[Senate Hearing 108-260]
[From the U.S. Government Publishing Office]
S. Hrg. 108-260
NOMINATION OF JOEL D. KAPLAN
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
ON THE
NOMINATION OF JOEL D. KAPLAN, TO BE DEPUTY DIRECTOR, OFFICE OF
MANAGEMENT AND BUDGET
__________
JULY 29, 2003
__________
Printed for the use of the Committee on Governmental Affairs
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COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Deleware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Counsel
Johanna L. Hardy, Senior Counsel
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Susan E. Propper, Minority Counsel
Jennifer E. Hamilton, Minority Research Assistant
Amy B. Newhouse, Chief Clerk
C O N T E N T S
------
Opening statements:
Page
Senator Collins.............................................. 1
Senator Lautenberg........................................... 2
Senator Coleman.............................................. 7
Senator Akaka................................................ 11
WITNESS
Tuesday, July 29, 2003
Joel D. Kaplan, Deputy Director, Office of Management and Budget
Testimony.................................................... 4
Biographical and professional information requested of
nominees................................................... 17
Pre-hearing questionnaire and responses for the Record....... 24
Post-hearing questions and responses for the Record from:
Senator Collins............................................ 94
Senator Lautenberg......................................... 95
Senator Lieberman.......................................... 105
Senator Akaka.............................................. 109
NOMINATION OF JOEL D. KAPLAN
----------
TUESDAY, JULY 29, 2003
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:52 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, Coleman, Akaka, and Lautenberg.
OPENING STATEMENT OF CHAIRMAN COLLINS
Chairman Collins. The Committee will be in order.
Today the Committee on Governmental Affairs is holding a
hearing to consider the nomination of Joel Kaplan to be the
Deputy Director of the Office of Management and Budget, a key
position within the Federal Government.
The Office of Management and Budget has many significant
and cross-cutting responsibilities for the Executive Branch.
Critical to the position we are examining today, OMB provides
the President with recommendations in formulating his budget
and oversees the administration of the budget once the
appropriations bills become law.
As Deputy Director of the Office of Management and Budget,
if confirmed, Mr. Kaplan will have many responsibilities, but
probably one of the most important will be helping the
President build a Federal budget that is fiscally responsible
and responsive to the needs of the American people. This will
be a difficult job in a time of spending imperatives and
revenue constraints.
Earlier this month, the Office of Management and Budget
released the mid-session review of the budget which did not
paint a rosy picture. The Federal deficit is now estimated to
be $455 billion for fiscal year 2003, compared to $304 billion
that OMB had predicted in February of this year. In addition,
the deficit for fiscal year 2004 is projected to be $475
billion.
Although the dramatic turnaround from surplus to deficit in
the span of 2 years is troubling, it is important to bear in
mind that economic and technical factors, much more so than tax
cuts and spending increases combined, are the single biggest
cause of our fiscal woes. It is important to remember also that
these deficit projections are just that, projections. They are
not set in stone, nor are they guaranteed. Indeed, if there is
any certainty, it is that they will change. In the time that I
have been in the Senate, never once have the projections of
either OMB or the CBO, the Congressional Budget Office,
regardless of whose administration it is or who is in charge of
Congress, proved to be accurate.
We must now look forward and find ways to bring fiscal
restraint to the government and show the American taxpayers
that the Federal Government can operate within a budget and
work effectively.
In his Fiscal Year 2004 Budget, the President proposed
several budget enforcement mechanisms, including biennial
budgeting, automatic continuing resolutions and the extension
of the pay-as-you-go provisions. Additionally, several Senators
have introduced legislation this year that would put
enforcement mechanisms in place. We must examine these options
to determine whether or not they are the proper tools to help
bring accountability to the Federal budget, but nothing can
really replace good old-fashioned budget responsibility.
As I mentioned, Mr. Kaplan's job will not be an easy one.
His background as an artillery officer in the Marine Corps is
undoubtedly useful training for the many battles ahead.
Implementing a Federal budget is never easy, but with strong
guidance from the Office of Management and Budget, under the
leadership of Director Bolten, and with the addition of Mr.
Kaplan, I am confident that we will move in the right
direction.
Mr. Kaplan will face many challenges if confirmed. I am
very pleased he has agreed to the President's request that he
serve in this position because I have concluded that he
possesses the background, intelligence and experience needed to
be a successful OMB Deputy Director; that is, assuming all goes
well at this hearing today.
So I want to thank the witness for being with us today, and
I would now like to yield to Senator Lautenberg for any
comments that he might have.
OPENING STATEMENT OF SENATOR LAUTENBERG
Senator Lautenberg. Welcome, Mr. Kaplan. I am not
accustomed to calling people as young as you ``mister,'' but I
am going to observe the protocol here.
And I want to join you, Madam Chairman, in welcoming the
President's nominee to be Deputy Director of OMB to the
Committee this morning. Mr. Kaplan is obviously an unusual
young man, sterling academic credentials and having clerked on
the Fourth Circuit Court and for Supreme Court Justice Antonin
Scalia, who has New Jersey roots, I do not know if you
remember.
