[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
                   PERFORMANCE, ACCOUNTABILITY, AND 
                    REFORMS AT THE CORPORATION FOR 
                    NATIONAL AND COMMUNITY SERVICE
_________________________________________________________________


                                HEARING

                              BEFORE THE

                     SUBCOMMITTEE ON SELECT EDUCATION

                                OF THE

                        COMMITTEE ON EDUCATION AND

                             THE WORKFORCE

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION
                                __________

            HEARING HELD IN WASHINGTON, DC, APRIL 1, 2003

                                __________


                            Serial No. 108-11

                                __________


          Printed for the use of the Committee on Education

                          and the Workforce












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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                   JOHN A. BOEHNER, Ohio, Chairman

THOMAS E. PETRI, Wisconsin			GEORGE MILLER, California
CASS BALLENGER, North Carolina			DALE E. KILDEE, Michigan
PETER HOEKSTRA, Michigan			MAJOR R. OWENS, New York
HOWARD P. "BUCK" McKEON, California		DONALD M. PAYNE, New Jersey
MICHAEL N. CASTLE, Delaware			ROBERT E. ANDREWS, New Jersey
SAM JOHNSON, Texas				LYNN C. WOOLSEY, California
JAMES C. GREENWOOD, Pennsylvania		RUBEN HINOJOSA, Texas
CHARLIE NORWOOD, Georgia			CAROLYN McCARTHY, New York
FRED UPTON, Michigan				JOHN F. TIERNEY, Massachusetts
VERNON J. EHLERS, Michigan			RON KIND, Wisconsin
JIM DeMINT, South Carolina			DENNIS J. KUCINICH, Ohio
JOHNNY ISAKSON, Georgia				DAVID WU, Oregon
JUDY BIGGERT, Illinois				RUSH D. HOLT, New Jersey
TODD RUSSELL PLATTS, Pennsylvania		SUSAN A. DAVIS, California
PATRICK J. TIBERI, Ohio				BETTY McCOLLUM, Minnesota
RIC KELLER, Florida				DANNY K. DAVIS, Illinois
TOM OSBORNE, Nebraska				ED CASE, Hawaii
JOE WILSON, South Carolina			RAUL M. GRIJALVA, Arizona
TOM COLE, Oklahoma				DENISE L. MAJETTE, Georgia
JON C. PORTER, Nevada				CHRIS VAN HOLLEN, Maryland
JOHN KLINE, Minnesota				TIMOTHY J. RYAN, Ohio
JOHN R. CARTER, Texas				TIMOTHY H. BISHOP, New York
MARILYN N. MUSGRAVE, Colorado			
MARSHA BLACKBURN, Tennessee
PHIL GINGREY, Georgia
MAX BURNS, Georgia

                       Paula Nowakowski, Chief of Staff
                    John Lawrence, Minority Staff Director
	                       ____________


                      SUBCOMMITTEE ON SELECT EDUCATION
                     PETER HOEKSTRA, Michigan, Chairman

JON C. PORTER, Nevada, Vice Chairman		RUBEN HINOJOSA, Texas
JAMES C. GREENWOOD, Pennsylvania		SUSAN A. DAVIS, California
CHARLIE NORWOOD, Georgia			DANNY K. DAVIS, Illinois
PHIL GINGREY, Georgia				TIMOTHY J. RYAN, Ohio
MAX BURNS, Georgia				













                                  TABLE OF CONTENTS


TABLE OF CONTENTS...................................................i 


OPENING STATEMENT OF CHAIRMAN PETE HOEKSTRA, SUBCOMMITTEE ON 
SELECT EDUCATION, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. 
HOUSE OF REPRESENTATIVES............................................1 

OPENING STATEMENT OF RANKING MEMBER RUBEN HINOJOSA, SUBCOMMITTEE 
ON SELECT EDUCATION, COMMITTEE ON EDUCATION AND THE WORKFORCE, 
U.S. HOUSE OF REPRESENTATIVES.....................................................4 

STATEMENT OF LESLIE LENKOWSKY, CHIEF EXECUTIVE OFFICER, CORPORATION  
FOR NATIONAL AND COMMUNITY 
 SERVICE.............................................................6

STATEMENT OF CARL H. ESBECK, ISABELLE WADE AND PAUL C. LYDA 
PROFESSOR OF LAW, UNIVERSITY OF MISSOURI, COLUMBUS, MISSOURI.......26 

STATEMENT JOHN PRIBYL, SENIOR COMPANIONS AND FOSTER GRANDPARENTS 
DIRECTOR, LUTHERAN SOCIAL SERVICE OF MINNESOTA.....................28 

STATEMENT OF MATTHEW C. SPALDING, DIRECTOR, B. KENNETH SIMON CENTER 
FOR AMERICAN STUDIES, THE HERITAGE FOUNDATION, WASHINGTON, D.C.....31 

STATEMENT OF RICHARD T. FOLTIN, LEGISLATIVE DIRECTOR AND COUNSEL, 
OFFICE OF GOVERNMENT AND INTERNATIONAL AFFAIRS, AMERICAN JEWISH 
COMMITTEE, WASHINGTON, D.C.........................................33 

APPENDIX A - WRITTEN OPENING STATEMENT OF CHAIRMAN PETE HOEKSTRA, 
SUBCOMMITTEE ON SELECT EDUCATION, COMMITTEE ON EDUCATION AND THE 
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES...........................43 

APPENDIX B - WRITTEN STATEMENT OF LESLIE LENKOWSKY, CHIEF EXECUTIVE 
OFFICER, CORPORATION FOR NATIONAL AND COMMUNITY SERVICE............47 

APPENDIX C -WRITTEN STATEMENT OF CARL H. ESBECK, ISABELLE WADE AND 
PAUL C. LYDA PROFESSOR OF LAW, UNIVERSITY OF MISSOURI, COLUMBUS, 
MISSOURI...........................................................63 

APPENDIX D - WRITTEN STATEMENT JOHN PRIBYL, SENIOR COMPANIONS AND 
FOSTER GRANDPARENTS DIRECTOR, LUTHERAN SOCIAL SERVICE OF 
MINNESOTA..........................................................87 

APPENDIX E - WRITTEN STATEMENT OF MATTHEW C. SPALDING, DIRECTOR, B. 
KENNETH SIMON CENTER FOR AMERICAN STUDIES, THE HERITAGE 
FOUNDATION, WASHINGTON, 
 D.C................................................................93

APPENDIX F - WRITTEN STATEMENT OF RICHARD T. FOLTIN, LEGISLATIVE 
DIRECTOR AND COUNSEL, OFFICE OF GOVERNMENT AND INTERNATIONAL 
AFFAIRS, AMERICAN JEWISH COMMITTEE, WASHINGTON, D.C...............113 

APPENDIX G - WRITTEN LETTER SUBMITTED FOR THE RECORD NY NATHAN J. 
DIAMENT, DIRECTOR, UNION OF ORTHODOX JEWISH CONGREGATIONS OF 
AMERICA WASHINGTON, D.C...........................................121 

TABLE OF INDEXES..................................................125












                   HEARING ON PERFORMANCE, ACCOUNTABILITY,

                AND REFORMS AT THE CORPORATION FOR NATIONAL  

                            AND COMMUNITY SERVICE 
_________________________________________________________________ 

                            Tuesday, April 1, 2003

                        Subcommittee on Select Education, 

                    Committee on Education and the Workforce,

                         U.S. House of Representatives,

                                Washington, D.C.







	The subcommittee met, pursuant to notice, at 2:13 p.m., in Room 2175,
 Rayburn House Office Building, Hon. Peter Hoekstra [chairman of the 
 subcommittee] presiding. 

	Present:  Representatives Hoekstra, Porter, Burns, Hinojosa, Davis,
 and Ryan. 

	Staff present:  Julian Baer, Legislative Assistant; Kevin Frank,
 Professional Staff Member; 
Melanie Looney, Professional Staff Member; Sally Lovejoy, Director of
 Education and Human 
Resources Policy; Alexa Marrero, Press Secretary; Krisann Pearce, Deputy
 Director of Education 
and Human Resources Policy; Deborah L. Samantar, Committee Clerk/Intern
 Coordinator; Rich 
Strombres, Professional Staff Member; Ellynne Bannon, Minority Legislative
 Associate/Education; 
Denise Forte, Minority Legislative Associate/Education; Ricardo Martinez,
 Minority Legislative 
Associate, Education; and Joe Novotny, Minority Staff Assistant/Education.

OPENING STATEMENT OF CHAIRMAN PETE HOEKSTRA, 
SUBCOMMITTEE ON SELECT EDUCATION, COMMITTEE ON 
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF 
REPRESENTATIVES 

Chairman Hoekstra. A quorum being present, the Subcommittee on Select
 Education will come 
to order.

	We are meeting today to hear testimony on performance, accountability,
 and reforms at the 
Corporation for National and Community Service.

	Under Committee Rule 12B, opening statements are limited to the
 chairman and the ranking 
minority member of the subcommittee.  Therefore, if other members have
 statements, they may be 
included in the hearing record.

	With that, I ask unanimous consent for the hearing record to remain
 open 14 days to allow 
member statements and other extraneous material referenced during the hearing
 to be submitted in 
the official hearing record.

	Without objection, so ordered.

	I would like to welcome each of you to the hearing on performance,
 accountability, and 
reforms at the Corporation for National and Community Service.

	The purposes of today's hearing are to learn about our nation's
 national service programs, to 
evaluate the performance and efficiency of the Corporation for National and
 Community Service, 
and to discuss various perspectives on legislation to reauthorize programs
 administered by the 
Corporation.

	The major federally funded national service programs in this country
 are authorized under 
two states, the National and Community Service Act and the Domestic Volunteer
 Service Act.

	In general, the programs authorized by these statues are administered
 by the Corporation for 
National and Community Service, an independent federal agency.  Although
 authorizations for 
these programs expired at the end of fiscal year 1996, they continue to be
 funded through 
appropriations legislation.

	Last Congress, the Subcommittee on Select Education and the Committee
 on Education and 
the Workforce reported H.R. 4854, the Citizen Service Act of 2002, to
 reauthorize programs 
administered by the Corporation through fiscal year 2007.

	The purposes of H.R. 4854 were to reform and strengthen national
 service programs 
administered by the Corporation, implement first-time accountability measures
 for grantees under 
the national service laws, and make the Corporation an effective outlet for
 leveraging volunteers 
and community service activities among the many service organizations across
 the country.

	In addition to the many important reforms within last year's Citizen
 Service Act, the 
Subcommittee on Select Education will work to build on last year's progress
 and address several 
issues to better our chances at completing a reauthorization bill that will
 improve our nation's 
national service laws and, more importantly, a reauthorization bill that
 President Bush can sign into 
law.

	Today I am looking forward to hearing testimony about religious
 staffing rights as they 
pertain to the Constitution and whether the protection of religious staffing
 rights is prudent and 
good public policy for programs administered by the Corporation for National
 and Community 
Service.

	This is a matter of concern for some of us, because under the current
 national service laws, 
faith-based groups are denied the protections of the Civil Rights Act that
 would otherwise allow 
them to hire employees or accept participants on a religious basis while
 accepting federal funds.

	I also hope to review living stipends and other supplemental benefits
 provided to program 
participants by the Corporation.  Under current law, programs receiving
 AmeriCorps funding must 
provide full-time participants with a living stipend of at least $9,900 in
 which the Corporation 
provides a maximum of 85 percent of the living allowance, and the grantees pay
 at least 15 percent.

	Full-time participants that do not otherwise have health care coverage
 also qualify for 
health coverage in which the Federal Government covers up to 85 percent of the
 cost. While the 
federal share varies among the many national service programs, CRS reports
 that the average 
amount spent on health coverage per participant for program year 2002 for
 AmeriCorps grants was 
$893.

