    [House Hearing, 109 Congress]
    [From the U.S. Government Publishing Office]

                                  MEMBERS' DAY

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

                                    HEARING

                                   before the

                            COMMITTEE ON THE BUDGET
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                   __________

               HEARING HELD IN WASHINGTON, DC, FEBRUARY 14, 2006

                                   __________

                               Serial No. 109-13

                                   __________

               Printed for the use of the Committee on the Budget

      Available on the Internet: http://www.access.gpo.gov/congress/house/
                                  house04.html

                                     ______

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                            COMMITTEE ON THE BUDGET

                           JIM NUSSLE, Iowa, Chairman
    JIM RYUN, Kansas                     JOHN M. SPRATT, Jr., South
    ANDER CRENSHAW, Florida                  Carolina,
    ADAM H. PUTNAM, Florida                Ranking Minority Member
    ROGER F. WICKER, Mississippi         DENNIS MOORE, Kansas
    KENNY C. HULSHOF, Missouri           RICHARD E. NEAL, Massachusetts
    JO BONNER, Alabama                   ROSA L. DeLAURO, Connecticut
    SCOTT GARRETT, New Jersey            CHET EDWARDS, Texas
    J. GRESHAM BARRETT, South Carolina   HAROLD E. FORD, Jr., Tennessee
    THADDEUS G. McCOTTER, Michigan       LOIS CAPPS, California
    MARIO DIAZ-BALART, Florida           BRIAN BAIRD, Washington
    JEB HENSARLING, Texas                JIM COOPER, Tennessee
    DANIEL E. LUNGREN, California        ARTUR DAVIS, Alabama
    PETE SESSIONS, Texas                 WILLIAM J. JEFFERSON, Louisiana
    PAUL RYAN, Wisconsin                 THOMAS H. ALLEN, Maine
    MICHAEL K. SIMPSON, Idaho            ED CASE, Hawaii
    JEB BRADLEY, New Hampshire           CYNTHIA McKINNEY, Georgia
    PATRICK T. McHENRY, North Carolina   HENRY CUELLAR, Texas
    CONNIE MACK, Florida                 ALLYSON Y. SCHWARTZ, Pennsylvania
    K. MICHAEL CONAWAY, Texas4           RON KIND, Wisconsin
    CHRIS CHOCOLA, Indiana
    JOHN CAMPBELL, California

                               Professional Staff

                         James T. Bates, Chief of Staff
           Thomas S. Kahn, Minority Staff Director and Chief Counsel

                                C O N T E N T S

                                                                       Page
    Hearing held in Washington, DC, February 14, 2006................     1
    Statement of:
        Hon. Randy Neugebauer, a Representative in Congress from the
          State of Texas.............................................     1
        Hon. Steve King, a Representative in Congress from the State
          of Iowa....................................................     5
        Hon. Vernon J. Ehlers, a Representative in Congress from the
          State of Michigan..........................................    10
        Hon. Rush D. Holt, a Representative in Congress from the
          State of New Jersey........................................    21
        Hon. Cathy McMorris, a Representative in Congress from the
          State of Washington........................................    25
        Hon. Ralph Regula, a Representative in Congress from the
          State of Ohio..............................................    29
        Hon. Don Young, a Representative in Congress from the State
          of Alaska..................................................    35
        Hon. Ruben Hinojosa, a Representative in Congress from the
          State of Texas.............................................    39
        Hon. Todd Tiahrt, a Representative in Congress from the State
          of Kansas..................................................    47
        Hon. Vito Fossella, a Representative in Congress from the
          State of New York..........................................    52
        Hon. Shelley Moore Capito, a Representative in Congress from
          the State of West Virginia.................................    57
        Hon. James P. McGovern, a Representative in Congress from the
          State of Massachusetts.....................................    61
        Hon. Julia Carson, a Representative in Congress from the
          State of Indiana...........................................    71
        Hon. Timothy H. Bishop, a Representative in Congress from the
          State of New York..........................................    74
        Hon. John L. Mica, a Representative in Congress from the
          State of Florida...........................................    77
        Hon. Sue W. Kelly, a Representative in Congress from the
          State of New York..........................................    83
        Hon. Dennis J. Kucinich, a Representative in Congress from
          the State of Ohio..........................................    86
        Hon. Brad Miller, a Representative in Congress from the State
          of North Carolina..........................................    90
        Hon. Robin Hayes, a Representative in Congress from the State
          of North Carolina..........................................    94
        Hon. Mark R. Kennedy, a Representative in Congress from the
          State of Minnesota.........................................    98
        Hon. Ginny Brown-Waite, a Representative in Congress from the
          State of Florida...........................................   100
        Hon. John T. Salazar, a Representative in Congress from the
          State of Colorado..........................................   103
        Hon. Michael G. Fitzpatrick, a Representative in Congress
          from the State of Pennsylvania.............................   106
        Hon. Charles F. Bass, a Representative in Congress from the
          State of New Hampshire.....................................   109
    Prepared statements, letters, extraneous material submitted by:
        Mr. Neugebauer...............................................     4
        Mr. King.....................................................     7
        Mr. Ehlers...................................................    17
        Mr. Holt.....................................................    22
        Miss McMorris................................................    27
        Mr. Regula...................................................    32
        Mr. Young of Alaska..........................................    37
        Mr. Hinojosa.................................................    41
        Mr. Tiahrt...................................................    49
        Mr. Fossella.................................................    55
        Mrs. Capito..................................................    60
        Mr. McGovern:
            Letter...................................................    64
            Prepared statement.......................................    65
        Ms. Carson...................................................    73
        Mr. Bishop of New York.......................................    75
        Mr. Mica:
            Prepared statement.......................................    79
            Cover letters............................................    81
        Mrs. Kelly...................................................    85
        Mr. Kucinich.................................................    89
        Mr. Miller of North Carolina.................................    92
        Mr. Hayes....................................................    96
        Mr. Kennedy of Minnesota.....................................    99
        Ms. Ginny Brown-Waite of Florida.............................   102
        Mr. Salazar..................................................   105
        Mr. Fitzpatrick..............................................   108
        Mr. Bass:
            Prepared statement.......................................   110
            Letter...................................................   112
        Hon. Tom Price, a Representative in Congress from the State
          of Georgia.................................................   113
        Hon. Lane Evans, a Representative in Congress from the State
          of Illinois................................................   113
        Hon. Jim Gibbons, a Representative in Congress from the State
          of Nevada..................................................   114

                                  MEMBERS' DAY

                                  ----------

                           TUESDAY, FEBRUARY 14, 2006

                              House of Representatives,
                                       Committee on the Budget,
                                                        Washington, DC.
        The committee met, pursuant to call, at 2:05 p.m., in room
    210, Cannon House Office Building, Hon. Jim Ryun presiding.
        Members present: Representatives Ryun, Crenshaw, Wicker,
    Diaz-Balart, Bradley, McHenry, Conaway, Spratt, Moore, Baird
    and Cooper.
        Mr. Ryun [presiding]. Good afternoon and welcome, everyone,
    to the Budget Committee Members' Day hearing. The hearing is
    directed by the Budget Act, and its intent is to provide a
    forum in which Members of Congress can relay their priorities
    from their districts, State, and country to this committee. We
    are pleased to have a diversified group of Members on the
    roster today and look forward to receiving their testimony.
        Before we go to our first Member, are there any Members who
    have any opening statements?
        I would like to recognize Mr. McHenry.
        Mr. McHenry. Mr. Chairman, thank you so much. I appreciate
    the Members coming forward with their ideas and look forward to
    hearing what good ideas we can try to incorporate as we try to
    create the budget for this coming fiscal year.
        I just want to thank my colleagues Mr. Neugebauer and Mr.
    King especially for being here.
        Thank you, Mr. Chairman.
        Mr. Ryun. Thank you very much.
        We will proceed with Members and their testimony. We will
    begin today with Representative Neugebauer of Texas.

        STATEMENT OF HON. RANDY NEUGEBAUER, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Neugebauer. Mr. Chairman, thank you, and I ask that I
    be able to revise and extend my remarks.
        Mr. Ryun. Without objection.
        Mr. Neugebauer. Thank you, Mr. Chairman.
        You know, we moved in the right direction last year when it
    comes to the budget. For the first time in 8 years, Congress
    passed legislation that reforms mandatory spending programs and
    slows their growth rates, saving nearly $40 billion. Through
    the appropriation process we reduced nondefense discretionary
    spending and held total discretionary growth to just 1.8
    percent. Tax revenues continue to rise, and we are on a track
    to pass legislation that will prevent any future tax increases.
        Despite this setback in the deficit due to emergency
    spending without enough offsets, we must maintain the momentum
    on spending control and continue to keep our tax rates low. To
    this end, Congress should have three goals in this year's
    budget. First, our budget must again contain spending
    reconciliation instructions in order to drive additional reform
    and savings in the rapidly growing entitlement programs.
    Second, we must prioritize our domestic spending better in
    areas in order to live within our means. Finally, we need to
    reform our budget process so that Congress is more accountable
    to the taxpayers.
        It has been a number of years since Congress used
    reconciliation to achieve savings and reforms in mandatory
    programs. We can't afford to wait a long time before we do it
    again, so reconciliation must become a regular part of the
    budget process. Left on autopilot, Medicare and Medicaid alone
    will become 32 percent of all Federal spending, and all
    mandatory programs will reach a two-thirds level of the budget
    within 10 years. The economy does not grow that fast, and
    neither can our government. Our goal should be to hold total
    spending growth to an annual GDP growth or less.
        And what I mean by that, Mr. Chairman, is that I think the
    President is going to report to us that the economy grew at 3.1
    percent GDP last year. And our spending cap should be for our
    Federal Government, that the Government should grow at no
    greater rate than 3.1 percent. If we begin to do that over the
    next few years, instead of letting government grow at a rate of
    over 5 percent, we begin to reduce the budget deficits at a
    much faster clip.
        So one of the things I would like for this committee to
    look into is coming up with some reasonable spending
    restraints. We are restraining the amount of revenue that is
    coming in in the form of keeping taxes lower, but as long as we
    keep writing checks that there are not sufficient funds for and
    we have to borrow, then the spending restraints are not
    enforceable. So what I think we should do, as we put this
    budget together, is look at other ways to enforce and impose
    upon ourselves certain spending caps.
        I would urge the Budget Committee to again include the
    reconciliation instructions in the budget resolution and giving
    the authorizing committees full latitude in order to decide how
    to achieve those savings. I also believe that the
    reconciliation targets should be set in line with a committee's
    share of total mandatory spending.
        What I mean by that is, for example, under the Agriculture
    Committee's jurisdiction, about one-half of a percent is the
    Federal budget and 4 percent of all mandatory spending. So when
    we look at assigning those spending and reform targets, that
    should be in proportion to that committee's share of the
    budget.
        Currently in the Agriculture Committee we will be working
    on reauthorizing the 2007 Farm Bill. We need to make sure that
    whatever bill that we do for budget purposes we keep in place
    our ability to keep our promise that we made to producers in
    the 2002 Farm Bill. I urge the Budget Committee keep these
    considerations in mind when setting targets so that Agriculture
    does not take a disproportionate share of those savings.
        The fiscal year 2007 budget resolution must also challenge
    appropriators and authorizers to better prioritize spending by
    reducing the amount allocated for discretionary spending. The
    discretionary spending debate needs to shift from how much to
    increase programs to whether or not we should be funding those
    programs at all. If an authorizing committee has not done the
    work to reauthorize a program, Congress should not continue to
    appropriate those funds to it. Reducing the discretionary
    spending level in the budget resolution is one way to force
    this change in debate.
        Limiting resources results in real priority setting and
    more debate on whether a program or Members' earmark requests
    are actually necessary. There are a lot of things that would be
    nice for the Federal Government to be doing, but the debate
    really ought to be what we should be doing.
        I appreciate the work that the Budget Committee does;
    however, reforming the way that we budget will enable Congress
    to do a much better job of being good stewards of the
    taxpayers' dollars.
        Two steps: No. 1, enforcing domestic spending caps for the
    next 5 years; and, No. 2, reinstating PAYGO for any new
    mandatory programs, again putting a ceiling on what we spend,
    and if we do initiate new programs, requiring that all new
    mandatory programs would have to be paid for.
        It is important for Congress to create a revolving sunset
    of all Federal programs. What I propose with that is whether
    that period is a 6- or 8-year period, that we say over the next
    8 years on a staggered basis that we are going to sunset every
    major Federal program. Then we begin the real debate on whether
    those programs should be reauthorized or not, looking at the
    effectiveness of them, measuring their success, looking at
    whether if we do reauthorize those programs, are three ways to
    reauthorize them in such a way that they are more efficient and
    better stewards of the taxpayers' dollars.
        Our budget process needs to take into account for emergency
    spending. I agree sometimes Federal resources such as hurricane
    recovery relief need to be made; however, when an emergency
    situation becomes a priority, we need to offset the cost by
    reducing spending items that are less pressing. Providing a
    clear definition of what constitutes an emergency, I think,
    would also be helpful, and creating an emergency spending fund
    within the budget would serve Congress better.
        We know that when we look back historically over the years
    that we have had, in numerous years, emergency spending
    requests that have had to come before this Congress. Let us
    anticipate those and build an emergency fund in our budget.
        We also, finally, need a debate on the budget process
    itself. In conclusion, a sound 2007 Federal budget resolution
    will guide Congress through to making further reforms to
    mandatory programs, prioritizing domestic programs, and
    allowing for continued economic growth by preventing tax
    increases.
        I also urge you to consider recommendations for budget
    reforms that other Members will be bringing forward today.
        Thank you for this opportunity to present my views on this
    year's budget.
        Mr. Ryun. Thank you very much for your testimony.
        [The prepared statement of Mr. Neugebauer follows:]

       Prepared Statement of Hon. Randy Neugebauer, a Representative in
                        Congress From the State of Texas

        Last year, for the first time in 8 years, Congress passed
    legislation that reforms mandatory spending programs and slows their
    growth rates, saving $40 billion. Through the appropriations process,
    we actually reduced non-defense discretionary spending and held total
    discretionary growth to 1.8 percent.
        Tax revenues continue the increase that began in 2004 due to
    sustained growth in the jobs and the economy, and we are on track to
    pass legislation that prevents a tax increase. Allowing tax rates to
    rise would take away resources from Americans that they use better than
    the government can to generate economic growth.
        As challenging as these budget accomplishments were, the deficit
    will still increase in FY 2006. Congress appropriated billions of
    dollars in emergency spending in response to the Gulf hurricanes and to
    continue to support our troops abroad, but we did not approve
    sufficient offsets to cover these needs.
        Despite this setback, we moved in the right direction last year.
    This year, we must maintain the momentum on spending control, prevent a
    tax increase and address the long-term threats to the nation's fiscal
    health. To this end, Congress should have three goals in this year's
    budget:
        First, our budget must again contain spending reconciliation
    instructions in order to drive additional reform and savings in
    rapidly-growing entitlement programs. Second, we must prioritize our
    domestic spending better in all areas in order to live within our
    means. Finally, we need to reform our budget process in order to make
    Congress more accountable to the taxpayers we represent.

                           MANDATORY SPENDING SAVINGS

        The Deficit Reduction Act will, on average, slow mandatory spending
    growth from 5.9 percent to 5.7 percent. It had been a number of years
    since Congress used reconciliation to achieve savings and reforms in
    mandatory programs; we can't afford to wait that long before we do it
    again. Reconciliation must become a regular part of the budget process
    given the deficit, the growing share of the Federal budget that
    mandatory spending comprises and the growing demographic demands on the
    largest entitlement programs.
        Congress has more opportunities to consider the long-term stability
    of programs such as Medicare and Medicaid when we add regular review of
    entitlement spending. CBO projects each of these programs will grow by
    more than 8 percent over the next 10 years. Left on autopilot, these
    two programs alone will comprise 32 percent of all Federal spending,
    and all mandatory programs would reach two-thirds of spending. The
    economy does not grow that fast, and neither can government. Our goal
    should be to restrict the growth of all spending annual GDP growth or
    less.
        I urge the Budget Committee to again include reconciliation
    instructions in the Budget Resolution that give authorizing committees
    full latitude in deciding how to achieve the savings. I also believe
    reconciliation targets should be set in line with a committee's share
    of total mandatory spending and commensurate with the degree a
    committee's programs are growing in excess of the economy.
        For example, all programs under the Agriculture Committee's
    jurisdiction comprise a half percent of total Federal budget and 4
    percent of all mandatory spending. In the Ag Committee, we have begun
    work to reauthorize Department of Agriculture programs and replace the
    current Farm Bill that expires in September, 2007. Reductions in
    agriculture mandatory spending could reduce the amount the available
    for the Farm Bill before we even write the bill. I ask that the Budget
    Committee keep these facts in mind when setting savings targets so that
    agriculture does not face a disproportionate share of the reductions.

                              PRIORITIZE SPENDING

        The FY2007 Budget Resolution must challenge appropriators and
    authorizers to better prioritize spending by reducing the amount
    allocated for discretionary spending. Although we could eliminate all
    non-defense discretionary spending and still run a deficit, we need to
    squeeze all the savings we can out of this area.
        The discretionary spending debate needs to shift from ``how much''
    to increase a program to whether or not we should be funding the
    program at all. If an authorizing committee has not done the work to
    reauthorize a program, Congress should not continue to appropriate
    funds to it.
        Reducing the discretionary spending level in the budget resolution
    is one way to force this change in debate. Limiting resources results
    in real priority-setting and more debate on whether a program, or a
    Member's earmark request, is necessary or is effective. There are a lot
    of things that may be nice for the Federal Government to do, but the
    spending debate ought to be about what the Federal Government should be
    doing.

                             BUDGET PROCESS REFORM

        I appreciate the work of the Budget Committee in setting the
    parameters for spending and tax policy every year. However, reform in
    the way we budget will enable Congress to be a better steward of tax
    dollars. Two first steps we need to take are setting and enforcing
    domestic spending caps for the next 5 years and re-instating PAYGO for
    new mandatory spending. Congress has used these tools successfully in
    the past, and we need to put them in force again.
        It is also important for Congress to create a revolving sunset for
    all Federal programs. A revolving sunset will push Congress to do more
    oversight and long-term planning and make better decisions about the
    role and activities of the Federal Government. Sunsetting will also
    help reduce duplication, waste and obsolete programs.
        Our budget process needs to take better account of emergency
    spending. I agree that we needed to devote Federal resources to
    hurricane recovery. However, when an emergency situation becomes the
    priority, we need to offset those new costs by reducing spending on
    items that are less pressing. Providing a clear definition of what
    constitutes emergency spending and setting aside an emergency ``rainy
    day'' fund in the budget would serve Congress better.
        There are a number of budget reform proposals on the table,
    addressing ideas such as biennial budgeting, earmarking, new budget
    points of order and a simplified budget resolution. We need a full
    debate on budget process reform this year.
        A sound FY2007 Budget Resolution will guide Congress in making
    further reforms to mandatory programs, prioritizing domestic programs
    and allow for continued economic growth by preventing tax increases. I
    also urge you to consider recommendations for budget reforms.
        Thank you for the opportunity to present my views on this year's
    budget.

        Mr. Ryun. Any Members with any questions at this time?
        Before we move to the next witness, I would like to take a
    moment and turn to Mr. Spratt for any opening comments he would
    like to make.
        Mr. Spratt. I have none, Mr. Chairman. I thank both
    witnesses for their attendance here and look forward to the
    further testimony and apologize for being late.
        Mr. Ryun. Our next witness is Mr. King from Iowa.

    STATEMENT OF HON. STEVE KING, A REPRESENTATIVE IN CONGRESS FROM
                           THE STATE OF IOWA

        Mr. King. Thank you, Mr. Chairman and Ranking Member
    Spratt, and other members of the committee. I appreciate the
    privilege to testify before this committee, and I ask unanimous
    consent to introduce my statement into the record and just
    speak directly to you off the statement extemporaneously.
        Mr. Ryun. Without objection.
        Mr. King. Thank you, Mr. Chairman.
        I want to make five points before this committee, all of
    which are included in my printed remarks. The first is a
    discussion on joint resolution; and then the need, I think, to
    produce a model balanced budget; and then to budget emergency
    spending, which Mr. Neugebauer addressed as well; and then to
    discuss a rescissions bill that could be useful to us in
    controlling spending; and then to point out what it would take,
    at least in a very snapshot way, to balance this budget this
    year.
        First of all, with a joint resolution on the budget, that
    is something we have discussed at some length in the past 2 or
    3 years that I have been here in this Congress, Mr. Chairman,
    and I think that it is essential for us to be able to pass a
    budget out of this House that goes over to the Senate and ask
    them to put an approval on that. So we would have a joint
    resolution that would have the endorsement of the House and
    Senate, and then send it to the President for his signature so
    it would have the full force and effect of law.
        That would eliminate a great deal of the temptation that
    comes in the appropriations process if we are bound then by a
    joint resolution and limits us to the 302(b) allocations that
    would be part of that budget. I have supported this for some
    time. There is significant support, I believe, to do so. And if
    we don't do this, we will continue to see this government grow
    6 to 8 percent every year, as we have seen it grow in the past.
    That would be my first point.
        My second point is a respectful request to this Budget
    Committee, and it is one that I have made in private over the
    last 3 years I have served in this Congress, and it is one I
    would ask your help with, and that is let us produce a balanced
    budget. Whether we can pass it or not is a secondary question,
    but we should hang a model up on the wall that lets the
    American people know how painful it might be to do the cuts
    that are necessary to balance this budget, like we would have
    to balance our family budget or our business budget.
        I reflect back that even though I was faced with emergency
    spending in my business in 1993, when four of my major projects
    went underwater in the construction business, I didn't have the
    alternative to produce anything but a balanced budget because I
    would have been out of business otherwise. And I am
    incorporating two ideas here, the balanced budget and emergency
    spending. We face this in our business and our families every
    day in this country. We do what is necessary to balance the
    budget, no matter how painful it is, because we know we are
    insolvent if we don't do so.
        So I would submit that this committee could be very
    valuable as a tool to produce a balanced budget, if nothing
    else, as a prototype, as a model or template to show how much
    we deviate from that when we produce the budget that actually
    gets 218 votes. I think this committee could do it, and I think
    you have the will to do it. You certainly have the will to get
    a budget out of here. I think you have done a great job out of
    this committee, especially in the last couple of years. Let's
    produce a model balanced budget.
        The third point would be one of Mr. Neugebauer's points as
    well, and that is to budget for emergency spending. There has
    been more efforts to do that in the past, and I applaud those
    efforts, but I think we need that line-item in there, and a
    realistic line-item, not one that is inflated that can provide
    for any contingency, but one that is realistic, that is perhaps
    the average of emergency spending for the last 5 years. Plug
    that number into the budget and adjust our other numbers
    accordingly. Then, if we have an emergency that exceeds that
    line-item within our 302(b) allocation, then let us put it in
    law, in our joint resolution, that there will be mandatory
    offsets so that we can control this spending in the event of a
    disaster, like we have seen down in the gulf coast this year.
        My fourth point is the one that I think could actually make
    a dramatic difference in the spending, and that is to bring a
    rescissions bill to the floor of Congress, at least one bill at
    the end of the appropriations process under an open rule in
    such a way that every single line item--and we talk about a
    line-item veto for the President. We don't even get to, as
    Members of Congress, offer a line-item veto for a majority vote
    of Congress. But under a rescissions bill that would come to
    the floor under an open rule, it would allow any Member of
    Congress to bring an amendment that would strike a line item.
    And in this I am keeping in mind earmarks that have been a
    central point of our discussion, but any line item, and direct
    those funds to any fund that Member chose, whether to reduce
    the overall debt or whether it is to go to another program, and
    let the majority of Congress put a vote up on the board that
    says where we are.
        When we finish this process of a rescissions bill, and I
    don't allege this will be an easy process, especially the first
    year, but after 2 or 3 years of a rescissions bill under an
    open rule that lets us bring anything, you would find that the
    earmarks would be reduced. Outrageous programs wouldn't be
    submitted because they wouldn't want to face the scrutiny of a
    potential majority vote in Congress. So I think that is an idea
    that has a lot of merit and that addresses the earmark problem
    and the overspending problem.
        And then in conclusion, Mr. Chairman, I would just add that
    under a quick analysis of a spreadsheet program I have had made
    available to me, I just went in yesterday and did some quick
    clicks on that, some potentials of what would it take to
    balance the budget for the 2007 fiscal year, and if I just go
    to nondefense discretionary spending, it would take a reduction
    of about 5 percent of nondefense discretionary spending. That
    is probably, I am certain, too painful for the majority of
    Congress to go that way, but I think it is important for this
    committee to analyze different proposals and come back to the
    Congress with a proposal that lets us know how painful it is to
    balance the budget in this time.
        That would conclude my testimony, and I would be open to
    any questions. Thank you, Mr. Chairman.
        [The prepared statement of Mr. King follows:]