Apparently, you have served in the Marine Corps. Was that
on active duty?
Mr. Kaplan. Yes, Senator, it was.
Senator Lautenberg. Four years' worth?
Mr. Kaplan. Just under 4 years, Senator.
Senator Lautenberg. Well, having said all of those nice
things, I am concerned about the nomination, and I will tell
you why. Because as bright as you obviously are, I do not see
anything in your experience, prior business or government work
experience, for helping you prepare for this post. And it is,
as everyone knows, the No. 2 position at the Office of
Management and Budget--the agency charged with preparing the
President's budget request and overseeing the administration's
procurement, financial management, information technology and
regulatory policies.
Now, aside from the question of that experience, there is
another matter that warrants some discussion. It is no secret
that you were in Florida to work for the Bush-Cheney campaign
during the recount that followed the 2000 election.
One aspect of that sorry moment that I still find troubling
is that on the Wednesday before Thanksgiving, there was a
court-ordered manual recount being conducted in the Miami, Dade
County building. I am not telling you anything new, obviously.
When the Canvassing Board attempted to move the recount up to
the 19th floor, where the tabulating machines were, a group of
protestors spontaneously assembled and caused enough commotion
and fear that the Canvassing Board was intimidated enough to
call the recount off. It was never resumed.
That group, we discovered later, did not really consist of
irate local Republican voters, as was portrayed, it was largely
a group of Republican staffers flown down by the campaign to
Florida. The group intimidated, physically accosted county
workers and Democratic campaign staff. They did everything they
could to disrupt the recount, and they succeeded. We are not
rehashing who is President. President George W. Bush is
President, period. So that is not where we are at. But mobs are
not supposed to rule in this country, but on that day one did.
And then in the pre-hearing interviews with staff, you
indicated that you were not part of the mob, that you were in
the tabulating room on the 19th floor as an official Republican
observer, and there is no reason to doubt that. But also there
was an acknowledgment that you knew several of the people who
were in the mob.
And I am curious to know why, when the Canvassing Board
asked people from both parties to help calm things down, that
you did not stand up, with your education, your skills, you did
not kind of stick your head out the door and say to these
friends--you say that you knew a lot of people--``Do not worry.
We have our observers. Everything is above board.''
And I think Mr. Kaplan also called the affair the ``Brooks
Brothers'' riot. It seems to suggest there was some kind of
whimsy about the episode, and there was not anything funny
about a mob trying to prevent people from counting votes,
whether the people in the mob are wearing brown shirts or
button-down shirts.
So I look forward to hearing Mr. Kaplan's opening statement
and your version of what happened that day.
I thank you, Madam Chairman, for conducting this hearing.
Chairman Collins. Thank you, Senator Lautenberg.
I want to point out that Mr. Kaplan currently is serving as
Special Assistant to the President in the Office of the Chief
of Staff. We have talked about his Marine experience and his
clerkships. He has filed responses to a biographical and
financial questionnaire, answered pre-hearing questions
submitted by the Committee, answered questions in a Committee
staff interview and had his financial statements reviewed by
the Office of Government Ethics.
Without objection, this information will be made part of
the hearing record, with the exception of the financial data
which are on file and available for public inspection in the
Committee's office.
Mr. Kaplan, our Committee rules require that all nominees
give their testimony under oath, so I would ask that you stand
and raise your right hand.
Do you swear the testimony you will give to the Committee
will be the truth, the whole truth, and nothing but the truth,
so help you, God?
Mr. Kaplan. I do.
Chairman Collins. You may be seated.
Mr. Kaplan. Thank you, Madam Chairman.
Chairman Collins. Mr. Kaplan, do you have any family
members that you would like to introduce to the Committee
before you proceed with your written statement?
Mr. Kaplan. If I may, Madam Chairman.
I would like to introduce my mother, Rosalind Kaplan, my
sister Sharon Chabot, my niece Jessica Chabot, who have all
come down from Massachusetts to be here with me today. I would
also like to introduce Lee Sax, who is a former assistant
secretary of the Treasury in the Clinton Administration and is
here to show strong bipartisan support for my nomination and
also because he is my cousin. [Laughter.]
Chairman Collins. That may have undercut his credibility
just a little bit.
Mr. Kaplan. He has told me that several times, Madam
Chairman.
Chairman Collins. Thank you. You may proceed with your
statement.
TESTIMONY OF JOEL D. KAPLAN, TO BE DEPUTY DIRECTOR, OFFICE OF
MANAGEMENT AND BUDGET
Mr. Kaplan. Thank you, Madam Chairman and Senator
Lautenberg. I appreciate the opportunity to be here this
morning and am deeply honored to come before you as the
President's nominee to be Deputy Director of the Office of
Management and Budget.
I would like to take this opportunity to express my
gratitude to the President for nominating me to this position
and also to Director Bolten for his confidence in me. If
confirmed, I will work tirelessly to meet their high standards
and their expectations.
Since the start of the administration, I have had an
opportunity to work with many officials at the Office of
Management and Budget and throughout the Executive Branch on
the development and implementation of administration policy.