	In addition, child care is provided to full-time, low-income
 participants.  CRS reports that 
the average amount spent on child care per qualified participant for program
 year 2002 was $3,324.

	Finally, the Corporation provides an educational award in the amount
 of $4,725 to qualified 
participants who serve for a full term of service, which is 1,700 hours over a
 period of 10 to 12 
months.

	In light of the significant federal share of costs associated with the
 national service laws, 
there are some tough questions we need to ask about various ways to control
 spending while 
maximizing the federal contribution to national service programs:

	Should the Federal Government provide a living stipend for national
 service participants?

	If there is a living stipend provided, should it and other benefits,
 such as health coverage 
and childcare, be awarded based on financial need?

	Should there be a cap on the federal share of benefits provided to
 AmeriCorps participants?

	If programs are operating indefinitely with full-time, federally
 supported participants, 
should the Congress limit the number of years a grantee may receive funds to
 support full-time 
participants to help encourage long-term program sustainability with non
-federal funds?
 
	In light of the many issues and programs associated with the
 Corporation and the fact that 
the national service laws have not bee authorized since fiscal year 1996, this
 subcommittee has a 
lot of work to do.  I look forward to crafting legislation that builds on last
 year's progress and 
focuses on improved performance, accountability, and reforms at the
 Corporation.

	I would like to thank our distinguished witnesses for appearing before
 the subcommittee 
today.  I look forward to hearing your testimony and the unique perspective
 that each of you brings 
to this discussion.

	At this time, I would like to yield to my colleague from Texas, Mr.
 Hinojosa, for his 
opening statement.

WRITTEN OPENING STATEMENT OF CHAIRMAN PETE HOEKSTRA, SUBCOMMITTEE 
ON SELECT EDUCATION, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. 
HOUSE OF REPRESENTATIVES - SEE APPENDIX A


OPENING STATEMENT OF RANKING MEMBER RUBEN HINOJOSA, 
SUBCOMMITTEE ON SELECT EDUCATION, COMMITTEE ON 
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF 
REPRESENTATIVES

Mr. Hinojosa. Good afternoon.  I also want to join Chairman Hoekstra in
 welcoming you before 
our subcommittee today.

	The Corporation for National and Community Service provides
 opportunities for Americans 
of all ages and income groups to serve their communities through three groups
 and programs:  
Senior Corps, AmeriCorps, and Learn and Serve America.

	Volunteers for these programs serve with national and community non
-profit organization, 
faith-based groups, and local agencies to help meet local needs in education,
 the environment, 
public safety, homeland security, and other critical areas.

	I strongly support the national legislation and the Corporation in its
 administrative 
endeavors and want to recognize some of the successful programs within my own
 district in South 
Texas.

	Some of these programs include:  the Boys and Girls Clubs of Edinburg;
 the Center for 
Economic Opportunities; and the Hidalgo County Bar Association; the Nuestra
 Clinica del Valle in 
Pharr; Sunset Dreams in Donna; the Lower Rio Grande Valley Development Council
 in McAllen; 
and several others I could name.

	I would emphasize, though, that the strength of these programs resides
 in how much they 
are able to contribute towards bettering the lives of individuals at the local
 level. In my district, 
AmeriCorps volunteers are making positive contributions to the success of
 these programs, and I 
am sure that is true in districts throughout the country.

	Today we will hear from Dr. Lenkowsky, CEO for the Corporation, along
 with several 
outstanding witnesses-Dr. Carl Esbeck, Dr. Matthew Spalding, John Pribyl, and
 Richard Foltin.  
Welcome to all of you.

	Last Congress, the legislation reauthorizing our national service
 programs was carried 
through in a bipartisan manner.  Indeed, the measure passed by voice vote at
 the subcommittee and 
at full committee.

	I am committed also to replicating those efforts and to working with
 you, the chairman, 
members of the committee, and our Senate colleagues, to send a good,
 bipartisan reauthorization 
bill to the President.  National service is something that we all value.  I am
 confident that if we 
work in a bipartisan way, we can successfully reauthorize this important
 program.

	The war in Iraq shows us vivid images every day of the thousands of
 young Americans who 
proudly serve their country in uniform.  There are also thousands of men and
 women who want to 
contribute towards improving the lives of our citizens across America.  These
 programs will give 
them the opportunity to do so.

	I look forward to the testimony, and I yield back the balance of my
 time.

Chairman Hoekstra. Thank you, Mr. Hinojosa, and I am hopeful that we can
 duplicate the 
success that Mr. Roemer and I had last year in getting a bipartisan piece of
 legislation through the 
subcommittee and through full committee, and will look forward to working
 together in getting that 
done.

	To kick off that process, we will begin with the doctor, Dr.
 Lenkowsky.  I guess I do not 
ever treat you with enough respect, because I always call you Les, but doctor,
 welcome.

	As many of you know, Dr. Lenkowsky is the Chief Executive Officer for
 the Corporation 
for National and Community Service.  He was appointed to this position by
 President Bush and 
served as CEO since October 2001.  Prior to his appointment, Dr. Lenkowsky
 served the 
Corporation as a member of its board of directors since its creation in 1993.


Dr. Lenkowsky, welcome, and the floor is yours.

	Push the button, Les.  There you go.



STATEMENT OF LESLIE LENKOWSKY, CHIEF EXECUTIVE OFFICER, 
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE



Mr. Lenkowsky. Thank you very much, Mr. Chairman, Congressman Hinojosa,
 members of the 
Select Education Subcommittee.

	I am pleased to be here this afternoon to report to you on the
 operations of the Corporation 
for National and Community Service and to discuss the Bush administration's
 proposals for 
improving and enhancing its programs.  In a more profound sense, I am here and
 you are here 
because at this critical moment in our nation's history, millions of Americans
 are asking the same 
question: what can I do to help?

	While our country is rich in ways to answer this question, we are
 responsible for an 
important group of them, the programs of the agency I am privileged to lead. 
 These programs 
provide opportunities for some 2 million Americans of all ages and backgrounds
 to serve the 
United States.

	Working together, it is up to us now to make these programs more
 effective in helping our 
fellow citizens fulfill their desire to pitch in at a time of great national
 need.

	For nearly 40 years, the Corporation's programs have been enlisting
 Americans in full-time 
and part-time service, sometimes with a small living allowance in return, and
 sometimes with 
nothing more than the satisfaction that comes from doing a good deed.

	Presidents of both parties have endorsed and improved these programs,
 as have members of 
both parties in Congress.  Last year, all 50 governors backed their renewal;
 as did our country's 
most respected charities, including Habitat for Humanity, Teach for America,
 and Communities 
and Schools.

	In 2002, when he established the USA Freedom Corps, a coordinating
 council and White 
House office to help build a culture of service, citizenship, and
 responsibility that strengthens our 
country and offers help to those in need, President Bush made the programs of
 the Corporation a 
major component of it.

	Since several of you are new to the subcommittee, let me briefly
 describe these programs.

	In terms of the number of Americans involved, Learn and Serve America
 is our largest 
program.  Through grants to state education agencies, colleges, universities,
 and community-based 
groups like the YMCA, over 1.5 million young people learn the habits of good
 citizenship through 
volunteering related to their classwork.

	This year, we are giving special emphasis to programs that focus on
 American history and 
civics so that the rising generation of Americans can become better informed
 citizens while they 
serve their communities.

	At the other end of the age range is our Senior Corps, which is really
 three programs:  
Foster Grandparents, whose members work up to 20 hours each week with needy
 children; Senior 
Companions, who assist family caretakers to look after frail elderly
 relatives; and the Retired 
Senior Volunteer Program, which engages people 55 years of age or older in
 activities ranging 
from tutoring and mentoring to assisting police departments and other
 emergency service workers.

	All together, 500,000 Americans at over 70,000 different locations are
 part of Senior Corps, 
staying active and healthy after their working years by helping others.

	Our final program is AmeriCorps, which last year enrolled nearly
 50,000 people 17 years of 
age or older in assignments requiring up to 40 hours per week working to help
 meet unmet needs in 
education, health, public safety, the environment, and other areas.

	All of them were volunteers, but 75 percent received a full or partial
 living allowance from 
the Corporation, and most an award that could be used for further education or
 to repay student 
loans, and they received this not because they were needy, though many are,
 but because they had 
given up other ways of earning a living to do something substantial and
 valuable for their country.

	All served with front-line units in the armies of compassion,
 charities large and small, faith-
based and secular, helping build their capacities to better achieve their
 goals, including by 
recruiting other Americans to give a few hours each week.

	Each of these programs has a long record of accomplishment that we at
 the Corporation and 
many others are proud of, but as you know, the management of these programs
 has often not been 
one we could be proud of.

	Indeed, last November, because of a serious weakness in our controls
 over obligations from 
the National Service Trust, I had to take the drastic but necessary step of
 instituting a pause in 
AmeriCorps enrollments, which I was only recently able to lift.

	Since taking office, this administration has been pursuing a
 comprehensive management 
improvement agenda, emphasizing outcome-based performance measurement,
 financial 
transparency, re-engineered procedures, and accountability from Corporation,
 staff, and grantees.

	We have made a great deal of progress, symbolized by the clean opinion
 the Corporation 
received for the third consecutive year from its independent auditors. 
 However, we still have a 
great deal more to do, which I look forward to discussing with you.

	Management changes will not be enough to ensure that the Corporation's
 programs can 
respond effectively to the desire of Americans to serve.

	We also need to make changes in the laws establishing our programs to
 foster greater 
engagement of citizens in volunteering, make federal support for service more
 responsive to state 
and local needs, strengthen our efforts to make federal funding more
 accountable and cost 
effective, and provide great assistance to faith-based and secular community
 organizations.

	These were the principles and reforms for a Citizen Service Act
 proposed by President Bush 
almost exactly one year ago.  They were embodied in H.R. 4854, which as you
 noted, was 
approved by the House Education and the Workforce Committee on a bipartisan
 voice vote last 
June.

	Unfortunately, time ran out before the Citizen Service Act could be
 enacted.  As the 
President said in his State of the Union address, we hope that the Congress
 will complete the work 
it began last year on this long overdue set of improvements in the
 Corporation's programs.

	That would be the best way we can answer the question, ``What can we
 do to help?''

	My written testimony, which I have submitted for the record, goes into
 more detail about 
our proposals for the Citizen Service Act.  I look forward to discussing these
 further with you.


Mr. Chairman, that concludes my oral testimony.  I would now be glad to answer
 your questions.

WRITTEN STATEMENT OF LESLIE LENKOWSKY, CHIEF EXECUTIVE OFFICER, 
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE - SEE APPENDIX B

Chairman Hoekstra. Thanks, Les.

	Can you explain to me exactly what the current status is of the $64
 million that you have 
asked for?  I thought that with the money in the omnibus bill we would have
 sufficient money in 
the trust and we were going to be done with it.

Mr. Lenkowsky. We had hoped that would be the case, too, but unfortunately,
 some information 
was not submitted in a timely enough manner for you to take action on it in
 the Congress.

	The $64 million reflects a procedural program that the Office of
 Management and Budget 
discovered as they were reviewing the situation with our National Service
 Trust that I discussed 
earlier.

	Essentially, we had been handling our books in a way that led
 everybody to think we had 
surpluses.  As you may remember those surpluses were rescinded at various
 times by our 
appropriations committees.

	In fact, by using proper accounting procedures and recognizing our
 obligations properly, we 
would not have had as much of a surplus as people thought.

	So the $64 million, in effect, is to un-rescind some of the money that
 was rescinded, and we 
are going forward using proper accounting procedures so that this problem will
 not recur again.

Chairman Hoekstra. But you're still $64 million short in the account?

Mr. Lenkowsky. We need the $64 million to make up a shortfall in our national
 trust.

Chairman Hoekstra. Then how did you start re-signing students again?

