it has been my experience in 20 years that they do not 
necessarily have too many positive things to say about most 
systems; so when they came out and said this, it was something 
that made us all feel very, very good about what we were able 
to accomplish.
    The Chairman. Well, it made the committee feel good, too. 
There is nothing more devastating in the food stamp program, 
ultimately, than reports such as we have had in hearings that 
people have used food stamps as currency in neighborhoods, 
often for other purposes.
    The Electronic Benefits Transfer Program was designed so 
there is an audit trail, and the floating around of this paper 
as a substitute currency declines. This leads us to wonder from 
time to time why there is a reticence or difficulty in adopting 
electronic benefits transfer in other places. The other 
dilemma, of course, is that even a very low error rate brings a 
number of critics of the program. There are a number of 
American taxpayers who ask why is there an error rate--are 
people receiving food stamps beyond what they should get, or 
are people in fact being cheated of benefits because they are 
poor and are not knowledgeable about the situation.
    On both counts, there is enormous scrutiny, because the 
program has been going on for a long time, as you know. You 
cannot administer the program before you are confirmed, but I 
just want to underline how important this is in terms of the 
integrity of the program, because this committee has strong 
support of that safety net for Americans, and we want to make 
sure its integrity remains.
    Mr. Bost. Mr. Chairman, I would agree with you, and I would 
add two additional points. We too have received some criticism 
in Texas regarding how well the program works, and one of the 
criticisms that I received was that we must not be doing 
something in terms of access or that we were not giving people 
enough benefits. The way the error rate is computed, it is an 
error if you give them too much, but it is also an error if you 
do not give them enough. So for us to have one of the lowest in 
the country while serving almost 1.2 million people monthly, I 
think is a major accomplishment on our part.
    The other issue that was also very, very important to me 
was this issue that there are people who are eligible for food 
stamps who are not receiving them. Well, last year, I kicked 
off probably one of the most comprehensive outreach campaigns 
in the entire State. I sent staff out throughout the State, and 
we made over 80,000 in-person contacts with homeless shelters, 
with food banks, the post office, the barbershop--everyplace 
where people live and work or are not working--also, I sent out 
information to all the daily newspapers, saying that if you 
think you are eligible for food stamps, here is an office you 
can go to or here is a number that you can call. I tried to 
make sure there was that balance in terms of maintaining a high 
level of integrity in our program, but also ensuring that if 
you thought you were eligible to receive benefits, you would 
come into our office to apply for them, or if there were a 
large group of people somewhere, like a homeless shelter--
because I heard that, too--I would actually send a staff person 
there to take your application on the spot.
    So my goal was to ensure that we struck that balance in 
terms of increasing access but also maintaining the integrity 
of the program; and also, a third component which is very, very 
important to me personally is building in some sense of 
personal responsibility that people have to go out and get a 
job, to work and be able to provide for yourself if you are not 
eligible or if you do not meet the requirements to participate 
in the program.
    The Chairman. Well, I thank you for that additional 
response on the advocacy issue, which would have been another 
question, what about the outreach.
    Mr. Bost. I am sorry, Senator.
    The Chairman. I am delighted that you have responded.
    Finally, as a part of our hearings, I discovered, as did 
other members, that we could use the data from school lunch 
applications with State governments to qualify a number of 
children for Medicaid, for the SCHIP program. That data was not 
being shared; it was sort of a stovepipe situation, which has 
some understandable privacy issues. Nevertheless we passed 
legislation to make that sharing possible and to make many more 
low-income children eligible for the SCHIP program.
    Are you aware of that, and did you adopt it in Texas, and 
if not, do you have any comment about this issue?
    Mr. Bost. Mr. Chairman, I think that that was an excellent 
idea in terms of increasing access for children to receive 
those medical services in addition to improving their 
nutritional lives. The only--``criticism'' is probably too 
strong a word--caution, I guess--the only caution that I have 
heard about the implementation of this has been about the 
sharing of confidential data. Other than that, everyone that I 
have talked to around the country has been very, very 
supportive of it and has found it to be very useful and very 
helpful in terms of ensuring that children are enrolled.
    The Chairman. I appreciate that concern. These privacy 
concerns are not trivial; they are important. It just appeared 
to us in a common sense way that for children of low income who 
had already gotten somehow the forms filled out for the school 
lunch program, this data might be shared for their health care. 
I am hopeful that this common sense will prevail over the need 
for a bureaucratic separation and entirely new forms and what-
have-you--and obviously, you are, too, so we are hopeful of 
moving ahead.
    Mr. Bost. Yes, absolutely. I share your concern.