Through that experience, I gained a tremendous appreciation for
both OMB's important role in that process and for the
dedication and skill of the professionals who work there.
The budget of the Federal Government represents the
judgment of Congress and the President about how much of the
people's money to spend and for what purposes. The President's
priorities, which are reflected in his budget submission, are
winning the war on terror, protecting the homeland, and
strengthening the economy. If confirmed, I will work faithfully
to ensure that we fund those priorities, while at the same time
setting a course that moves our Nation's budget back towards
balance.
The other important role OMB plays, which I know is of
particular interest to the Members of this Committee, is
improving the management of the Executive Branch. The President
and his administration share your commitment, Madam Chairman,
to giving the American people the well-functioning and
efficient government they deserve and to energizing and
empowering the thousands of hardworking Federal employees who
come to work and serve their country every day.
This Committee has shown great leadership in this area and,
if confirmed, I look forward to working with you to make
progress on the President's Management Agenda and your
management priorities. In fulfilling these important
responsibilities, Madam Chairman, I will work diligently to
make sure that OMB's relationship with this Committee, and with
the Congress, is an open and productive one.
Thank you again for the opportunity to appear this morning,
and I will look forward to answering your questions. Thank you.
Chairman Collins. Mr. Kaplan, I am going to start with the
three standard questions we ask all nominees, and then I am
going to defer to Senator Lautenberg for his questions so that
he can keep a previous commitment.
First, is there anything you are aware of in your
background which might present a conflict of interest with the
duties of the office to which you have been nominated?
Mr. Kaplan. No, Madam Chairman.
Chairman Collins. Second, do you know of anything personal
or otherwise that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated?
Mr. Kaplan. No, Madam Chairman.
Chairman Collins. And, third, do you agree, without
reservation, to respond to any reasonable summons to appear and
testify before any duly constituted committee of Congress if
you are confirmed?
Mr. Kaplan. Yes, I do, Madam Chairman.
Chairman Collins. Senator Lautenberg.
Senator Lautenberg. Thank you very much, Madam Chairman.
Mr. Kaplan, I will try to be brief because you heard the
couple of concerns that I raised.
I want to talk about what you think the scope of your
responsibilities within OMB might be and what do you bring, by
way of experience, to the job that would prepare you for this?
Mr. Kaplan. Sure, Senator. The scope of the
responsibilities of the office, as the Chairman described them,
are quite broad and I think important ones. The two primary
responsibilities have to do with helping to design, propose,
and then implement the President's budget. And as I mentioned
briefly in the opening statement, helping to improve the
management of the Executive Branch.
As to the first primary responsibility, I have spent the
last several years working in the Office of the Chief of Staff,
directly involved in designing, coordinating and overseeing the
implementation of administration policy. In that capacity, I
participated throughout the process with many officials at the
Office of Management and Budget and throughout the Executive
Branch in determining how those policy initiatives of the
President fit into the President's priorities, as reflected in
the President's budget.
I have participated in numerous discussions and reviews of
the budget at every stage in the budget process from the review
of the agencies' submissions, which typically takes place in
September, through the OMB's pass-back of those requests, to
ensure that the President's priorities and policies are
properly reflected in the agency budgets, through to the
preparation and presentation of the President's budget and
review of that document, and through the administration's
efforts to work with the Congress in the budget process, and
then, later in the year, through the appropriations process.
So I think I have had, Senator, a good experience working
in this administration. I am quite familiar with most, if not
all, of the significant officials in the agencies that I will
be charged with working with, and certainly in OMB as well and,
for that matter, with the officials in the White House, who I
have worked very closely with over the last several years.
In fact, it is because of these relationships and because
of the work I have done with those officials that I believe the
President, his senior advisers and Director Bolten have
developed the confidence in me that I do have the
qualifications and the abilities to execute these
responsibilities.
Senator Lautenberg. Because I have a commitment to the
Chairman that I am going to wrap up very quickly, so I do not
want to interrupt your testimony, but I do want to just move
along. And that is the experience that you just presented for
us to review is mostly on the budget side of things. It is the
Office of Management and Budget. It is really an arm of the
chief executive that is involved with the management side of
things.
Do you think you have had any experience in that area that
would enable you to move into this job and participate in a
full fashion?
Mr. Kaplan. I do, Senator. I think I have had two
particularly relevant experiences; the first that the Chairman
mentioned in her remarks was my experience--and you did as
well, Senator--was my experience as an officer in the Marine
Corps.
Senator Lautenberg. Platoon leader.
Mr. Kaplan. Platoon leader and then an executive officer.
Senator Lautenberg. How many people in the platoon?
Mr. Kaplan. Forty-five in the platoon, 150 in a battery, of
which I was the executive officer.
Senator Lautenberg. They are quite different because here,
regardless of whether you are in the majority party or not, it
is awful hard to command people to do things, as you have
probably seen already, but if you would, just give me a word of
comment about my review of those what I call kind of dark days
for everybody. Again, we are not discussing outcome. The
outcome is what it was and what it is.
But why you, with all of the training that you have had in
the law, and the skills, the academic background that you
bring, and I am sure accompanying that is a fairly deep
conscience--I would bet that your family has produced that kind
of an awareness in you--why did you not say, hey, let's cut
this out?