Mr. Lenkowsky. We have a ruling from the Office of Management and Budget that
 said, ``The 
$100 million that you appropriated for the National Service Trust in the 2003
 omnibus 
appropriation act was designed to pay for educational awards,'' and as you
 know, the President has 
submitted a request to Congress not only for the $64 million as a supplemental
 to deal with this 
accounting issue, but also some other changes that would help us avoid future
 problems.

Chairman Hoekstra. Now, we have given $100 million in the trust in the omnibus
 bill, right?

Mr. Lenkowsky. Correct.

Chairman Hoekstra. Why does that not take care of the $64 million?

Mr. Lenkowsky. It does not because the $64 million is, in effect, for past
 obligations.  The $100 
million is for current obligations.

Chairman Hoekstra. For the new people you enlist?

Mr. Lenkowsky. The people we will enlist in 2003.

	Again, we did have money in the trust to cover those.  It was reported
 in the wrong way.  
The money had been rescinded in prior years by the Appropriations Committee.

	This was largely the result of improper accounting practices that had
 been in place going 
back to the beginning of the Corporation, which we discovered as part of our
 effort to remedy 
another problem in the National Service Trust.

Chairman Hoekstra. So the only way you are going to fix the $64 million is for
 a special 
appropriation for $64 million?

Mr. Lenkowsky. That is correct.

Chairman Hoekstra. Even though we have just given you $100 million?

Mr. Lenkowsky. That is correct.

Chairman Hoekstra. Why do you not take $64 million out of the $100 million and
 say it is done, 
and allocate new positions for the $36 million?

Mr. Lenkowsky. I think it is the Office of Management and Budget position
 that, barring some 

future enactment by this Congress, that the $100 million was intended for
 education awards for the 
50,000 AmeriCorps members that we are scheduled to enroll in 2003.

	The $64 million does not apply to that group, but un-rescinds the
 earlier year rescissions to 
put the trust in a proper balance.

Chairman Hoekstra. So what are you going to do when those young people want
 money out of 
that $64 million, and you do not have it?

Mr. Lenkowsky. We have ample money in the trust to cover the obligations we
 anticipated 
incurring immediately. We think that with the $64 million on hand, recognizing
 our obligations 
properly, the trust will be completely solvent.

Chairman Hoekstra. For how long will it be?

Mr. Lenkowsky. Long enough to handle all obligations that we have made under
 the trust.

Chairman Hoekstra. So then why do you need $64 million?

Mr. Lenkowsky. In effect, this is a bit like your bank account.  We had been
 accumulating funds 
for a rainy day.  We had surpluses in the trust.

	Those surpluses, though, appeared to be larger than they really were.

Chairman Hoekstra. Right.  You rescinded some of those.

Mr. Lenkowsky. We rescinded over $100 million of them.

Chairman Hoekstra. So do you need $64 million or not?

Mr. Lenkowsky. We do need $64 million to make good for the rescissions that
 were done.

Chairman Hoekstra. Yes, to make good for the rescissions.

Mr. Lenkowsky. There are incorrect obligations.

Chairman Hoekstra. Do you have the money to make good to the people that have
 worked, or 
who have earned the award?  If everybody who earned the award today walked in
 and said, ``I want 
it,'' do you have the money or not?

Mr. Lenkowsky. I would want to check with our finance people on that, but my
 understanding is 
we need to have the $64 million in the trust to pay for the obligations we
 have incurred in prior 
years.

Chairman Hoekstra. So you are not, you are still not solvent in that area?

Mr. Lenkowsky. Money was rescinded.  The President has requested $64 million.
Chairman Hoekstra. I know what he has requested.

Mr. Lenkowsky. That request is to make up a shortfall.

Chairman Hoekstra. You do have a shortfall?

Mr. Lenkowsky. There is a shortfall.

Chairman Hoekstra. Hmm.  I think that is an interesting decision on your part,
 and the part of 
OMB, to say go ahead and award 50,000 more without an agreement or even a
 leadership position 
that says Congress is going to give you $64 million.

Mr. Lenkowsky. Well, this is the opinion we have, which we will be glad to
 submit for the record.

Chairman Hoekstra. You have explained the opinion.  You have explained the
 opinion very, very 
well.  I just find it interesting.

Mr. Lenkowsky. I think what is behind this is while, hypothetically, everybody
 could claim their 
education award tomorrow if they wanted to, the trust of the matter is that
 people have seven years 
in which to claim those education awards, and we would expect that to occur
 over a seven-year 
period.

	So we think that getting the $64 million in place will ensure that out
 over that period we 
will have the adequate funds to meet all obligations.

Chairman Hoekstra. So we can give you $9 million a year for the next seven
 years and you would 
be happy?

Mr. Lenkowsky. Well, not if, as you suggested, Mr. Chairman, people start
 coming in at a higher 
rate than we expect.  I think it is the sort of thing we want to get done
 right now so we do not have 
to be asking these questions at future hearings.

Chairman Hoekstra. That is what I thought we were going to do, and I am
 tremendously proud of 
the work that you have done there.  You got a clean audit.  I believe it is a
 clean audit, right, maybe 
two or three in a row?

Mr. Lenkowsky. It is the third in a row.

Chairman Hoekstra. The third in a row means, that you have done a tremendous
 job in cleaning 
up the books there.

	This is that kind of dark cloud on the horizon, and it is kind of like
 you could have taken 

care of it by taking $64 million out of the $100 million that we gave you and
 saying, ``This covers 
our past transgressions, that is now behind us, and yeah, it is painful, but I
 only have $36 million in 
awards to offer this year, and if Congress wants to enroll more students or
 participants in the 
program, then there is going to have to be an additional appropriation to make
 that happen.''

	With the track record that you and the board have established at the
 Corporation for not 
keeping funny books, having it pass muster, I love what you are doing. 
 However, I do not agree 
with your decision on the $64 million.  I wish you would clean that off your
 books, bite the bullet, 
and as painful as that is for this year in enrolling students, recognize that
 this is the bite you have to 
take to get this issue off of the books and to have us stop talking about it.

Mr. Lenkowsky. Well, we had certainly hoped that that would happen in the 2003
 omnibus bill as 
well, but if I may use the phrase, "the fog of the appropriations process" at
 that end, led to a certain 
amount of confusion.

	We really did not have much to do with that, as you know.  That is
 something that goes on 
between the Office of Management and Budget and the appropriations committees,
 and I think that 
we have to abide by their decisions.

Chairman Hoekstra. Yes, but it is your decision as to whether you are going to
 transfer that $64 
million.

Mr. Lenkowsky. Well, I think the OMB ruling reflects the understanding, which
 seems fairly clear 
in the language accompanying our appropriation, that the appropriations
 committees expected us to 
use the money to enroll 50,000 members in 2003.

	That seems clear, and I think that is the basis of the OMB ruling.  So
 we are going to do 
that.

	So you might say that we are sort of caught between two different
 things here.  We have a 
congressional appropriation with accompanying language that directs us to
 enroll 50,000 members 
in 2003, and we have a shortfall that we have to cure, and we are intending to
 do that, and I think 
President Bush's request to Congress is meant to enable us to do this.

Mr. Hoekstra. Right.  Thank you.  Mr. Hinojosa.

Mr. Hinojosa. I am new to this committee, and I find it very difficult to
 understand how this 
Corporation, possibly prior to your coming in, could have used accounting
 procedures that would 
produce a $64 million shortfall.  That is a huge amount.  It reminds me of
 Enron and it reminds me 
of all of these awful things that happened last year.

	Can you briefly tell me what kind of accounting procedures and what
 kind of accountants 
would have allowed such a mess?

Mr. Lenkowsky. Well, I wish I could, but I must say that I have asked at OMB
 as well as had our 
own files searched, and I cannot tell you conclusively.

	The problem basically was that, as we requested funding for the trust,
 our request was based 
on how much we expected to spend out of the trust in any given year.  The
 proper procedure is to 
request funds based on your obligations, which in our case involves a
 calculation based on the 
number of AmeriCorps enrollments.

	We do not know conclusively whether or not the prior accounting method
 had received 
OMB approval.  We do have testimony from previous CEOs to our appropriations
 committee that 
seems to suggest that it had been approved.  On the other hand, OMB tells us
 they have no records 
that it has been approved.

	Rather than spend my time looking at the past, I want to look forward,
 get this thing done 
right, keep it done right, deal with any shortfalls that are a consequence of
 prior practices, and go 
on from there.

	Ultimately, we have to make sure, as I said in my opening statement,
 that we are in a 
position to respond to the desire of Americans to serve.

	I should point out, by the way, that during the whole period there was
 a lot of bad publicity 
about the Corporation, including stories saying we were not enrolling members. 
 Our on-line 
applications actually went up 15 percent.  People were still anxious to come
 into this program.

	I regard my responsibility to make sure that we clean up whatever I
 have inherited and go 
forward in a proper manner.

Mr. Hinojosa. So the clean audits that you have, apparently OMB is telling you
 that the 
accounting procedures are acceptable to them and to everyone, so that we won't
 have this 
happening anymore?

Mr. Lenkowsky. Currently, that is correct.  I do not want to get too deeply
 into the language of 
audits, though I do have a fair amount of experience with that.  We have a new
 chief financial 
officer who has been very instrumental in helping work through these problems.

	We believe now we have established procedures with regard to our
 accounting for the 
National Service Trust and are relating those accounts to the obligations we
 are making in 
AmeriCorps that will keep us on a solid footing going forward.

Mr. Hinojosa. Well, tell me this.  Was there any fraud, was there any
 embezzlement found in those 
$64 million that is causing this shortfall?

Mr. Lenkowsky. No, Congressman, there was not.  We have both the inspector
 general 
investigating and the GAO is investigating.  We will await the final outcome
 of that, but at the 
moment, no one has suggested to me that there was any fraud, embezzlement, or
 other illegal 
activities under way.

Mr. Hinojosa. Well, I feel like I'm looking at a situation with a fog that I
 just can't see through it, 
and I would reserve the right to come back and ask more questions, because I
 am not satisfied with 
the explanation on the $64 million shortfall.

	Last Congress, you and the chairman of your board, as well as
 President Bush, supported 
the bipartisan efforts that passed our subcommittee as well as the full
 committee. This Congress, 
you have fairly significant changes that may discourage similar cooperation on
 certain provisions, 
especially civil rights and religious rights issues.  Could you please
 elaborate on some of the 
specific reasons for your changes now and why they were not included last
 year?

Mr. Lenkowsky. When I testified last year, Congressman Scott, who was a member
 of this 
subcommittee at that time, asked me about this.  We had an interesting, if
 inconclusive, discussion.  
I made quite clear that we have a provision relating to religious liberty that
 is unique to the 
Corporation.

	There were discussions elsewhere in Congress about different
 provisions, and certainly the 
courts have been speaking on this, as well.

	We have continued to study this throughout the entire year, talking to
 members.  You will 
hear later in this hearing from a very distinguished lawyer we have consulted
 on these matters. We 
have concluded that both as a matter of law, but also to make our programs
 more amendable to the 
organizations that we are trying to reach, and particularly the faith-based
 organizations.  It is better 
to reduce the confusion by amending the provision we currently have.  It is
 known as Section 
175C.  We should amend this instead of relying on the civil rights law of 1964
 as well as the 
President's recent executive order in this matter, Executive Order 13279.

	We believe this provides full coverage with respect to the existing
 standards of law and it is 
also consistent with the law in other programs of the Federal Government.
 Therefore, it will be less 
confusing to potential grantees and more likely to be helpful to our reaching
 out to the small 
grassroots faith-based groups, like some of the ones you mentioned, that we
 want to reach.

Mr. Hinojosa. Are you prepared for the division that this is going to cause in
 our committee?

Mr. Lenkowsky. Well, we would hope there would not be a division.

	We stand strongly behind the civil rights laws, the existing civil
 rights law.  The civil rights 
laws are a great monument of our democracy.  We believe they provide more than
 adequate 
protection for individuals as well as balance that with protection for
 organizations, religious 
organizations in this particular case, and we support those completely, and
 think that is also 
reflected in the President's executive order.