      Prepared Statement of Hon. Steve King, a Representative in Congress
                             From the State of Iowa

        I wish to thank the gentleman from Iowa (Mr. Nussle), Chairman of
    the Budget Committee, and other members on the Budget Committee for
    holding this important hearing today to chart our financial course for
    Fiscal Year 2007.
        Spending is out of control and we are paying more money per
    household for taxes than we have at any time since the Second World
    War. We need to get out of the cycle of automatic spending increases.
    Since much of the budget is calculated from formulas that result in
    automatic spending increases, the size of government may be expected to
    grow by 6 to 8 percent every year--automatically. Baseline budgeting
    estimates how much Federal spending is projected to increase. An
    automatic increase to mandatory programs is not an effective tool to
    reduce spending. During this time of year, those seeking funds often
    play on syntax and claim that budgets are being decreased. For example,
    if a proposal to reduce the rate of growth on spending that has not yet
    actually occurred--recommending that entitlements increase by 6.2
    percent rather than 6.3 percent--there is a mad scurry stating that
    funding is being cut when in fact it is not. We need to get Washington
    out of the mind-set that budget assumptions need to account for the
    growth of government.
        Here are a few of my suggestions to keep us on track toward a
    balanced budget.
        First, I believe that we should transform the concurrent resolution
    on the budget into a joint resolution, requiring the President's
    signature and making it enforceable. The Executive and Legislative
    branches would begin early on to work on budget priorities together
    rather than working on two separate tracks, which is the current
    system. Early involvement between the two branches would foster
    cooperation, leading to less conflict when legislation implementing
    budget resolution policies is finalized later in the session. This
    would make the appropriations process more accountable because the
    appropriators would be bound by law to not exceed the discretionary
    spending caps set by the 302(b) Budget Allocations. Authorizing
    committees would be required by law to find savings in existing
    programs. It would help to keep the budget process from being watered
    down by the time the bill makes it out of conference committee. The
    work during Fiscal Year 2006 is a good start, but we have a long way to
    go.
        Secondly, to fully understand the scope of the budgeting challenges
    we are faced with in the coming years, Members of Congress need to
    understand the full scope of a balanced budget and what it will take to
    get us there. The Budget Committee should be required to present a
    balanced budget annually even if the balanced budget is not passed out
    of committee. This would give us a template to work from and always
    direct us toward a balanced budget. It is important that we set short-
    term, mid-term, and long-term priorities. Setting a budget is more than
    just numbers. It defines us by vision and priorities for this Nation.
        Third, Congress currently provides additional funds during the
    fiscal year, usually in supplemental appropriations, to respond to
    specific natural disasters and other emergency, or unanticipated,
    situations. Congress and the President usually designate the additional
    spending as an ``emergency requirement,'' effectively exempting it from
    budget constraints established under the Budget Enforcement Act of
    1990, as amended. I propose that emergency spending should be planned
    for to the best of our ability. We are not really living under a real
    and true budget when spending can be taken off the table and accounted
    differently under the auspices of an emergency. As a small businessman
    who saw my very livelihood in pending construction jobs and equipment
    washed down the Missouri River in the flood of 1993, I had to count
    that disaster as part of my whole budget.
        Finally, the Budget Committee should require that at least one
    rescissions bill be brought to the floor of the House and the Senate
    under an open rule so that every member has the opportunity to bring
    amendments. This will reduce the number of earmarks simply because of
    the intimidation factor. Bloated spending will be dramatically cut by a
    majority vote of Congress.
        I believe we can work together to reduce the deficit and still
    support a budget that provides for the common defense, helps us fight
    and win this war on terror, and promotes economic growth. I have some
    sample charts that illustrate what a 5-percent cut to discretionary and
    other non-Medicare or non-Social Security spending would look like over
    the next 5 years. There is nothing courageous or commendable about
    voting for deficits. True courage is exhibited by taking a tough stand
    and choosing to cut spending. When it comes to Federal programs, it is
    not how much money is spent, but what we spend the money on that
    counts. I believe we need to chart an economic course in this Nation
    that will not bankrupt our children and grandchildren. The easiest and
    best way to stop the growth of Federal spending and give more money
    back to American families is to make these tough decisions now. There
    still remains much work to be done, and I look forward to working with
    the Committee to accomplish the goal of not only reducing the deficit
    but also balancing the budget.
        Once again, I thank and commend the Chairman (Mr. Nussle) and the
    Committee for the work they have done and encourage them to press
    forward on our tough budget decisions ahead.

        Mr. Ryun. Thank you very much for your testimony, and I
    would like to at this point turn to any Members that might have
    questions.
        Mr. Wicker.
        Mr. Wicker. Let me ask a question, and I appreciate the
    testimony from both of you. It seems that both of you would
    like for us to change the budget procedure with regard to
    emergency spending.
        Mr. King, you were a little more specific, suggesting that
    we look back at the past 5 years and use that average as an
    amount. Have you run the numbers to see how that would have
    changed things for the Hurricane Katrina. Is it something that
    you have already done; or would you supply that to the
    committee?
        And, also, how would it actually change things as a
    practical matter, since we actually did offset a great deal of
    the emergency spending that we had last year?
        Mr. King. Well, I would be happy to run those numbers and
    provide them to the committee.
        I have just laid out a philosophy, and I don't think any 5-
    year history would have prepared us for the Katrina/Rita
    disaster that hit us, because the magnitude of that is beyond,
    I believe, what that would have accommodated for. But that is
    from a philosophical perspective. It isn't clear yet the
    expenses of Katrina to be able to determine the impact of that
    particular disaster, but I do think Katrina/Rita is anomaly.
        We have faced severe disasters in the past, none of that
    magnitude. So I am hopeful that that will be kind of a blip on
    the radar screen in a fashion that as we look back
    historically, we would be able to have a perspective that is
    broader than Katrina and absorb that into our average in future
    years.
        Mr. Wicker. Would this contingency emergency fund be added
    to the baseline each year? That is one of the arguments in
    favor of emergency spending, that you go back to the original
    baseline; you don't add that in.
        Mr. King. It would be my philosophical position, not a
    procedural one, that unspent funds would be returned back into
    the general fund so that they didn't add to the baseline.
    Otherwise we would be inflating on unspent funds, and that
    wouldn't reflect the disasters that we faced.
        Mr. Neugebauer. I think I would probably take a little bit
    different approach. I think I would put it in the baseline. It
    is easier to give it back. But if you build your budget around
    that, one of the things, for example, in Katrina, if we had had
    an emergency contingency fund, I think we would have given
    Congress a little more time to have sat down and looked at what
    would have been an appropriate reaction to Katrina. As a result
    of that, we came back and we passed an unprecedented--I think
    it is the largest disaster bill in the history of this country.
    If you had had a certain amount of money in there that could
    have been activated under the budget, rather than having to
    come back and passing an emergency bill, I think possibly a
    better outcome of how we spent that money could have been
    achieved.
        In my business, for example, I just recently came to
    Congress from the private sector, and we reserved amounts for
    potential overages or for potential unforeseen things that
    could happen during the budget year because we had to build it
    around that. It is hard to go back to your customers after you
    have sold all your merchandise and say, I didn't sell this for
    enough because we had an extraordinary expense that occurred
    during the year.
        So I think you have to build that into this budget, whether
    it is a drought in the Midwest or hurricanes in Florida or
    hurricanes in the Southeast. I think we have to build that in
    our budget because we have been spending those kinds of monies.
        Mr. Wicker. Well, I thank you both for your testimony. Both
    of you do come from a business background. That is very helpful
    in looking at the problems that we face.
        I want to congratulate these two witnesses, Mr. Chairman,
    for being creative and thinking outside the box in providing us
    their expertise on this issue.
        Mr. Ryun. Thank you very much.
        Any more questions?
        May I just say to Mr. McHenry, if you can make your
    question brief. We have two other witnesses. You may continue.
        Mr. McHenry. Thank you, Mr. Chairman.
        I do want to thank Mr. Neugebauer and Mr. King for their
    testimony. What they both struck upon was the need for a
    balanced budget.
        Mr. King, you spoke directly about that. Do you want to
    fill in any more of the details on what you would like to see,
    the approach here? Because I know every year we have the
    opportunity to offer amendments, and if it is something the
    committee cannot take up, I would be very willing to work with
    you on crafting our view and create our version of a budget so
    that we can move toward balance and bring the Congress with us.
        Mr. King. Well, thank you, Mr. McHenry. I have not worked
    out a budget yet myself. As you know, it takes a broad staff
    and time to do that in a responsible fashion. But I think we
    need to look at all the components of the budget and analyze
    them. And it is the growth of entitlements that I am
    particularly concerned about.
        I am also concerned that we put together a budget that if
    it doesn't balance this year, let us set a target for when it
    does balance and let us try to make a promise to the American
    people and head down that path. We need a short-term, a mid-
    term, and a long-term strategy, and that strategy needs to
    include these entitlements, particularly Medicare, Medicaid,
    and Social Security.
        And there is going to have to be some policy changes there
    in order to keep that growth under control, or interest will
    eat us up in the end down the road. So I would like to look at
    that with you in the overall composition of the budget.
        I do not think a 5-percent cut in the discretionary
    nondefense spending would be the way to balance the budget. I
    think that is too draconian, but I used that because it was a
    simple model. So I would like to look at that in a broader
    scope with you and anyone else interested in producing a
    balanced budget.
        Mr. Ryun. Mr. King, thank you very much for your testimony,
    and we will move now to Mr. Ehlers of Michigan for his
    testimony.

        STATEMENT OF HON. VERNON J. EHLERS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Ehlers. Thank you very much, Mr. Chairman, and I thank
    you for the opportunity to testify on my favorite topic and, I
    believe, yours, the same thing I have spoken to you about over
    the past several years, about the need for more funding for
    scientific research and the need for great improvement in math-
    science education in this Nation.
        I was always received very cordially by this committee, but
    I was always told that you could not grant my entire request
    because you could not go over the President's request. So we
    now have a situation where the President has requested
    substantial improvement through his American Competitiveness
    Initiative, and I would like to discuss that a little bit and
    certainly lend my wholehearted support to that.
        First of all, the most important thing to understand is
    about math and science education, and I have put on the board
    something that indicates I am not alone in this. This is
    President's Bush's comments about America's Competitiveness
    Initiative announced in a letter on February 2nd, and I think
    this speaks for itself. I am not in the habit of reading
    PowerPoint presentations to people, but you can see it for
    yourself.

        In addition to that, there is another dimension which I
    have testified to you before about, and which is becoming
    increasingly apparent, and that is the national security aspect
    of this. The national security aspect--probably the best
    statement I can give you on that is the Hart-Rudman Report of
    2001, which is, in this Commission's view, that the
    inadequacies of our systems of research and education pose a
    greater threat to U.S. national security over the next quarter
    century than any potential conventional war that we can
    imagine.

        Basically they are saying, and I see I have the undivided
    attention of the committee, this is extremely important, our
    national security depends on developing better research systems
    and better math-science education. If we look at what we have
    been doing and what is happening with our Federal funding, we
    have--for NASA, Department of Energy, and the National Science
    Foundation (NSF), we have actually gone down in most of our
    funding for scientific research, except the NSF has climbed
    very slowly.

        What this chart does not show, and I have not included a
    chart on that because I don't want to overdo it with charts,
    but if you compare it to other countries, we are falling behind
    dramatically. In fact, we are at the point where South Korea
    will very shortly surpass us in the amount spent on research
    compared to their GDP, and so will other nations, who are
    already ahead of us on that point.
        One area we have done well is not shown in this, and that
    is at the National Institutes of Health (NIH), where we,
    through agreement with a previous administration and with the
    strong support of Speaker Gingrich, doubled it over a period of
    5 years. And if you talk to Mr. Gingrich today, he will tell
    you he considers it his greatest failure as a Speaker the lack
    or the failure to double National Science Foundation at the
    same time.
        It has reached the point where scientists at NIH are saying
    we will have to fund physical science research ourselves
    because we cannot proceed faster and further in health and life
    science research until we get the physical science and research
    done. So the President's initiative addresses this.
        This shows what we have actually done with the National
    Science Foundation, and the President's request targets three
    entities, the National Science Foundation, National Institute
    of Standards and Technology, and the Department of Energy's
    Office of Science. Now, when you look, notice here what has
    happened. For years the President's request was below the
    Congress' actual appropriation. That has changed. In the last
    few years, if you look at fiscal year 2005, the red bar, the
    President's request was substantially above what the Congress
    appropriated. The next year, same thing; still below the
    President's request.

        I am pleased that the President has offered a much higher
    request this year, recognizing the urgent need for the
    increased funding for scientific research, particularly for the
    National Science Foundation, and I ask that this committee will
    agree with that request.
        This chart is interesting because the House itself decided
    to double the appropriations for the National Science
    Foundation. They doubled the authorization over 5 years. The
    red lines show what that authorization is, and the other lines
    demonstrate how clearly we have failed to meet our goal as
    passed in that legislation.

        Basically, in the National Science Foundation, the
    President requested an increase of 8 percent, which is large in
    terms of our budget difficulties, but won't begin to really
    catch up with other nations unless we keep this up for some
    years. But his effort is to double in 10 years.
        Department of Energy, Office of Science, increased by 14
    percent in several areas, and half that will go to researchers
    and half to facilities that will keep us competitive
    internationally.
        And then we have the National Institute of Standards, which
    is often neglected, but is very vital to our competitiveness in
    terms of their standards-setting, their Manufacturing Extension
    Partnership and the Advanced Technology Program (ATP), which is
    now in limbo. But this will provide the increase they need,
    particularly in cybersecurity. They have some of the world's
    cybersecurity experts there, and other branches of government,
    including the Defense Department, depend on those individuals
    to keep abreast of the developments in cybersecurity.

        So my request is that we follow the President's request,
    that we raise the basic research, the math and science
    education and the Function 250 levels to the President's
    request, and this, I believe, should be our top priority if we
    expect our Nation and our businesses to remain competitive with
    other countries.

        It is not just a matter of different wage rates in
    different countries. It is a matter that our engineering
    enrollment has gone down for 20 years, whereas the Chinese have
    gone from producing half as many as we do to now producing six
    times as many as we are. They have graduated 300,000 engineers
    this past year, six times what we have graduated, and it is a
    concerted effort on their part. India has done the same, both
    of those as a result of decisions made 20 years ago that they
    could beat us only if they improved their investment in
    research and in math and science education.
        They decided to do it, they have done it, and, frankly,
    they are beating the pants off us in some areas. So we have to
    get with it and meet the competition.
        Thank you very much for your time.
        [The prepared statement of Mr. Ehlers follows:]

       Prepared Statement of Hon. Vernon J. Ehlers, a Representative in
                      Congress From the State of Michigan

        Thank you, Mr. Chairman, for the opportunity to testify as the
    Committee considers a FY 2007 Budget Resolution. I know the Committee
    must weigh many pressing national priorities, including the continuing
    war on terrorism, facilitating economic stimulus, and maintaining
    fiscal responsibility.
        Mr. Chairman, I strongly support the President's call to maintain
    the competitive ability of the United States in an increasingly
    innovative world economy. His American Competitiveness Initiative (ACI)
    requests focused funding on areas that will improve education, promote
    domestic innovation and economic productivity. I hope that you share my
    view that the research and education initiatives are a national
    priority, and I encourage you to budget the necessary resources for
    scientific research and education as you evaluate the FY 2007 budget.
        In making these difficult budget choices, we must not overlook the
    fact that scientific research and development underpins our economic
    and national security. Scientific research and development forms the
    foundation of increased innovation, economic vitality and national
    security and is an investment that has historically delivered
    significant returns on that investment. For the U.S. to remain a
    prosperous country, it must maintain its technological leadership in
    the world. As you begin the budget process, I strongly urge you to give
    high priority to scientific research and development and math and
    science education as highlighted in the American Competitiveness
    Initiative.
        For the past several years, research and development funding for
    defense, weapons development and national security has increased while
    other areas of Federal research and development, especially basic
    research in the physical sciences, has remained flat or declined in
    real terms. The President's FY 2007 request of $137 billion for
    research and development seeks to reverse this trend at three important
    agencies: the National Science Foundation, Department of Energy's
    Office of Science, and National Institute of Standards and Technology.
        While our focus on immediate threats is certainly warranted, it is
    necessary for us also to consider longer-term threats to our national
    security and the agencies that support research in these areas.
    Fundamental research and science education are essential to advances in
    medicine, military applications and continued economic prosperity,
    including the development of cancer therapies, GPS- or laser-guided
    missiles, and the Internet. The diversity of the basic science research
    portfolio ensures discoveries that lay the foundation for biomedical
    advances and defense. Historically, our investment in physical science
    research has been slipping, and our overall national investment in
    research and development is at a rate much slower when compared to
    other growing economies. Furthermore, Congress has actually reduced the
    appropriated funds for physical sciences at NSF and DOE in recent
    years, compared to the request.
        The bulk of the requested funds at the three agencies will support
    research in the areas of computer technology and homeland security
    infrastructure and fund facilities that will maintain the U.S. as a
    paramount location to conduct physical sciences and energy research.
    The American Competitiveness Initiative sets the U.S. on a bold path to
    double the budgets of three agencies in the next 10 years. In addition
    to doubling these research budgets, it is a bold and ambitious approach
    to keeping America at the forefront of research and education by
    increasing the numbers of highly qualified math and science teachers,
    expanding high school advanced placement offerings, and providing
    workforce skills training to some 800,000 workers annually.

                          NATIONAL SCIENCE FOUNDATION

        The National Science Foundation is the only Federal agency
    dedicated solely to supporting basic scientific research. NSF funding
    accounts for one-fifth of all Federal support for basic research and 40
    percent of physical science research at academic institutions. Nearly
    90 percent of these awards are made through a competitive, merit-review
    process that ensures that excellent and innovative research is being
    supported. Furthermore, NSF consistently receives the highest rating
    from OMB for the efficiency and excellence of its programs.
        The NSF's FY 2007 budget request of $6.0 billion is an 8-percent
    increase over FY 2006 appropriations, the first year in a 10-year
    commitment to double its budget. This marks a shift from previous
    budget requests, as the NSF budget has been stagnant in recent years,
    and even cut in FY 2005. This significant infusion of research funds is
    extremely necessary for FY 2007 and I ask you to enhance the science
    allocation accordingly. The request is still well below the authorized
    funding level necessary to complete the commitment Congress made to
    double NSF funding in 2002, but I am confident that this request is the
    start of a new doubling path that we can truly follow.
        While I am heartened by the commitment the Administration's request
    shows for the fundamental research budget at NSF, I would like to
    register my concern that the education programs at the Foundation have
    not been included in the ACI. NSF is the primary Federal supporter of
    science and math education; it underwrites the development of the next
    generation of scientists and engineers. I am particularly concerned
    about the trend of the current budget request that restructures the
    Education and Human Resources (EHR) budget at the Foundation and
    eliminates three programs critical to our nation, including the Math
    and Science Partnership program. The budget request, while firmly
    supporting research endeavors at NSF, overlooks the education role of
    NSF. While the overall budget of NSF increases almost 8 percent, the
    EHR directorate experiences a modest 2.5-percent increase and a
    dramatic restructuring. This is a continuing, but distressing, trend
    for NSF to move away from their K-16 educational mission and to focus
    solely on graduate education and activities to broaden participation in
    STEM fields. Decreasing the role of NSF in education, or eliminating
    any new awards entirely, seems very shortsighted when we are currently
    facing the challenge of adequately preparing our students to enter
    science and technology fields.
        I have worked very hard to maintain the Math and Science
    Partnership program at NSF, where grants are awarded on a peer-reviewed
    basis that complements the strengths of a research-based organization.
    The FY 2007 request for the Math and Science Partnerships of $46
    million will only allow continued funding for the programs that were
    started in previous years, eliminating the future of a research-based
    program to determine how our students best learn the subjects of math
    and science. I urge the Committee to provide NSF with the highest
    possible budget allocation this year in order to support the education
    as well as research mission of the Foundation.

                    DEPARTMENT OF ENERGY'S OFFICE OF SCIENCE

        The Department of Energy's Office of Science funds 40 percent of
    our nation's physical science research. Research in these areas has led
    to many new economic and medical advancements including, among others,
    new energy sources, the Internet, cell phones and laser surgery. To
    maintain our economic, technical, and military pre-eminence, the
    Federal Government must continue to support research in alternative
    energy sources, nanotechnology and supercomputing. I am pleased that
    the Office of Science is included in the President's ACI and that the
    FY 2007 budget request for the Office of Science is $4.1 billion--an
    increase of 14 percent from the FY 2006 enacted level. I respectfully
    request that the Committee provide the Office of Science with a budget
    that reflects the critical role that it plays in maintaining our
    economic and military pre-eminence. Last year it endured significant
    cuts that, in part, led to layoffs and the delay of many important
    instruments. As part of the American Competitiveness Initiative, the
    Office of Science is not only important to the future of U.S. science,
    but also our competitiveness and energy security.

                 NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

        The National Institute of Standards and Technology is the nation's
    oldest Federal laboratory, and the only laboratory with the explicitly-
    stated mission to promote U.S. innovation and industrial
    competitiveness. Because it has consistently provided high-quality,
    cutting-edge research into a wide range of scientific and technical
    fields critical to U.S. industry it is perfectly placed to play a
    central role, as proposed in the Presidents' American Competitiveness
    Initiative.
        The budget request includes $467 for the core NIST laboratory
    programs and facilities in FY07, a 17-percent increase over FY06
    enacted. This increase includes $72 million for new research
    initiatives and enhancements to NIST's user facilities. I believe it is
    very important to support this request, as it represents a significant
    yet sensible investment in programs that give the U.S. a significant
    head start in several fields of emerging technology in quantum physics
    and nanotechnology that will ultimately have great economic impacts.
    Work at NIST's labs also supports our nation's efforts to improve
    cybersecurity, building safety, and voting technology. In addition,
    NIST has a proven track record in research and development on standards
    and measurement techniques that help U.S. industries become more
    globally competitive and retain leadership in cutting-edge technologies
        While I am pleased that the president has included NIST labs in his
    ACI, I am very concerned about other manufacturing programs at NIST.
    The President's FY 2007 budget request cuts the Manufacturing Extension
    Partnership (MEP) program by over 50 percent to $46 million. The MEP
    program is interested in upgrading its services beyond its traditional
    model of simple cost reduction assistance that helps these firms
    compete at a higher level, to move into areas such as design and
    technological sophistication. This is necessary for their survival in
    the 21st century globalized economy, and MEP is an excellent entity to
    transfer the products of scientific research to small and medium-sized
    firms. I have worked very hard over the years to help my colleagues in
    Congress understand that MEP is vital to retaining American
    competitiveness and American jobs, and I believe they appreciate the
    value of this program. Data on the improvement of assisted firms proves
    MEP works, and therefore Congress continues adequate funding. Yet each
    budget cycle the Administration proposes to significantly cut this
    program. Diminishing funding for MEP will devastate small and medium-
    sized manufacturers and in the long run severely hurt our competitive
    edge in the manufacturing sector. Furthermore, I continue to support
    the Advanced Technology Program (ATP) and am disappointed that the
    Administration has again included no funds for the program in the
    budget request. ATP is NIST's only extramural research grant program,
    funding high-risk, high-return technology research and development on a
    cost-shared basis with U.S. industry, and as such can make a major
    contribution to the American Competitiveness Initiative.

                 NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
        Finally, I would like to address the National Aeronautics and Space
    Administration (NASA) and its share of function 250. In order to align
    the agency with the President's challenge to travel to the moon and
    Mars, NASA has reorganized and streamlined its structure again this
    year under new Administrator Griffin. The proposed missions will be
    very costly and will pose significant technical obstacles that will
    only be solved through basic research. Despite a 3.2-percent requested
    increase in FY 2007, in order to fund the next generation human space
    vehicle and to retire the Shuttle by 2010, $1.5 billion has been
    transferred from the science mission budget at NASA.
        I understand that the impacts of unanticipated budget constraints
    have been felt across the entire agency, but I remain concerned that we
    will finance the return to the moon and travel to Mars at the cost of
    other critical scientific discovery. Basic science and engineering
    research underpin all of NASA's major accomplishments as well as many
    of the technologies you and I use everyday. Furthermore, basic research
    at NASA will support the future exploration endeavor; if we continue to
    reduce basic research in the out-years, our astronauts will be working
    with outdated technology. I urge you to protect NASA's future by
    supporting its basic research accounts and making the function 250
    budget a significant amount.