You knew what was happening. I am not saying that you
participated, but why did you not object so that people would
hear your voice?
Mr. Kaplan. Senator, my role in all of the proceedings in
the recount up until that point, and in Miami Dade on that
date, was as an observer/representative of the Bush-Cheney
campaign to ensure that the activities of the Canvassing Board
were properly viewed by our campaign. The Democrats had
representatives there, as well--to register any objections and
to take note of the process. That is what I was there to do,
and that was my intention in attempting to get into the room,
where I was permitted and invited to be. I was not in charge of
the people who were congregated outside.
Senator Lautenberg. I understand. But I know enough about
you, from reading about you, seeing your family here and the
pride that they share and that we will share in your life thus
far as an upstanding young person, but I bet anything that you
would never walk by an attack in the street, where someone was
being victimized or intimidated and let it pass. Your training
as a Marine would not permit it, and I served 3 years in the
Army during the war, and I know I could not do it, and I do not
believe that you are of any different character. But it was
disappointing that even though you were officially an observer,
you were there as a responsible human being and that you were
not disturbed in any way by the things that were going on.
Mr. Kaplan. Respectfully, Senator, I certainly hope that I
would do what you described if I were to come upon a scene like
the one you described. What I saw before I went into the room
was a group of people protesting, and I didn't see anything
that suggested any violence or any violent activity preparing
to take place.
Senator Lautenberg. Thank you very much, Madam Chairman.
Thank you, Mr. Kaplan.
Chairman Collins. Senator Coleman, I have not yet
questioned the witness because I deferred to Senator
Lautenberg, who was under a time constraint. If you are under a
similar time constraint, I would be happy to yield to you for
your questions first.
OPENING STATEMENT OF SENATOR COLEMAN
Senator Coleman. Madam Chairman, I will defer to my
Chairman, and then would love to follow up a little bit on just
the last line of questioning. And being an ex-protestor myself,
by the way, I would love to explore, but I defer to my
Chairman.
Chairman Collins. Thank you.
Mr. Kaplan, before I do go to my questions, I just want to
clarify one issue, and that is were you a participant in the
demonstration that Senator Lautenberg mentioned this morning?
Mr. Kaplan. Madam Chairman, I was present while there was
protesting taking place. My responsibilities and role was to go
into the room and be an official observer. So, while I was
there, I was not, to my recollection, a participant, as I think
Senator Lautenberg envisions.
Chairman Collins. Thank you. That is a helpful
clarification.
I am going to ask you questions in three areas. First, I
want to talk to you about the budget deficit; second, I want to
talk about certain procedural reforms that the President has
proposed; and, third, I want to talk to you about funding for
some specific programs. Even though I know you are not
responsible right now for preparing the budget, you will be
assisting in that regard going forward, and I want to make sure
that you are aware of certain programs that I think are of high
priority.
First of all, on the budget deficit, as I mentioned in my
opening remarks, OMB has significantly revised the budget
deficit upward from its February estimation. It is $150 billion
more than OMB estimated in February of this year, and it is so
for very good reasons; the cost of the war, the cost of
homeland security, and most of all, the decline in the economy
has meant that revenues are far lower than anticipated.
For that reason, OMB Director Bolten has stated that these
levels of deficits are ``manageable'' if we continue pro-growth
economic policies and exercise serious spending discipline.
I would also note that the deficit, as a percentage of GDP,
remains at a manageable level. But how long can the Federal
Government continue to run so-called manageable deficits before
we start seeing an impact on the economy, on interest rates, on
our ability to function in a healthy economy?
Mr. Kaplan. Thanks, Madam Chairman, for that question.
I think you have asked the right question which is, with
the deficits that we are currently running, which I think, as
you correctly note, although large in nominal terms, are not by
any means deficits that are, as a percentage of GDP, beyond
what we have seen even in recent years.
It is difficult to say how long deficits of this magnitude
could be sustained before there would be an impact on interest
rates. I think what is important to note, as Director Bolten
did when discussing the mid-session review, is that we have not
seen the impact on interest rates that we'd be concerned about
so far, but it is, as he said, a legitimate subject of concern,
and it is important that we exercise and continue the types of
economic policies and fiscal restraint that will allow us to
bring the deficit into a declining trajectory and back towards
balance.
The projections that were released at the time of the mid-
session review do show, Madam Chairman, as you know, that by
2006 the deficit, as a percentage of GDP, will be half of what
it is projected to be this year, and I believe it is that
budget path that Director Bolten was discussing in terms of its
manageability. But it is important that we continue these
policies and that the Congress work with the administration to
exercise the fiscal restraint that will put us on that path.
Chairman Collins. The President has proposed that there be
an automatic continuing resolution, and in many ways, that is a
very appealing concept because, when Congress does not finish
its work by the start of the fiscal year, there is always a
battle to get a continuing resolution passed.
Of course, ideally, we ought to finish all of the
appropriations bills before October 1st. However, in the
President's proposal, the automatic continuing resolution would
be funded at either the President's proposed budget level or
the prior fiscal year's level, whichever is smaller.