	So we hope that, at this point in our history, that support would not
 be divisive.

Mr. Hinojosa. Well, Les, if you don't have evidence of how the $64 million
 shortfall occurred, 
what evidence do you have that faith-based organizations are experiencing
 confusion or having 
difficulties?

Mr. Lenkowsky. We have heard that faith-based organizations are concerned
 about this Section 
175C in our program.  They are not quite sure what it means.  Some are afraid,
 as you know, as you 
will hear testimony later.

	Part of the impetus for clarification in this area is the concern on
 the part of potential 
grantees that there would be, through the regulatory process, undue
 involvement with the religious 
liberties of those organizations.  We have heard from constituency groups who
 tell us that 175C 
creates that fear.

	We do not think it is necessary to create it.  To reiterate it, we
 think the civil rights laws, as 
they are currently interpreted through our courts, provide the kind of
 protection that both 
individuals want against being discriminated against and organizations need in
 order to maintain 
their character, in this case, their religious character.

Mr. Hinojosa. Mr. Chairman, my time is up, and I will stop at this point.

Chairman Hoekstra. Good.  Thank you.

	Just to clarify, Mr. Hinojosa, in the late 1990s, there were a number
 of cases of fraud and 
abuse within the department, but I believe there were also problems in the
 trust with tracking who 
was eligible for what amount and who would actually pull out their dollars and
 those types of 
things, but those issues are a separate issue from the $64 million question. 
 They are two different 
things.

	The waste and the fraud within the Corporation and some of the lack of
 information within 
the trust, existed, and they were documented; but the $64 million problem is
 something that came 
out once they applied proper accounting procedures to the trust to figure out
 exactly what potential 
liabilities might be.

	You asked if there had been fraud, and there had been, but it does not
 relate to the $64 
million.

	All right.  Mr. Porter.

Mr. Porter. Thank you, Mr. Chairman.

	Also being a new member, I realize this situation is an A through Z
 problem, and I am 
coming in the middle at P and Q, so bear with me as I ask you a couple
 questions.

	Regarding the $64 million, and I know that we are spending a lot of
 time on this, but 
explain to me again how you determined this problem, and how it came about? 
 Because I am not 
really clear on that at this point.

	In fact, is it an ongoing problem over the last decade, or is it
 something that has just 
happened?

Mr. Lenkowsky. We believe it is an ongoing problem that goes back pretty much
 most of the 
decade, since the Corporation was started.

	Each year when we request, and the President requests funds for the
 Corporation, there are 
two parts to the request for AmeriCorps.  One part is for program funds that
 would enable us to 
enroll AmeriCorps members.  The other part is for an appropriation to the
 trust.

	The practice we had been using was requesting as much for the trust as
 we felt we needed to 
meet the expenditures of the trust in that particular year.

	The official way of doing it would probably be a better way to
 characterize it.  The way to 
do it is to request in funding from the trust the amount you expect to
 obligate that year, even if all 
of it will not be expended that year, which is true in our case.

	As I mentioned earlier, a member of AmeriCorps has seven years after
 completing his or 
her service to claim an education award.

	So we have been using annual outlays.  OMB feels we should properly be
 using amounts 
obligated.  We have accepted that.  That will mean in each particular year we
 will be requesting 
more for the National Service Trust than we have in prior years.

Mr. Porter. Excuse me.  So what you are saying is that you are going to
 establish a reserve?

Mr. Lenkowsky. That is correct, and we had been building a reserve, anyway.

Mr. Porter. What you were talking about earlier, that may cover you in the
 short term, but you are 
trying to build a larger reserve?

Mr. Lenkowsky. Well, it will cover us.  It will balance out over the seven
 years so that we should 
have in the trust enough to cover our expected obligations over the seven-year
 period.

Mr. Porter. How can we be assured this will not happen again?  Would you
 suggest, or shall we 
suggest some standards to be put in place to prevent it from happening again?

Mr. Lenkowsky. Well, I think certainly we would be very open to doing that.

	I think the critical standard is to recognize that we have put in a
 number of procedures in 
place already, which again I will be glad to submit for the record.

	The critical one is to make sure that the chief financial officer has
 to approve, and has to 
certify that there are funds for the trust before we start making awards for
 AmeriCorps.  I think that 
is a fairly straightforward procedure.

	It is so straightforward that, frankly, I am amazed it did not go into
 place before, but as I 
said, I ca not really explain a number of things that happened before.  All I
 can do is fix them and 
get them done right.

Mr. Porter. We expect you should have this crystal ball so you can answer
 things that happened 
before.  
	I appreciate your answer.

	Thank you, Mr. Chairman.

Chairman Hoekstra. Mr. Ryan.

Mr. Ryan. Thank you, Mr. Chairman.

Chairman Hoekstra. Welcome to the subcommittee.

Mr. Ryan. Glad to be here.

Chairman Hoekstra. All new faces surround me.

Mr. Ryan. That is right.  It'll keep you young, Mr. Chairman.

	Thank you very much for showing up today.  I'm also new and may ask a
 few elementary 
questions, but I hope that you can bear with us.

	Looking through your testimony and listening a little bit to it, under
 the National and 
Community Service Act, there's a part near the bottom of your testimony that
 says you're going to 
be getting tough on prohibited political activity.

	Can you just kind of let me know what was going on that is not going
 on anymore, or 
maybe is still going on but will not be happening anymore?

Mr. Lenkowsky. A lot of this was in the past, as the chairman suggested.  We
 have very stringent 
restrictions on AmeriCorps members, some of which actually are tougher than
 the rules governing 
501C non-profit organizations.

	For example, AmeriCorps members on AmeriCorps time are not allowed to
 engage in voter 
registration efforts, even non-partisan ones.  That is simply a rule that we
 have adopted.

	As you probably know, non-profit organizations are allowed to do that,
 as long as it is non-
partisan.

	We want to continue to enforce this.  In the past, these rules have
 been administrative in 
nature.  We really want to make them part of our regulations, and to the
 extent necessary, part of 
the existing law.

	We think that this is a program, and getting to Congressman Hinojosa's
 point, this is a 
program that deserves strong bipartisan support, and to do that, we want to
 make sure there is not 
the slightest suspicion of a doubt that any of our AmeriCorps or Senior Corps
 or Learn and Serve 
members are engaged in any sort of partisan political activities.

Mr. Ryan. Thank you.  So no voter registration?

Mr. Lenkowsky. That is our existing rule.  That is correct.

Mr. Ryan. Okay.  Also, I had an opportunity, down by the earmarked section,
 you talked a little bit 
about the organizations that do receive earmarks:  Teach for America, Points
 of Light Foundation, 
and America's Promise.

	And then at the bottom, it says, ``Limit the use of earmarking funds
 through the 
appropriations process.''

	Can you talk to me a little bit about what, in a general sense, in a
 nutshell, what each of 
those do, maybe what their level of funding is now, and why it's going to be
 capped or limited or 
whatever your plans are for it?

Mr. Lenkowsky. The Points of Light Foundation has been a long-time partner of
 this organization, 
going back to our earliest days under the first Bush administration.

	The Points of Light Foundation was contained in, created in the same
 law, and it provides a 
variety of things to help promote volunteering in the United States. The one
 that you are perhaps 
most familiar with would be the support of the national network of volunteer
 centers.  There are 
such centers all over the country, and they provide a way by which people in
 your community and 
many other communities who want to volunteer can find organizations that are
 looking for 
volunteers, and that is a principal activity of the Points of Light
 Foundation, along with others.

	America's Promise was created a few years later, in the middle of the
 1990s, following the 
bipartisan Presidential Summit on Volunteering and National Service that
 occurred in Philadelphia.

	You may recall that General Colin Powell was the chairman of that, and
 out of that, to 
implement the work of the summit, came America's Promise.  It focuses on
 mobilizing volunteers, 
again, in communities throughout the United States to help young people.

	It has a list of five promises to young people, that every young
 person should have a safe 
place to go after school and so on, and America's Promise is a vital link in
 the nation's voluntary 
infrastructure trying to assist the realization of those promises in our
 communities.

	Teach for America also is one of our oldest national service grantees
 and one of the most 
successful.  What Teach for America does is recruit students from some of our
 nation's finest 
colleges and universities, gives them some training, and then places them in
 underserved school 
systems, including in the Rio Grande Valley, where they will spend a year or
 two in public schools 
teaching students who are anxious to get an education.

	It is one of the most heralded innovations in the non-profit world
 over the last decade, and 
this particular earmark in this year's budget is designed to deal with
 something I believe we will be 
talking about, which is to promote sustainability on the part of these
 organizations.

	Teach for America receives 15 times as many applications, I believe,
 as it has spaces for.  
More students, the story goes, at Yale University went into Teach for America
 last year than went 
down to Wall Street.  That tells you something about Wall Street, too, I
 expect.

Mr. Ryan. Right.

Mr. Lenkowsky.  But they are poised to grow.  They want to triple the number
 of people in the 
program, and this is meant to help them as part of their expansion plans,
 while also maintaining the 
ratio of private money to our money.

	They raise significant amounts of private money, so you might think of
 this as a kind of 
investment, a venture capital kind of investment in a program that has proven
 itself.  Their teachers 
already teach hundreds of thousands of students, and I can testify firsthand
 to the quality of them, 
since some of my best students have gone into teach for America.

Mr. Ryan. Thank you very much.

	So the Points of Light, just so I can try to keep this organized, the
 Points of Light is more of 
a promotional volunteer piece?

Mr. Lenkowsky. Network.

Mr. Ryan. Network.  You use the Internet, I would imagine.

Mr. Lenkowsky. That is right.

Mr. Ryan. To try to recruit volunteers.  The American Promise is a way to
 maybe mobilize some 
of these volunteers?

Mr. Lenkowsky. Yes, it is, particularly youth-serving ones.

Mr. Ryan. Youth-serving ones, and then the Teach for America is obviously
 geared towards 
recruiting people to come and teach in under-served areas?

Mr. Lenkowsky. That is correct.

Mr. Ryan. You said there was a ratio of private-public money for the Teach for
 America?

Mr. Lenkowsky. They have raised substantial amounts of public-private money. 
 They have a lot 
of very generous supporters, a number of major foundations, plus they get
 support from local 
school systems where they are operating.

	The earmark in this year's appropriation does not change the ratio of
 non-corporation 
dollars to corporation dollars at all, but it is meant to get them on a faster
 growth path.

Mr. Ryan. Mr. Chairman, if you don't mind, one final?

Chairman Hoekstra. All right.

Mr. Ryan. Thank you.  As far as the appropriations and the earmarks, what are
 you going to be 
asking for each of these?  You said they wanted there to be an increase for
 Teacher for America, is 
that correct, and if so, what are you asking for the other two?

Mr. Lenkowsky. I do not have our appropriations request in front of me, but I
 believe we have 
requested $10 million for the Points of Light Foundation; $7.5 million for
 America's Promise, and 
$3 million for Teach for America, but we will double check those to make sure
 we have the 
accurate figures in the record.

Mr. Ryan. Are those increases over the past year?

Mr. Lenkowsky. Well, Teach for America has not been an earmark.  Well, it was
 a $1 million 
earmark before, so it is somewhat an increase, but again, as part of a growth
 plan for Points of 
Light Foundation and America's Promise.  Those are the same numbers that we
 requested in the 
past.

	I would have to double check, but I believe the 2003 appropriation
 provided 5 million for 
America's Promise, although the President's request had been 7.5 million and
 that is what we again 
request for 2004.

Mr. Ryan. Okay.  Thank you very much.  Thank you, Mr. Chairman.

Chairman Hoekstra. Thank you.  Let us not create too many earmarks, okay?