                                  CONCLUSION

        I realize that the fate of many of the programs I have highlighted
    in this testimony lies not with you, but with the appropriations
    committee. While the budget does not spell out exact funding for these
    programs, I believe that you can send a strong signal about the
    importance of fundamental science and education to the appropriations
    committee by making function 250 a top priority in the FY 2007 budget.
    Behind your lead, I, along with many colleagues who also support
    science funding, will fight for these programs throughout the budget
    and appropriations process. When faced with the difficult choices you
    must make this year, I urge you to remember that we cannot afford to
    sacrifice the research and education which current and future
    generations need to ensure their economic prosperity and domestic
    security.
        Thank you again for allowing me to testify.

        Mr. Ryun. Any Members that have any questions at this point
    for the gentleman from Michigan?
        Mr. Spratt. Dr. Ehlers, thank you very much for your
    emphasis, in particular on the education and human resources
    budget. I had an interesting experience several years ago. I
    went to a church homecoming in a little town called Dillon,
    South Carolina, notable today because Ben Bernanke, now head of
    the Fed, grew up in that school. And I was seated next to a
    gentleman who is African American, also graduated the year
    before Ben Bernanke, and, in fact, convinced him he should come
    to Harvard instead of Brandeis, and probably had an
    incalculable impact on his future. This man today is professor
    of the history of science at MIT. Both he and Ben Bernanke came
    from the same small high school in Dillon, South Carolina.
        I asked him what would he do to change math and science
    education in the country, and particularly in a State like
    South Carolina. And he said clearly there are complicated and
    simple answers to that, but the simple answer is to start much
    earlier, with much better instruction in the lower grades, as
    opposed to just concentrating your effort on college education
    and graduate education. Start in the first, second, and third
    grade, with teachers who are clearly competent to deal with
    scientific concepts and to capture the imagination of young
    people at a point in time when they can become enthralled with
    science and develop a momentum that will take them through the
    rest of their years.
        And I am simply glad to see you are putting the emphasis on
    the fact that we should not let up in that area. If we are
    truly going to have a math and science initiative, the NSF
    clearly will have to be involved in developing the curriculum
    and methods of teaching and the people who will be the resource
    people for making this initiative work.
        Mr. Ehlers. Thank you very much for that comment. I would
    point out I feel very strongly about this. I have watched the
    National Science Foundation work in math-science education for
    over 30 years, I have been in the field longer than that, and
    it is crucial to our efforts to improve math-science education.
        The emphasis in the President's budget is more on the
    Department of Education than on the National Science Foundation
    in an apparent effort to eliminate duplication. I would simply
    point out that it is not duplication.
        The National Science Foundation deals with research on the
    best ways to teach math and science, on curriculum development,
    and on teacher training provided by the initiative of faculty
    members who submit grants that are peered-reviewed and, if
    approved, go into effect. The Department of Education also does
    excellent work, but they work through State boards of education
    and State departments of education, and so we lose our focus to
    a certain extent depending on which State gets it and how that
    State feels about it.
        So I strongly favor a very good program in that area in the
    National Science Foundation. I do not in any way denigrate what
    the Department of Education is doing. I just think they are
    complementary and should both be funded and work together.
        Mr. Ryun. Are there any other questions? Seeing none, Mr.
    Ehlers, thank you very much for your proposal.
        We will next move to the gentleman from New Jersey, Mr.
    Holt, for his testimony.

     STATEMENT OF HON. RUSH D. HOLT, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF NEW JERSEY

        Mr. Holt. Thank you very much. I am really pleased to be
    here with my colleague Vern Ehlers. We do tag team on this
    issue often. But I guess we had better work on our strategy,
    because over the past 5 years we haven't yielded that much.
        I strongly concur in his recommendations for Function 250
    and for science and math education, and I would just hasten to
    point out that this is critical for what you do, for what we
    do, for what America does. Even if none of you intend to go
    into science or engineering, you have already got a career, let
    me tell you that what you are predicating your work on, what
    you are predicating this Budget Committee's work on, is growth
    in our economy. It will not happen without investment in
    education and research and development.
        We are living off of the investments that were made two or
    three decades ago. For productivity, you need new ideas, and
    you need a good workforce. That requires investment. According
    to the American Association for the Advancement of Science, in
    real terms the total Federal R&D portfolio will decline for the
    first time since 1996 after flattening out for a number of
    years.
        The NSF, which my colleague spoke about, has had
    essentially a real decrease. The contradictions between the
    President's call for improved science and math education and
    the budgets proposed represent contradictions that are poignant
    and telling. Programs zeroed out in the NSF education and human
    resources directorate include the NSF Math-Science
    Partnerships, about which my colleague spoke, we need these
    programs.
        The NIH, yes, has had a budget doubling, although it is now
    starting to creep downward again. But all of the
    instrumentation, methodology, and the scientists themselves
    which are necessary to make good use of that NIH budget come
    from programs like the NSF, like the Department of Energy, like
    NASA, and they are not coming. So we are falling far short in
    our investments.
        The Democrats have put together something we call the
    innovation agenda. I plead with you on the other side of the
    aisle here to take that issue away from us. The reason we have
    presented that innovation agenda is because the work is not
    getting done. It is not getting done in science education, it
    is not getting done in implementing broadband, and it is not
    getting done in energy research.
        Let me take energy research for just a moment. If you have
    a business with a questionable input, you might want to spend,
    1 or 2 percent of your revenue in searching for some insurance
    on your input. Well, we have an $800 billion energy economy.
    Each year we are spending $800 billion on energy goods and
    services. We are not spending anywhere close to 1 percent of
    that amount in R&D on alternatives to what we know is a
    questionable input.
        So just to take that example of energy R&D and extend that
    across the whole field in which you deal, I think you can
    quickly see we are not making the investments we need to make
    in order to get the productivity growth on which your
    projections are predicated. This is not charity to people in
    lab coats, this is not charity to schoolteachers, but an
    investment that we must make for all the reasons that Mr.
    Ehlers gave, or all the reasons that you yourself could give.
        Function 250 is lagging, science and math education are
    lagging, and study after study, whether it's the Hart-Rudman
    Commission, or the National Academy of Sciences Commission this
    year, or the John Glenn Commission, study after study shows
    that this is reaching a critical point. We may have passed the
    critical point. It requires dramatic action on your part and
    all of us in Congress to correct.
        With that, I would be happy to take any questions or
    provide additional material for the record.
        [The prepared statement of Mr. Holt follows:]

     Prepared Statement of Hon. Rush D. Holt, a Representative in Congress
                          From the State of New Jersey

        Thank you, Chairman Nussle, Ranking Member Spratt, and
    distinguished Members of the Committee on the Budget. I appreciate the
    opportunity to testify regarding appropriate funding levels for
    Function 250 programs in the FY 2007 Budget.
        I come here today to share with you the importance of increasing,
    not cutting, the budget of Function 250 programs. The President's
    ``American Competitiveness Initiative'' has proposed an increase in the
    Research and Development budgets in particular areas of three major
    agencies of the U.S. Government: the Department of Energy Office of
    Science, the National Institute of Standards, and the National Science
    Foundation. These increases are mildly encouraging, and only mildly
    encouraging. The increases are at the expense of research and
    development in other agencies. Peter is being robbed to pay Paul.
        In the AAAS Preliminary Analysis of R&D in the FY 2007 Budget one
    finds the following:
        ``The overall Federal investment in R&D would increase to $137
    billion in 2007, but in a repeat of past budgets the continuing
    Administration priorities of weapons development and space vehicles
    development would take up the entire increase, and more, leaving
    declining funding for the remainder of the R&D portfolio.''
        The proposed increase for the Federal R&D portfolio in FY07 is 1.9
    percent, which is short of the 2.2-percent increase needed to keep pace
    with the expected inflation.
        Additionally, ``The large proposed increases for physical sciences
    and engineering research are not enough to keep the Federal investment
    in basic and applied research (excluding development) from declining
    for the third year in a row after peaking in 2004.''
        As the AAAS notes, ``In real terms, the total Federal R&D portfolio
    will decline for the first time since 1996 after flattening out the
    last few years.''
        The proposed R&D budget is not even keeping pace with inflation!
        After we achieved the doubling the National Institutes of Health
    budget, the focus shifted to doubling the budget of the National
    Science Foundation. The intent was not to reduce the NIH and raise the
    NSF, but to have both budgets increased.
        The current increase in the NSF is packaged as the start of a 10
    year doubling effort of the NSF. We should not forget that in the 2002
    NSF authorization, the Bush Administration and Congress agreed on a 5
    year doubling effort by 2007. This 2007 request, according to the AAAS,
    falls nearly $4 billion short of that previous target.
        With the increase in the NSF budget we see the NIH budget flat for
    the second year in a row, and would fund less than 1 out of every 5
    grant applications (AAAS). After adjusting for inflation, the NIH
    budget would decline for the third year in a row. All but three of the
    NIH institutes and centers would see their budgets fall for the second
    year in a row. The NIH is not alone in these tough decisions, however.
        Despite the increase in the Department of Energy's budget for
    nuclear physics, computing research, and basic energy sciences, high
    energy physics, fusion, and biological and environmental research would
    remain below last year's budget.
        In addition, despite the increase in energy R&D monies, the DOE
    would eliminate R&D on gas and oil technologies and some renewable
    energy technologies. Just last week, in response to the FY06 budget,
    the National Renewable Energy Laboratory in Golden, Colorado, cut its
    budget on travel, outside contracts, other operating expenses and still
    had to lay of 32 staff, eight being researchers--1 from solar physics,
    and the 7 from the biomass and hydrogen arenas.
        NREL's biomass projects focus on developing, integrating, and
    demonstrating biochemical and thermochemical conversion technologies,
    and renewable diesel technologies. Through its Hydrogen, Fuel Cells,
    and Infrastructure Technologies Program, NREL conducts R&D in hydrogen
    production and delivery, hydrogen storage, fuel cells, technology
    validation, safety, codes and standards, and analysis.
        Aren't these areas in the President's State of the Union address as
    areas that are components of the Advanced Energy Initiative?
        How are we to attract the best and the brightest to areas of
    declared national need, if our national laboratories are firing
    researchers in these areas? The mixed messages of the State of the
    Union address and the Budget of the Federal Government express a lack
    of continuity and trustworthiness.
        The world is in transition right now. We, and the other
    industrialized nations of the world, are accelerating into a knowledge-
    based global economy.
        The task of the government is to lead the nation in creating an
    environment where talent grows, talent develops, talent stays, and even
    attracts new talent to create new knowledge, launching new companies,
    spurring on economic growth. The government must work to protect this
    newly created knowledge as well, or the creators will leave and produce
    elsewhere.
        The rules of this new economy based on knowledge and networks are
    very different than the rules of a manufacturing based economy
    (Enriquez, pg. 31), and we need visionary leadership followed by
    thoughtful, critical actions to propel us to forefront of this
    unfolding new world.
        As described by the Organization for Economic Co-Operation and
    Development, technology is the enabler of a knowledge based economy.
    Technology moves forward through basic and applied R &D in all areas of
    science. The application and commercialization of technology are the
    ``weed out'' factors of this global economy. We cannot, at this time,
    afford to not invest in the future of our nation which will unfold
    through research and development.
        We can make no assumptions that we will remain the dominant factor
    in this economy. Complacency will be our downfall. Although there is
    some increase in R&D programs, we cannot accept the cuts as well. We
    must take a stand to increase the overall R&D budget (including all
    three arenas: basic, applied, and technology development), not select
    particular programs at the cost of other programs.
        Distressing examples of the current practice is the National
    Institute Standards and Technology, where the laboratories receive a
    substantial increase as the cost of the Advanced Technology Program and
    the Manufacturing Extension Partnership.
        The ATP program, zeroed out for the second year is designed to
    provide cost-shared funding to industry to accelerate the development
    and broad dissemination of high-risk technologies that promise broad-
    economic benefits for the nation. When evaluated by National Research
    Council, an arm of the National Academies of Science, the program was
    found to be effective, but with suggested improvements. Companies are
    less likely to gamble on high-risk, high-return research and
    development without an investment by the government. These are highly
    competitive grants with only 12.5 percent of applications passing the
    critical analysis to obtain funding. High-risk, high gain R&D can lead
    us forward in the knowledge economy, but not with the support and
    encouragement of the Federal Government.
        At the National Science Foundation, as the research directorates do
    well, the Education and Human Resources directorate's funding levels
    will remain at a level 20 percent below the 2004 budget in real terms
    (AAAS). Similar actions are taking place in NASA as well, as it
    restructures away from its education directive and focuses on the moon
    and Mars, by reducing or removing effective nation-wide education
    programs.
        The contradictions are poignant and telling, as our President calls
    for improved science and mathematics education, his budget cuts these
    programs throughout the science agencies.
        Programs zeroed out in the NSF Education and Human Resources
    directorate include NSF Math-Science Partnerships. The MSP's result in
    large scale changes in educational practice to improve student
    mathematics and science achievement. The three goals of the program
    are: ensuring that all students have access to, are prepared for, and
    are encouraged to participate and succeed in, challenging and advanced
    mathematics and science courses; enhancing the quality, quantity and
    diversity of the K-12 mathematics and science teacher workforce; and
    developing evidence-based outcomes that contribute to our understanding
    of how students effectively learn mathematics and science. Successful
    MSP projects are intended to serve as models that can be widely
    replicated by state math and science partnership programs under the
    Math and Science Partnerships in No Child Left Behind.
        Why are math, science, and critical foreign language education
    important? Science, technology, engineering, and mathematics are the
    foundations of innovation, technology, and a knowledge economy.
    Critical foreign language fluency allows for better communication with
    markets that are opening to us or arenas of the world with whom who
    need to collaborate to fight disease, terrorism, piracy and challenges
    of globalization yet to be revealed. The youth of our nation are the
    future of America. If we fail to prepare them to compete in the global
    economy, we are failing our nation. Do we want history to look back at
    this time and view us as short-sighted, isolationist, commonplace,
    declining? We must reach out and be innovative with our future.
        To help the concept evolve for you, let me give you the example of
    South Korea, which spends 3.7 percent of its GDP on education, with
    parents contributing the almost as much as the State does on their
    child's education. The brutal system, where the results of the test you
    take at the end of your high school career determines the university
    you attend and your major (therefore your career) has catapulted South
    Korea to a technology leader and one of the world's fastest growing
    economies (Enriquez, p. 188).
        Japan preceded South Korea in this area. Japan learned the value of
    science, technology, and educating one's own and Japanese students out
    perform the U.S. students on mathematics and science tests.
        We often viewed India as behind us, but perhaps they are moving
    ahead. The following comes from Goverdhan Mehta Director, Indian
    Institute of Science: ``Strengthening science education at all levels
    is an enabling requirement, especially for developing nations, for a
    self-standing national science base.'' (Mehta)
        Mehta also states that ``the interactive complexity of the
    triumvirate of science, innovation and commercialization indicates that
    the linear conception of S&T for progress in the emerging knowledge
    society may be inadequate'', and the Innovation Agenda as proposed by
    the House Democrats understands the complexity of innovation, and the
    necessity to act on research and development, education,
    telecommunication technology, energy, and small entrepreneurial
    endeavors not linearly, but conceptually, and within the context of
    connections. They are pieces of the future on one nation. We must come
    together as one Congress, united across party lines, choosing to act
    for our future. The House Democrats have continually attempted to
    engaged our Republican colleagues to work together for our nation. We
    continue to this day.
        We are slipping behind in this clamor for the top of the
    globalization mountain. Other nations are acting as we sit thinking of
    actions to take. The cultural shift required for our nation to move
    forward and maintain a competitive edge over all other nations begins
    with how the Federal Government spends its money.
        Notes: Enriquez, Juan (2001). As the Future Catches you, Three
    Rivers Press, New York.

        Mr. Ryun. Mr. Holt, you and Mr. Ehlers put together a very
    passionate proposal, and certainly it will be given worthwhile
    consideration.
        Are there any questions from the Members?
        Mr. Cooper.
        Mr. Cooper. I just wanted to thank both Members for their
    excellent testimony. I hope that all of our colleagues will
    take it to heart. We do need to invest in the future, and I am
    worried deeply that the future is being terribly shortchanged
    right now. So thank you for pointing that out.
        Mr. Ryun. Mr. Baird.
        Mr. Baird. I just would like to echo that. It is a
    privilege to serve with these two gentlemen on the Science
    Committee. Their commitment to investing in America's science
    education and research budget and talent pool is just
    unparalleled. I am grateful for their service and for their
    testimony today. Well done, gentlemen.
        Mr. Holt. If I might just add, Function 250, if the
    President's request is fully met, will only have increased by 4
    percent over the past 5 years. That is insufficient.
        Mr. Ryun. Very good.
        If there are no further questions, we will turn to Ms.
    McMorris for her testimony.

    STATEMENT OF HON. CATHY McMORRIS, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF WASHINGTON

        Ms. McMorris. Thank you, Mr. Chairman and members of the
    committee. I appreciate the opportunity to testify today on the
    importance of the fiscal year 2007 budget resolution and its
    impact on eastern Washington.
        My primary reason in testifying today is to discuss several
    important budget items the committee will soon consider,
    including fighting meth, ensuring quality affordable health
    care, training our 21st century workforce, the provisions
    related to the Bonneville Power Administration, and, above all,
    supporting the President's efforts to control spending and
    address the deficit .
        One of my top priorities in Congress is working on issues
    and projects that will keep our Nation and communities safe. In
    eastern Washington we deal on a daily basis with the
    devastating effects of meth and other drug abuse. In Spokane
    County alone it is estimated that 80 percent of the crime, 90
    percent of the check fraud is drug and meth related. In 2004,
    Washington ranked sixth in total meth seizures, ahead of
    California. Imagine the increased safety of our communities if
    meth production and abuse were reduced. That is why I strongly
    support the President's call for $40 million toward meth lab
    cleanup, as well as the proposed $69 million to increase our
    Nation's drug courts to offer treatment and alternatives for
    nonviolent offenders.
        Creating a technical and educated workforce is key in
    promoting economic development in eastern Washington and
    throughout our region and Nation. I support the President's
    call toward advancing our 21st century workforce. Specifically,
    I applaud the proposal for the High Growth Job Training
    Initiative as well as the Career Advancement Accounts to assist
    workers who are entering the workforce, transitioning to new
    jobs, or advancing in their current jobs.
        In addition to building our workforce and encouraging
    economic growth, we must also maintain a health care system
    that is affordable and accessible. That is why I strongly urge
    the committee to maintain the President's budget request for
    $169 million for health information technology programs.
    National coordination on health IT is vital in streamlining
    systems, reducing overall medical costs, improving quality of
    care, and strengthening preventive medicine. The use of health
    technology throughout eastern Washington has led to more
    efficient patient treatment, expanded rural health and improved
    doctor care.
        Though I recognize the increased funding of the Office of
    Rural Health Policy, Telehealth, and Community Health Centers,
    the overall proposal for rural health is insufficient. There
    are many programs at the center of our rural health
    infrastructure which are proposed to be zeroed out. These
    grants have demonstrated an essential link between critical
    access hospitals and providers. My district stretches over
    23,000 square miles, 12 counties, and much of that distance is
    rural, creating considerable challenge in ensuring access to
    health care for eastern Washington residents.
        Though the President's budget provides many great
    initiatives, there is one specific proposal that I believe
    could be detrimental to the economy and the livelihoods of the
    people of the Northwest. This proposal is the expedited debt-
    retiring provisions affecting the Bonneville Power
    Administration (BPA). As you may be aware, the BPA markets
    electric power from a series of hydroelectric dams within
    eastern Washington and throughout several other Northwest
    States. One of my top priorities is to provide economic growth
    for our region, part of which is ensuring affordable energy.
    The Pacific Northwest economy was built on inexpensive
    renewable energy. This rural proposal would seize a portion of
    BPA's future revenue and use it toward an escalating repayment
    of its Federal debt, essentially reversing BPA's ability to use
    its sale of surplus power to decrease electric rates in the
    Northwest.
        The surplus is often assumed during good water years in the
    Northwest, years which can often be few and far between. BPA
    needs the revenue from this surplus not to pay down a debt
    which BPA is already ahead of paying off, but to use it for
    flexibility in those years in which they must adjust for other
    conditions.
        However, debt repayment is not the issue here. In fact, BPA
    has already prepaid the Treasury $1.46 billion in the last 5
    years and plans to continue additional debt prepayments in the
    future. A proposal such as this could raise rates as high as 10
    percent and will have an enormous impact in our region, a
    region where electricity rates are almost 50 percent higher
    than those in place before the 2001 energy crisis.
        This increase would build upon the already increased rates
    we are paying for salmon recovery costs. In 2004 alone, BPA
    paid over $414 million toward salmon recovery programs, costs
    which are expected to rise within the next several years. That
    cost is then absorbed into every individual customer,
    translating into 21 percent of their bill. Between salmon rates
    and the effects of the administration's proposal on BPA, energy
    consumers will simply not be able to foot the bill.
        At a time of rising energy and electricity costs around the
    country, a proposal that effectively increases these rates in
    Washington, Idaho, Montana, and Oregon is simply not
    acceptable.
        It is my understanding that although this provision is in
    the President's budget, it would not need congressional
    approval, but would rather be implemented by a simple
    rulemaking procedure by the administration. This is of great
    concern to me and something I will work on with my colleagues
    in the House and the Senate to prevent. Our communities and
    businesses are dependent on the low-cost energy rates which BPA
    provides. These same businesses operate because of these low
    electric rates and will face major problems should this
    proposal be enacted.
        In summary, I believe funding to help combat our Nation's
    drug problems, improve the quality of health care, provide
    economic opportunities, all of which are supported in the
    President's budget, will help carry our Nation forward.
        Once again, Mr. Chairman, thank you for the time, and I
    look forward to your leadership as we move forward on the 2007
    budget.
        Mr. Ryun. Ms. McMorris, thank you very much for your
    testimony.
        [The prepared statement of Ms. McMorris follows:]

    Prepared Statement of Hon. Cathy McMorris, a Representative in Congress
                          From the State of Washington

        Mr. Chairman, Members of the Committee, thank you for allowing me
    to speak on the importance of the Fiscal Year 2007 Budget Resolution
    and its impact on Eastern Washington.
        My primary reason in testifying today is to discuss several
    important budget items the Committee will soon consider, including
    fighting meth, ensuring quality, affordable health care, training our
    21st century workforce and provisions regarding the Bonneville Power
    Administration. And, above all, support the President's efforts to
    control spending and eliminate the deficit.
        One of my top priorities in Congress is to keep our nation, and
    communities, safe. In Eastern Washington, we deal on a daily basis with
    the devastating effects of methamphetamine (meth) and other drug abuse.
    In Spokane alone, it is estimated that 80 percent of crime and 90
    percent of check fraud is drug and meth related. In 2004, Washington
    ranked 6th in total meth seizures, ahead of California. Imagine the
    increased safety of our communities if meth production and abuse were
    reduced, and substance abuse programs were more effective. That is why
    I strongly support the President's call for $40 million toward meth lab
    cleanup, as well as a proposed $69 million to increase our nation's
    drug courts to offer treatment and alternatives for non-violent
    offenders.
        Creating a technical and educated workforce is key in promoting
    economic development in Eastern Washington and throughout our region
    and nation. I support the President's call toward advancing our 21st
    Century Workforce. Specifically, I applaud the proposal for the High
    Growth Job Training Initiative, as well as the Career Advancement
    Accounts to assist workers who are entering the workforce,
    transitioning to new jobs, or advancing in their current jobs.
        In addition to building our workforce and encouraging economic
    growth, we must also maintain a healthcare system that is affordable
    and accessible. That is why I strongly urge the Committee to maintain
    the President's budget request of $169 million for health information
    technology programs. National coordination on Health IT is vital in
    streamlining systems, reducing overall medical costs, improving quality
    of care, and strengthening preventative medicine. The use of health
    technology throughout Eastern Washington has led to more efficient
    patient treatment, expanded rural health, and improved doctor care.
    Strengthening and improving Health IT is essential to the future of
    healthcare.
        Though I recognize the increased funding for the Office of Rural
    Health Policy, Telehealth and Community Health Centers, the overall
    proposal for rural health is insufficient. There are many programs at
    the center of our rural health infrastructure which are proposed to be
    zeroed out, including Rural Hospital Flexibility Grants and all of
    Title VII, which funds our Area Health Education Centers. These grants
    have demonstrated an essential link between Critical Access Hospitals
    and providers, increasing quality of care, and producing collaboration
    for these safety net hospitals within our communities.
        My district stretches over 23,000 square miles. Much of that
    distance is rural, creating considerable challenge in ensuring access
    to health care for Eastern Washington residents. We continue to see
    increasing shortage of health care professionals. In towns like Odessa,
    Republic and Davenport primary care coverage is sparse. People in our
    rural region deserve to have access to the same quality of care as
    people in large, urban areas. I will work to restore increased funding
    for critical rural health programs.
        Though the President's budget provides many great initiatives,
    there is one specific proposal that I believe could be detrimental to
    the economy and livelihoods of people of the Northwest. This proposal
    is the expedited debt retiring provisions affecting the Bonneville
    Power Administration (BPA). As you may be aware, the Bonneville Power
    Administration markets electric power from a series of hydroelectric
    dams within Eastern Washington, and throughout several other Northwest
    States. One of my top priorities is to provide economic growth for our
    region, part of which is ensuring affordable energy. The Pacific
    Northwest economy was built on inexpensive renewable energy.
        This rule proposal would seize a portion of BPA's future revenue
    and use it toward an escalating repayment of its Federal debt,
    essentially reversing BPA's ability to use its sale of surplus power to
    decrease electricity rates in the northwest. The surplus is often
    assumed during good water years in the Northwest, years which can often
    be few and far between. BPA needs the revenue from this surplus not to
    pay down a debt which BPA is already ahead of paying off, but to use
    for flexibility in those years in which they must adjust to other
    conditions.
        However, debt repayment is not the issue here. In fact, BPA has
    already prepaid the Treasury $1.46 billion in the last 5 years, and
    plans to continue additional debt prepayments in the future.
        A proposal such as this could raise rates as high as 10 percent and
    will have an enormous impact in our region--a region where electricity
    rates are almost 50 percent higher than those in place before the 2001
    energy crisis. This increase would build upon the already increased
    rates we are paying for salmon recovery costs. In 2004 alone, BPA paid
    over $414 million toward salmon recovery programs, costs which are
    expected to rise within the next several years. That high cost is then
    absorbed by every individual customer, translating to 21 percent of
    their bill. Between salmon rates and the effects of the
    Administration's proposal on BPA, energy consumers will simply not be
    able to foot the bill. At a time of rising energy and electricity costs
    around the country, a proposal that effectively increases these rates
    in Washington, Idaho, Montana and Oregon is simply not acceptable.
        It is my understanding that although this provision is in the
    President's budget, it would not need Congressional approval, but
    rather would be implemented by a simple rulemaking procedure by the
    Administration. This is of great concern to me, and something I will
    continue to work on with my colleagues in the House and Senate to
    prevent.
        Our communities and businesses are dependent on the low cost energy
    rates which BPA provides. These same businesses operate because of
    these low electric rates, and will face major problems should this
    proposal be enacted.
        In summary I believe funding to help combat our nation's drug
    problems, improve the quality of health care, and provide economic
    opportunities, all of which are supported in the President's budget,
    will help carry our nation forward.
        Once again Mr. Chairman, thank you for your time and I look forward
    to your leadership as we move forward on the 2007 budget.