That concerns me because the President may have zeroed out
programs that Congress will restore almost certainly. That
happens every single year. And it seems to me that we are
tilting the balance of power toward the Executive Branch if,
rather than funding at the previous year's level, a figure that
has gone through Congress and been signed into law, we use the
President's proposed budget if it is a lower figure. Could you
comment on that?
Mr. Kaplan. Yes, Madam Chairman. That is the President's
proposal. I understand the concern that you raise, and were the
Congress to take action on the President's proposal, I would
look forward, if confirmed, to working with you, to minimize
any of the concerns that you have along those lines.
All of the President's proposals, reflected in his budget
submission that deal with reforms of the budget process, are
designed to help the administration and Congress put in place
the type of discipline, Madam Chairman, that you spoke of.
Discipline that will be necessary if we are to reduce these
deficits and to get back on a path towards balance. I think,
that is the intent of the automatic continuing resolution
proposal, as well as the others in the President's submission.
Chairman Collins. Let me give you an example of one such
program which the President's budget, for both fiscal years
2003 and 2004, would be zeroed out that I can virtually predict
will be restored by Congress, and that is the Rural and Small
School Achievement Act. This is an education program that I
worked very hard on a bipartisan manner to incorporate into the
No Child Left Behind Act legislation, which I was pleased to
support and helped to draft.
Part of ensuring our commitment to Leave No Child Behind is
to make sure that we leave no child of rural America behind.
The Rural and Small School Achievement Act, which is the first
of the rural education programs, has delivered needed money and
flexibility to small rural school districts. We crafted this
legislation to respond to a problem in which small school
systems receive very small funding streams from numerous
Federal programs, none of which is sufficient to really
accomplish any goal. So we allowed this money to be combined
into one block grant program, essentially, under the rural
education program and then used for whatever is the greatest
need of that district.
Of the 4,700 eligible school districts nationwide this
year, 4,028 applied and received funding. I think that shows
just how well received this program was. The State of Maine has
received $1.9 million under this program, and it has made a
real difference in the lives of children attending rural small
schools.
Let me give you an example. For Fiscal Year 2003, the
Bradley School Department in Penobscot County, Maine, which has
104 students in the whole department, is slated to receive
about $21,000 through the rural education program. The previous
year, Bradley's entire non-Title I Federal allocation totalled
only about $4,400. So now the total Federal money going to
Bradley in Fiscal Year 2003 will be more than $25,000. That is
enough in Bradley, Maine, to hire a reading specialist, to
update computer systems or provide for extended day learning
opportunities, and that is typical.
I could give you many other examples of school systems in
Maine that have been able to use that small pot of money to
make a real difference, and this does give them the
flexibility.
So I want to express to you my disappointment that the
administration has zeroed out a program that is so in keeping
with the principles of flexibility that the administration has
embraced, and I realize you were not involved or at least I do
not think you were involved in that decision--if you were, I
would not tell me that, if I were you. [Laughter.]
But I would urge you to take a look at the funding for that
program and also to think about it in the context of the
continuing resolution proposal, where a program that almost
certainly will be restored has been zeroed out. And I would ask
for your comments.
Mr. Kaplan. I certainly will, Madam Chairman, consider, if
confirmed, everything that you have just said. I appreciate, as
I know the people of rural Maine do, your support for providing
the resources that they need to those rural districts.
The President's proposal for No Child Left Behind was to
provide, as you know, large, flexible amounts in grants to the
States so that they would have the ability to take care of the
specific concerns and the specific circumstances of their
State.
Again, I will, if confirmed, look forward to working with
you on the particular program that you have described. Of
course, if Congress sees fit to fund the program, I will work
diligently to make sure it is implemented according to
Congress' direction.
Chairman Collins. Thank you. Senator Coleman.
Senator Coleman. Thank you, Madam Chairman.
I would just briefly follow up on my distinguished
colleague from New Jersey's questions about protest. It kind of
caught my interest.
I really protested in the sixties, and here I am in the
U.S. Senate. It is kind of part of my life. But just reflecting
on Florida, and the Chairman I know asked that question, but I
just want to clarify, you were an official observer of a
campaign; is that correct?
Mr. Kaplan. That's right, Senator.
Senator Coleman. And you were not there to organize, plan
or participate in protests.
Mr. Kaplan. That's right, Senator.
Senator Coleman. And I must say, Madam Chairman, I do not
look at those as the dark days. It is part of American
democracy. Things get difficult, and we come back stronger than
ever. So I just have a different reflection on that, but
appreciate and understand your position.
Senator Lautenberg also asked or raised a question about
experience, noting that you have tremendous experience on the
budget side. Let me explore, though, on the management side, if
I can. Give me some of your reflections on what OMB can do to
help agencies better manage the Federal Government. What are
your thoughts on that?
Mr. Kaplan. As you know, Senator, shortly after the
President came into office, the Office of Management and Budget
designed the President's Management Agenda, which focused on
five particularly problematic areas in managing the Federal
Government that were cross-cutting across the agencies.