    The Chairman. Thank you.
    Senator Harkin.
    Senator Harkin. Thank you, Mr. Chairman.
    I would just ask that my statement be made a part of the 
record.
    The Chairman. It will be included in full.
    Senator Harkin. I want to concur in the statements that the 
chairman just made. I support his views entirely on those 
matters.
    I want to welcome Mr. Bost and Mr. Hawks to the committee. 
I have just a couple of issues that I would like to cover with 
the two of you, very briefly.
    Mr. Bost, a major theme of welfare reform has been to 
encourage low-income families to work to reduce their need for 
cash assistance--that is all of the welfare-to-work program. 
Yet today, extensive verification requirements and requirements 
of frequent reapplications make it much harder for working 
families to obtain food stamps than for families on cash 
assistance.
    In the last couple of years, the Department has taken 
several important initiatives to reduce the administrative 
burdens of low-wage working families who need food stamps to 
help their families eat.
    Again, as Under Secretary, I would ask if you would explore 
further measures that can be taken. I do not think we are at 
the best level yet of reducing these burdens, and I hope that 
you will take a further look at what we can do to reduce those 
administrative burdens.
    Mr. Bost. Absolutely, Senator. I would be more than happy 
to do that if confirmed.
    Senator Harkin. Second, on the school breakfast program, we 
are still lagging in getting schools and students into this 
program. That has been a keen interest of mine and of a number 
of others on this committee as to how we can expand the school 
breakfast program. As you know, we have some pilot programs 
ongoing right now to expand that program, and I wonder if you 
have any thoughts on what steps you might take to support 
expansion of the school breakfast program to more schools and 
more students, and would that be an area that you would be very 
proactive in?
    Mr. Bost. Senator, absolutely. Going back to the comment I 
made earlier, I think before you arrived, one of the 
overwhelming comments that I have received in my role as 
commissioner in Texas from current sponsors and entities that 
would be interested in becoming sponsors in terms of 
implementing this program has been the overwhelming burden of 
the paperwork requirements. That has been a deterrent to some 
entities in terms of being able to enroll and to process the 
information.
    If confirmed, my commitment would be to look at that to see 
what we can do to make it easier and more user-friendly and to 
add a level of flexibility to our programs that is now missing, 
but also, concurrently, to ensure that if we do that, we 
maintain a high level of integrity in the program. So my 
commitment to you is that absolutely, I would be more than 
happy to look into this.
    Senator Harkin. Thank you.
    Last, on the WIC program, I was heartened that Secretary 
Veneman assured the Appropriations Committee that the 
Department would be monitoring spending in the WIC program to 
ensure that there is no reduction in the number of eligible 
women, infants, and children served. Again, I hope that you 
will continue to give us your thoughts and suggestions on how 
we can expand the WIC program to serve those in need, and I 
hope that will be a priority of yours in your new position.
    Mr. Bost. Absolutely, Senator.
    Senator Harkin. Finally, Senators Dole and McGovern have 
proposed what I call an international school lunch program. It 
has received a lot of publicity, it has been widely supported, 
and I think it is a great concept. I think others on the 
committee have been supporting it on a bipartisan basis. I 
think we are going to be feeling our way forward as to exactly 
how we implement the legislation or how we can get the 
legislation through and how we can move ahead in this area. But 
I think it could be a wonderful thing for the United States to 
take the lead in getting other producing nations involved in 
providing the commodities for Third World countries. I think 
this could act as a great magnet to get kids out of work 
places, reducing the incidence of child labor around the world 
and getting these kids into school.
    When you think about it, while we spend a very small part 
of our disposable income on food in this country--less than 10 
percent, something like that. In some Third World countries, 50 
to 60 percent and more of their disposable income goes for 
food. So while giving a free breakfast or a free lunch to a 
student in this country might not save the family a great deal 
of money because we spend so little of our disposable income on 
food, one nutritious meal for a child in a Third World country 
not only helps that child in terms of the child's own nutrition 
and health and education, but it saves the family a lot of 
money. So again, I think it can be a great economic incentive 
for families to get their kids into school, also, because a lot 
of the kids bring home money from working in child labor. If we 
could replace some of that income with food, then, I think 
there would be less reticence on the part of families to let 
the kids out of the workplaces and get them into school.
    I tell you all that because I do not know what role you 
will play in that, and I do not know what role the Department 
of Agriculture is going to play in it; but I hope that you will 
take a look at it and become aware of the legislation that is 
pending and give us your best thoughts and suggestions as Under 
Secretary as to how we might use the Department of Agriculture 
to help stimulate this and get it moving around the world.