        Mr. Ryun. Are there any questions by any Members?
        Mr. Baird.
        Mr. Baird. Yes. I want to commend the gentlewoman for her
    excellent summary of the challenge we face with this BPA
    proposal. Put that into context, we have seen substantial rate
    increases over the last several years. It has caused
    devastating unemployment in parts of our region. It hit farmers
    hard, and it hit our school districts hard. An additional raise
    in rates would be very, very difficult, especially when you
    have so many power-dependent industries. And I applaud the
    gentlewoman and pledge to work with her.
        I also appreciate and respect very much her commitment to
    dealing with the problem of methamphetamine. I agree it is a
    good thing that the President has called for an increase in
    drug courts. The one thing I would call to your attention,
    however, that we have looked at is the President has proposed
    significant cuts and zeroing out, indeed, of fundamental
    programs for law enforcement that are used to fight meth, among
    them the Byrne grant program, which he has proposed to zero
    out; $300 million in COPS and Safe and Drug-Free Schools would
    be slashed.
        Overall, we calculate about an 80-percent cut in programs
    that are federally funded and that are used by local law
    enforcement to fight meth. So maybe we could work together on
    that, perhaps through the Meth Caucus, to fight
    methamphetamine, because I can tell you that my local sheriffs
    and law enforcement, and I am sure it is the same with you when
    you go back home, will tell you they depend on Byrne grants and
    COPS, et cetera, and our drug efforts depend on Safe and Drug-
    Free Schools money.
        It is the number one drug of use, as you so well put. It is
    behind a host of crimes, and now is not the time to be cutting
    back to this magnitude on our Federal commitment to fight meth.
    So perhaps we can work on that as well.
        Ms. McMorris. I look forward to it.
        Mr. Ryun. Are there any other questions by any other
    Members at this point?
        Ms. McMorris, thank you very much for your testimony.
        At this point we are going to turn to Mr. Regula for his
    proposal, and we look forward to your testimony.

     STATEMENT OF HON. RALPH REGULA, A REPRESENTATIVE IN CONGRESS
                         FROM THE STATE OF OHIO

        Mr. Regula. Well, thank you very much. I don't have my copy
    with me of my written testimony.
        Mr. Ryun. Mr. Regula, may I encourage you to turn your
    microphone on.
        Mr. Regula. I say I don't have a copy of my written
    testimony, but you all have copies, and I would end up reading
    it to you anyhow.
        Just some generalities. Let me say you have an extremely
    important challenge. I appreciate the opportunity to be here
    and to share a little bit the challenge that confronts us in
    the Labor-Health-Education Subcommittee. I think it is an
    extremely important function because we deal with things that
    touch people's lives.
        If you could go to the days where we had a couple days of
    outside witnesses, and families come in with children with all
    kinds of diseases and problems and medical conditions, and it
    is almost heartbreaking to listen to their cries for some kind
    of research through NIH to find a solution; or maybe it is a
    parent with Alzheimer's, and on and on, and I know there just
    isn't enough money.
        One of the things we are going to do this year, and I know
    historically that many of you have been part of the decision to
    actually quintuple the budget of NIH, and as a result they have
    gone from something like $12 billion to $28 billion. At the
    hearing I am going to ask the Director this year and our
    subcommittee to give us an accounting of what has been done,
    what has changed as a result of all this money. Are we getting
    results? Are we helping people?
        And I will say that Director Zerhouni testified recently
    that every 5 years life expectancy in the United States goes up
    a year. I said a little tongue in cheek to him that he should
    go to the Ways and Means Committee, because the significance of
    that is enormous in terms of Social Security and Medicare. I
    think whomever is filling your seats here in years to come are
    going to have some really tough decisions. You already are
    faced with trying to replicate that story in the Bible where
    they fed 5,000 with 5 loaves and 5 fishes.
        I would just plead with you to think about in your
    allocation of the enormous importance of medical research to
    the well-being of all of us; and, secondly, of education. I
    don't know how many of you read Tom Friedman's book, ``The
    World Is Flat,'' it is a bit sobering to realize how aggressive
    other countries are, particularly China, India, Taiwan and
    Korea, and places like that. I was struck by the fact that
    Intel sponsors a competition among high school, I think
    seniors, in basically math and science. They had 65,000 Chinese
    and 6,500 American students involved. It is indicative of what
    is taking place.
        It is not going to be overnight. Friedman says it is 25
    years from now when we will be faced with a highly competitive
    situation for skills. I told him 1 day, I said, you are a
    modern-day Paul Revere because you are saying to the American
    people, get ready, they are coming. And he pointed out in his
    book that last year 400,000 American tax returns were done in
    India. I thought that was a bit of a stretch, and then my chief
    of staff in the district said his wife is a CPA with one of the
    big accounting firms, and her job assignment was to train
    Indian tax preparers on how to do Ohio tax returns.
        What I am simply saying is that the coin of the future is
    going to be brainpower and the way in which we utilize those
    skills. And that is why I think it is so important that now we
    address the challenges of education. Not that the Federal
    Government is going to replace the State and the local
    community for basic funding of education, but what we do in
    Labor-H is try to put in carrots, so we have the Pell Grants to
    incentivize poorer students from poorer environments to go and
    get some education; and we have programs for one-stops, where
    people are laid off and where they can go back and acquire a
    new skill. It is really a people's bill in so many different
    ways and touches the lives of them.
        I said when I took the chairmanship, and I hadn't been on
    the subcommittee, but Bill Young asked me to chair it, and I
    said, so you know where I am coming from, it is very simple.
    The Bible says there are two great commandments. The first is
    to love the Lord, and the second is the like unto it, to love
    your neighbor. I said this is the Love Your Neighbor Committee,
    and to do that you have to recognize these programs.
        I know that you just had testimony on math and science and
    the importance of this, and we heard about the competitive
    program in the President's State of the Union. But keep in mind
    you can't do math and science if you can't read. So you have to
    start out with the fundamentals, and what we have are some
    reading programs in Labor-H where you try to give incentives to
    schools to put in upgrades of their reading program.
        I put some extra money in last year to upgrade the
    advancement of teachers and principals. I feel strongly if you
    have a good principal, you have a good school. And if you have
    good teachers, you have a good school, and we have to encourage
    that. We not only looked into the programs from the Department
    of Education to incentivize teachers to go back and get
    additional skills, but we also had testimony from the colleges
    of education, because it starts there.
        Too often the colleges of education have been sort of an
    afterthought for our universities and colleges, and they do not
    put enough emphasis on encouraging talented people to get in
    the education field. Yet there isn't one of you that would not
    be able to remember a teacher that made a difference in your
    life because that individual was an inspirational type of
    person.
        We fund the Teach for America in part because it is a great
    program. These are young college students who care about their
    fellow man, if you will, and they sign up for 2 years to go
    wherever they are sent. And they are sent into the poor
    districts, the poorest of the poor districts in cities for 2
    years, and many of them will stay in the profession. They work
    with the young people, they have certain standards that they
    have to meet in the Teach for America program, and the same
    thing is true of charter schools, because they are a little bit
    outside the box.
        Another program we fund is Troops to Teachers. This is to
    get individuals that get out of the military, usually they get
    some how-to courses and they are usually in their 40s, they
    have medical care, they have been around the world a lot of
    them, they have managed people, and they make great teachers. I
    think last year the Teacher of the Year in America, in the
    United States was a Troop to Teacher individual. There is a
    certain element of maturity that enables them to handle a
    classroom.
        So we need to take programs, and we try to do that in our
    bill to continually upgrade the quality of teaching in the
    classroom and the principalship, because that individual is an
    inspiration to students and teachers alike. I might say I spent
    7 years as an elementary principal and teacher, and went to law
    school at night, and I know how much difference even to this
    day 50 years later, but I bonded with those kids, and it makes
    a difference with them.
        Another thing that troubles me a lot is the dropout rate.
    The average nationwide is 32 percent. Now, we can ill afford
    this as a nation, to have 32 out of 100 students drop out
    before they finish high school. Interesting, a little footnote
    on that, I just read the other day that 85 percent of the
    individuals in the penal system across the board are dropouts,
    and that gives you some idea of the social cost of dropouts,
    and then also welfare and all sorts of social problems that
    arise as a result of individuals dropping out of high school.
    And we are trying to develop programs that we can encourage,
    with a little bit of help, schools to address the problem of
    dropouts because we need to reduce those numbers. The big
    cities are anywhere from 60 to 70 percent do not finish high
    school, and that is a terrible waste of human capital.
        And I just was reading this morning in the Wall Street
    Journal where the Secretary of Defense wants to get a leaner,
    meaner, smaller, long-term Quadrennial Report that looks into
    the future. Well, to do what he hopes to achieve he has got to
    have individuals that have gone through high school at least
    and can read a manual and can operate this sophisticated
    equipment, so the Defense Department has a stake. I think the
    defense budget ought to have a section in it on supporting
    education, because unless they can get quality people to enlist
    and be part of the team they are not going to have what they
    seek.
        I don't want to bore you with a lot of details, but simply
    to say that what we try to do in Labor-H is address the human
    element, the medical research which is vitally important to
    people, to address the incentives in education that will
    address the dropout rate, that will teach kids to read. I said
    the decision to drop out isn't made at the ninth grade, it is
    made at the third grade when you don't learn to read
    adequately. So we try to use the dollars we have; last year our
    budget was roughly $2 billion less than the year before and the
    budget that is being proposed for this year is another $2-
    billion cut. I don't know how we are going to stretch it to
    meet what I think are the needs of the future in education. So,
    anything you can do to make a larger allocation for those
    functions, medical, NIH, Centers for Disease Control (CDC). We
    are asking CDC and policemen to keep bird flu away from us, to
    keep out these other things that can be brought to the United
    States. People don't realize the importance of the role of CDC.
    They are the watchdog. They are people in 43 countries
    constantly looking out for things that might get brought to the
    United States via the jets and who knows what.
        So, again, it is an important thing, and this budget that
    is being proposed takes a cut at CDC, takes NIH flat-funded,
    Health and Human Services Department are both down, education
    is down. It is going to be a tough challenge, and I think if we
    care about the future of the United States, we need to address
    those needs of people, and that is essentially what we do in
    Labor-H, and I hope you will give us consideration in the
    allocation of resources. I know it is a tough job, I spent
    several years on the Budget Committee and I realize the
    challenges that come your way, and I appreciate the service you
    are all doing.
        [The prepared statement of Mr. Regula follows:]

     Prepared Statement of Hon. Ralph Regula, a Representative in Congress
                             From the State of Ohio

        Mr. Chairman, Congressman Spratt, thank you for allowing me the
    opportunity to testify before your Committee. As you begin
    deliberations in the coming days on the fiscal year 2007 budget, I
    wanted to share with you the tremendous importance of and remarkable
    progress being made by programs funded in the Labor, Health and Human
    Services, and Education appropriations bill.
        Whether it is a job training program for the unemployed, research
    to find a cure for the thousands of diseases our citizens suffer from,
    or education for our youth, the programs in this bill provide hope to
    Americans in search of a better life.
        The dreams of a better life take root in a foundation of solid
    education. Education creates the opportunity for sustainable
    livelihood, improves quality of health, reduces crime, raises
    industrial productivity, and increases the level of civic
    participation. It is essential to the preservation of democracy.
        Four years ago, we passed the No Child Left Behind Act and provided
    record funding increases to the Department of Education, and in turn,
    to our local school districts. For the first time ever, we required
    high standards and accountability in our nation's public schools.
        Multiple studies and reports have shown that our efforts are
    working.
         The long-term Nation's Report Card (NAEP) results,
    released in July 2005, showed elementary school student achievement in
    reading and math at all-time highs and the achievement gap closing.
         For America's 9-year-olds, there's been more progress in
    reading the last 5 years than in the previous 28 combined.
         America's nine and 13-year-year-olds posted the best
    scores in math the test ever recorded.
         Reading and math scores for African American and Hispanic
    9-year-olds reached an all-time high.
         Math scores for African American and Hispanic 13-year-olds
    reached an all-time high.
         Achievement gaps in reading and math between white and
    minority 9-year-olds are at an all-time low.
        The state-by-state Nation's Report Card results, released in
    October 2005, showed the number of fourth-graders who learned their
    fundamental math skills increased by 235,000-enough to fill 500
    elementary schools.
        Despite the record gains, Mr. Chairman, much work remains. High
    quality public education has assumed a much greater significance in the
    context of our rapidly changing world and the emergence of new
    technologies. Where oceans and mountains once limited trade and the
    rapid transmission of ideas, as Tom Friedman tells us in his book The
    World is Flat, technology has flattened our world and made borders more
    permeable to products and highly skilled labor.
        The United States has always depended on the inventiveness of its
    people in order to compete in the world marketplace. Now, preparation
    of a well educated workforce is a vital arena for national
    competitiveness. Since 1980, the number of science and engineering jobs
    has grown at more than four times the rate of the U.S. labor force as a
    whole. This is an average annual growth rate of 4.9 percent compared
    with 1.1 percent for the entire labor force.
        The average age of the science and engineering workforce is rising.
    The proportion of foreign-born students in science and engineering
    fields and workers in science and engineering occupations continues to
    rise dramatically. Global competition for science and engineering
    talent is intensifying, such that the United States may not be able to
    rely on the international science and engineering labor market to fill
    unmet skill needs. The number of native born science and engineering
    graduates entering the workforce is likely to decline unless the U.S.
    intervenes to improve success in educating students from all
    demographic groups.
        My Subcommittee has recognized this challenge and provided
    substantial dollars to the math and science partnerships program since
    FY2002. The President senses the importance of this initiative and has
    requested $380 million in new funding to improve math and science
    instruction in schools.
        Just as education, health, too, is important to the economic
    advancement of a nation.
        For over a century, the National Institutes of Health (NIH) has
    played a key role in improving the health of the nation. More than 80
    percent of NIH's funding is awarded through almost 50,000 competitive
    grants to more than 212,000 researchers at over 2,800 universities,
    medical schools, and other research institutions in every state.
        Many important health and medical discoveries of the last century
    resulted from research supported by NIH. In part because of NIH
    research, our citizens are living longer and better. Life expectancy at
    birth was only 47 years in 1900; by 2000, it was almost 77 years.
        In the past several decades, NIH-supported research, and its
    national programs to communicate the results of research to patients
    and their doctors, played a major role in achievements such as the
    following:
         Death rates from heart disease and stroke fell by 40
    percent and 51 percent, respectively, between 1975 and 2000.
         The overall 5-year survival rate for childhood cancers
    rose to nearly 80 percent during the 1990's from under 60 percent in
    the 1970's.
         The number of AIDS-related deaths fell by about 70 percent
    between 1995 and 2001.
         Infectious diseases--such as rubella, whooping cough, and
    pneumococcal pneumonia--that once killed and disabled millions of
    people are now prevented by vaccines.
         The quality of life for 19 million Americans suffering
    with depression has improved as a result of more effective medication
    and psychotherapy.
        And, the progress continues. The sequencing of the human genome,
    completed in 2003, set a new course for developing ways to diagnose and
    treat diseases like cancer, Parkinson's Disease and Alzheimer's
    Disease, as well as rare diseases.
        NIH should be applauded for their successes. However, I also
    believe we need to continue our oversight of NIH programs, not to
    direct the science--for that is best left to scientists--but to ensure
    that scientific opportunity drives funding decisions within the agency.
        Similar to the efforts of the Department of Education and the
    Department of Health and Human Services, programs at the Department of
    Labor play a vital role in society. A number of communities continue to
    experience plant closings and other layoffs, an ongoing reminder of
    global competition. We need to support dislocated worker training
    programs that assist workers return to gainful employment. In my
    district, the local One-Stop in Canton is extremely effective. Over 90
    percent of the participants complete their training, and more than 90
    percent of the trainees secure jobs paying a similar or higher wage
    than their previous employment.
        Another example is the Job Corps program, which provides a
    comprehensive and intensive array of training, career development, job
    placement and support services to disadvantaged young people between
    the ages of 16 and 24. Many people who enroll in Job Corps Centers
    never completed their high school education and may have other barriers
    to maintaining a job. This program ensures that disadvantaged young
    people are afforded an opportunity to successfully participate in the
    Nation's workforce, and most of the participants secure gainful
    employment.
        I can point to many other examples of good programs in my bill.
    Whether it is a Centers for Disease Control and Prevention program in
    New Mexico to investigate emerging diseases, or a Substance Abuse and
    Mental Health Services Administration drug prevention and
    rehabilitation clinic in Maine, Corporation of National and Community
    Service funded efforts in Louisiana to rebuild communities ravaged by
    the hurricanes, a Department of Education grant in Iowa to develop and
    support a high-quality teaching force, every dollar in this bill is
    dramatically altering the lives of Americans.
        As you begin consideration of the FY2007 budget, I would like to
    point out that in the FY2006 Labor, Health and Human Services, and
    Education appropriations bill, we provided almost $900 million in
    administrative cost to the Centers for Medicare and Medicaid Services
    (CMS) and the Social Security Administration to implement a mandatory
    program-the Medicare Modernization Act. We provided for this increase
    in spending for a mandatory expense by eliminating and reducing several
    programs. The final FY2006 budget for the bill was $1.6 billion below
    FY2005 and contained no earmarks.
        Mr. Chairman, it is important for the Budget Committee to note that
    the trend of shifting costs of mandatory programs to discretionary
    accounts continues. In 2006 the Budget Deficit Reduction Act, again,
    included legislation to shift $600 million in administrative expenses
    for another mandatory program, this time Student Aid Administration
    (Pell Grants), to the discretionary side of the budget as one way of
    meeting its reductions in mandatory programs. OMB has recognized this
    shift by showing the $600 million in additional Budget authority in
    FY2006 and allocating the funds to the discretionary budget in the
    request for FY2007. It is critical that the Budget Committee also
    include the additional funds needed to fund administrative expenses for
    Student Aid in the discretionary allocation. If this is not done, we
    will be faced with the difficult task of eliminating or severely
    reducing programs that have significant support of the Members of the
    House such as Rural Health, Vocational Education State Grants, GEAR-UP,
    and TRIO, to name a few. Equally noteworthy, we will not be able to
    provide the necessary dollars for new programs to prepare our students
    for success in a competitive world.
        I would like to close with this: When I became Chairman of the
    Labor, Health and Human Services, and Education Appropriations
    Subcommittee, I told my colleagues that the Lord says there are two
    great commandments. The first is to love your Lord, and the second is
    like unto it, to love your neighbor. I told them that this is the Love
    Your Neighbor Committee.
        Last year, we made many difficult choices, cutting the bill by $1.6
    billion and eliminating 29 programs. The Administration's FY2007 budget
    proposes to further reduce the spending on the Labor, Health and Human
    Services, and Education by nearly $4 billion. As you consider the
    budget, I strongly urge you to be mindful of the considerable impact
    the programs in this bill have on Americans.
        Mr. Chairman, I thank you for allowing me the opportunity to
    testify, and at this time I would be happy to answer any questions you
    may have.

        Mr. Ryun. Mr. Regula, thank you very much for your
    testimony. You have certainly presented a lot of ideas, and it
    is a lot to put our arms around, and you can see the passion
    with which you carry a lot of this. And one of them I will just
    mention is the life expectancy, how that increases. It
    certainly does put us with difficult decisions for the future
    because of policies that we have here, but I am hoping as a
    Congress that we will put aside partisanship and genuinely look
    to what we need to do.
        Mr. Regula. Well, I think the only way out of it is a
    strong economy that will produce the revenues to meet Social
    Security and Medicare, and a strong economy is predicated on an
    educated population.
        Mr. Ryun. Are there any questions by any of the members
    that are present?
        Mr. Spratt. Let me assure the chairman that he will have
    our full support in fully funding particularly the education
    component of the Labor-H bill. Thank you very much for your
    time.
        Mr. Regula. Thank you.
        Mr. Ryun. Mr. Regula, thank you.
        At this point we will turn to Mr. Young from Alaska for his
    testimony.