OMB's role is to work with Congress and others who watch
these things to identify what the major management challenges
are to the Executive Branch and to focus the attention of the
agencies on those challenges, which the administration has done
with the President's Management Agenda and with the design of
the scorecard. The scorecard is intended to highlight the
progress or lack thereof on occasion, of agencies and to
incentivize them to take action to address these longstanding
problems of government.
OMB, because of its central role, also has the ability to
work with the agencies to share with them the best practices
that other agencies of government have developed in addressing
these challenges in their agency. So I think it is a critical
role.
The President recently nominated, and the Senate confirmed,
Clay Johnson to be the Deputy Director for Management. I know
he is as enthusiastic as the Members of this Committee are and,
if confirmed, I will work very hard with Deputy Director
Johnson and with Director Bolten to try to implement the
President's Management Agenda and the other significant
management challenges that the Committee is interested in.
Senator Coleman. Thank you. I would just follow up a
comment about experience, and I often reflect on my own
experience. I talk about being at the bottom of the political
food chain being a mayor. Your experience working in the Marine
Corps, platoon leader, executive officer, you were dealing with
people on a one-to-one basis, and I take it responsible for
making sure things get done.
Mr. Kaplan. Yes, Senator. That's correct.
Senator Coleman. I think that is very good experience, by
the way, and I would hope that you bring that same mentality,
working now with your commanding officer, Josh Bolten, and the
President, to make sure things get done.
I will just raise, however, one issue, and it was your last
comment in regard to the Chairman's comment about a particular
program. Many of us get involved in discussions with OMB about
programs. I am involved right now in a discussion about sugar,
and your comments were that you will work hard to implement the
will of Congress. I hope you reflect on that and take that to
heart. We sometimes have some different perspectives, as part
of the legislative body, on this beautiful democracy and
balance. I think it is important that OMB understands it has
responsibilities regarding the budget, and see it as a whole
and look at the bottom line. We do, and I want to take you at
your word that you will work hard to implement the will of
Congress in some of these programs. That is what we get elected
to do, and I think that is part of the job.
Mr. Kaplan. I will, Senator. Thank you.
Senator Coleman. With that, no further questions, Madam
Chairman.
Chairman Collins. Thank you, Senator. Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Madam Chairman. I join
you in welcoming our nominee today. In the interest of time, I
ask that my statement be included in the record.
Chairman Collins. Without objection.
[The prepared opening statement of Senator Akaka follows:]
PREPARED OPENING STATEMENT OF SENATOR AKAKA
Thank you very much Madam Chairman. I join you in welcoming our
nominee today.
At the nomination hearing of OMB Director Bolten last month, I
noted that it is a President's prerogative to implement management
proposals such as the President's Management Agenda. We must ensure,
however, that these management proposals are an improvement.
The success of any management policy requires recruiting and
retaining the right people with the right skills. OMB should foster
government's ability to retain current Federal workers and attract
those considering Federal service. I am concerned that the
administration's contracting out policies may do just the opposite.
Just last week, I participated in two hearings which raised concerns
over the costs of implementing the administration's competitive
sourcing initiative.
As the Ranking Member of the Senate Subcommittee on National Parks,
I believe that the cost of conducting public private competitions may
have serious consequences for visitor services and seasonal operations.
But, the Parks Service is not alone. Government wide, managers are
working to find creative ways to implement the administration's
contracting out policies. In fact, there is currently no reliable
estimate of the government wide cost of the administration's
outsourcing proposals.
I believe the administration can do more to promote an employee-
friendly work environment. Management proposals should be discussed
with Federal employees, not handed down as orders. There have been
actions that have sparked alarm and distrust among Federal employees
who are concerned for their jobs. We should respect and value the
government's most critical asset--its workforce.
Mr. Kaplan, if you are confirmed as Deputy Director of OMB, I look
forward to working with you to ensure that Federal agencies have
adequate resources and personnel to fulfill their missions. I hope you
will make it your priority that sufficient resources are made available
to agencies to enhance the government's efforts to recruit, retain, and
manage the Federal workforce.
Mr. Kaplan, I look forward to your testimony.
Senator Akaka. Mr. Kaplan, in response to one of my
questions at Director Bolten's nomination hearing, he said that
OMB should ensure that Federal agencies have the resources to
compete effectively in public-private competitions, including
resources training. I have a keen interest in workforce and
training.
If confirmed, how would you ensure that resources are made
available for training Federal workers to conduct public-
private competitions?
Mr. Kaplan. Senator, if confirmed, I think what we would do
at OMB is to sit down with each agency, on an individual
agency-by-agency basis, and look at what their needs are, look
at what their capacity is, look at what their mission is and
try to figure out in the budget process what they need in order
to accomplish the mission that they have set out for themselves
in this area and that the administration has worked out with
them.
As we enter into the 2005 budget process, I will commit to
you, Senator, if confirmed, to very closely follow those
developments and to work with the individual agencies to make
sure that they have the resources they need to do what is
expected of them and what they expect of themselves.
Senator Akaka. Thank you. We are looking forward to working
with you, too.