    I hope you will take a good look at it and give us your 
best thoughts on that.
    Mr. Bost. Absolutely, Senator. I would be more than happy 
to do that.
    Senator Harkin. Thank you.
    Mr. Hawks, last year, the General Accounting Office called 
for more effective USDA enforcement of the Packers and 
Stockyards Act. That included better teamwork of lawyers and 
economists, plus assigning more lawyers to handle the 
investigation. The Appropriations Committee last year put in 
more money specifically for stronger Packers and Stockyards Act 
enforcement. That was in last year's appropriations bill.
    My question is will you make sure that USDA steps up and 
increases their Packers and Stockyards Act enforcement?
    Mr. Hawks. Yes, Senator. If confirmed, it is my intent to 
ensure that we enforce every law, every regulation that is in 
existence with all haste.
    Senator Harkin. There is a great deal of concern out my 
way, at least, and I think maybe in other parts of the country, 
about concentration, and the lack of markets for our farmers. 
Also, we are not getting enough information out on mandatory 
price reporting. We passed the legislation on that, but for 
some reason, we are still not getting the information out to 
farmers. I do not know if that law is being enforced adequately 
enough.
    These are the reasons why we really have to focus on this. 
We put the money in, and I just hope that you will step up the 
enforcement even more than it was a year ago.
    Mr. Hawks. Senator, I have the same concerns that you have 
about those issues. Being a farmer myself, I understand the 
need for adequate price discovery, and I also understand the 
need for transparency in the reporting process. But I had said 
before you came in that it is my intent to fix the mandatory 
price reporting program.
    Senator Harkin. Good for you. I look forward to working 
with you.
    Thank you, Mr. Chairman.
    The Chairman. We are on the same wavelength. I peppered Mr. 
Hawks with the same questions--but he has affirmed it again; he 
has not changed his mind.
    Mr. Hawks. You got it on the record twice.
    The Chairman. Senator Stabenow.
    Senator Stabenow. Thank you, Mr. Chairman, and good 
morning. I appreciate your holding the hearing, and welcome to 
our two nominees this morning.
    I would like to first ask Mr. Bost--it is more a comment 
than anything else. I want to talk with you for a moment about 
the importance in Michigan--I represent the wonderful 
agriculture community in Michigan. There has been a real 
partnership as it relates to our farmers, our commodities, 
through the purchase of many of our fruits and vegetables for 
school lunch, and we are looking forward to continuing to 
partner with the school breakfast program as well. I think it 
has been one of the most positive ways that has brought the 
agricultural community together with the nutritional needs of 
children. I would hope that you would continue to aggressively 
pursue that partnership.
    Mr. Bost. Absolutely.
    Senator Stabenow. We benefited recently in Michigan from 
apples and cherries being purchased for school lunch, and this 
year, our asparagus growers are very interested in the same 
thing, so I will put a plug in for them.
    But I think that the Bonus Purchase Program is very 
important to continue and to expand upon because of the obvious 
benefits both to children and to our farmers.
    I do not know if you have any thoughts on that or if you 
have taken a look at it. I know that FSA is directly involved 
in that area, but anything that we can do that brings more of 
our fresh fruits and vegetables and other products together 
with the needs of families through the commodity programs and 
the other areas in which you touch--as you said, you touch one 
out of five people in the country; that is a pretty awesome 
responsibility, and I think there is a very important part of 
this that benefits both our farmers and the people who are in 
need of nutritious food.
    Mr. Bost. Thank you, Senator.
    I am not familiar with all of the aspects of that program; 
I have heard about some of them. But if confirmed, my 
commitment is to, of course, look at continuing to strengthen 
those partnerships and collaborations. We are interested in 
doing all that we can do to improve the nutritional lives of 
our children in this country, and of course, fruits and 
vegetables are very, very important to that.
    Senator Stabenow. Thank you.
    Mr. Hawks, again regarding something that is critical in 
Michigan, I just want to bring to your attention something that 
I brought to the attention of the Secretary, and hopefully she 
has talked with you or you will be talking about a real 
challenge in Michigan, an animal disease that is devastating 
Michigan, which is bovine TB. It is in our deer herds, and it 
is an extremely serious issue and is, as you may be aware, 
being transferred to our cattle. I would hope that you could 
work with us to eradicate this disease. Obviously, it is a 
long-term issue, but there are both short-term as well as long-
term issues on research, and working with Michigan State 
University, there has been a very aggressive level at the State 
level regarding the issue of bovine TB.