Mr. Lenkowsky. That is not our intent.  As you know, Mr. Chairman, one of the
 most important 
things we do is our competitive process, and when I spoke about re-engineering
 procedures, that 
has been a lot of our focus.

Chairman Hoekstra. I think in some of the other programs there are areas where
 we got too many 
earmarks or too many programs that have become authorized. They lose some of
 their edge and 
some of their vitality.

Mr. Lenkowsky. We agree.

Chairman Hoekstra. Yes.  Mr. Burns.

Mr. Burns. Thank you, Mr. Chairman.

	Like so many others, we need a bit of education as we move through
 this process.

	Help me understand how the Corporation establishes full-time
 participant slots.  What is the 
total number authorized, and then what is the total number filled?

Mr. Lenkowsky. We have a grant process each year. We are at the beginning of
 the grant process; 
and organizations, charities, over 2,000 of them, will apply.

	There are several different routes by which they can apply.  Some will
 apply directly to us 
nationally, some will apply through our state commissions, and some are kind
 of a hybrid.  They 
apply in the first instances to the states and then the states apply their
 best ones for national.

Mr. Burns. Can we address just AmeriCorps?

Mr. Lenkowsky. Yes, those are all AmeriCorps programs.

Mr. Burns. Okay.

Mr. Lenkowsky. A reporter once referred to our organization as a dinky little
 organization by 
federal budget standards.  Perhaps we are that, but we are very complex, which
 is part of the reason 
a lot of people have difficulty quite understanding what we are doing, and
 that is one thing we are 
trying to fix.

	In terms of your question, the division of full-time, part-time,
 reduced part-time is really 
driven in the first instance by the applications of our grantees, so they will
 say, for example, that 
we need so many full-time members and so many part-time members to accomplish
 our objectives.  
It might be tutoring kids or recruiting tutors for kids or doing homeland
 security or anything else.

	We will review this in light of the case they make for it, or this
 will occur at the state level, 
and we will reach judgment as to whether they have made a good case for the
 number of slots and 
the kinds of slots they are requesting.

	That is also obviously affected by the amount of money available.  A
 full-time slot costs 
more, for obvious reasons, than a part-time slot or education award only,
 where the only 
expenditure from the Corporation is a commitment for an education award and a
 very small 
administrative fee.

	So we will, in our grant review process, try to match up how our
 grantees define their needs 
in terms of the kinds of slots they would like with the allocation available
 in the budget.

	One of the things that is part of the Citizen Service Act request is
 to take this education 
award only program, which now accounts for about one out of four AmeriCorps
 members, and 
move it out of our demonstration authority, which is where it began.  It was
 an innovation and we 
tested it and it works extremely well.  We would like to move it into our
 general AmeriCorps 
program authority.

	The reason for that is if you are running an organization that wants
 both regular 
AmeriCorps members and education award only AmeriCorps members, we now make
 you apply 
twice, once for each competition.

	What we would really like to do is have you look at the needs of your
 organization, submit 
one application, and tell us what you want, and then, as I suggested before,
 we would review it in 
terms of the merits and against what is available in the budget, and make an
 award.

Mr. Burns. What does your budget establish as far as an upper limit for
 AmeriCorps or for full-
time?

Mr. Lenkowsky. Right now, we do not have a cap per full-time member in
 AmeriCorps.  In the 
Citizen Service Act that was passed by this subcommittee and the full
 committee last year, for the 
first time we established a cap of $16,000 for a full-time AmeriCorps member,
 not including our 
education award.

	That cap will cover such things as the living allowance, health care,
 child care, 
administrative support, training, a very important part of what we do, since,
 unlike traditional 
volunteers, AmeriCorps members are going to be engaged, if they are full time,
 35 to 40 hours a 
week.  It gives us time to give them training in methods of tutoring or things
 like that, and that is 
part of the program budget, as well.

Mr. Burns. What I am trying to get at is the number of total volunteers, total
 participants, and full-
time equivalents.  I realize we have some part-time, some full-time, perhaps
 some reduced, and 
different types of categories.

	But in the budget that you deal with on an annualized basis, how many
 volunteers, full-time 
equivalent participants would your budget support?

Mr. Lenkowsky. The 2003 appropriation will support 35,000 full-time equivalent
 members, 
roughly, in AmeriCorps.

Mr. Burns. What is the current level?

Mr. Lenkowsky. That is the current level.

Mr. Burns. That is the current level?

Mr. Lenkowsky. Right.

Mr. Burns. So you are saying it could not go above that?

Mr. Lenkowsky. Well, in 2004, the President has requested 75,000 slots, which,
 again, I would 
need to double check the figures, but I think that would be slightly in
 excess, in the 40 to 45,000 
range for full-time equivalents, because we are also increasing the percentage
 devoted to the 
education award only program.

Mr. Burns. Over the past three, four, five years, have you experienced slots,
 actuals, higher than 
what you were able to support financially?

Mr. Lenkowsky. Oh, absolutely.  That is exactly why we had to put in a
 request.

Mr. Burns. That is why we are in the middle of a shortfall?

Mr. Lenkowsky. Right.  What happened was, in the year 2000, awards were made
 for somewhere 
in excess of 65,000 slots, not full-time equivalents.  That was about a 125
 percent increase over the 
prior year.

Mr. Burns. So 65,000 slots, but they were not all full-time?

Mr. Lenkowsky. Right.  But it was a substantial increase.

Mr. Burns. Right.

Mr. Lenkowsky.  This increase really put a lot of strain at a time we were
 budgeting for no 
particular change.

	Now, because the demand for our programs was not as great as it became
 after 9/11, so 
immediately the actual enrollments were slightly above the budgeted number,
 not a lot, despite the 
fact that we had made awards significantly above the budgeted number.

	But as we started going into 2001 and 2002, people were coming in to
 serve.  In effect, we 
had left the door open, and initially, not many more people came through than
 we expected, but 
partly because of the great surge in enthusiasm to serve our country, more
 people started coming in, 
and that is when we realized we needed to put a pause in place.

Mr. Burns. Right.  Certainly, we appreciate the volunteers and the people
 wishing to serve in this 
area, but you have a challenge of trying to pull together a budget that
 supports a certain number.

Mr. Lenkowsky. That is correct.

Mr. Burns. My final question is, "How are you now managing that process, where
 certainly the 
need is there?"  We have a potential group of individuals who wish to be of
 service to America, we 
would hope to utilize their talents, but we still have to make sure that we
 live within certain 
constraints?

Mr. Lenkowsky. That is correct.  Prior to the past few months, the folks who
 were making the 
awards for AmeriCorps slots, the program staffs, were not required to check
 whether or not as they 
made those slots they were actually creating obligations in our trust fund
 that went beyond what the 
trust fund could sustain.

	That is why I suggested that it was a really simple fix to get this
 done right, and why it had 
not been done before, I do not know, but we have a list of procedures,
 including timelier 
notification of obligations, commitments to people to serve in AmeriCorps,
 than we have done 
previously that are now going into place, and we think they will prevent a
 recurrence of that 
problem.

Mr. Burns.  You are confident those controls are in place?

Mr. Lenkowsky. I am as confident as I can be until I have actually tried them. 
 As you know, you 
put the procedures in place, you try them, and then if we have to fix them, we
 will fix them again.

	But I am very confident that we have the right procedures in place
 now.

Mr. Burns. Thank you.  Thank you, Mr. Chairman.

Chairman Hoekstra. Mrs. Davis, do you have any questions?

Mrs. Davis. I'm going to pass now, Mr. Chairman.

Chairman Hoekstra. You are going to pass?  All right.

	Les, thank you.  I think we are going to go to the second panel.  I
 think there are a number 
of questions that members may still have.  I am sure that if they are
 submitted to you in writing, 
you will be more than willing to answer those.

	As we work and go through the reauthorization process, we may just
 have some meetings 
where we invite you down to sit down, on a bipartisan basis, to talk about
 some of these questions 
and these issues as we try to pull this together.

Mr. Lenkowsky. Thank you very much, Mr. Chairman. We would be delighted to do
 so.

Chairman Hoekstra. Great.  Thank you.

	I would then like to ask the second panel to move forward, and as we
 are doing that, let me 
introduce the second panel.

	Rumor has it that we may have some votes in a few minutes.  It is
 musical chairs up there.  
Find the right one. But we will get started.

	The first member of our second panel is Professor Esbeck.  He has been
 a faculty member 
at the University of Missouri since 1981.  He also has practiced law in New
 Mexico. He has done a 
number of things.  He has been Senior Counsel to the Deputy Attorney General
 and Director of the 
Task Force on the Faith-Based and Community Initiatives in the U.S. Department
 of Justice.

	Professor Esbeck has written numerous articles and essays on the
 issues of church-state 
relations and civil rights in addition to serving on several advisory boards
 and committees in those 
areas.

	Welcome.  Thank you for being here.


Mr. John Pribyl.  Mr. Pribyl has been the Director of the Senior Companions
 Program of 
the Lutheran Social Service of Minnesota since 1974.  In addition, he
 currently serves as the 
Director of the Foster Grandparents Program.

	He has previously served as the President of the National Association
 of Senior 
Companions Program Directors and has been active in numerous facts of the
 community, including 
the school board, his church, and other volunteer activities.

	Welcome.  Thank you for being here.

Dr. Matthew Spalding is the Director of the Heritage Foundation's new Center
 for American 
Studies.  Previously, he served as the Director of the foundation's Lectures
 and Educational 
Programs Division and as manager of the academic programs.

	He serves in numerous other capacities, including as an adjunct fellow
 at the Clairmont 
Institute, a national board member of the Fund for the Improvement of Post
-Secondary Education, 
and as a contributing editor to several publications.

	Welcome.  Good to see you here.

	Then we have Mr. Richard Foltin.  Mr. Foltin is the Legislative
 Director and Counsel for 
the Government and International Affairs Office of the American Jewish
 Committee. He serves as 
the co-chair of the ABA's Section on Individual Rights and Responsibilities
 Committee on First 
Amendment Rights, and is a member of the National Council of Churches
 Committee on Religious 
Liberty.

Mr. Foltin is also a faculty member at the Florida College of Advanced
 Judicial Studies.

	That is our panel.

	Welcome.  Thank you for being here.

	I ask each of you to limit your statements to five minutes.  Your
 entire statements will be 
submitted for the record.

	Professor Esbeck, we will begin with you.

STATEMENT OF CARL H. ESBECK, ISABELLE WADE AND PAUL C. 
LYDA PROFESSOR OF LAW, UNIVERSITY OF MISSOURI, COLUMBUS, 
MISSOURI 


Mr. Esbeck. Thank you, Mr. Chairman and members of the subcommittee.

	The Acts that are before you for reauthorization seek to capitalize on
 the principle of 
volunteerism.  When the challenges are enormous but spirits are high, the
 voluntary principle 
manifests great power to do great good.

	But these Acts, at least in their original construction, are in one
 crucial respect not 
consistent with the voluntary spirit.  I speak here of Section 175C, where the
 government's hand 
falls unevenly, regulating some but not others.  The section prevents
 religious organizations from 
staffing on a religious basis.

	Now, our government is committed to religious pluralism, and that is
 commendable, but the 
government is inconsistent in implementing this commitment, and in two
 respects.

	Let me illustrate the first one by a reference to an environmental
 group.  An environmental 
group is every bit as much committed to a cause or mission, and it can hire
 and fire people based 
on devotion to environmentalism, but recollection groups do not have that kind
 of privilege 
because of the restriction of 175.

	The government lacks consistency in its commitment to religious
 pluralism in a second 
respect, and this one perhaps is the more important.  Some religious groups
 are eligible for 
assistance, but not others, and let me illustrate that, as well.

	We have, for example, Reform, Conservative, and Orthodox Jewish
 charities, but it is only 
the Orthodox group which are not eligible under these Acts.  Why?  They are
 not eligible because 
they staff on a religious basis.  That is not pluralism.