    STATEMENT OF HON. DON YOUNG, A REPRESENTATIVE IN CONGRESS FROM
                          THE STATE OF ALASKA

        Mr. Young. I thank you, Mr. Chairman, and members of the
    committee. I have done this so many times that it is always a
    pleasure to be before you.
        I appreciate the assistance this committee gave us last
    year. We worked together jointly to reach a budget solution.
    And of course the Transportation Committee, which I am chairman
    of, will meet later this week to approve its views and
    estimates for 2007, and my testimony reflects those views and
    it will be adopted.
        First and foremost, I am pleased that the President's
    budget almost completely is consistent with last year's Surface
    Transportation Reauthorization Act, known as SAFETEA-LU. The
    budget supports the fiscal year 2007 SAFETEA-LU funding levels
    with only one major exception: The 2007 funding level for the
    Federal Transit Administration is $100 million lower than what
    was authorized due to administrative failure to fully fund the
    Small Starts programs.
        Unfortunately, the budget does not make a similar
    commitment to meeting our Nation's aviation infrastructure and
    investment needs. Under the President's budget, aviation
    capital programs would receive $5\1/4\ billion, which is $1.6
    billion or 23 percent less than the level guaranteed by Vision
    100--Century of Aviation Reauthorization Act. This reduction is
    extremely shortsighted and will only serve to accelerate the
    impending crisis of congestion and delays in our Nation's
    aviation system.
        It wasn't long ago, Mr. Chairman, all we heard about was
    the Fliers Bill of Rights and the congestion and how airports
    weren't working, and now there is an attempt to cut it further
    back. The slowing economy and the terrorist attacks of
    September 11 temporarily reduced aviation congestion beginning
    in 2001. However, the number of air travelers has since
    rebounded in 2005 to pass the previous record high level
    experienced in 2000. Unless we make necessary investments in
    our airport and air traffic control infrastructure, delays will
    increase significantly as air travel continues to increase.
        The FAA forecasts the number of air travelers will grow
    from 739 million people in 2005 to more than 1 billion by 2015.
    This growth will place even greater demands on a system already
    plagued by delays. To ensure the aviation system remains safe,
    reliable, efficient and able to accommodate the increased
    number of passengers anticipated in the near future, the
    committee recommends that aviation capital programs be funded
    at least to the level of $6.8 billion guaranteed by Vision 100.
        I would also like to address several other proposals in the
    budget that are a concern to me. For example, the
    administration proposes to cut funding for Amtrak from $1.3
    billion in 2006 to $900 million in 2007. Over the years
    proposed cuts in Amtrak funding have been repeatedly rejected
    by Congress. Now, if the budget resolution assumes just $900
    million for Amtrak, but Amtrak funds are subsequentially
    restored during the appropriation process, other important
    programs will have to be cut in order to make up the
    difference.
        In addition, the President's budget proposes to cut funding
    for the clean water State revolving fund and Army Corps of
    Engineers. These proposals would produce shortfalls that are of
    significant concern to the Transportation and Infrastructure
    Committee. And may I explain why? Estimates of the clean water
    infrastructure needs over the next 20 years exceeds $400
    billion. Current spending by all levels of government addresses
    only one-half of this need, and that is a problem. Water is our
    next big crisis, this is a problem that requires investment at
    all levels of government. However, cutting the size of the
    Federal program will only make an already very bad situation
    much worse.
        Under the funding of the Corps of Engineers, there has been
    a chronic problem that has resulted in outdated and aged
    infrastructure. I think you see this down in Katrina where the
    levees were built that were not repaired and should have been
    repaired. The transportation benefits that could be achieved
    through greater investments in Corps navigation projects would
    help American products compete in the world market. Greater
    investments in flood control infrastructure today will reduce
    the risk that we will have to pay later larger sums of disaster
    relief at some later date.
        Finally, I would like to discuss an area in which we could
    be using our scarce resources more wisely. Since the creation
    of the Department of Homeland Security in 2003, the Department
    and Congress have tended to throw money at problems before
    having the proper mechanisms or programs in place to ensure
    that money is well spent. And I think you have seen some recent
    disclosures of how money has been misspent, and we have to stop
    that and structure it in a much better way.
        Millions of dollars have been wasted due to a lack of
    authorization statutes and insufficient coordination between
    the authorizing and appropriations committees. I think we can
    and I know we must do a much better job in this arena.
        More comprehensive information on the committee
    recommendation will be provided in its views and estimates to
    be adopted by the committee later this week. These views and
    estimates will demonstrate that we are significantly
    underfunding many of our transportation infrastructure
    investments. This investment puts our economy and global
    competitiveness and quality of life at risk. While the cost of
    meeting our Nation's transportation and infrastructure
    investment seems to be high, the cost of not meeting them is
    clearly much higher.
        May I say, Mr. Chairman, I listened to Mr. Regula with
    great interest, and, yes, education is one of the keys,
    transportation is the second key. Without a good transportation
    infrastructure within our country, we cannot be competitive nor
    will our economy grow. I have argued this for 6 years. I am
    going to continue to argue, because we are lacking the courage
    to raise the money necessary to fulfill the obligation that I
    think is important to the future generations.
        I know you have a difficult job. I have said this every
    year. I expect you to do the best you can. I am not wedded
    totally to the numbers the President has brought down, as I
    mentioned. I think we have to look at the total package of the
    Congress. We are the ones that write the budget, it is not the
    President. He submits the budget under the Constitution; but it
    is our duty to write the budget. I think there are many areas
    that money can be shifted around for better purposes, than has
    been proposed by the President's budget. And I will answer any
    questions.
        [The prepared statement of Mr. Young follows:]

    Prepared Statement of Hon. Don Young, a Representative in Congress From
                              the State of Alaska

        Thank you Chairman Nussle and Ranking Member Spratt for this
    opportunity to testify before you on behalf of the Transportation and
    Infrastructure Committee.
        I appreciate your assistance during last year's surface
    transportation reauthorization, and look forward to continuing to work
    cooperatively with you as the budget process moves forward this year.
        The Transportation and Infrastructure Committee will meet later
    this week to approve its views and estimates for the 2007 budget. While
    my testimony today precedes the formal adoption of the committee's
    views, it is consistent with what I anticipate will be adopted.
        First and foremost, I am pleased that the president's budget is
    almost completely consistent with last year's surface transportation
    reauthorization act, known as SAFETEA LU.
        The budget supports the fiscal year 2007 SAFETEA LU funding levels
    with only one major exception. the 2007 funding level for the Federal
    transit administration is $100 million lower than what was authorized
    in due to the administration's failure to fully fund the ``small
    starts'' program.
        Unfortunately, the budget does not make a similar commitment to
    meeting our nation's aviation infrastructure investment needs.
        Under the president's budget, aviation capital programs would
    receive $5.25 billion, which is $1.6 billion or 23 percent less than
    the level guaranteed by the vision 100--century of aviation
    reauthorization act.
        This reduction is extremely shortsighted, and will only serve to
    accelerate the impending crisis of congestion and delays in our
    nation's aviation system.
        The slowing economy and the terrorist attacks of September 11,
    2001, temporarily reduced aviation congestion beginning in 2001.
    however, the number of air travelers has since rebounded, and in 2005
    surpassed the previous record-high level experienced in 2000.
        Unless we make the necessary investments in our airport and air
    traffic control infrastructure, delays will increase significantly as
    air travel continues to increase. the faa forecasts that the number of
    air travelers will grow from 739 million in 2005 to more than one
    billion in 2015. This growth will place even greater demands on a
    system that is already plagued by delays.
        To ensure that our aviation system remains safe, reliable,
    efficient, and able to accommodate the increased number of passengers
    anticipated in the near future, the committee recommends that aviation
    capital programs be funded at least at the $6.81 billion level
    guaranteed by vision 100.
        I would also like to address several other proposals in the budget
    that are of concern to me.
        For example, the administration proposes to cut funding for Amtrak
    from $1.3 billion in 2006 to $900 million in 2007. Over the years,
    proposed cuts in Amtrak funding have been repeatedly rejected by
    Congress.
        If the budget resolution assumes just $900 million for Amtrak, but
    Amtrak funds are subsequently restored during the appropriations
    process, other important programs will have to be cut in order to make
    up the difference.
        In addition, the president's budget proposes to cut funding for the
    clean water state revolving fund and the army corps of engineers. These
    proposals would produce funding shortfalls that are of significant
    concern to the Transportation and Infrastructure Committee.
        Estimates of the clean water infrastructure needs over the next 20
    years exceed $400 billion. Current spending by all levels of government
    addresses only one-half of this need.
        This is a problem that requires investments by all levels of
    government; however, cutting the size of the Federal program will only
    make what is already a very bad situation much worse.
        Under funding of the corps of engineers has been a chronic problem
    that has resulted in an outdated and aging infrastructure. The
    transportation benefits that could be achieved through greater
    investments in corps navigation projects would help american products
    compete on the world market. Greater investments in flood control
    infrastructure today will reduce the risk that we will have to pay
    larger sums in disaster relief at some later date.
        Finally, I would like to discuss an area in which we could be using
    our scarce resources much more wisely. Since the creation of the
    department of homeland security in 2003, the department and congress
    have tended to throw money at problems before having the proper
    mechanisms or programs in place to ensure the money is well spent.
        Billions of dollars have been wasted due to a lack of authorizing
    statutes, and insufficient coordination between the authorizing and
    appropriations committees. I think we can--and must--do much better in
    this area.
        More comprehensive information on the committee's recommendations
    will be provided in the views and estimates to be adopted by the
    committee later this week.
        These views and estimates will demonstrate that we are
    significantly under-funding many of our transportation and
    infrastructure investments. This underinvestment puts our economy,
    global competitiveness, and quality of life at risk.
        While the cost of meeting our nation's transportation and
    infrastructure investment needs may seem high, the cost of not meeting
    them is clearly higher.
        I urge your support for the transportation and infrastructure
    committee's recommendations as you develop the 2007 budget resolution.

        Mr. Ryun. Mr. Chairman, thank you very much for your
    comments. It does not take much for those of us that travel a
    lot either by air or on the ground to recognize the seriousness
    of the problem. And there does need to be a fix, and we will
    certainly take a close look at it on this committee.
        Are there any questions by any of the members? Yes, Mr.
    Diaz-Balart.
        Mr. Diaz-Balart. Thank you, Mr. Chairman. Just a quick
    comment. I want to thank Chairman Young for not only obviously
    his drive to make sure that our infrastructure around the
    country is as good as it can be, but one of the things that I
    think needs to be noted is that Chairman Young has personally
    been to, I think, just about every congressional district in
    the country and really knows----
        Mr. Young. Most of the Democrat and Republican.
        Mr. Diaz-Balart. Absolutely. And the thing that struck me
    is he knows the details of the infrastructure needs in every
    part of the country, in many cases even better than the Members
    that represent those areas. So I just want to thank him for not
    only his hard work, but really it takes a lot of effort and a
    lot of time to get on a plane or get in a car, particularly if
    you are from a country that is pretty far away, Mr. Chairman,
    and so I just want to thank him for his commitment and his
    willingness to spend an incredible amount of time and effort to
    try and make sure that he understands every single detail and
    all parts of the infrastructure of this great Nation of ours.
    It takes a lot of work, and here is a man that is willing to do
    that, and I think we all owe him a great deal.
        Thank you.
        Mr. Ryun. I would like to yield at this point to Mr. Moore.
        Mr. Moore. Thank you, Mr. Chairman. And, Mr. Chairman, I
    want to thank you for being here as well. I am from Kansas, and
    I agree with some of the witnesses who testified in a prior
    panel here. When they talked about an investment in education,
    it is not spending money, it is a wise investment in our
    future. And I feel the same way about our transportation
    infrastructure as well, and I commend you for bringing this
    proposal here and I thank you very much.
        Mr. Young. Thank you.
        Mr. Ryun. Mr. Chairman, thank you for your testimony. At
    this point we will turn to Mr. Hinojosa for his comments.

    STATEMENT OF HON. RUBEN HINOJOSA, A REPRESENTATIVE IN CONGRESS
                        FROM THE STATE OF TEXAS

        Mr. Hinojosa. Thank you, Chairman Ryun. I am pleased that I
    got to see Ranking Member Spratt and other members of the
    committee, Congressman Dennis Moore and Congressman Diaz-
    Balart. Thank you for this opportunity to testify before you on
    the fiscal year 2007 budget. I ask that my written statement be
    included in the record.
        Mr. Ryun. Without objection.
        Mr. Hinojosa. I agree wholeheartedly with the previous
    speakers, particularly with Chairman Regula's plea to get
    budget increases in his budget, some areas very important to my
    constituents and that I will be addressing at least some areas
    during my comment period.
        The Federal budget is our most direct and telling statement
    of the Nation's values and priorities. Unfortunately, when the
    people of my Texas 15th Congressional District, hard-working
    people, many who live in rural areas, most of whom are
    Hispanic, look at this Federal budget, they do not see their
    community's well-being and prosperity treated as a national
    priority.
        I am here today to share with you some areas where the
    Federal budget could better reflect the values and priorities
    of my congressional district and similar communities across the
    Nation from West to East Coast. I will focus my remarks on
    three critical areas: Education, health, and community
    development.
        Nothing demonstrates our misplaced national priorities more
    than our failure to invest in education, particularly our
    failure to invest in the key programs that are making a
    difference in the Hispanic community throughout the country.
    Hispanics are now the largest minority group in the country. By
    2010, Hispanics will be the largest minority group in our
    Nation's workforce. Yet Hispanic children are the least likely
    to attend preschool, the most likely to drop out of school
    before earning a high school diploma, and the least likely to
    earn a college degree.
        We know what we need to do and we have an investment plan.
    The Congressional Hispanic Caucus focuses on a group of Federal
    educational programs that are critical to the Hispanic
    community. They are Title I and Title III of the Elementary and
    Secondary Education Act, the migrant education programs, the
    dropout prevention program, HEP and CAMP as well as TRIO and
    GEAR-UP, as well as Hispanic Serving-Institutions, Even Start,
    Adult English As a Second Language, and Civics Education. We
    call these programs the Hispanic Education Action Plan.
        The fiscal year 2006 education budget cut every single
    program in this plan. Unfortunately, the President's 2007
    budget calls for an even greater assault on Hispanic education
    programs with the proposed cuts of $855 million to the HEAP and
    $2.1 billion to the education overall. These cuts include the
    elimination of key programs such as the dropout prevention as
    well as the GEAR-UP and the TRIO programs of Upward Bound and
    Talent Search.
        We must turn this around and significantly increase the
    investment in all of these programs. The stakes could not be
    higher. I urge you to reject the administration's proposed cuts
    and restore funding that has been cut over the past several
    years, and I urge you to put us on a path of increased
    investment in our children starting with fiscal year 2007.
    Without these investments, our Nation will no longer be
    economically competitive in the future.
        In addition to creating an educated workforce, we also need
    a healthy workforce to remain competitive. Unfortunately, many
    people in my district do not have access to quality health
    care, particularly those in rural communities. Rural
    communities cannot compete against urban wages and benefits in
    this time when we are facing a national shortage of nurses and
    allied health professionals. Yet the President's budget
    eliminates health profession training grants and slashes
    funding by 83 percent for rural health activities. Diabetes is
    afflicting my constituents at an ever younger age and in near
    epidemic numbers, yet this budget for 2007 cuts critical
    diabetes programs at the Centers for Disease Control that
    bridge the gap between the theoretical research at the National
    Institutes of Health and real community-based treatment.
        Provider cuts in Medicare will make it more difficult for
    my senior citizens to find a physician to treat them, and
    higher co-pays will make even Medicaid unavailable for
    thousands of my constituents. My returning veterans from Iraq
    will have difficulty accessing services because VA funding is
    $10.1 billion below what is needed just to maintain its 2006
    purchasing power.
        I urge this committee to reconsider these policies that
    will undermine the health of millions of Americans. Rural
    America truly is the heartland of this great country. It is up
    to all of us here in Congress to ensure its continued vitality.
        The President's fiscal year 2007 budget seems geared to do
    just the opposite. The $2.77 trillion budget that the President
    sent to us last week cuts $1.5 billion from the Department of
    Housing and Urban Development, which we call HUD. The President
    is proposing these cuts despite HUD's recently reporting that
    $5.18 million very low income families have critical housing
    problems. The President's fiscal year 2007 budget imposes
    severe cuts to Sections 202 and 811 programs that provide
    housing to the lowest income seniors and people with
    disabilities at a time when the baby boom generation is
    beginning to retire.
        One of the programs that is fundamental to the success of
    rural cities is the Community Development Block Grant Program
    (CDBG). The President's budget proposes cutting the CDBG
    program by another 20 percent from $3.7 to $2.9 billion. And
    this cut and HUD's intention to revamp the program to award
    grants to undefined areas of greatest needs will devastate
    rural America. State and local authorities rely on those grants
    for community revitalization. Now is not the time to abandon
    our commitment to these communities in the guise of reform.
        Mr. Chairman, recently HUD awarded Texas only $74,523,000
    in CDBG funds despite its request for approximately $1 billion
    in assistance to provide relief to the hurricane evacuees.
    Texas will not have enough funds to provide for the hurricane
    evacuees much less its own population if Congress cuts CDBG
    program funding.
        The pending supplemental makes it clear: We need to
    actually increase funding for this CDBG program. The Rural
    Housing and Economic Development Program, the Housing
    Assistance Council, and the National Community Development
    Initiative are all key programs for our rural America. The
    President's budget has either zero funded or eliminated all of
    them.
        Furthermore, Mr. Chairman, the President's budget has
    proposed no funding for the construction of low income housing
    and calls for the elimination of all funding for the
    construction or preservation of affordable housing units in
    rural areas.
        One ray of hope lies in the fact that the proposed budget
    maintains the Community Development Financial Institutions
    Program. However, it reduces this important program 85 percent
    from its current funding of $46 million to a mere $8 million
    for this fiscal year 2007.
        In conclusion, let me say last year I fought to keep the
    Resource Conservation and Development Program intact and
    prevent closure of Farm Service Agencies, and yet again the
    President is recommending consolidating funding for the
    programs that are vital to a rural America. At a time when we
    are trying to rebuild the gulf coast, it is a mystery to me
    that programs people rely upon to get back on their feet face
    such drastic cuts.
        Thank you for allowing me to testify here before you. I
    encourage you to maintain an increased funding for programs
    that are essential to the education, health, economic
    development of our country. And if you have any questions, I
    will be glad to address them.
        [The prepared statement of Mr. Hinojosa follows:]

    Prepared Statement of Hon. Ruben Hinojosa, a Representative in Congress
                            From the State of Texas

        Chairman Nussle, Ranking Member Spratt and Members of the
    Committee, thank you for this opportunity to testify before you on the
    fiscal year 2007 budget. I ask that my written statement be included in
    the record.. The Federal budget is our most direct and telling
    statement of the nation's values and priorities. Unfortunately, when
    the people of my congressional district--hard working people--many who
    live in rural areas--most of whom are Hispanic--look at the Federal
    budget, they do not see their values reflected in the budget; and they
    do not see their community's well-being and prosperity treated as a
    national priority.
        I am here today to share with you some areas where the Federal
    budget could better reflect the values and priorities of my
    congressional district and similar communities across the nation. I
    will focus my remarks on three critical areas: education, health, and
    rural development.

                                   EDUCATION

        Nothing demonstrates our misplaced national priorities more than
    our failure to invest in education--particularly our failure to invest
    in the key programs that are making a difference in the Hispanic
    community.
        Our census figures tell the story. Hispanics are now the largest
    minority group in the country. Hispanic children are now second to only
    non-Hispanic whites in our nation's schools. By 2010, Hispanics will be
    the largest minority group in our nation's workforce. Yet Hispanic
    children are the least likely to attend preschool, the most likely to
    dropout of school before earning a high school diploma, and the least
    likely to earn a college degree.
        Strengthening educational opportunities for Hispanic Americans from
    pre-school through graduate school must become a national priority.
    Literally, our future depends on it. Unfortunately, the opposite has
    been true.
        We know what we need to do. We have an investment plan. The
    Congressional Hispanic Caucus focuses on a group of Federal education
    programs that are critical to the Hispanic community--Titles I and III
    of the Elementary and Secondary Education Act, migrant education
    programs, dropout prevention, HEP and CAMP, TRIO, GEAR UP, Hispanic-
    Serving Institutions, Even Start Adult English as a Second Language and
    Civics Education. We call these programs the Hispanic Education Action
    Plan.
        The fiscal year 2006 education budget cut every single program in
    this plan. For the first time in 10 years, the Federal support for
    Hispanic-Serving Institutions (HSIs) has been reduced, in spite of the
    fact that half of all Hispanic college students attend HSIs. For the
    first time in 10 years, funding for Title I, the cornerstone of the No
    Child Left Behind Act has been cut. TRIO programs have been put on the
    chopping block. Even Start, which provides literacy services to low-
    income families, over half of whom are Hispanic, has been slashed by
    more than 50 percent. Programs for English language learners and
    migrant students have been cut for the third year in a row. These cuts
    are coming at a time when the Department of Education estimates that
    there are 5.4 million English language learners in our schools and
    projects that the number will double by 2025.
        Unfortunately, the President's budget calls for an even greater
    assault on Hispanic education programs with cuts of $2.1 billion to
    education overall--a reduction of 3.8 percent from last year. These
    cuts include the elimination of key programs such as dropout
    prevention, GEARUP, and the TRIO programs of Upward Bound and Talent
    Search. In total, the President's budgets cuts the Hispanic Education
    Action Plan by more than $855 million.
        We must turn this around and significantly increase the investments
    in all of these programs. The stakes could not be higher. I urge you to
    reject the Administration's proposed cuts. I urge you to restore
    funding that has been cut over the past several years. And I urge you
    to put us on a path of increased investment starting with fiscal year
    2007. Without these investments, our nation will no longer be
    economically competitive in the future.

                                     HEALTH

        In addition to creating an educated workforce, we also need a
    healthy workforce if we are to remain competitive. Unfortunately, many
    people in my district do not have access to quality healthcare,
    particularly those in rural communities. Rural communities suffer from
    a lack of trained medical personnel because they cannot compete against
    urban wages and benefits in this time when we are facing a national
    shortage of nurses and allied health professionals. Yet the President's
    budget eliminates health profession training grants and slashes funding
    by 83 percent for rural health activities.
        My district is plagued by the ever increasing scourge of diabetes
    which is afflicting my constituents at an ever younger age and in near
    epidemic numbers. Yet the 2007 budget cuts critical diabetes programs
    at the Center for Disease Control which bridge the gap between
    theoretical research at the National Institutes of Health and real
    community based treatment.
        The Centers for Disease Control will also lose $290 million in
    programs for programs like the Preventative Health and Social Services
    Block Grant, Emergency Medical Services for children and the Universal
    Newborn Screening even while we all know that early prevention can save
    billions in future health costs.
        Provider cuts in Medicare will make it more difficult for my
    seniors to find a physician to treat them and higher copays will make
    even Medicaid unavailable to thousands of my constituents. My returning
    veterans from Iraq will have difficulty accessing services because VA
    funding is $10.1 billion below what is needed to maintain its 2006
    purchasing power. This will severely impact the VA's ability to treat
    new veterans.
        I urge the committee to reconsider these policies that will
    undermine the health of millions of Americans.