Last week, Angela Styles, the Administrator for Federal
Procurement Policy, testified before this Committee that OMB
will work with agencies to establish agency-specific plans for
contracting out Federal jobs. Yet, we know that many agencies
lack the funds to effectively participate in these public-
private competitions.
As Deputy Director of OMB, how will you work to ensure that
the President's budget includes sufficient resources to support
these plans?
Mr. Kaplan. Senator, if I may, I think I will give you
roughly the same answer that I did on the last question, which
is that I will work very closely with the agencies, as those
plans are being developed for 2005 and beyond, to look at them
in light of the resources that each agency has because, as you
point out, Senator, they do come to the table with different
resources, with different abilities and capacity, and we will
work with them, and I know Administrator Styles will as well,
on making sure that they have the resources they need.
Senator Akaka. The President's Management Agenda includes
several government-wide management initiatives. However, there
are management challenges not addressed in the management
agenda, such as contract management, which has been on GAO's
high-risk list for 13 years.
My question to you is how will you ensure that the
President's budget request addresses management challenges,
such as contract management and also other areas not in the
President's Management Agenda?
Mr. Kaplan. Yes, Senator. I don't want to suggest that the
President's Management Agenda represents all of the challenges
that the government agencies face in managing their agencies.
As you point out, GAO has done a lot of work, as has this
Committee, in identifying other very significant challenges
that agencies face across the government.
I know that Deputy Director Johnson has already sat down
with GAO and is going through the list of concerns on GAO's
high-risk list and trying to design initiatives, and programs,
and approaches to dealing with those problems. I expect, if
confirmed, that I will work closely with Deputy Director
Johnson and with Director Bolten to make sure that we are
addressing those concerns and are dedicating the resources we
need to address them.
Senator Akaka. You have stated that the primary management
tool of the administration is the Program Administration Rating
Tool, known as PART. The Government Performance and Results
Act, which is known as GPRA, requires that agencies develop
performance plans and also report on their performance. Could
you explain how PART and GPRA differ and how one enhances the
other?
Mr. Kaplan. I can, Senator, or at least I can try. The act,
as I understand it, was designed to require agencies to put
together performance plans that reflect their overall goals and
objectives.
PART, which has been designed and implemented as part of
the President's Budget and Performance Integration Initiative,
is designed to look at individual agency programs, starting
with 20 percent of those programs last year, adding an
additional 20 percent this year and 20 percent every year
moving forward, to make sure that we're asking the right
questions about each of those programs, to measure those
programs and to be able to determine whether they are doing
what Congress wanted them to do in authorizing them and
appropriating the funds for them.
And the idea is that once we can measure how successful
those programs are, we will have information to evaluate them
and make further budget decisions and will be able to share
that information obviously with Congress to help inform your
decisions about what programs you want to authorize and
appropriate funds for going forward.
So my understanding is that PART is intended to complement
and essentially meet the goals and requirements of the act,
even if the form is not specifically what was contemplated and
described there. So it is supposed to, as I understand it, meet
Congress' intention and this Committee's intention in working
on the act.
Senator Akaka. During your pre-hearing interview, you
stated that you will work with the Deputy Director of
Management to maintain OMB's strong commitment to improve
management policies and practices across the Federal
Government.
Do you believe that the full requirements of the Chief
Financial Officers Act of 1990 and the Klinger-Cohen Act will
be extended to the Department of Homeland Security? As Deputy
Director, how will you ensure that this occurs?
Mr. Kaplan. Senator, my understanding, specifically with
regard to the requirements of the CFO Act, is that OMB will
require DHS to conform to the substantive requirements of the
act. With respect to Klinger-Cohen, I know that OMB is working
very closely with the Department of Homeland Security to review
its information technology plans. The specifics of the act I
cannot speak to, Senator, but I will certainly look into it and
can get back to you, if that is alright, Senator.
Senator Akaka. Thank you very much, Madam Chairman.
Chairman Collins. Thank you, Senator Akaka.
Mr. Kaplan, I want to follow up on an issue that Senator
Akaka raised that is of great concern to me as well. I was
pleased last week when Administrator Styles announced that OMB
had abandoned its government-wide goals for competing
commercial positions in the Executive Branch because I always
felt that having a government-wide goal was an arbitrary
approach to what should be a worthwhile system of reducing
costs and improving performance in the Executive Branch.
Individual agency goals, it is my understanding, still remain.
What assurances can you give us that those will not be
subject to the same kinds of problems that afflicted the
government-wide goal? In other words, would it not be better
to, instead of a goal applied to each agency, use a cost
reduction or a performance measure, rather than an arbitrary
percentage?
Mr. Kaplan. Madam Chairman, I think cost reduction and
performance-based measures are worth looking at. As you have
described, this is an initiative that, as I understand it, has
evolved considerably from the way it was initially proposed in
2001, in large part because of the very legitimate concerns
that Members of this Committee have raised and other Members of
Congress.
And I know Director Bolten, for one, heard in his
confirmation process loud and clear the Committee's concerns
and is committed to trying very hard to address those concerns,
beginning with the report that he sent up last Thursday.