	Similarly, we have liberal and mainline and evangelical Protestant
 groups, but only the 
evangelical groups, who staff on a religious basis, are not eligible under
 these Acts.  That is not 
pluralism.

	That Section 175 is inconsistent with religious pluralism has been
 obscured by a clever 
slogan, and the slogan, I am sure you have heard it or read it, and goes
 something like this:

	"Well, to repeal 175 is to throw the door open," and here is the
 slogan, "to government 
funding of religious discrimination."

	Well, that is a big deception, and it is repeated again and again and
 again, and those who do 
not know the principles of law or are sloppy in their reasoning begin to
 believe it.

	So let me walk you through why it is a deception.

	In my longer, written testimony, I begin with Congress's recognition
 of freedom for 
religious staffing rights dating back to Title VII of the Civil Rights Act of
 1964, and as you know, 
Title VII provides for faith-based organizations to continue to staff on a
 religious basis.

	The amendment that made that possible was introduced by Senator Sam
 Ervin.  You 
recognize Ervin, because he became famous during the Watergate hearings, a
 Democrat from North 
Carolina, recognized by his Senate colleagues at the time as something of a
 constitutional scholar, 
and justly so.

	In introducing his amendment, which passed, he said the following:


	``This amendment is to take the political hands of Caesar off the
 institutions of God, where 
they have no place to be.''

	You see, Senator Ervin appreciated that his amendment reinforced, and
 buttressed, the 
separation of church and state.  It did not undermine it.  It was taking
 Caesar out of the regulatory 
mode.

	The government does not establish religions by leaving it alone.  That
 is common sense, 
and he saw that.

	Now, Title VII has become the gold standard, and that is proper.  It
 has become the standard 
not because it dates all the way back to 1972 in its present form, but because
 it is about freedom, 
and because it is about religious pluralism, and when it was challenged in the
 courts and it went all 
the way to the U.S. Supreme Court in the Amos case in 1987, the religious
 hiring rights provision 
was upheld, and by a unanimous, or nine/zero court.

	Now, you are thinking, well, but perhaps Amos is somewhat different
 because it does not 
involve government funding, but under the Acts that are to be reauthorized
 here, the purpose of the 
government's grant funding is to host and train volunteers, so the applicable
 rule of law is found in 
cases like Rendell-Baker v. Cohen, a Supreme Court case in the 1980s.

	Let me briefly describe Rendell-Baker.  We had a private school. 
 Ninety to 95 percent of 
the funding of the students in that school was from the government, but when a
 teacher was fired 
and then challenged it, the Court said it was not the government that had
 dismissed the teacher, it 
was the school, and the presence of overwhelming government funding did not
 change that fact.

	Well, the parallel is pretty obvious to our situation here.  A faith
-based organization gets 
funding to do volunteerism, or to host AmeriCorps members and participants,
 and that then does 
not make all that that faith-based organization does, in particular its
 employment practices, the acts 
of the government.

	So it is wrong, it is just false to say that when the government funds
 a faith-based 
organization to do volunteerism, it is also funding religious discrimination.

	So I call on the Congress to be consistent in its commitments to
 religious pluralism.  Stop 
funding some religious groups and not others.  All that we want here is a
 complete religious 
freedom to continue to hire those of like-minded faith.  No group ought to be
 confronted with the 
cruel choice of either recanting its faith or to be denied at least the
 opportunity to compete for grant 
funding.

	Thank you.


WRITTEN STATEMENT OF CARL H. ESBECK, ISABELLE WADE AND PAUL C. LYDA 
PROFESSOR OF LAW, UNIVERSITY OF MISSOURI, COLUMBUS, MISSOURI - SEE 
APPENDIX C
	

Chairman Hoekstra. Mr. Pribyl.

STATEMENT JOHN PRIBYL, SENIOR COMPANIONS AND FOSTER 
GRANDPARENTS DIRECTOR, LUTHERAN SOCIAL SERVICE OF 
MINNESOTA


Mr. Pribyl. Thank you, Mr. Chairman, and members of the committee.

	I am here today to talk specifically about the Senior Corps programs
 of Foster Grandparents 
and Senior Companions, and I will focus my remarks on some specific
 innovations that we have 
been able to try in Minnesota with some state funding and some local funding,
 and we feel that 
those demonstration things have had some significant impact on our programs, and we would like 
to see them incorporated into the Act.


Dr. Lenkowsky already talked about the three Senior Corps programs, and I
 would just like 
to reinforce the impact on the society from those programs is immeasurable. 
 Now, as we look at 
reauthorizing these time-tested programs, it is time to make some minor
 adjustments to keep them 
relevant as we approach this new phenomenon in our society of the aging of the
 baby boomers.

	My involvement in service began early in my life as I served in the
 Catholic priesthood for 
four years, from 1970 to 1974.  After much thought and prayer, I made a
 difficult decision to take 
another career path, which ended up in my developing and implementing the
 original Senior 
Companions grant in Minnesota back in 1974.

	I currently now serve as the Senior Companions director and the Foster
 Grandparents 
director, operating under the sponsorship of Lutheran Social Service.  In this
 position, I have had 
the opportunity to see firsthand the development and the growth of the
 programs and how this 
simple structure gives older adults the opportunity to give back to their
 community.

	As I said, we have had some chances to do some demonstration
 activities to find out what 
are the barriers that limit recruiting in the current legislation, and they
 also end up limiting the 
volunteer participation.

	So first of all, we would very much support the lowering of the age
 from 60 to 55 for Foster 
Grandparents and Senior Companions as the current law already states for the
 RSVP volunteers.

	Secondly, we would like to see you remove the income eligibility
 limitations for Senior 
Companions and Foster Grandparents.

	There are many challenges in encouraging people that are retired to
 volunteer, especially in 
the two programs with stipends.

	When these programs started, the poverty rate among seniors was 33
 percent, and the 
stipend amount was roughly 71 percent of minimum wage.  As a result, many
 people that 
volunteered when I started with this program looked at it as more of a job to
 earn money, because 
the stipend was a higher amount in relationship to the minimum wage at that
 time.

	Today, the stipend is about 50 percent of minimum wage, and the
 poverty rate among 
seniors is around 11 percent instead of 33 percent, so today if people come in
 that really 
desperately need the money, I think I have an ethical obligation to tell them
 to go down and get a 
job at Wal-Mart and be a greeter and get minimum wage, or work at a fast food
 chain, because they 
are basically going to get more money and it is going to help them in their
 very low income 
situation.

	The stipend today is more of an incentive to encourage a regular
 commitment of time from 
people.  I see that as a real asset.  It is not just to get people out of
 poverty, as it was 30 years ago.

	As a result, when the stipend is lower, programs are facing a major
 recruiting problem.  
During the last fiscal year, approximately two-thirds of the Senior Companions
 programs and 
Foster Grandparents programs had a difficult time filling their allotted slots
 of volunteers.  They 
could not find enough people, and basically, that was because of the income
 guidelines.

	There have been several ideas proposed to fix that problem.  One was
 to raise the income 
guidelines to a higher percentage of poverty.  Another one was to look at
 guidelines from other 
government programs.  Another is to maybe allow a certain percentage of people
 to be over the 
income guidelines.

	My suggestion is to support what the administration recommended last
 year, to remove the 
income criteria completely and put the responsibility on the individual
 projects to continue to focus 
on recruiting low-income older adults and make that determination based on the
 cost of living in 
the area where the program is funded.  The stipend then is based on somebody's
 commitment of 
time and not simply on what their income happens to be.

	Since 1997, the Minnesota Senior Companions and four Foster
 Grandparents programs 
have had the opportunity to test this very idea with this demonstration grant
 of non-federal dollars.  
We set up an option for volunteer of any income to come and serve in our
 Senior 
Companions/Foster Grandparents program.

	Volunteers who wanted to receive some financial reimbursement had to
 commit to at least 
40 hours of service, 10 hours a week.

	After conducting this demonstration for five full years out of the
 900-plus volunteers we 
have in our Senior Companions/Foster Grandparents program, over 75 percent
 meet the current 
income criteria, and my point is, we have been recruiting without any income
 guidelines, and yet 
75 percent still meet those income guidelines; so we can and we do focus on
 lower income 
volunteers.

	The best part is, now, the people in our program do not have any
 stigma on their foreheads 
saying that ``Hey, I am a Foster Grandparent because I am low income.''  ``I
 am a Foster 
Grandparent because I make a major commitment of time,'' and I think that is a
 better 
representation, and it does not classify people at all.

	Furthermore, if we did not have that flexibility over the last five
 years, we would not have 
been able to find enough seniors to provide the service to the growing list of
 children and older 
adults that have specific needs and want to be in program.

	You know, there are many programs that provide this stipend, and they
 are not means tested 
at all, and I just do not see why the Senior Companions and Foster
 Grandparents programs today, 
in 2003, should have that means testing part of it.

	Thirdly, I would have you look at promoting innovations in
 programming, looking at more 
flexible types of service, and I will sum up with the following propositions:
 allow a Foster 
Grandparent to serve with more than one child, and provide an incentive for an
 RSVP volunteer 
who wants to contribute a significant amount of time.

	Finally, I would give you one example.  We have got a volunteer leader
 that is currently 
allowed in our Senior Companions program.  Arlene is one of our volunteer
 leaders in Minnesota.  
She not only serves her clients, but she also provides leadership and support
 to new volunteers and 
helps them in the introductory process to their new clients.  She has a way
 about her to make 
everybody feel at ease.

	Hopefully, this leadership option would be available in developing
 more flexible 
programming to be more attractive to those baby boomers that are coming into
 the programs today.

	Thank you very much for the chance to testify. Thank you very much for
 the opportunity to 
talk to you about programs that I really feel can make a difference in our
 society.

WRITTEN STATEMENT JOHN PRIBYL, SENIOR COMPANIONS AND FOSTER 
GRANDPARENTS DIRECTOR, LUTHERAN SOCIAL SERVICE OF MINNESOTA - SEE 
APPENDIX D


Chairman Hoekstra. Thank you.

Dr. Spalding.

STATEMENT OF MATTHEW C. SPALDING, DIRECTOR, B. KENNETH 
SIMON CENTER FOR AMERICAN STUDIES, THE HERITAGE 
FOUNDATION, WASHINGTON, D.C. 


Mr. Spalding. Thank you, Mr. Chairman.  I thank you for the opportunity to
 testify in support of 
this Congress' and this administration's effort to foster service,
 citizenship, and responsibility.

	I think that working with the Bush administration, Congress should
 propose a reformed 
legislative package that builds on the changes proposed in last year's
 session, takes additional steps 
to correct the infringement of religious liberty in current service laws, and
 fundamentally 
transforms the current government's international service into a true citizen
 service initiative.

	I believe there are some principles that should be behind and at the
 heart of the Citizen 
Service Act, and I would like to go through those very briefly.

	The primary goal of citizen service should be to protect and
 strengthen civil society, 
especially the non-governmental institutions at its foundation.  Policymakers
 must recognize that 
President Bush's call to service will be answered not by a government program,
 but by the selfless 
acts of millions of citizens in voluntary associations, local communities, and
 private organizations.

	Secondly, the goal of an authentic citizen service initiative should
 not be to engage citizens 
in a program, nor to create an artificial bond between citizens and the state
 or organization that 
coordinates that service, but to energize a culture of personal compassion and
 commitment to those 
in need.

	Third, reform of the national service laws should redesign service
 programs as an 
opportunity for true voluntary service rather than a jobs program. 
 Volunteerism that is paid and 
organized by the government belittles authentic volunteerism by presenting
 service as an 
employment option rather than a sacrificial giving of one's time and
 resources.

	Fourth, where possible, reform should prevent government support and
 presumed public 
endorsement of frivolous, controversial, and special interest activities.  It
 should focus instead on 
encouraging traditional service opportunities that address real problems of
 those in need.