                               RURAL DEVELOPMENT

        Finally, I strongly urge this committee to provide the funds
    necessary to operate key programs that help bolster economic
    development in Rural America. Rural America truly is the heartland of
    this great country. It is up to all of us here in Congress to ensure
    its continued vitality. The President's fiscal year 2007 budget seems
    geared to do just the opposite.
        The $2.77 trillion budget that the President sent to us last week
    cuts $600 million from the Department of Housing and Urban Development
    (HUD), a 1.8-percent decrease from the FY06 appropriations. The
    President is proposing these cuts despite HUD recently reporting that
    5.18 million very low-income families have critical housing problems.
    It seems illogical at best for the Administration to be recommending a
    reduction of $1.15 billion in funding for housing programs when the
    agency responsible for those programs is aware of the need to do just
    the opposite--to increase funding for critical housing needs.
        At this juncture in our history, and in light of the nation's
    demographics, we need to begin increasing funding for lowest income
    seniors and people with disabilities. Contrary to this logic, the
    President's Fiscal Year 2007 budget imposes severe cuts to Sections 202
    and 811 programs that provide housing to the lowest income seniors and
    people with disabilities. This budget adds insult to injury by
    targeting seniors and people with disabilities twice for reduced
    assistance: first by reducing funding for health care and again by
    substantially reducing not only the funding for housing programs but
    the availability of key programs to those most in need. This budget is
    far from being compassionate.
        President Bush recently noted that he and former President Clinton
    will turn 60 this year, as will a considerable number of other members
    of the Baby Boom generation. He and his Administration should realize
    that the Sections 202 and 811 programs should be expanded considerably
    to prepare for the future housing needs of these people and for the
    housing needs of the Baby Boomers in general. The Baby Boom generation
    is going to place a huge drain on our economy, and we need to prepare
    for that now by providing the funds necessary to maintain programs that
    are going to be vital to the continued success of our country.
        One of the programs that is fundamental to the success of rural
    cities is the Community Development Block Grant Program. The
    President's budget proposes cutting the CDBG program by 20 percent--
    from $3.7 billion to $2.975 billion. This cut, and HUD's intention to
    revamp the program to award grants to the ``areas of greatest needs''--
    terminology which has yet to be defined--will devastate Rural America.
    State and local authorities rely on those grants for a variety of
    purposes. The reduction in funding is bad enough, but HUD has made
    statements that the CDBG program will be reformed but has not expounded
    on its proposal.
        In the aftermath of Hurricanes Rita and Katrina, Texas needs a
    considerable amount of CDBG funding. Following Hurricane Katrina,
    Texans were more than happy to open our hearts, our homes, our
    communities and our resources to the evacuees of Hurricane Katrina, and
    we remain committed to helping them in any way we can. However, we need
    the Federal Government, particularly HUD, to provide us with greater
    assistance.
        Recently, HUD Secretary Alphonso Jackson announced the allocation
    of $11.5 billion in disaster funding to be divided among the five Gulf
    Coast states impacted by Hurricanes Katrina, Rita and Wilma. He, HUD
    and the Administration decided to provide ``relief'' through the CDBG
    Program to Louisiana, Mississippi, Florida, Alabama and Texas.
    Unfortunately, Texas received only $74,523,000 from HUD despite its
    request for approximately $1 billion in assistance. In response, the
    Texas Delegation sent a letter to HUD Secretary Jackson requesting a
    detailed explanation of the Department's allocation of CDBG funds. The
    Secretary himself has yet to respond. I hope that this committee will
    take HUD's treatment of Texas into consideration when it decides
    whether or not to increase funding for CDBG. It is obviously a key
    ingredient to addressing housing needs of communities in need as
    demonstrated by HUD's use of the funds for Hurricane relief.
        The Rural Housing and Economic Development (RHED) Program, the
    Housing Assistance Council (HAC), and the National Community
    Development Initiative (NCDI) are all key programs for Rural America.
    The President's budget has either zero-funded or eliminated all of
    them. Furthermore, the President's budget has proposed no funding for
    the construction of low-income housing, and the budget calls for the
    elimination of all funding for the construction or preservation of
    affordable housing units in rural areas. This is at best irresponsible.
        One ray of hope lies in the fact that the proposed budget maintains
    the Community Development Financial Institutions (CDFI) Program.
    However, it reduces this important program 85 percent, from its current
    funding of $46 million to a mere $8 million for Fiscal year 2007.
        Last year I fought to keep the Resource Conservation and
    Development Program (RC&D) intact, and prevent closure of Farm Service
    Agencies, and yet again the President is recommending consolidating
    funding for the programs. Farmers and ranchers are the backbone of our
    economy, and we need to do all we can to support them, not continue
    slashing programs that assist them.
        All of these programs directly help low-income and rural
    communities across the country. At a time when we need to maintain
    funding for CDBG, RHED, CDFI, HAC, and other low-income and rural
    housing programs, especially in the aftermath of Hurricanes Katrina and
    Rita, it's a mystery to me that programs people rely upon to get back
    on their feet face such drastic cuts.
        I urge the committee to stand up for rural America and oppose these
    cuts.

        Mr. Ryun. Mr. Hinojosa, thank you very much for your
    testimony. Are there any members that have questions at this
    point? Hearing none--Mr. Moore.
        Mr. Moore. May I comment very briefly? Thank you, Mr.
    Hinojosa, for being here and for your presentation. I just want
    to comment on two, very quickly, areas that you covered. One is
    you talked about a budget being a values document. I think you
    are exactly right. I have learned in the 7 years I have been
    here in Congress that our job is about setting priorities for
    how we are going to spend our money. And people can talk all
    they want about values, but what it comes down to, a real
    demonstration of values is how we choose to the spend the money
    for the people in this country, and you mentioned in particular
    two areas I want to comment on very quickly.
        One is education. I think it is a drastic mistake to be
    cutting back on college student loans. I don't know that you
    mentioned that, but you mentioned several other work and
    education programs. And the second, you did mention health. You
    talked about cutbacks in diabetes programs and cutbacks in
    provider cuts for Medicare beneficiaries--and for providers,
    excuse me. And I think, again, those are places we should not
    choose to make cuts. I believe in a balanced budget, I believe
    in fiscal responsibility, but we have got to make hard
    decisions here, and we can't sacrifice the least among us.
        Thank you.
        Mr. Hinojosa. Congressman Moore, if I may, I would like to
    respond by saying that one thing I have learned here in
    Congress these 10 years, and that is that issues divide us.
    Values, as I addressed in the opening of my remarks, is what
    unites us. And that is why I am making such a plea for
    increases in funding in these areas. And, Mr. Chairman, if I
    may, I would like to ask unanimous consent that to my remarks,
    that we also add two documents that I have which are a history
    from 1995 to 2006 of the funding that we have received in the
    HEAP programs, which is our Hispanic Education Action Plan, so
    that you can see that we were on a good route, a good track to
    be able to increase funding which is very necessary to address
    the programs that are helping our community be able to graduate
    and go on to college.
        Mr. Ryun. Without objection, those will be put into the
    record.
        [The information referred to follows:]

                                                               CONGRESSIONAL HISPANIC CAUCUS HISPANIC EDUCATION ACTION PLAN (HEAP) FUNDING
                                                                                          [Amounts in millions]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    1995     1996     1997     1998     1999     2000     2001     2002        2003          2004            2005           2006
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Hispanic Serving Institutions...............................      $12    $10.8    $10.8      $12      $28      $43      $69       $86         $92.4           $94            $95.1         $94.9
    Bilingual Education.........................................   $156.7     $128   $156.7     $199     $224     $248     $296  \1\ $665        $683.7          $681             $676          $669
    Migrant Education HEP/CAMP..................................   $10.29    $9.47    $9.47    $9.72      $13      $22      $30       $38           $39         $34.5              $34         $33.9
    Migrant Education (Title I of ESEA).........................   $305.5   $305.5   $305.5   $305.5   $354.7     $355     $380      $396        $395.5        $393.6           $390.4        $386.5
    Adult Education\2\ (State Grant)............................      N/A      N/A      N/A      N/A      N/A      $25      $70       $70   $70 (571.3)   $70 (574.4)    $68.5 (569.7)   $67.8 (564)
    TRIO--Total.................................................     $463     $463     $500   $529.7     $600     $645     $730      $803        $827.1        $832.6           $836.5        $828.2
    GEAR-UP.....................................................      N/A      N/A      N/A      N/A     $120     $200     $295      $285        $293.1        $298.2           $306.5        $303.4
    Title I (LEAs)..............................................   $6,698   $6,730   $7,295   $7,375   $7,676   $7,940   $8,336   $10,350       $11,684     $12,342.3        $12,738.6      12.713.1
    Dropout Prevention (Title I, Part H)........................      N/A      N/A      N/A      N/A      N/A      N/A      N/A        $7           $11            $5             $4.9         $4.85
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ The No Child Left Behind Act consolidated bilingual and immigrant education programs into a state formula grant program under Title III. Immigrant education had been funded at $150 million
      in previous fiscal years.
    \2\ Adult English as a Second Language and Civics setaside from the Adult Education State Grant Program.

                                                FY 2006 BUDGET PRIORITIES--HISPANIC EDUCATION ACTION PLAN (HEAP)
                                                                      [Amounts in millions]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Admin
                                                                       2004         2005       Request        CHC         House        Senate       Final
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Hispanic-Serving Institutions (Title V of HEA)...............          $94        $95.1        $95.9         $125        $95.9       $100.8        $94.9
    English Language Acquisition (Title III, ESEA) \1\...........         $681         $676         $676         $900         $676       $683.4         $669
    Migrant Education HEP/CAMP...................................        $34.5        $34.3        $34.3          $50        $34.3        $37.1        $33.9
    High School Equivalency Program (HEP)........................      ($18.9)      ($18.7)      ($18.7)        ($27)      ($18.7)      ($21.6)       (18.5)
    College Assistance Migrant Program (CAMP)....................      ($15.7)      ($15.5)       (15.6)        ($23)      ($15.6)      ($15.5)       (15.4)
    Migrant Education Programs (Title I of ESEA).................       $393.6       $390.4       $390.4         $455       $390.4       $395.2       $386.5
    Adult ESL/Civics \2\.........................................          $70        $68.5        $68.5         $100        $68.5          $72        $67.8
    (Adult Education State Grant)................................     ($574.4)     ($569.7)       ($200)     ($604.4)     ($569.7)     ($572.9)        (564)
    TRIO.........................................................       $832.6       $836.5       $369.4         $900       $836.5       $841.5       $828.2
    GEAR-UP......................................................       $298.2       $306.5           $0         $350       $306.5       $306.5       $303.4
    ESEA Title I (LEAs)..........................................    $12,342.3    $12,738.6    $13,342.3         Full    $12,839.6    $12,839.6    $12,713.1
    Dropout Prevention (new program).............................           $5         $4.9           $0          $11           $0         $4.9        $4.85
    Local Family Information Centers.............................           $0           $0           $0           $5           $0           $0           $0
    (Parent Information Resource Centers \3\)....................        ($42)        ($42)         ($0)        ($60)         ($0)      ($48.5)      ($39.6)
    Even Start...................................................         $247         $225           $0         $230         $200           $0          $99
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Previously bilingual and immigrant education, these programs were consolidated by NCLB.
    \2\ Under the Adult Education State Grants: earmark for English Literacy and Civics for immigrant and LEP populations.
    \3\ Local Family Information Centers cannot be funded until Parent Information and Resource Centers reach $50 million.

        Mr. Hinojosa. Thank you. I appreciate that.
        Mr. Ryun. At this point I would like to turn to the
    gentleman from Kansas, a colleague of mine, Mr. Tiahrt, for his
    proposal.

      STATEMENT OF HON. TODD TIAHRT, A REPRESENTATIVE IN CONGRESS
                        FROM THE STATE OF KANSAS

        Mr. Tiahrt. Thank you, Mr. Chairman. It is nice being here
    with half the Kansas delegation. And Mario, we will just go
    ahead and adopt you, and that way all four of us will be here.
        I want to talk to you about saving some money. Instead of
    about spending more money, I want to talk to you about how we
    can save some money. And I appreciate the gentleman from
    Kansas, Mr. Moore's, comments and also Mr. Hinojosa's comments
    about this being a values document. It is--our values are
    embedded in this budget document, and one of the things I think
    that we all want in those values that should be included in
    here is accountability and integrity and fiscal responsibility.
        This is an option that I am going to present that will help
    us get to a balanced budget. I have a formal testimony that I
    would like to submit for the record.
        Mr. Ryun. Without objection.
        Mr. Tiahrt. And then I am going to give you some brief
    comments and take your questions. The bill I am presenting that
    I would like to be part of the budget document is called the
    Commission on Accountability and Reform of Federal Agencies, or
    CARFA for short. Basically, it sets up an agency to help us do
    oversight.
        Now, it is no secret that the Federal budget has got a lot
    of examples of duplicative, inefficient, failed Federal
    agencies and programs, and it is a serious problem facing our
    Nation today. The House Budget Committee put out a 421-page
    report outlining as much as $100 billion in waste, fraud, and
    abuse throughout the Federal Government. But there is other
    examples. The Office of Management and Budget said there is
    about $90 billion of waste and abuse out there in the Federal
    Government. The Congressional Budget Office said it could be as
    high as $140 billion in spending waste. There is also reports
    from Government Affairs Committee, from the General Accounting
    Office, and the Senate Government Affairs Committee has also
    put out a document.
        So what do we do with that information? Well, one of the
    biggest frustrations I have as a Member of the House and an
    appropriator is dealing with the size and scope of the Federal
    Government. It has gotten so big that our attention is focused
    on the crisis of the day rather than stepping back and looking
    at the effectiveness of what we are trying to do. Oversight is
    the term or the word that sort of sums up that process.
        Now, if we were to do some oversight, just taking an
    average legislative day, we ought to be looking at $30 billion
    worth of spending on any given legislative day. I think we have
    to ask ourselves: How much oversight did we provide today? Was
    it $30 billion worth of oversight? Did we find any waste,
    fraud, or abuse today? One of the examples that is very--since
    we have most of the, or a majority of the Kansas delegation
    here, I have found out that, according to the Congressional
    Research Service, that one out of four payments that Kansas
    makes in Medicaid is wrong. One out of four payments. Can you
    imagine FedEx running a commercial saying, if you will give us
    four boxes to ship, we will get three of them there and then we
    will go find the other one. And you have got three out of four
    chances of getting that one sent to the right place. But if we
    lose it again, we will find it again and we will finally get it
    there. The fact that we make one out of four of our payments
    inefficiently means that we need some oversight. They need some
    reforms and they need some help.
        CARFA is about helping with that process. Even the
    Appropriations subcommittees which do a fabulous job of
    oversight don't have the time to deal with all of the--with the
    size and the scope of the number of agencies and the amount of
    spending that is out there.
        There is also--I am not talking about any earmarks here at
    all. What I am talking about is agencies that are out there,
    both of them doing good work. Say there is two agencies, both
    of them doing training activities, both of them doing good
    work, not aware that they are competing for the same clientele,
    not aware that they have duplicative overhead, and that we are
    wasting money by having a structure that has two redundant
    programs. Well, there are over 100 training programs in the
    Federal Government. And where is the coordination of all that
    activity? We don't have it. We just need to have somebody step
    back and take a look at it.
        CARFA basically would be a commission of 12 people. They
    would be volunteers. There would be a 2-year term limit. This
    whole thing is really for 2 years and 3 months with the final
    report at the end. But basically they would have access to
    staff, they would have their expenses covered, their travel
    expenses, given a per diem. Their staff would have sufficient
    space to work and also expenses. They would have the right to
    bring information before their committee. And at the end of 2
    years they would submit to Congress in a BRAC-like fashion
    programs that they have found to be duplicative, inefficient,
    or wasteful, and we would bring it to the floor for an up or
    down vote in the same fashion that we do as in BRAC. So this is
    a BRAC-like commission to help us do the oversight
    responsibility that we have here in Congress but we don't spend
    enough time doing. And, as I said, any given legislative day we
    ought to be doing about $30 billion worth of oversight, and I
    think we are far behind that goal to try to achieve that on any
    given day even at the end of the session.
        So CARFA is the bill and I would like to have that concept
    in the budget resolution. I think that it would be a very
    effective way to reduce the waste, fraud, and abuse that is in
    our Federal Government, and it would save us money.
        If we could save $140 billion, that would be a tremendous
    step to reducing the budget deficit. If we could save $100
    billion, still a significant step. If we could save $1 billion,
    that is a lot of money. Any of us could retire on that amount
    of money. So CARFA I think is a good concept, it is a good
    idea, and ought to be included in the budget document.
        I stand for your questions.
        [The prepared statement of Mr. Tiahrt follows:]

     Prepared Statement of Hon. Todd Tiahrt, a Representative in Congress
                            From the State of Kansas

        Mr. Chairman, thank you for the opportunity to testify before the
    committee today.
        As I think you would agree, the President's tax cuts are to be
    commended for getting our economy moving in a positive direction again.
    However, the other half of the formula for economic success is to cut
    wasteful and unnecessary spending. It is certainly no secret that the
    Federal budget is filled with examples of duplicative, inefficient, and
    failed Federal agencies and programs. I am here today to discuss
    legislation that I have introduced that I believe would eliminate much
    of the fraud and abuse that persists in our Federal Government in a
    politically viable manner.
        When Republicans gained control of Congress in 1994, we proposed to
    eliminate wasteful and deficit spending. In fact, in the Contract with
    America, which several of us in this room signed, we pledged to (and I
    quote) ``restor(e) fiscal responsibility to an out-of-control Congress,
    [by] requiring them to live under the same budget constraints as
    families and businesses.'' For several years, we held to that promise
    by modestly curtailing spending growth and balancing the budget in 1998
    for the first time since the 1960's. Since that time, however, Federal
    spending has jumped drastically and we have returned to a time of
    massive budget deficits.
        Some of this increased spending is understandable--especially in
    the defense budget, considering the one-two punch of being under-funded
    by the previous administration and the exigencies of 9/11. But these
    events do not justify the fact that non-defense discretionary outlays
    have increased by over 30 percent over the past 3 years. These
    tremendous spending increases have been a significant cause of the
    deficits that we now face.
        This problem can also be traced to the billions of taxpayer dollars
    that go every year to Federal programs and agencies that are redundant,
    wasteful, and altogether irrelevant. I certainly support a 1-percent
    cut in non-defense, non- homeland security discretionary spending as
    well as a cap of 1 percent on the rate of growth of mandatory spending.
    These are measures that we must take given our current fiscal climate.
    But I also think there are other meaningful ways that we can confront
    the deficit, including by rooting out fraud and abuse in our
    government.
        Some say that a growing national debt will force us to curtail
    government growth. So far we have seen none of that. It is also
    commonly believed that economic growth will reverse the effects of
    running up the national credit card. Although the economy is perking
    up, we cannot become complacent. As a matter of fact, former Federal
    Reserve Chairman Alan Greenspan warned us that ``impressive gains'' in
    our economy would not outshine the negatives of our growing budget
    deficits. Mr. Greenspan promised that the Fed will hold short-term
    interest rates; now at a 45-year low of 1 percent, then he warned that
    these rates ''will not be compatible indefinitely'' with the Fed's
    fight against inflation.
        If interest rates go up, what will happen to the stock market, the
    housing market and personal credit card debt? A rise in interest rates
    could stall economic growth by damaging fledgling business projects and
    cause other complications.
        We now have just about $380 billion left to spend before we have to
    start borrowing again! We are spending a few billion dollars a day, so
    it won't be long. As you know, deficits REQUIRE the Treasury to borrow
    money to raise cash needed to keep the Government operating. Yes, our
    economy is rebounding, but we are simply not keeping pace with our rate
    of spending--therefore the deficit is growing like a gelatinous monster
    from a ``B-grade'' movie.
        Concerned grassroots conservative organizations including The Club
    for Growth, The Free Congress Foundation, Citizens Against Government
    Waste, The Heritage Foundation, The American Conservative Union,
    Citizens for a Sound Economy have been vocal in their criticism of the
    rate of growth of the deficit and the large spending increases that we
    have witnessed over the past few years. We can no longer ignore the
    fact that all this spending is endangering our economic vitality. The
    government cannot spend or give anything until they have collected the
    money to do so. Magic does not happen. Taxes and borrowing happen.
        It has become increasingly clear that Congress' normal procedures
    cannot address the spending and waste problems that persist within our
    Federal Government. Time and again, we see congressionally-authorized
    programs become institutionalized, ultimately becoming a permanent
    fixture at the expense of taxpayers. This ties up precious Federal
    resources that could be used toward paying down the national debt or
    higher Congressional priorities. By cutting out unnecessary Federal
    programs and agencies, we will send a strong message that we are
    serious about exercising fiscal responsibility and controlling
    government spending. With this in mind, I have introduced a bipartisan
    piece of legislation that will accomplish this very purpose.
        A first step toward a stable financial future for this country
    currently can be found in H.R. 2470, which is also known as the
    Commission on the Accountability and Review of Federal Agencies Act
    (CARFA). CARFA is based on a process with an established record of
    successful program-elimination and prioritization of spending--the Base
    Realignment and Closure Commission (BRAC). H.R. 2470 will ``establish a
    commission to conduct a comprehensive review of Federal agencies and
    programs and to recommend the elimination or realignment of
    duplicative, wasteful, or outdated functions...'' CARFA provides for a
    disciplined spending review process for non-defense, non-entitlement
    programs. Congress will have to simply vote up-or-down on the
    commission's recommendations in their entirety. The congressional log-
    rolling that normally bogs down the process will be short-circuited. In
    this way, real reform can emerge, and the deficit and debt problems can
    be brought under control. H.R.2470 offers Congress and the
    Administration a unique opportunity: rather than simply re-fund and
    increase funding for every Federal program, CARFA will eliminate
    unproductive, duplicative and outdated programs.
        Here's how CARFA would work. The Commission would consist of 12
    members, appointed by the President, no later than 90 days after the
    enactment of this Act. Members would be appointed for the life of the
    Commission, and would be required to meet no later than 30 days after
    the date on which all members of the Commission have been appointed.
    CARFA's duties would then include conducting a top to bottom review of
    all Federal programs and agencies--excepting the Department of Defense
    and any agency that solely administers entitlement programs. CARFA
    would seek to identify those programs or agencies that could be
    considered duplicative in mission, grossly wasteful or inefficient,
    outdated, irrelevant, or failed. The assessment of these programs would
    be based primarily upon the achievement of common performance measures,
    financial management, and other factors determined by the President. No
    later than 2 years after the enactment of this Act, the Commission
    would be required to submit to the President and Congress a plan with
    recommendations of the agencies and programs that should be realigned
    or eliminated and propose legislation to implement this plan. CARFA
    would require congressional consideration of the review's findings
    under expedited legislative rules. In short, Congress would be voting
    ``up or down'' to continue or stop wasteful spending.
        CARFA's main focus would be to make our government smarter and more
    efficient, and also to ensure that taxpayer dollars are not used to
    support programs such as the ``Federal Tea-taster,'' who until 1995
    headed the ``Board of Tea Experts'' which was created by the Imported
    Tea Act of 1897. Until this program's elimination just 10 short years
    ago, the Federal Government was spending $120,000 in salary and
    operating expenses per year to taste tea. Obviously this is only one
    example of the type of programs that CARFA would target, but I am
    convinced that our Federal Government is replete with programs such as
    this that make a mockery out of the hard-earned tax dollars that
    Congress provides. Other examples of government waste that CARFA would
    target include surplus lands owned by the Department of Energy, which
    if sold would save taxpayers $12 million over 5 years. In addition,
    eliminating four duplicative bilingual education programs at the
    Department of Education would save taxpayers over $800 million over a 5
    year period. We could save $1 million dollars every year by simply
    eliminating overlapping responsibilities and reducing administrative
    positions at the Consumer Product Safety Commission. The examples of
    inefficient and wasteful government practices that CARFA could target
    are far too numerous to cite in this short amount of time. However, it
    is clear to me that the need for CARFA is very real.
        The strict time limits governing the Commission, which would expire
    shortly after submitting its findings, would ensure that its costs are
    kept to a minimum. I believe that the savings that would occur as a
    result of the Commission's findings will more than justify the minimal
    expenses that the study might incur. In addition, it is worth noting
    that CARFA requires that ALL funds saved by the implementation of this
    plan can ONLY be used for supporting other domestic programs or paying
    down the national debt.
        H.R.2470 offers Congress and the Administration a test: Can we
    address a real and present problem by adopting a method that has been
    successful in the past? The answer will tell us much about the
    prospects for our country in the 21st century. CARFA offers an idea
    other than hiding our heads in the sand and ignoring this problem.
    CARFA is a realistic plan that will make genuine reform possible. It
    takes LEADERSHIP to point out hard truths and LEADERSHIP to find and
    implement a workable answer. We welcome support to this politically
    viable solution to government spending gone awry. If the CARFA
    commission comes to fruition, it will give Congress arms-length
    distance to do the right thing and vote down ridiculous, redundant and
    outdated programs. Over forty-five of my colleagues in the House have
    agreed to co-sponsor this legislation and our numbers are growing
    stronger. We hope to see the CARFA commission hard at work cutting
    wasteful spending by this time next year, if not sooner.
        Thank you for your time.