As to the specific agency plans that are described in that
report, I don't believe they are arbitrary. In fact, in
response to the Congress' concerns, OMB has worked very closely
with the agencies to ensure they are not arbitrary, but rather
that they are the result of considered research and sound
analysis, where OMB sits down with the agency, discusses their
workforce, the particular challenges they face, the other
alternatives in the marketplace, whether they have the capacity
to actually do competitions and what is a reasonable number for
that agency based on their mission.
So I think what OMB is trying to do here is to avoid the
arbitrary goals or targets that were the subject of some
considerable concern, and we are making real progress on that,
and I will look forward, if confirmed, to continuing to work
with you on that.
Chairman Collins. I also want to follow up briefly on a
comment made by my distinguished colleague from Minnesota, and
that is to emphasize to you how important it is that OMB not
only work with Congress, but also follows the will of Congress
when it is expressed in law.
And I am going to submit for the record the details of this
because I do not expect you to have the answer, but this spring
the Department of Agriculture, as I understand it, under the
direction of OMB, diverted more than $150 million from four
working land conservation programs to pay for the cost of
administering the Conservation Reserve Program and the Wetlands
Reserve Program.
And that is troubling to me because, under the 2002 Farm
bill, these costs were intended to be paid out of the Commodity
Credit Corporation funds, as the result, the effect of the
diversions is to deny funds for farmers who are seeking to
participate in these conservation programs, which are already
oversubscribed, and that has an impact on the EQIP program, the
Environmental Quality Incentives Program, and others.
And I will submit the details of that to you for the
record, but that is indicative of the kind of action taken
allegedly by OMB that is very frustrating to us. When we are
crafting legislation and providing funding for specific
programs, to then have money diverted from one program to
another, thwarts the will of Congress.
So I hope we can receive from you today a general pledge
that you will try to ensure that does not happen, and when OMB
feels the need to reprogram funding, that you will come to
Congress, as is anticipated, for permission from the
Appropriations Committee.
Mr. Kaplan. Madam Chairman, you can certainly receive that
pledge from me today.
Chairman Collins. Thank you. And my final question today
concerns the Low-Income Heating Assistance Program. And the
question that I want to pose to you is whether OMB looks at how
funding streams go to programs and whether there are more
efficient ways of funding programs that would allow us to
stretch scarce Federal resources further.
And the LIHEAP program is a perfect example of that. Every
year there is a battle over the LIHEAP program, and the
administration is very slow to release the money. The result is
the money is always released at the height of the winter, when
fuel costs, home-heating costs and natural gas costs, are the
highest, and thus the money buys the least.
Ideally, what you would want to do is double fund for 1
year the LIHEAP program so you could change the funding cycle
so that the money would be received by States and community
action agencies that administer the program in the summer when
the costs are far lower. That way you can serve more people or
you would at least be able to provide a greater benefit if
people were able to use those funds to fill up their home
heating oil tanks in the summer.
But at the very least, if the administration would release
the money promptly at the beginning of the fiscal year, rather
than at the height of the winter, even that would be an
improvement.
Would you take a look not only at the LIHEAP program--I
definitely want you to take a look at that--but also at other
programs where, when the money is released, will make a
difference in the number of clients we can serve and the amount
of benefits that we can provide.
Mr. Kaplan. Madam Chairman, if confirmed, I will certainly
look forward to looking at and considering these types of
funding mechanisms and any other good ideas that will allow
these programs to be managed more effectively.
With respect to LIHEAP, in particular, I would want to
reiterate something I think Director Bolten discussed with you,
either in the hearing or outside of it. I know he shares your
concerns about the administration not responding rapidly enough
and is committed to making sure that those funds are released
very rapidly, as needed.
And with respect to the specific advanced funding proposal,
I know that he promised to review it and, if confirmed, since I
will be working for him, I know that I will be doing that as
well.
Chairman Collins. I thought it could not hurt to get a
second commitment on this issue----
Mr. Kaplan. Absolutely, Madam Chairman.
Chairman Collins [continuing]. To emphasize its importance
to me and to many other members.
Senator Coleman, do you have any further questions?
Senator Coleman. Thank you, Madam Chairman. I just want to,
by the way, applaud your commitment and persistence on the
LIHEAP program in getting that second commitment. I also
represent a Northern border State and have the same concerns.
So thank you, Madam Chairman, and I would just note that I look
forward to supporting the confirmation of Mr. Kaplan. I think
he is very well-qualified, and I think he will serve this
country well. So I look forward to that happening.
Mr. Kaplan. Thank you, Senator.
Chairman Collins. Thank you, Senator, and thank you for
your participation in this hearing today.
I want to thank Mr. Kaplan for appearing before the
Committee, and also for his public service to date and to what
I am sure will be an equally impressive career as the Deputy
Director.
We do hope to expedite the confirmation of your nomination.
So, without objection, the record will be kept open until 5
p.m. today for the submission of any written questions or
statements for the record. I would encourage you to reply to
any additional questions as rapidly as possible so that we can
expedite your nomination.
Thank you for appearing today, and this hearing is now
adjourned.
[Whereupon, at 11:47 a.m., the Committee was adjourned.]
A P P E N D I X
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