	Fifth, reform should reduce government's financial, administrative and
 regulatory role in the 
voluntary sector.

	There already exists between government and many large nonprofit
 organizations what Dr. 
Lenkowsky has called a dysfunctional marriage in which government money has
 led to significant 
loss of nonprofit independence.  Expanding this relationship to include the
 voluntary sector 
generally, and especially those smaller organizations that have thus far
 eluded the federal reach, 
would only expand and intensify that problem.

	The Citizen Service Act of 2002 contained many useful and innovative
 changes in existing 
programs and should serve as a basis for future reform.  More fundamental
 changes are required, 
however, to transform today's national service into a true citizen service.

	First, I believe that policymakers should eliminate the stipends and
 benefits for AmeriCorps 
participants, thus ending the program as an employment option and reorganizing
 it as a true 
volunteer service initiative.

	You could allow AmeriCorps to continue to award modest educational
 grants, not as a 
financial incentive or an in-kind payment for volunteering, as a nominal award
 for service 
rendered.

	Eliminating the financial stipend and pay benefits still leaves
 participants with a 
considerable education voucher that is nearly double the amount of the current
 Pell Grant.

	Concerning VISTA, I would recommend focusing VISTA as much as
 possible, focusing it 
on helping to solve the most important poverty-related problems of the day.

	VISTA could be focused on strengthening families through groups like
 Marriage Savers 
and the training of mentoring couples.  Another possibility is to focus VISTA
 activity on mentoring 
in low-income communities.

	Whatever focus is selected for the agency's service activities, in
 keeping with renewed 
interest in government accountability, VISTA programs should be subject to
 appropriate rigorous 
and regular methods of assessment and measurement.

	I also believe VISTA should be changed from a federally operated
 program to a federally 
assisted program.

	The problem with Learn and Serve America is more fundamental.  It has
 to do with the 
methodology of service learning.  I recommend that Congress end the Learn and
 Serve program, 
and if they do not, that at the very least, they back away from their support
 of the philosophy of 
service learning by changing some of the definitions in the legislation.

	To conclude, now more than ever, at a time when Americans are
 volunteering and engaging 
in service to their country in unprecedented numbers and unprecedented ways,
 policy makers must 
reject the model of government-centered national service that undermines, in
 my opinion, the 
American character and threatens to weaken the private associations that have
 always been the 
engine of moral and social reform in this country.

	The better course is to bolster President Bush's noble call to service
 by creating a true 
citizen service initiative that is consistent with principles of self
-government, is harmonious with a 
vibrant civil society, and promotes a service agenda based on personal
 responsibility, independent 
citizenship, and civic volunteerism.

	Thank you.


WRITTEN STATEMENT OF MATTHEW C. SPALDING, DIRECTOR, B. KENNETH SIMON 
CENTER FOR AMERICAN STUDIES, THE HERITAGE FOUNDATION, WASHINGTON, 
D.C. - SEE APPENDIX E


Chairman Hoekstra. Thank you.

Mr. Foltin, we are going to probably have to hold you as close to five minutes
 as we can, 
only because you got caught by the bells, which means we are going to have to
 vote, but let us get 
started.

STATEMENT OF RICHARD T. FOLTIN, LEGISLATIVE DIRECTOR AND 
COUNSEL, OFFICE OF GOVERNMENT AND INTERNATIONAL AFFAIRS, 
AMERICAN JEWISH COMMITTEE, WASHINGTON, D.C.


Mr. Foltin. Thank you.  My name is Richard Foltin. I am the legislative
 director and counsel in the 
Office of Government and International Affairs of the American Jewish
 Committee, and I thank 
you, Mr. Chairman, and Mr. Ranking Member, for the opportunity to testify
 today about AJC's 
perspective on the need to retain protections against employment
 discrimination based on religions 
with respect to positions funded under the Corporation for National and
 Community Service.

	We are here today discussing a proposal to eliminate Section 175C from
 the National and 
Community Service Act is really a testament to the power of an idea, and it is
 an idea that I have to 
give credit for to my distinguished colleague on the panel, Professor Esbeck. 
 This idea is this 
notion of charitable choice and of ending what is called religious
 discrimination with respect to 
religious institutions that receive public funds to provide social services.

	Now, the danger of having a big idea sometimes is that it tends to
 sweep aside competing 
concerns, and that it can sweep aside, as well, a pragmatic resolution of
 competing concerns in a 
particular program, and so we have, in 175C, a narrow and appropriate attempt
 to reconcile some 
very crucial priorities within our constitutional system, and an appropriate
 attempt to do so.

	The government and all citizens have a strong interest in not seeing
 taxpayers' dollars 
utilized to underwrite the funding of employment positions for which hiring
 decisions are made 
based on religion.

	At the same time, any prohibition on religious discrimination by
 religious organizations 
when they operate programs for which they receive government funds must be
 carefully cabined so 
as not to encroach on the legitimate interests of religious organizations'
 autonomy with respect to 
their positions that are privately funded.

	So if there is common ground, and I think there is, between those who
 have differing 
positions on 175C, it is this intense respect for the necessity of respecting
 religious autonomy, the 
autonomy of religious organizations.

	It's grandfather clause aside, Section 175 of the National and
 Community Service Act of 
1990 limits its prohibition on religious discrimination by a funded
 institution to a member of the 
staff of such project that is paid with funds received under this subchapter.

	Thus, unlike the civil rights law that prevail in certain other
 circumstances, it does not apply 
to the entire institution, does not say that funds may not flow to an
 institution if somewhere else in 
some other program or with respect even to some other position that is funded
 with private funds, 
there is a preference based on religion.  This restriction exists only with
 respect to those positions 
that are funded with federal money.

	In so doing, as I discuss in my statement, Section 175 draws a careful
 line that seeks to 
safeguard the important interests of both the government and religious
 institutions.

	Those arguing for deleting Section 175 point to the need to enable
 faith-based groups to 
promote common values, a sense of community, and shared experiences through
 service. These are 
all important values, but there is something inherently problematic as a
 matter of public policy, it is 
not as a matter of constitutional law, in the government funding what it
 itself cannot do.  Namely, 
subject employment positions to a religious test.

	Put more bluntly, applicants for a government-funded position should
 not be confronted 
with a sign, real or metaphoric, that says, ``No Jews need apply, no Baptists
 need apply.''  Neither 
the First Amendment nor any other provision of the Constitution requires
 religious institutions to 
be given unlimited autonomy in their employment decisions with respect to
 employment positions 
that are government funded.

	Indeed, the presence of government funding implicates several clauses
 of the Constitution: 
the Establishment Clause, the Free Exercise Clause, and the Equal Protection
 Clause.  All of which 
preclude government discrimination on the basis of religion.

	But the importance of this principle of non-discrimination does not
 mean that it cannot be 
reconciled with another important priority, the autonomy of religious
 institutions and safeguarding 
those institutions from undue government interference.

	The discretion of religious organizations is, to be sure, a
 fundamental aspect of the religious 
freedom that is protected as our first liberty in the First Amendment, that
 religious organizations, 
the vehicle through which religious communities manifest their religious
 missions, should be able 
to demand, as a general principle, that the individuals that they hire to work
 for those organizations 
subscribe to the creed and practices of their faith.

	But the case which established Congress's right to allow this broad
 zone of discretion for 
religious organizations involved a privately funded, not a government-funded
 position.  Extension 
of the exemption upheld in Amos to cover employees providing publicly funded
 services is not 
required by concerns addressed in that decision.

	Much of the Amos analysis, as amplified in concurring opinions, turns
 on the problems that 
would be posed in limiting the exemption to religious activities of a
 religious organization, not the 
least of which would be placing the state in the position of parsing which
 activities of the 
organization are secular and which are religious; but with respect to programs
 funded by the 
government, the state, as a matter of constitutional..

Chairman Hoekstra. Excuse me.

Mr. Foltin. Yes, sir.

Chairman Hoekstra. We are going to have to interrupt.  We will let you finish
 your statement 
when we get back.  

Mr. Foltin. Thank you.

Chairman Hoekstra.  We now have a firmer gavel on the floor of the House than
 we have in this 
subcommittee, which means that if we do not get there soon, we will miss our
 vote.

	[Recess.]

Chairman Hoekstra. The subcommittee will reconvene.

Mr. Foltin. Shall I restart, or not restart, but continue?

Chairman Hoekstra. Not from the beginning, that is right.  Not that we did not
 think it was 
worthwhile or valuable.

Mr. Foltin. It sinks in better if I say it twice.

Chairman Hoekstra. Yes.

Mr. Foltin. It does for me, anyway.

Chairman Hoekstra. All right.  Just wrap up.

Mr. Foltin. I will wrap up.

	Just first, let me return, just to conclude the discussion about Amos,
 to say that with respect 
to programs funded by the government, however, the state, as a constitutional
 principle, may fund 
only the secular activities of a religious organization, which makes
 unnecessary an explicit 
extension of the Title VII exemption to cases involving government funding or
 by, on appropriate 
anti-discrimination provisions in particular, authorizing legislation with
 respect to employees 
providing publicly funded services.

	To the contrary, such an approach runs counter to the fundamental
 civil rights principles of 
non-discrimination, as well as identifies the government with using religious
 criteria for 
employment.

	This is even more the case when we are faced, as we are today, with an
 initiative that is 
premised on substantial expansion of the role of religious organizations in
 social services provision.

	Of course, even if the Title VII exemption is not automatically waived
 with respect to a 
government-funded employment position, this is far from the end of the
 inquiry. Congress may 
determine, as it did in enacting Section 175C, that as a matter of policy, it
 does not want publicly 
funded employment positions to be subject to religious preference.

	The Amos court did not rule that the broad exemption from Title VII
 carved out by 
Congress so as to extend even to employees with no religious duties was
 constitutionally required, 
only that it was constitutionally permitted, and this was with respect to a
 privately funded position.

	So what I want to conclude by saying is that to be sure, any effort to
 prohibit religious 
discrimination by religious organizations when they operate programs for which
 they receive 
government funds must be carefully cabined so as not to encroach on the
 legitimate interests of 
religious organizations in autonomy with respect to positions that are
 privately funded.

	Any such positions should be crafted so that even while it prohibits
 discrimination on the 
basis of religion with respect to an employment position funded with federal
 financial assistance, it 
does not encroach upon such exemption from the federal prohibition on
 religious discrimination as 
a religious organization may enjoy in the use of its own or privately donated
 funds.

	That is the careful line that 175C seeks to draw, unlike the case, as
 I said at the outset, with 
civil rights laws that generally cover federally funded institutions, and
 recognizing the particular 
constitutional concerns that are presented by religious organizations, the
 anti-discrimination 
provision of Section 175 does not extend to the entire institution nor even to
 all staff employed in 
connection with the funded activity, but only to those who are actually paid
 with federal funds.

	By thus limiting its reach, Section 175 takes an appropriate approach
 in seeking to protect 
the important interests of both the government and of religious institutions
 when the latter receive 
government funds.

	Thank you.


WRITTEN STATEMENT OF RICHARD T. FOLTIN, LEGISLATIVE DIRECTOR AND 
COUNSEL, OFFICE OF GOVERNMENT AND INTERNATIONAL AFFAIRS, AMERICAN 
JEWISH COMMITTEE, WASHINGTON, D.C. - SEE APPENDIX F


Chairman Hoekstra. Thank you.

	What happens if the reauthorization is silent on 175, meaning 175 is
 eliminated, Mr. Foltin?

Mr. Foltin. Well, I think what will happen is that there will be an argument
 as to what the 
implications of the government funding are, as there is an argument generally
 now.

	There are cases in the courts, not having to do with federal
 legislation, but with state 
legislation, I think, at this point, which test whether or not when there is a
 government-funded 
position there is allowed to be discrimination with respect to that position.

	A particular case arises out of the State of Georgia, in which a
 Methodist social service was 
about to hire a very qualified person for a position.  The interviewer
 discovered during the 
interview that this person was Jewish, and basically said to that person, "I'm
 sorry, we just do not 
hire Jews.''