        Mr. Ryun. I would like to begin just with a brief comment
    actually from your testimony here. You have a statement from
    Federal Reserve Chairman Alan Greenspan warning that impressive
    gains in our economy would not outshine the negatives of a
    growing budget deficit.
        Now, I know in your proposal with the oversight you would
    look for perhaps ways to save money. If you look back at the
    Katrina situation where you have all the mobile homes that are
    sitting down on the runways in Arkansas that are not being
    used, that is a waste of money. You threw out a number of
    numbers. Do you have any estimate, and perhaps it is in your
    testimony or I didn't hear it, with regard to how much
    potentially can be saved through this process?
        Mr. Tiahrt. Well, I think that would be difficult to
    estimate right now, but I think it could be as much as $100
    billion. This is like an experiment. If this works, I am sure
    we would want to repeat, like we have had several BRACs. But
    what I think is important now is that they would have the
    opportunity, this commission would have the opportunity to go
    out and look for these examples. There is plenty of examples
    out there, and they can set a list of priorities. I don't think
    they could work through the complete list in only 2 years
    because our Federal Government is so large. I mean, it is $2.7
    trillion. That is a lot of money. But I think that they could
    save money for us, but, more importantly, put mechanisms or
    give us the ideas to put mechanisms in place so that we don't
    have decisions made that buys $400 million worth of trailer
    houses that sit on a runway in northwest Arkansas.
        Mr. Ryun. I appreciate the gentleman's proposal. Are there
    any other questions by members? Mr. Moore.
        Mr. Moore. Thank you very much, Congressman Tiahrt, for
    being here. I really appreciate the concept here and I do have
    a couple of questions, but first I have just a couple of
    comments as well. But I really do appreciate the concept here.
        We have in this country an $8.2 trillion national debt. In
    the past 4 years, since 2003 at least, in 2003 we had a $378
    billion deficit; 2004, a $412 billion deficit; 2005, a $318
    billion deficit; 2006, the projected deficit is $423 billion.
    Since June of 2002, the first debt limit increase was $450
    billion; May of 2003, a $984 billion debt limit increase;
    November of 2004, an $800 billion debt increase; and a pending
    increase has been requested I understand of $781 billion. So I
    very much like the concept of your proposal here, and I would
    like to see more specifics.
        My questions about your proposal--and I just got this
    statement, but it says on page 7, here is how CARFA would work.
    The commission would consist of 12 members appointed by the
    President. Is that a bipartisan appointment, or does the
    President appoint 12 members of his party, or how does that
    work, sir?
        Mr. Tiahrt. Well, it would be up to--of course the
    President would make that selection. He would, I would hope, do
    it after consultation with both minority and majority Members
    of the House and Senate. I think it would be more effective as
    a bipartisan commission.
        Mr. Moore. Well, I certainly agree with that. What we don't
    need is more partisanship here in Washington, D.C.
        The second question is this. It says on the same page:
    Commission having been appointed, CARFA's duties would then
    include top to bottom review of all Federal programs and
    agencies, excepting the Department of Defense and any agency
    that solely administers entitlement programs.
        Are you suggesting there is no waste or abuse or fraud in
    the Department of Defense or entitlement programs?
        Mr. Tiahrt. Absolutely not. And this would be subject to
    the amendment process as it moves forward. And I think, for
    example, in the Department of Defense, the procurement where
    they have over 75,000 people just buying stuff is a system that
    is archaic and behind the times and needs to be reformed. What,
    this was designed on BRAC, it sort of bases the fundamental
    concept. BRAC is focused on the Department of Defense, so I
    said why don't we look at the rest of the Government. That is
    why it was segregated. It was more an artificial separation. I
    do think there needs to be reform, and I would be open to an
    amendment like that.
        Mr. Moore. I would appreciate if you would send a copy of
    your proposal, if it is in writing right now, over to my
    office.
        Mr. Tiahrt. Absolutely. And one other thing I wanted to
    mention to you, we are going to increase the Federal debt later
    on this year sometime. I hope that we can get some reforms in
    exchange for doing that so that we can save money in the
    future. But this January was very encouraging. I believe that
    the President's tax policies are paying off in that we ran over
    $20 billion in surplus in the first month of this calendar
    year. Hopefully, it will be able to--we will have less than a
    $412 billion deficit. And I believe that if January is an
    indication, we may have some hope of hitting that.
        Mr. Moore. I hope as well your comments about the tax
    policy are correct, but I fear they may be misguided because it
    seems like for the last 4 years we have had nothing but more
    and more deficits. Thank you.
        Mr. Ryun. I would like to thank the gentleman from Kansas
    for his initiative and his testimony. And we will now turn to
    the gentleman from New York, Mr. Fossella.

     STATEMENT OF HON. VITO FOSSELLA, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF NEW YORK

        Mr. Fossella. Thank you, Mr. Ryun and colleagues. I thank
    the committee for the opportunity to testify. And as we know,
    the President's budget provides Congress with a blueprint that
    we will refer to as we move forward with the budget for 2007. I
    think Congress' responsibility is to build on the strengths in
    that blueprint and also work to develop alternatives to ensure
    that the final product best serves the interests of the
    American people.
        As our troops lead the world in the war on terrorism, it is
    essential that we continue to provide them with the resources
    and tools they need to keep themselves and our Nation safe from
    future attacks. The President's budget calls for a 7-percent
    increase in defense spending next year, representing an
    aggregate increase of 48 percent since 2001. At the same time,
    with our military so bravely battling terrorism abroad, we must
    continue to strengthen and protect our homeland from the
    continuing threat of a terrorist attack.
        The President's budget would provide an 8-percent increase
    in nondefense homeland security funding. In addition, the
    budget includes a number of proposals geared toward increasing
    the Nation's preparedness against a variety of threats, from
    bioterrorism attacks to natural disasters to an influenza
    pandemic. As a priority, we need to ensure that the homeland
    security programs are adequately funded and that this funding
    is directed to the cities that face the greatest threat.
        Indeed, I introduced legislation this Congress to reform
    the current system for allocating anti-terror funding, making
    risk the only criteria for distributing the nearly $2.5 billion
    in Federal homeland security aid. While we have made progress
    on this issue in recent years, the only rule that should apply
    is this: Congress should send resources to fight terrorism
    where they are needed most, not based on arbitrary formulas. I
    look forward to working with all parties to achieve this
    important goal.
        Tragically, Hurricane Katrina provided evidence that our
    current system for disaster response and recovery is inadequate
    for catastrophic events like those that devastated the Gulf
    States last year. The President's budget also includes $1.94
    billion for the Disaster Relief Fund and $3.1 billion for FEMA
    activities to continue and strengthen recovery and relief
    efforts. In addition, the President requested continued funding
    to the Inspector General within the Department of Homeland
    Security to oversee the allocation of relief funds and ensure
    the dollars are flowing to those who truly need them.
        There is no greater priority of the Federal Government than
    protecting the people of our Nation. It is the most essential
    function of government, and I look forward to working with you
    to build on these strong points. At the same time, we also have
    a responsibility to care for America's seniors by protecting,
    preserving, and strengthening Social Security and Medicare and
    helping those less fortunate by enhancing Medicaid. Therefore,
    I would like to take this opportunity to raise concerns over
    several budget proposals that I believe need to be considered.
        With Medicare expected to grow 17 percent this year alone
    from $330 billion to almost $390 billion, and an average of 8.5
    percent a year through 2016, the program will increase from 3.3
    percent of GDP in 2005 to 4.2 percent of GDP in just 10 years.
    Therefore, it is important that we explore ways to create
    efficiencies so our Nation's seniors continue to have access to
    the high quality care they need. However, several proposals to
    increase out-of-pocket expenses for beneficiaries and reduce
    anticipated payments to hospitals and health systems could make
    it more difficult for beneficiaries to access that care. I also
    have concerns about the proposals aimed at the specific
    specialties commonly needed by the Medicare population, such as
    reduced payments for hip and knee replacements and the
    inclusion of inpatient rehabilitation facilities and skilled
    nursing facilities and the elimination of market-basket
    updates.
        I believe Congress should focus on principles that can
    produce savings over the long term. The President proposes
    initiating and expanding to health savings accounts for
    Medicare beneficiaries and increasing cost efficiencies through
    the use of competitive bidding for durable medical equipment,
    outpatient drugs, initiating competitive bidding for Medicare
    laboratory services as examples.
        Additionally, on top of the $1.1 billion provided for the
    health care fraud and abuse control, the President requested
    $118 million for the targeted efforts to protect the new
    prescription drug benefit and Medicare Advantage programs from
    waste, fraud, and abuse. We need to protect and enhance the
    Medicare program to ensure its sustainability for future
    generations. To meet that challenge, we should focus on cost
    effectiveness and quality assurance measures that will not harm
    our senior citizens. I look forward to working with you toward
    that end.
        Medicaid outlays in 2005 will reach $182 billion and more
    than $300 billion when State expenditures are included.
    Spending on Medicaid will increase by 5.2 percent in 2006, and
    an average of 8 percent over the next 10 years. As a share of
    gross domestic product, Medicaid spending will rise from 1.5
    percent in 2006 to 2 percent in 2016. The Deficit Reduction Act
    included significant reforms authored by the bipartisan
    National Governors' Association aimed at improving the overall
    fiscal health of Medicaid. Without congressional action,
    Medicaid would have begun bankrupting States or, as some
    Governors have revealed, forced them to drop beneficiaries from
    coverage altogether.
        As we work to fix Medicaid's problems, we should also be
    wary of initiatives included that would reduce access to care
    for those who need it and truly cannot afford it.
        On Social Security reform, I believe we can find a
    bipartisan solution to strengthening Social Security if
    politics is cast aside and the best interests of the American
    people take priority. As I have said in the past, I stand ready
    to work with Democrats and Republicans to find common ground
    that will allow our generation to renew the sacred covenant.
    Indeed, I believe we have a responsibility to ensure that
    Social Security is strong and solvent for today's seniors, baby
    boomers, our children, grandchildren, and future generations of
    Americans. Partisanship and unwillingness to compromise has
    stalled efforts to improve Social Security. Therefore, I
    believe the best course of action at this time is to appoint a
    bipartisan commission that would be charged with developing a
    plan to strengthen Social Security for all Americans.
        By all accounts, it seems the American people do not
    support the personal accounts of progressive indexing as a way
    to secure Social Security. Therefore, we should really and
    truly explore other proposals to strengthen this program.
        Mr. Ryun, as we begin the budget process, America is faced
    with great challenges and even greater opportunities. I look
    forward to working with Chairman Nussle, Ranking Member Spratt,
    the Budget Committee, and all my colleagues in the House to
    develop a budget that best reflects the priorities and best
    interests of the American people. Thank you for the
    opportunity.
        [The prepared statement of Mr. Fossella follows:]

    Prepared Statement of Hon. Vito Fossella, a Representative in Congress
                           From the State of New York

        Thank you Chairman Nussle and Ranking Member Spratt for the
    opportunity to testify before your committee this afternoon. As you
    know, the President's budget provides Congress with a blueprint that we
    will refer to as we move forward with a budget for 2007. Congress'
    responsibility is to build on the strengths of that blueprint and also
    work to develop alternatives to ensure that the final product best
    serves the interests of the American people.
        As our troops lead the world in the War on Terrorism, it is
    essential that we continue to provide them with the resources and tools
    they need to keep themselves and our nation safe from future attacks.
    The President's budget calls for a 7-percent increase in defense
    spending next year, representing an aggregate increase of 48 percent
    since 2001. At the same time, with our military so bravely battling
    terrorism abroad, we must continue to strengthen and protect our
    homeland from the continuing threat of a terrorist attack. The
    President's budget would provide an 8-percent increase in non-defense
    homeland security funding. In addition, the budget includes a number of
    proposals geared toward increasing the nation's preparedness against a
    variety of threats, from bioterrorism attacks to natural disasters to
    an influenza pandemic.
        As a priority, we need to ensure that homeland security programs
    are adequately funded--and that this funding is directed to the cities
    that face the greatest threat. Indeed, I introduced legislation this
    Congress to reform the current system for allocating anti-terror
    funding, making risk the only criteria for distributing the nearly $2.5
    billion in Federal homeland security aid. While we have made progress
    on this issue in recent years, the only rule that should apply to
    homeland security funding is this: Congress should send resources to
    fight terrorism where they are needed most, not based on arbitrary
    formulas. I look forward to working with all parties to achieve this
    important goal.
        Tragically, Hurricane Katrina provided evidence that our current
    system for disaster response and recovery is inadequate for
    catastrophic events like those that devastated the Gulf states last
    year. The President's Budget includes $1.94 billion for the Disaster
    Relief Fund and $3.1 billion for FEMA activities to continue and
    strengthen recovery and relief efforts. In addition, the President
    requested continued funding to the Inspector General within the
    Department of Homeland Security to oversee the allocation of relief
    funds and ensure the dollars are flowing to those who truly need them.
        There is no greater priority of the Federal Government than
    protecting the people of our nation. It is the most essential function
    of government, and I look forward to working with you to build on these
    strong points.
        At the same time, we also have a responsibility to care for
    America's seniors by protecting, preserving and strengthening Social
    Security and Medicare and helping those less fortunate by enhancing
    Medicaid. Therefore, I would like to take this opportunity to raise
    concerns over several budget proposals that I believe need to be
    reconsidered.
        With Medicare expected to grow 17 percent this year alone (from
    $330 billion to $390 billion) and an average of 8.5 percent a year
    through 2016, the program will increase from 3.0 percent of GDP in 2005
    to 4.2 percent in just 10 years. Therefore, it is important that we
    explore ways to create efficiencies so that our nation's seniors
    continue to have access to the high-quality care they need.
        However, several proposals to increase out-of-pocket expenses for
    beneficiaries and reduce anticipated payments to hospitals and health
    systems could make it more difficult for beneficiaries to access that
    care. I also have concerns about proposals aimed at specific
    specialties commonly needed by the Medicare population, such as reduced
    payments for hip and knee replacements and the inclusion of inpatient
    rehabilitation facilities and skilled nursing facilities in the
    elimination of market-basket updates.
        I believe Congress should focus on principles that can produce
    savings over the long term. The President proposes initiating and
    expanding access to Health Savings Accounts for Medicare beneficiaries,
    and increasing cost efficiency through the use of competitive bidding
    for durable medical equipment, outpatient drugs, and initiating
    competitive bidding for Medicare laboratory services. Additionally, on
    top of the $1.1 billion provided for Health Care Fraud and Abuse
    Control, the President requested $118 million for targeted efforts to
    protect the new prescription drug benefit and Medicare Advantage
    programs from waste, fraud and abuse.
        We need to protect and enhance the Medicare program to ensure its
    sustainability for future generations. To meet that challenge, we
    should focus on cost effectiveness and quality assurance measures that
    will not harm America's senior citizens. I look forward to working
    toward that end.
        Medicaid outlays in 2005 will reach $182 billion and more than $300
    billion when state expenditures are included. Spending on Medicaid will
    increase by 5.2 percent in 2006 and an average of 8.0 percent over the
    next 10 years. As a share of GDP, Medicaid spending will rise from 1.5
    percent in 2006 to 2.0 percent in 2016.
        The Deficit Reduction Act included significant reforms--authored by
    the bipartisan National Governors Association--aimed at improving the
    overall fiscal health of Medicaid. Without Congressional action,
    Medicaid would have begun bankrupting states or, as some Governors have
    revealed, forced them to drop beneficiaries from coverage altogether.
    As we work to fix Medicaid's problems, we also should be wary of
    initiatives included in the Budget that would reduce access to care for
    those who need it and truly cannot afford it.
        On Social Security reform, I believe we can find a bipartisan
    solution to strengthening Social Security if politics is cast aside and
    the best interests of the American people take priority. As I have said
    in the past, I stand ready to work with Democrats and Republicans to
    find common ground that will allow our generation to renew this sacred
    covenant. Indeed, I believe we have a responsibility to ensure Social
    Security is strong and solvent for today's seniors, baby boomers, our
    children, grandchildren and all future generations of Americans.
        Partisanship and an unwillingness to compromise has stalled efforts
    to improve Social Security. Therefore, I believe the best course of
    action at this time is to appoint a bipartisan commission that would be
    charged with developing a plan to strengthen Social Security for all
    Americans. By all accounts, the American people do not support personal
    accounts and progressive indexing as a way to fix Social Security.
    Therefore, we should explore other proposals to strengthen the program.
        Lastly, I believe we must work to restore funding to public
    broadcasting, which would be hit with budget cuts in excess of $150
    million over the next 2 years. Last year, I voted for an amendment that
    restored $100 million in cuts to the Center for Public Broadcasting.
    While tight fiscal times require us to make difficult choices, I
    believe there is more to lose than gain by slashing funding to this
    important educational resource. Indeed, such a cut would negatively
    affect PBS programming in my district of Staten Island and Brooklyn and
    potentially leave our children without access to some of the most
    effective educational shows on television today.
        As we begin the budget process, America is faced with great
    challenges and even greater opportunities. I look forward to working
    with Chairman Nussle, Ranking Member Spratt, the Budget Committee and
    my colleagues in the House to develop a budget that reflects the
    priorities and best interests of the American people. Thank you for
    this opportunity today.

        Mr. Ryun. I thank the gentleman for his testimony and
    proposals. And you have touched on a number of very important
    things trying to figure out what we can do in a bipartisan way,
    finding common ground for the future. And that is my hope as we
    push forward with this committee.
        Any questions from other members? Mr. Moore.
        Mr. Moore. Thank you, Congressman, for being here today,
    and I really appreciate what I consider to be a very thoughtful
    proposal and statement here. I would like to send over to your
    office a couple of proposals I have. One addresses the Social
    Security situation, and what it would do is take Social
    Security funds out of the unified budget so that when we report
    to the American people, and Congress knows what we have in the
    way of a deficit or surplus right now, a lot of that money that
    keeps the deficit from being so large is in fact Social
    Security tax revenues coming in.
        I practiced law for 28 years before I came to Congress, and
    lawyers in Kansas and most other States are required to have a
    trust fund to segregate their own funds from client funds, and
    I think that would probably be good here in this case. And I
    approached one of my colleagues on the other side of the aisle
    and I said, I know you are a fiscal conservative, I know you
    believe what you say about that. You should be on this bill.
    And he said, well, there is a problem, Dennis. And I said, what
    is that? He said, it would make our deficits look even larger.
    And I said, that is called telling the truth to the American
    people. And I think we need to start doing that as a Congress.
    And I really applaud your recommendation that there be a
    bipartisan commission. I would like to see that, and I probably
    would join with you on that.
        No. 2, with regard to the Medicare, I have a bill that--I
    got a call from Secretary Tommy Thompson back at the time of
    the night of the Medicare vote that happened at 3 or 4 in the
    morning. It was about 5:00, and Secretary Thompson said,
    Congressman, can you be with us on this vote? And I said I
    have--it is a $500 billion bill; there is good news and bad
    news. And he says, what is your concern about this bill? I
    said, Mr. Secretary, I wish you had the authority to negotiate
    with pharmaceutical companies to get a group discount for
    Medicare beneficiaries, 43 million in this country, just like
    the Secretary of Veteran Affairs has had for veterans since
    1992. And he says, I do, too. But as you know, this bill
    specifically prohibits that.
        I filed a bill that would in fact give the Secretary of
    Health and Human services that authority. When Secretary
    Thompson, the day he left office, was asked do you have any
    regrets about your tenure, he says, I regret I didn't have the
    opportunity to negotiate.
        I think we should give that to Secretary Leavitt now, and I
    would like to send a copy of that bill over to you. Please take
    a look at it. This should not, as you say, be about Democrats
    and Republicans. In fact, 80 percent of what we do in Congress
    shouldn't be about Democrats and Republicans; it ought to be
    about taking care of our people and our country. And I hope we
    can put aside all this partisan stuff on both sides and come
    together and start working for our country. Thank you.
        Mr. Ryun. Does the gentleman have a question?
        Mr. Moore. Yes. Would you like us to send those bills over?
        Mr. Fossella. Yes.
        Mr. Moore. Thank you.
        Mr. Ryun. Thank you very much for your testimony. At this
    point, Mrs. Capito, we look forward to your testimony.

      STATEMENT OF HON. SHELLY MOORE CAPITO, A REPRESENTATIVE IN
                CONGRESS FROM THE STATE OF WEST VIRGINIA

        Mrs. Capito. Thank you, Mr. Chairman, and members of the
    Budget Committee. I appreciate the opportunity to appear before
    the Budget Committee. As you know better than I, the annual
    budget resolution charts the course for our Federal spending,
    and I am pleased to testify regarding programs that are of
    great importance to West Virginia that I represent.
        During the last budget cycle, we took a step forward toward
    greater fiscal responsibility by controlling the growth of both
    discretionary and entitlement spending. I continue to support
    these efforts to cut waste, fraud, and abuse from our budget,
    and provide the most efficient government for our taxpayers.
        Because the tax relief passed in 2001 and 2003 has grown
    our economy and helped American families, I fully support the
    extension of the increased child tax credit and the permanent
    repeal of the marriage penalty and death tax that are assumed
    in this budget. Congress should work within its means to ensure
    that these taxes do not return to increase the burden on the
    American people.
        The President's budget provides funding increases both in
    homeland security and defense that are crucial to continuing
    the war on terror, and I fully support that. Given the presence
    of the chemical industry in the Kanawha Valley in West
    Virginia, I am especially pleased that the budget would fund a
    new Chemical Security Office to work with the industry and
    other interested parties to keep these plants safe from attack.
        West Virginians have a long and distinguished record of
    service to our Nation. We have a responsibility to meet the
    medical needs of our veterans who have sacrificed for our
    Nation. This budget proposes an increase of over $2.5 billion
    for VA and medical programs. We need to make sure that we
    provide this increase to meet the health care needs of our
    veterans.
        Mine safety is a critical issue for the people I represent.
    So far just this year, 16 miners have been killed in coal
    mining accidents in West Virginia. In response, West Virginia's
    congressional delegation has introduced legislation to enhance
    mine safety requirements. All the legislative and regulatory
    efforts in the world will not improve safety if the Mine Safety
    and Health Administration does not have adequate resources to
    carry out its enforcement mission. The President's budget
    requests an increase of 3.6 percent for MSHA to $290 million. A
    more significant increase is necessary if we are to improve
    inspections and also evaluate new technologies that can improve
    safety for our miners. I firmly believe that we need more
    inspectors in our mines and more engineers examining the next
    generation in safety equipment at MSHA. And I hope my
    colleagues will join with me in working to further increase
    this funding level through the appropriations cycle.
        Coal is an essential part of our energy supply, providing
    over half of the Nation's electricity. I was pleased that the
    President mentioned the need to provide more funding for clean
    zero emissions coal programs in his State of the Union. This
    budget provides $268 million for research and development on
    new clean coal technologies that will allow coal to continue to
    provide low cost electricity while also working to protect the
    environment.
        It is also important that we provide the proposed increase
    to the Department of Energy's Office of Science so that we can
    examine new ways to use coal, wind power, solar energy,
    biomass, and other innovative methods that will help us end our
    dependency on oil. Only through investment now will we ever be
    able to solve the problem of high gasoline prices that all of
    our constituents face at the pump.
        I want to commend the administration for proposing the
    American Competitiveness Initiative. We all agree that
    attracting more of our students to engineering technology--I
    would like to say I was a zoology major--and other science
    fields is important to growing our economy and ensuring that
    America will continue to be the worldwide leader in innovation.
        Despite this initiative, I am troubled by several parts of
    the President's education budget. The budget would end funding
    for GEAR-UP and TRIO, Upward Bound, and Talent Search programs.
    These successful education programs help us aid in the
    transition from high school to college for those first
    generation college students. West Virginia's education system
    is making significant progress and sending more students to
    college than ever before. As a result, many of today's students
    are the first in their families to attend college. TRIO and
    GEAR-UP programs found at both public and private institutions
    in my State are of great benefit in preparing these students
    for college. Last year, Congress was able to restore funding
    for these two programs during the appropriations process, and I
    hope we will do the same this year.
        Also like last year's budget, the President's budget
    eliminates funding for the Vocational Education Program.
    Vocational education funds provide money for job training for
    high school students and at community and technical colleges.
    For some students who will not attend college, vocational
    education provides those skills necessary to find a good-paying
    job. For other students, the hands-on learning will bring
    motivation and encouragement needed for the student to move on
    to higher ed. The House reauthorized the vocational education
    programs by a vote of 416 to 9 last year, demonstrating, I
    believe, our overwhelming bipartisan support.
        Finally, I want to address the proposal to achieve further
    reconciliation savings through Medicare and Medicaid. I voted
    for the Deficit Reduction Act because I believe we must get a
    handle on spending in mandatory programs and I believe most of
    the savings achieved targeted waste in those programs. As we
    consider further savings, we must make sure--I emphasize, we
    must make sure that medical care for those in need and in
    particular our seniors and children are not jeopardized. I have
    serious questions with the proposal to reduce Medicare payments
    to providers because I believe that such an action would limit
    the access to medical care and especially access to specialists
    for those served by the programs.
        If the budget resolution is to ask the full House to
    achieve more savings, we must be careful that we do not inhibit
    access to care and quality care. The rising cost of health care
    affects every American on several fronts. They have less money
    in their personal budgets for expenditures on other goods and
    services. On a Federal level, it could lead to a greater tax
    burden for future generations if nothing is done to make health
    care more affordable and accessible.
        I am pleased the President's budget provides provisions for
    tax credits for individuals who make contributions to health
    savings accounts. This, coupled with efforts to make health
    savings accounts more portable, will allow consumers to have
    greater control of their health care and less concern when they
    move from one job to another.
        Our small business owners should be allowed to pull
    together through associations so they can provide similar
    benefits to their employees that large corporations currently
    are offering. Health savings accounts and association health
    plans will allow American employers to offer more affordable
    coverage and give the employee an enhanced role in the
    decision-making process.
        I do believe we have a long ways to go before we meet our
    goals of full accessibility to health care and affordability of
    health insurance.
        Your committee faces a challenging task over the next weeks
    as you work to craft a budget that provides for our security
    and grows our economy. I thank you for considering the impact
    the programs I have discussed have on the people of West
    Virginia, and I again thank you for the opportunity to testify.
        [The prepared statement of Ms. Capito follows:]