    This is an extremely serious issue for our State, and I 
would like to know if you are aware of it at this point and if 
you have any thoughts as to how we might work together on it.
    Mr. Hawks. Yes, Senator. I am looking forward to working 
with you on that issue. I have been apprised of it, and I would 
like to share with you some of my past experiences with 
eradication programs.
    In my earlier years as a farmer and a cattleman, I had some 
herds that were infected with brucellosis. They were crossbred 
animals that I had gotten out of Texas that infected my herd--
yes, Texas--and I was having to corral those cattle in August. 
For those of you who know anything about corralling Brahma 
cattle in August, it is not good in Mississippi. I will share 
with you the fact that on the day we were out there getting 
them up, I told the guys who worked for me: ``Life is too short 
to do this. We are going to get out of the cattle business.''
    I understand the need for eliminating all diseases in 
cattle, and I do look forward to working with you.
    Senator Stabenow. I look forward to working with you. We do 
not want our folks getting out of the business, though.
    [Laughter.]
    Mr. Hawks. I do not want your people out of business, 
either.
    Senator Stabenow. I would certainly invite you to come to 
Michigan at some point and meet with folks. We have had entire 
dairy herds that have had to be put down as a result of this. 
It is a real challenge for us in Michigan and one that we need 
to partner with you on.
    Mr. Hawks. Thank you, and I look forward to working with 
you.
    Senator Stabenow. Thank you, Mr. Chairman.
    The Chairman. Senator Conrad.
    Senator Conrad. Thank you, Mr. Chairman.
    I would like to ask Mr. Hawks, have there been any steps 
proposed that you are aware of to deal with hoof and mouth, or 
foot and mouth as some call it now, that have been rejected?
    Mr. Hawks. Any----
    Senator Conrad. Are there any steps that have been 
proposed, aggressive steps, to prevent hoof and mouth, or foot 
and mouth, from spreading to this country? Are there any 
proposals that to your knowledge have so far been rejected?
    Mr. Hawks. Senator, not to my knowledge. Any specifics, I 
would be delighted to visit with you on that if confirmed. But 
I am not personally aware of any steps that have been rejected. 
Do you mean rejected by APHIS and the science community?
    Senator Conrad. Rejected by the administrators at USDA, 
those in charge at USDA--any proposals that have been made by 
staff or by credible outside groups to more aggressively deal 
with foot and mouth, or hoof and mouth, that have been 
rejected.
    Mr. Hawks. Not to my knowledge. I am not saying there have 
not been, but I have not had the opportunity to nor have I had 
access to all the inner workings there. As you are probably 
familiar, in a consulting capacity, I am only there to gather 
information, so I have not had the opportunity to see that.
    Senator Conrad. Have you participated in meetings on the 
question of steps to be taken to deal with a potential spread?
    Mr. Hawks. Not exactly. I visited one--we had one session 
where a working group was in, and the two presenters made their 
presentations, but when they broke into the smaller groups, I 
was not there. It may have been in that environment, but there 
is nothing that I am personally aware of.
    Senator Conrad. The reason I raise the question is that I 
have been told that there have been proposals made, either at a 
staff level or by credible outside groups, as to additional 
steps to be taken and that some of those have been rejected. I 
would like to know if that is accurate, what the proposals have 
been, and maybe you could provide to the committee a list of 
the proposals that have been made to deal with hoof and mouth, 
or foot and mouth--I grew up knowing it was ``hoof and mouth'' 
and now it has somehow morphed into ``foot and mouth''--I would 
like to know the proposals that have been made by staff and by 
outside groups and what the disposition of all those proposals 
have been and the reasons for it. That is, what have the 
recommendations been, and what has been the disposition of 
those proposals and the rationale. If there are some that have 
been overturned, there may be a good reason for it, but I would 
like to know that.
    I say this because I think we have an enormous 
responsibility here. I think every member of this committee 
feels it. The danger is so acute--in reading an analysis of how 
easily this can spread, and when you think about how open our 
market is and you think of all the going back and forth there 
is between our country and Europe--I am told that this can be 
in the intestinal tract of a person and be there for several 
days and be transmitted in that way. It does not affect the 
person or the animal necessarily, but it can be transmitted 
just in that way. People who have been on farms--when I have 
been in Europe, I have, at least for part of the time, been on 
farms--it is very, very easy for this to be transmitted, and 
the consequences are so staggering if this were to come to our 
country and spread--as I know you appreciate, and I know every 
member of this committee appreciates.
    I would very much like it if you could provide that.