	Whether or not that can constitutionally be done with state funding is
 now under debate.

Chairman Hoekstra. You would think there would be a court challenge?

Mr. Foltin. Well, I cannot say there necessarily would be, but there might be. 
 I would hope, as 
well, that, in implementing the programs, which many religious organizations,
 as they do now, 
would see fit not to discriminate on the basis of who they hire.

	But it is very important that this provision, which is very limited
 and very modest, I think, 
be part of this program.

	I would note here that this is not the only social service legislation
 that includes this kind of 
religious protection against discrimination with respect to publicly funded
 programs.

Chairman Hoekstra. The question is just what happens if it is not, and you
 think the question as to 
whether a religious organization could or could not discriminate would be
 determined through the 
courts?

Mr. Foltin. I think that that might be one route that that might occur.

Chairman Hoekstra. All right.  Does anybody else want to take a shot at what
 they think would 
happen if 175 were not in?

Mr. Esbeck. Mr. Chairman, I would like to speak to that if I could.

Chairman Hoekstra. Okay.

Mr. Esbeck. Then, of course, we fall back on Title VII, which as I
 characterized, is the gold 
standard here that applies pretty much throughout all federal legislation,
 including social service 
legislation, and we would also have in place what was referred to earlier as
 the December 12, 2002 
executive order of the President, and I think Dr. Lenkowsky referred to that.
 We would have that in 
place as well as protecting religious hiring rights.

	Of course, anybody can sue in this country.  It is said that America
 is a litigious country, 
and we get all kinds of lawsuits.

	The real question is not would there perhaps be a lawsuit, but would
 the lawsuit be 
successful.  I think not.

	Again, just go back to the Rendell-Baker case that I referred to. 
 There, 90, 95 percent of the 
funding of that private school was from the government, but the court said,
 ``Look, we are funding 
in that case educational services.  That does not make the employment
 practices of that private 
organization the responsibility of the government.''

	If 95 percent of the funding came from the government, you can bet
 that the teacher that 
was dismissed there was receiving some of those government funds to pay her
 salary.

	So the fact that the government funding actually flows to the
 particular salary of the person 
that it alleges was improperly handled as an employee is a distinction without
 any merit.

Mr. Foltin. May I respond?

Chairman Hoekstra. You can, and I bet we are going to hear a whole lot more of
 this over the 
next three to five months.  So yes.

Mr. Foltin. Yes, that certainly is a good argument for one side, but I think
 that these are issues that 
are not resolved at this point.  It is an important Supreme Court case going
 back to 1973 that says 
that a state may not induce, encourage, or promote private persons to
 accomplish what it is 
constitutionally forbidden to accomplish, namely, discrimination.

	There is a case, and it is the closest thing to a case on point we
 have, from a district court in 
1989, that suggests that it violates the Establishment Clause when the
 government, in effect, 
finances a position with respect to which there is discrimination.

	But I would not be candid if I did not say that these are matters that
 are very much still in 
issue, and it is not at all clear how the courts will deal with this when they
 are faced with it.

	I think the best course is for there to be a clear standard, in
 addition to the gold standard of 
Title VII, to have this bill, when reauthorized, continue to include the
 provision that it already had 
in place.

Chairman Hoekstra. Dr. Spalding?

Mr. Spalding. I will just add a practical point.

	As I understand it, the status quo is not Section 175. Section 175 is
 really an unusual 
circumstance.

	So making it consistent with existing law, going back to the 1964
 Civil Rights Act, would 
seem to me to be the practical objective here, and so it is not a question of
 what would happen if 
you remove it.  The question is what happens if you leave it in there, which
 is to leave something in 
there which is a sore thumb, to say the very least, in light of other
 legislation passed by Congress.

Chairman Hoekstra. Yes, we had this debate last week as to what the standard
 is and what is a 
retrenchment and what is current law.

	It is hard to determine if it is current law or if it is in the
 authorizing statute.  It is there, but 
should we let civil rights law be the standard and be the gold standard?  That
 is what these actions 
should be measured against.

	We heard the debate last week.  We heard the debate today, and I am
 believing that, over 
the next few months, Mr. Hinojosa and I and others will be talking about it
 and hearing it a number 
of more times.

	But thank you very much for that.

Mr. Hinojosa.

Mr. Hinojosa. Thank you, Mr. Chairman.

	This question is for Mr. Foltin.

	Many religious organizations that participate in federally funded
 programs have voiced 
their opposition to charitable choice provisions and continue to do so today.


	Can you share with us some of the concerns of the religious community
 as it relates to 
charitable choice?

Mr. Foltin. Well, that is a whole other debate that, of course, is ongoing.

	I think the concern that a number of religious organizations have is
 really concerns that 
many communities have about the implications of charitable choice, and I see
 this discussion today 
as part of that larger debate, and I alluded to that earlier, even in terms of
 constitutional analysis of 
the problem of this effort to remove 175C as being part of this larger effort
 to draw religious 
organizations into the charitable choice provision.

	What does charitable choice do?  For one thing, it allows
 organizations of a kind that I think 
even with recent Supreme Court decisions are problematic recipients of federal
 financial assistance 
to discriminate.  Namely, these are pervasively religious organizations like
 churches, synagogues, 
mosques, and religious schools.

	The reason that is problematic is because these are the kinds of
 organizations that it is 
intrinsically difficult to see how they are going to separate out their
 provision of the secular 
services that the government is supposed to be financing from their engagement
 in religion 
teaching activities, which are very worthy activities, of course, but the
 issue is that the government 
should not be funding them.

	Once, and when they start to receive these funds, the question is
 whether or not there are 
going to be sufficient safeguards in place for beneficiaries of these services
 so they are not 
effectively coerced into participating in religious activities that they do
 not wish to be part of, even 
when there are some formal protections in place to guard against that.

	There are, of course, the issues of whether or not there is going to
 be decisions made on the 
basis of religion in terms of who gets hired for providing these services, and
 perhaps most 
crucially, from the religious community's perspective, and of course, I only
 speak for those 
religious communities that are in agreement with these concerns, there are
 others on the other side, 
the most significant concern is what all of this means for the autonomy of
 these religious 
organizations on an ongoing basis.

	The late Reverend Dean Kelly of the National Council of Churches used
 to say, "With the 
king's shilling comes the king.''

	As soon as you start to have great amounts of funding, of federal
 funding, government 
funding, going into religious organizations, particularly to these that are
 pervasively religions 
organizations, you more and more begin to run the risk that these
 organizations will have their 
religious autonomy interfered with, their ability to carry out their religious
 mission interfered with, 
and this, I think, is really an immense danger and one that we ought to be
 very careful about as we 
look to expanding the ways in which government funds the provision of services
 by religious 
organizations.

Mr. Hinojosa. My next question goes to Mr. Pribyl.

Mr. Pribyl. Yes.

Mr. Hinojosa. Is that the correct pronunciation?

Mr. Pribyl. Close enough.

Mr. Hinojosa. Thank you for your many years of service and for the set of
 recommendations you 
have put forth today.

	I'd like to know how you have dealt with the issue of providing these
 services to individuals 
who do not speak English or who are limited English proficient?  What is your
 recommendation for 
how Senior Corps could work in my congressional district along the Texas
-Mexico Southern 
Borders?

Mr. Pribyl. Thank you, Congressman.

	Maybe one way I could answer that is, one of my best friends in the
 Senior Corps business 
is the Senior Companions director in your district, Jose Perez from Alamo,
 Texas, just a great 
gentleman, and I have learned a lot from him about diversity and how the
 Hispanic population is 
served in his community.

	What we have done in Minnesota, we have a lot of diversity in our
 program with a lot of the 
new Americans, and translating is a major problem when we are dealing with a
 Somali population, 
a Liberian population, a Hmong population, a Vietnamese population, a North
 Korea, or South 
Korean population.  We have all these groups in our program.

	We are able to do it because we rely on the agencies that we contract
 with that are the 
experts with those particular populations.

	For instance, the Women's Association of Hmong and Lao in St. Paul is
 our volunteer 
station for Senior Companions there, and they help us with the translation, to
 do the training, and 
gather the time sheets, and work with that population, and it works very well.

	It does take some time, it does take some effort; and I think we have
 proven that we can do 
it.

Mr. Hinojosa. Thank you.

Mr. Chairman, I yield back the balance of my time.

Chairman Hoekstra. Mr. Porter?  No questions?  I have no additional questions.

	I thank the panel for being here.  I appreciate the input.  Now I have
 got to find out whether 
I have got a script here as to any formal things here I have to get right at
 the end.

	I think that is it.

	So thank you.  We look forward to working with individuals like
 yourselves over the 
coming months, learning about the programs and the things that you have in
 place.

	Obviously, we have a number of reform ideas that have been proposed,
 and we have got 
some issues here dealing with Section 175.  We may call on you again to help us work through that 
maze, but the commitment is here to try to build on the bill that we had in
 the last session and to 
move forward and get this reauthorized.

	I know that just about everybody agrees that a reauthorized program
 with some level of 
reforms is much better than to continue funding the program under the old
 authorization.

	So thank you very much, and with that, the subcommittee will stand
 adjourned.

	[Whereupon, at 4:30 p.m., the subcommittee was adjourned.]


















APPENDIX A - WRITTEN OPENING STATEMENT OF CHAIRMAN PETE 
HOEKSTRA, SUBCOMMITTEE ON SELECT EDUCATION, COMMITTEE 
ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF 
REPRESENTATIVES














APPENDIX B - WRITTEN STATEMENT OF LESLIE LENKOWSKY, CHIEF 
EXECUTIVE OFFICER, CORPORATION FOR NATIONAL AND 
COMMUNITY SERVICE












 APPENDIX C -WRITTEN STATEMENT OF CARL H. ESBECK, ISABELLE 
WADE AND PAUL C. LYDA PROFESSOR OF LAW, UNIVERSITY OF 
MISSOURI, COLUMBUS, MISSOURI












APPENDIX D - WRITTEN STATEMENT JOHN PRIBYL, SENIOR 
COMPANIONS AND FOSTER GRANDPARENTS DIRECTOR, LUTHERAN 
SOCIAL SERVICE OF MINNESOTA












APPENDIX E - WRITTEN STATEMENT OF MATTHEW C. SPALDING, 
DIRECTOR, B. KENNETH SIMON CENTER FOR AMERICAN STUDIES, 
THE HERITAGE FOUNDATION, WASHINGTON, D.C.












APPENDIX F - WRITTEN STATEMENT OF RICHARD T. FOLTIN, 
LEGISLATIVE DIRECTOR AND COUNSEL, OFFICE OF GOVERNMENT 
AND INTERNATIONAL AFFAIRS, AMERICAN JEWISH COMMITTEE, 
WASHINGTON, D.C. 












APPENDIX G - WRITTEN LETTER SUBMITTED FOR THE RECORD NY 
NATHAN J. DIAMENT, DIRECTOR, UNION OF ORTHODOX JEWISH 
CONGREGATIONS OF AMERICA WASHINGTON, D.C. 



125



TABLE OF INDEXES



Chairman Hoekstra, 2, 5, 8, 9, 10, 11, 12, 15, 17, 20, 21, 24, 28, 
31, 33, 35, 36, 37, 38, 39, 41
Mr. Burns, 21, 22, 23, 24
Mr. Esbeck, 26, 38
Mr. Foltin, 25, 33, 35, 36, 37, 38, 39
Mr. Hinojosa, 4, 12, 13, 14, 15, 39, 40, 41
Mr. Lenkowsky, 6, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 
21, 22, 23, 24
Mr. Porter, 15, 16, 17
Mr. Pribyl, 28, 40, 41
Mr. Ryan, 17, 18, 19, 20
Mr. Spalding, 31, 39
Mrs. Davis, 24



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