    Mr. Hawks. Yes, Senator, I would be happy to get the 
information that is there, and if you have any specifics that 
you would like to share with me at a later time to help me in 
my investigation of that, I would certainly appreciate that.
    Senator Conrad. All right.
    Mr. Hawks. Thank you.
    Senator Conrad. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Conrad.
    Senator Harkin.
    Senator Harkin. Thank you, Mr. Chairman.
    I am sorry, Mr. Hawks. I had one other area that I wanted 
to cover with you.
    We have some critically important Federal animal disease 
facilities in Ames, Iowa--the National Animal Disease Center, 
the Center for Veterinary Biologics, and the National 
Veterinary Services Laboratory--in fact, Secretary Veneman just 
visited the National Animal Disease Center last Friday. Apropos 
of what Senator Conrad was just saying, this country has become 
keenly aware of what could happen here and the costs and 
problems that can occur because of animal diseases.
    I do not know how many billions of dollars Great Britain 
has lost now, but it is in the billions, and Europe also--
enormous sums of money. It can also affect human health as 
well, in terms of BSE--not foot and mouth, but BSE.
    These facilities without a doubt need upgrading. They are 
out-of-date. Many of the buildings are over 50 years old, and 
quite frankly, the facilities themselves may actually present a 
great risk in terms of the kinds of things they are dealing 
with there and how out-of-date they are.
    A highly respected international peer review group that was 
created by USDA to look at the draft report on what should be 
done indicated that the need to move forward was--and I use the 
word that they use--urgent, should be considered an emergency, 
that the inadequacy of some of the facilities is astounding, 
that there is a severe vulnerability--a severe vulnerability.
    This facility deals with some of the most toxic pathogens, 
some of the most virulent pathogens known to humankind, and yet 
they are not really that secure. Current studies are restricted 
that the status quo is not an option. This is all out of that 
report.
    This peer review group indicated that the improvements 
would facilitate United States animal exports which could 
presently be at some risk because of the poor quality of the 
existing facilities.
    Will you carefully review this situation and be prepared to 
support the action and funding necessary to upgrade these badly 
outdated facilities?
    Mr. Hawks. Yes, Senator. I am aware of the situation there 
at Ames and understand that that is a joint ARS and APHIS 
facility out there, and I look forward to working with you and 
members of this committee as we move forward with that. I am 
looking forward to going out there and having the opportunity 
to visit those facilities.
    Senator Harkin. You have not been there yet?
    Mr. Hawks. No, sir, I have not.
    Senator Harkin. Well, I urge you to go out and take a look 
at those facilities. I think you will see with your own eyes 
that there is a campus facility out there. The Federal 
Government has this land, and it can be--I do not know what the 
proper word is--a good perimeter can be put around it. It can 
be made very secure. As you know, they did incinerate and 
dispose of the carcasses--well, they actually disposed of all 
the sheep that came out of New England that were brought there 
for disposal. I went out to view that myself, and I am not an 
expert in these areas, but it does not take too much of a 
trained eye to see that this may have been OK 50 or 60 years 
ago, but it is not for the new century.
    Mr. Hawks. I will assure you that that is a priority issue 
with APHIS.
    Senator Harkin. I appreciate it. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Harkin.
    For the record, the committee's concern that has been 
expressed by Senator Conrad and Senator Harkin's last comments 
about foot and mouth disease is profound, and of course, we 
called Secretary Veneman over for a briefing--it was not an 
open hearing, but it was an opportunity for her to bring us up-
to-date--and we may want to do that again. But I appreciate 
that with you aboard, that will be helpful.
    As we all know, to this point, the Secretary alone has been 
confirmed and is there by herself, and we are hopeful that 
staff can be supplemented by yourselves and by others.
    Let me just say that the committee offers an invitation to 
members with additional questions to offer those, and I hope 
they will be submitted by the end of the day today so that you 
can respond as rapidly as possible.
    I will work with the distinguished ranking member for an 
appropriate time for the committee to consider these 
nominations. It is our intention--and that was the purpose of 
the hearing and the intrusion on the credit hearing, and we 
thank those who are going to testify for their indulgence, 
because this is important business to have the administration 
filled out with nominees as they come.
    So we thank you very much for coming and for your 
forthcoming responses, and we thank committee members for 
engaging in this dialog.
    The Chairman. This portion of our hearing is concluded.
    [Whereupon, at 10:15 a.m., the nominations hearing was 
concluded.]
      
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                            A P P E N D I X

                              May 16, 2001




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                              May 16, 2001



      
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                         QUESTIONS AND ANSWERS

                              May 16, 2001



      
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