     Prepared Statement of Hon. Shelley Moore Capito, a Representative in
                    Congress From the State of West Virginia

        Mr. Chairman and Members of the Budget Committee, I appreciate the
    opportunity to appear before the Budget Committee. The annual budget
    resolution charts the course for our Federal spending, so I am pleased
    to testify regarding programs that are of great importance to West
    Virginia.
        During the last budget cycle, we took a step toward greater fiscal
    responsibility by controlling the growth of both discretionary and
    entitlement spending. I continue to support efforts to cut waste,
    fraud, and abuse from our budget and provide the most efficient
    government possible for American taxpayers.
        Because the tax relief provided in 2001 and 2003 has grown our
    economy and helped American families, I fully support the extension of
    the increased Child Tax Credit and the permanent repeal of the Marriage
    Penalty and Death Tax that are assumed in this budget. Congress should
    work within its means to ensure these taxes do not return to increase
    the burden on the American people.
        The President's budget provides for funding increases both in
    Defense and Homeland Security that are crucial to continuing the war on
    terror. Given the presence of the chemical industry in the Kanawha
    Valley, I am especially pleased that the budget would fund a new
    Chemical Security Office to work with the industry and other interested
    parties to keep these plants safe from attacks.
        West Virginians have a long and distinguished record of service to
    our nation. We have a responsibility to meet the medical needs of our
    Veterans who have sacrificed for our nation. This budget proposes a
    increase of over $2.5 billion for VA Medical programs. We should
    provide this increase to meet the health care needs of our veterans.
        Mine safety is a critical issue for the people I represent. Sixteen
    miners have been killed in coal mining accidents in West Virginia so
    far this year. In response West Virginia's congressional delegation has
    introduced legislation to enhance mine safety requirements.
        All the legislative and regulatory efforts in the world will not
    improve safety if the Mine Safety and Health Administration does not
    have adequate resources to carry out its enforcement mission. The
    President's budget requests an increase of 3.6 percent for MSHA to $290
    million. A more significant increase is necessary if we are to improve
    inspections and also evaluate new technologies that can improve safety
    for our miners. I firmly believe that we need more inspectors in our
    mines and more engineers examining the next generation in safety
    equipment at MSHA, and I hope my colleagues will join me in working to
    further increase this funding level through the appropriations cycle.
        Coal is an essential part of our energy supply, providing over half
    of the nation's electricity. I was pleased that the President mentioned
    the need to provide more funding for clean, zero emissions coal
    programs in his State of the Union. This budget provides $268 million
    for Research and Development on new clean coal technologies that will
    allow coal to continue to provide low cost electricity while also
    protecting our environment.
        It is also important that we provide the proposed increase to the
    Department of Energy's office of Science so that they can examine new
    ways to use coal, wind power, solar energy, biomass, and other
    innovative methods that will help us end our dependence on oil. Only
    through investment now will we ever be able to solve the problem of
    high gasoline prices that all of our constituents face at the pump.
        I want to commend the administration for proposing the American
    Competitiveness Initiative. We all agree that attracting more of our
    students to engineering, technology, and other science fields is
    important to growing our economy and ensuring that America will
    continue to be the worldwide leader in innovation.
        Despite this initiative, I am troubled by several parts of the
    President's Education budget. The budget would end funding for Gear-up
    and TRIO Upward Bound and Talent Search programs. These successful
    education programs help to aid in the transition from high school to
    college for first generation college students. West Virginia's
    education system is making significant progress and sending more
    students to college than ever before. As a result, many of today's
    students are the first in their families to attend college. TRIO and
    Gear-Up programs found at both public and private colleges in my state
    are of great benefit in preparing these students for college. Last
    year, Congress was able to restore funding for these two programs
    during the appropriations process, and I hope we will do the same this
    year.
        Also like last year the President's budget eliminates funding for
    the vocational education program. Vocational education funds provide
    money for job training both for high school students and at community
    and technical colleges. For some students who will not attend college,
    vocational education will provide the skills necessary to find a good
    paying job. For other students, the hands on learning will bring the
    motivation and encouragement needed for the student to move on to
    higher education. The House reauthorized vocational education programs
    by a vote of 416 to 9 last year, demonstrating overwhelming bipartisan
    support. We should fund this important program.
        Finally, I want to address the proposal to achieve further
    reconciliation savings through Medicare and Medicaid. I voted for the
    Deficit Reduction Act because I believe we must get a handle on
    spending in mandatory programs and I believe most of the savings
    achieved targeted waste in the programs. As we consider any future
    savings, we must make sure that medical care for those in need, and in
    particular our seniors and children, is not jeopardized. I have serious
    questions with the proposal to reduce Medicare payments to providers
    because I believe such an action would limit the access to medical
    care, and especially access to specialists, for those served by the
    program.
        If the Budget resolution is to ask the full House to achieve more
    savings from health programs, we must take special care to target waste
    and abuse, rather than access to care.
        Your committee faces a challenging task over the coming weeks as
    you work to craft a budget that provides for our security and grows our
    economy. I thank you for considering the impact the programs I have
    discussed have on the people of West Virginia, and I again thank you
    for the opportunity to testify.

        Mr. Ryun. I want to thank the gentlelady for her testimony
    and her proposals and her initiatives. There are many of these
    that I can agree with. I will just highlight, the
    reauthorization of vocational education, I know I have been a
    beneficiary of that and as have many others and how important
    it is.
        I would like to turn to members if they have any questions
    at this point? Hearing none, thank you for your time.
        Mr. McGovern, your opportunity to give us your initiatives.

       STATEMENT OF HON. JAMES P. McGOVERN, A REPRESENTATIVE IN
                CONGRESS FROM THE STATE OF MASSACHUSETTS

        Mr. McGovern. Thank you, Mr. Chairman, and other members of
    the committee. I want to thank you for the opportunity to
    testify before you today on the direction I believe the Budget
    Committee should take as it begins work on the fiscal year 2007
    budget resolution.
        Mr. Chairman, over the past few years I have had
    differences--I have had several opportunities to talk about the
    direction and priorities of the Federal budget, and I do not
    intend to take up the committee's time by repeating that
    discussion here. As you well know, there are many issues that I
    believe require more funding than what the President has
    proposed in his fiscal year 2007 budget or what Congress has
    provided in past budgets. My concerns range from fully funding
    our veterans, education and conservation programs, to reducing
    our historic Federal deficit. I have dealt with these and many
    other matters in my written testimony, and would like to ask
    permission of the chairman to insert my full testimony in the
    record at this time.
        Mr. Ryun. Without objection.
        Mr. McGovern. But this afternoon, Mr. Chairman, I would
    like to focus on just one issue; namely, the need to
    substantially increase funding for programs that reduce hunger
    in the United States and around the world.
        Recent reports by the U.S. Department of Agriculture and
    the Census Bureau find food insecurity and hunger are rapidly
    rising in America and now affect nearly 20 percent of all our
    children. The number of food insecure households grew by nearly
    2 million in 2004, and in 2005 an additional million people in
    America fell into poverty. Mr. Chairman, now is not the time to
    reduce our commitment to feed the hungry.
        I firmly believe the budget resolution can be a road map
    that could dramatically contribute to the fight to end hunger
    here at home and to reduce it by half around the world. The
    committee and Congress should focus on these worthy goals in
    the fiscal year 2007 budget resolution and increase funding for
    our domestic and international food, nutrition, and food aid
    programs, both for those administered by USDA Function 350--
    which for the fourth year in a row has suffered a severe blow
    in the President's budget proposal, and for those international
    food aid programs that are under the jurisdiction of the U.S.
    Agency for International Development, International Affairs
    Function 150.
        Domestically, we have an obligation to make sure that our
    Nation's children do not go hungry. This is why the school
    breakfast and school lunch programs were developed, along with
    programs that help provide nutritional meals for pregnant women
    and nursing mothers, infants and children under the age of 5.
    Unfortunately, the school breakfast and lunch programs are not
    universal and they are not year round. This means that some of
    the poorest families receive a free school meal during the
    school year while others only qualify for a reduced price meal.
    To Congress' credit, the Child Nutrition Reauthorization Act
    phased this inequity out, but it is subject to appropriations,
    and appropriations is subject to budget caps, and so the
    inequities remain.
        Under the President's budget, approximately 40,000 low
    income children will no longer receive a free school lunch. It
    is past time we fully fund this program so that we could
    finally eliminate the reduced price meal at our Nation's
    schools. Additionally, millions of our children who receive
    meals during the school year lose access to this food when
    school is out of session.
        The Summer Food Service Program was designed to combat this
    problem, but its funding is also woefully inadequate. Fifteen
    million poor and low income children qualify to receive food
    during the school year, but only 2.9 million children receive
    food during the summer. That is an 81-percent decrease, Mr.
    Chairman. We simply must do better than that.
        The President's budget request eliminated funding for
    commodity supplemental food program. Currently, this modest
    food program provides vital food assistance to over 420,000
    elderly poor and to 50,000 low income pregnant women and
    children. Eliminating this $108 million program guarantees that
    these vulnerable people will no longer obtain their monthly
    supply of groceries.
        Now, I recognize that the administration believes we can
    simply enroll the women and children in Women, Infants, and
    Children program (WIC) and the seniors in the Food Stamp
    Program, but this program was created precisely to fill the
    eligibility gap WIC and food stamps fails to cover. In short,
    Mr. Chairman, most of the low income recipients of these food
    packages will not be eligible for these other programs, but
    they will end up hungry and be faced with choosing between
    food, medicines, rent, child care, heat, electricity, and other
    basic needs.
        On the international level, emergency and other food aid
    programs provided under Public Law 480, Title II, receive only
    $1.2 billion in funding under the President's fiscal year 2007
    budget proposal. Now, this may sound like a lot of money, Mr.
    Chairman, but unfortunately by the end of the year, just as has
    been the case in the past 3 years, the United States will most
    likely expend between $1.7 billion and $2.2 billion for
    international emergency and other food aid programs. Since we
    know this is the likely reality based on past experience, then
    we should include that level of funding for Title II up front
    and not off budget in emergency appropriations or through a
    reprogramming request that robs Peter to pay Paul, taking the
    funds from other urgent development, emergency disaster and
    food aid programs.
        Another successful program, the George McGovern-Robert Dole
    International Food For Education Program, is also flat funded
    at $99 million for fiscal year 2007, a level that actually
    reflects the fiscal year 2006 1-percent across-the-board cut to
    all programs.
        Mr. Chairman, you might not be aware that when USDA puts
    out the call each year for proposal submissions for McGovern-
    Dole projects, it receives proposals that would total over $1
    billion if all were funded. Now, I am not asking for that level
    of funding, but such a response clearly demonstrates that the
    need is great, well identified, and well documented. Yet we are
    freezing this program just as it begins to make a modest
    recovery from the devastating cuts of fiscal year 2002 when it
    was reduced from $300 million to $50 million.
        Now, last year Secretary Johanns described some of
    McGovern-Dole's positive results as including, and I quote,
    increased school enrollment especially among girls, declines in
    absenteeism, improved concentration, energy, and attitudes
    toward learning, and infrastructure improvements, including
    classrooms, kitchen, storage facilities, water supplies, and
    latrines. The McGovern-Dole country programs have been made so
    successful that some have begun to graduate and become self-
    sustaining, such as in Lebanon, Moldova, and Vietnam.
    Additionally, the success of McGovern-Dole has resulted in
    other donors becoming involved in school feeding programs,
    including the European Union, Germany, Japan, Canada, and the
    World Health Organization.
        Mr. Chairman, all of us support national security and the
    global war on terrorism as priorities, but ensuring national
    security is not just the result of soldiers, guns, and bombs.
    Our Nation's security is strengthened and safeguarded by
    thousands of individuals and organizations who serve on the
    front lines of the battle against hunger and poverty. Their
    work daily combats the hate, fear, despair, and hopelessness
    that contribute to acts of desperation, terror, and war.
        The 9/11 Commission report acknowledged this important
    reality in its final recommendations, and Senator Roberts,
    chairman of the Senate Intelligence Committee, has stated on
    more than one occasion that initiatives like the McGovern-Dole
    program are critical to winning the war against global
    terrorism. And, quite frankly, Mr. Chairman, you know far
    better than I since you represent one of the finest farm States
    in our country how much our farmers appreciate and take pride
    in the fact that part of their hard work and their crops go to
    help the neediest Americans and the most vulnerable people
    around the world.
        Mr. Chairman, I would like to ask permission to enter into
    the record and to provide the committee with a copy of a letter
    sent to President Bush on December 20th from 108 bipartisan
    Members of this House asking that the President restore the
    funding for the McGovern-Dole program to its original $300
    million level.
        Mr. Ryun. Without objection.
        [The information referred to follows:]
                                         U.S. Congress,
                                                Washington, DC,
                                                     December 20, 2005.
    Hon. George W. Bush, President
    The White House,
    Washington, DC.
        Dear Mr. President: We are writing to thank you for your support of
    the George McGovern-Robert Dole International Food for Education
    Program, which is administered by the U.S. Department of Agriculture.
    As Secretary of Agriculture Mike Johanns has attested, this program has
    made a critical difference in the lives of thousands of children and
    their communities around the world. We believe it is urgent to sustain
    and expand this program and to restore funding for the McGovern-Dole
    program to levels similar to those of the original pilot program. For
    these reasons, we strongly urge you to provide $300 million for the
    McGovern-Dole International Food for Education Program in your Fiscal
    Year 2007 Budget Proposal.
        We recognize the difficult financial constraints that will govern
    your decisions as you determine priorities for the Fiscal Year 2007
    budget. We believe increased funding to sustain and expand the
    McGovern-Dole program contributes to achieving U.S. priorities to
    increase food security and access to education among many of the
    world's most vulnerable children. It also plays a role in combating
    terrorism and building and consolidating democracy in the Middle East,
    southern Asia, the Near East and other regions critical to our national
    security.
        As you well know, one of the recommendations of the 9/11 Commission
    Report stated that ``a comprehensive strategy to counter terrorism must
    include economic policies that encourage development, more open
    societies, and opportunities for people to improve the lives of their
    families and to enhance prospects for their children's future,'' a
    priority you echoed in your remarks before the United Nations General
    Assembly in September. Both the initial pilot program and the current
    McGovern-Dole program have a proven track record at reducing the
    incidence of hunger among school-age children and improving literacy
    and primary education enrollment, especially among girls, in areas
    devastated by war, hunger, poverty, HIV/AIDS, and the mistreatment and
    marginalization of girls. School meals, teacher training, and related
    support have helped boost school enrollment and academic performance.
    McGovern-Dole nutrition and school feeding programs improve the health
    and learning capacity of children both before they enter school and
    during the years of primary and elementary school.
        With over 300 million children suffering from chronic hunger and
    over 100 million of them not attending school, reaching those who could
    benefit from the McGovern-Dole program requires a firm commitment to
    continued support and significant resources. At the same time, U.S.
    leadership and the success of the McGovern-Dole program have played an
    important role in encouraging other donor nations to provide new
    resources for school feeding programs, as well as promoting ``best
    practices'' among those organizations that carry out these programs in
    the field. And after just four short years, we are already witnessing
    how the success of the McGovern-Dole program has resulted in an
    increased commitment by local communities to school feeding and
    universal education, setting the stage for some country projects to
    ``graduate'' from the program and assume local administration of their
    school feeding programs.
        For just a few cents a day, the McGovern-Dole program has made a
    critical difference in the lives of children and communities, promoted
    American values in the most positive terms, and helped achieve U.S.
    foreign policy and national security goals. The program's flexibility
    and ability to be tailored to local needs ensure that American
    products, commodities, and financial and technical support are directly
    associated with hunger alleviation, educational opportunity, and
    sustainable development. Few programs deliver so much for such a
    minimal investment.
        Once again, we thank you for your commitment to the McGovern-Dole
    International Food for Education and Child Nutrition Program, and we
    strongly urge that you restore the capacity of this critically
    important program by providing $300 million for Fiscal Year 2007.
                Sincerely,

    James P.           Jo Ann Emerson,    Tom Lantos,       Todd Tiahrt,
     McGovern,
    Ike Skelton,       Sam Graves,        Earl Pomeroy,     Thaddeus G.
                                                             McCotter,
    Bob Etheridge,     John Shimkus,      Jim Marshall,     Jim Leach,
    Vic Snyder,        Christopher        Sanford Bishop,   Phil English,
                        Smith,             Jr.,
    Nancy Pelosi,      Doc Hastings,      Donald Payne,     James Walsh,
    Mike Doyle,        Jose Serrano,      Bill Delahunt,    Gary Ackerman,
    Raul Grijalva,     Dale Kildee,       Emanuel Cleaver,  Betty McCollum,
                                           II,
    Hilda L. Solis,    Dennis Kucinich,   Elijah Cummings,  Stephanie
                                                             Herseth,
    Bernard Sanders,   Marcy Kaptur,      Maxine Waters,    Rush Holt,
    George Miller,     Tammy Baldwin,     Chris Van         Steve Rothman,
                                           Hollen,
    James Oberstar,    Mark Udall,        Joseph Crowley,   Carolyn Maloney,
    Jan Schakowsky,    Sherrod Brown,     Corrine Brown,    John Olver,
    Stephen Lynch,     Carolyn McCarthy,  Gregory Meeks,    Juanita
                                                             Millender-
                                                             McDonald,
    Bobby Rush,        Pete Stark,        Rosa DeLauro,     Anthony Weiner,
    Neil Abercrombie,  Jim Moran,         Michael R.        Martin O. Sabo,
                                           McNulty,
    Jim McDermott,     Lynn Woolsey,      Charles A.        Marion Berry,
                                           Gonzalez,
    Richard Neal,      Adam Schiff,       Jim Costa,        Barney Frank,
    Howard Berman,     Patrick Kennedy,   Doris Matsui,     Martin Meehan,
    Robert A. Brady,   Alcee Hastings,    Ed Markey,        Julia Carson,
    Henry Waxman,      Lois Capps,        Barbara Lee,      Tim Holden,
    Lloyd Doggett,     Debbie Wasserman   John Tierney,     Allyson
                        Schultz,                             Schwartz,
    Mike Capuano,      Dianna DeGette,    Louise            Danny K. Davis,
                                           Slaughter,
    Chaka Fattah,      Sam Farr,          Joe Baca,         Sheila Jackson
                                                             Lee,
    Sander Levin,      Bobby Scott,       Ellen Tauscher,   Major R. Owens,
    Frank Pallone,     Jerry Moran,       Robert Wexler,    Bob Filner,
    Dan Lipinski,      Donna M.           John Lewis,       Stephanie Tubbs
                        Christensen,                         Jones,
    Eddie Bernice      Adam Smith,        Tom Allen,        Henry Cuellar,
     Johnson,

                                                   Members of Congress.

        Mr. McGovern. Mr. Chairman, since this did not occur in the
    President's budget, I urge the committee to increase the
    overall agriculture account to make room for such an increase.
        Mr. Chairman, I appreciate the opportunity to testify today
    on the priorities that I believe face this Nation and have made
    other recommendations in my written testimony. However, I want
    to conclude with this one final point.
        We have an opportunity and we have a responsibility to
    prioritize programs that will benefit the people who need help
    the most, whether that is a victim of Hurricane Katrina or a
    poor working family trying to make ends meet or a hungry child
    in Africa, Asia, or Latin America. Investing today in programs
    that help these individuals and families will pay off in the
    future.
        The fiscal year 2007 budget resolution that this committee
    will draft could provide the necessary increase in funding for
    domestic and international food and nutrition programs, and you
    can indeed create a road map that charts a new course for the
    United States.
        Once again, I appreciate your granting me this time and I
    certainly welcome any questions or comments any Member may
    have.
        [The prepared statement of Mr. McGovern follows:]

       Prepared Statement of Hon. James P. McGovern, a Representative in
                    Congress From the State of Massachusetts

        Mr. Chairman, Ranking Member Spratt and Members of the Budget
    Committee,
        I want to thank you for the opportunity to testify before you today
    on the direction I believe the Budget Committee should take as it
    begins work on the Fiscal Year 2007 Budget Resolution.
        Mr. Chairman, over the past few years, you and I have had several
    opportunities to talk about the direction and priorities of the Federal
    budget, and I do not intend to take up the Committee's time by
    repeating that discussion here. As you well know, there are many issues
    that concern me and which I believe require more funding than what the
    president has proposed in his Fiscal Year 2007 budget, or what Congress
    has been providing in past budgets. My concerns range from:
         providing the necessary funding for our veterans'
    programs;
         to the urgent need of reducing the historic Federal
    deficit;
         to the urgent need of fully funding our K-through-12
    education programs and our higher education student financial aid;
         to honoring our promise and legal responsibility to fully
    fund the Federal share of IDEA;
         to preserving our parks, forests, wildlife refuges, and
    local recreation areas and open spaces, most especially by fully
    funding the Land and Water Conservation Fund, including the state-side
    program, from its allocated trust fund revenues; and
         to significantly increasing funding for programs that
    combat hunger and poverty, both here at home and around the world.
        First, let me begin this discussion by urging the Committee to make
    sure that the FY 2007 Budget Resolution fully funds our Veterans
    Affairs (VA) system. Contrary to recent claims about adequate funding
    for veteran's needs, the facts are that the VA has been perennially
    underfunded. For each year that passes by, the VA estimates that a
    minimum budget increase of 13-14 percent is required just to stay
    afloat, when inflation is taken into account. The President's request
    for FY06 was less than a 1-percent increase, well short of the funding
    necessary for the VA to operate at its current level. This pattern of
    inadequate funding for the VA has resulted in a decrease in veterans'
    access to health care and has forced a series of emergency supplemental
    budgets to keep the system up and going.
        Mr. Chairman, I believe our veterans should not have to rely on
    emergency funding. They should be the very first on our list of
    priorities. The health care that they earned through their service to
    country, and which was promised to them, should be assured through
    sufficient budget requests, allocations and appropriations. Instead of
    proposals imposing a $250 enrollment fee, the doubling of veteran
    prescription co-payments, and denying health care access to 260,000
    veterans, the FY 2007 budget for the VA needs to provide adequate
    funding for every veteran. A budget request that truly reflects the
    needs of every veteran, from those of the Greatest Generation to those
    newest veterans returning from Iraq and Afghanistan, is what's deserved
    and required--and it is truly one of the best ways we can genuinely
    honor out troops.
        Second, I believe that education at all levels of schooling--from
    early childhood education and development through college--is
    significantly under-funded in the president's budget proposal. While we
    often hear how the FY 2007 budget is focused on our national security,
    I cannot imagine how our national security and our economic security
    can succeed if we short-change the education of our children and
    citizens.
        Just like last year, the president cynically eliminates programs
    that Congress will need to find a way to fund later in the year, such
    as Vocational Education, Safe and Drug Free Schools, Even Start,
    Technology State Grants, TRIO Programs, GEAR-UP, Tech-Prep State
    Grants, and a host of others. In order to ensure that we can restore
    these programs' funding and provide the appropriate level of funding to
    those programs whose funding was reduced or frozen--such as IDEA or
    after-school programs--Congress needs to increase the Education Account
    (Function 500) to accommodate at least another $14 billion for the No
    Child Left Behind Act, including the necessary increase for the IDEA
    that is absent from the president's proposed budget; and we need to
    increase higher education funding by at least another $2 billion to
    secure adequate Federal funds for an increased number of Pell Grant and
    SEOG beneficiaries and an increase in the size of the average grant.
        Third, I am disappointed and frustrated that once again the
    president's budget fails to fund the Federal and state-side programs of
    the Land and Water Conservation Fund (LWCF), the funding for which is
    designated by law from royalty receipts from drilling done in the outer
    continental shelf.
        As you well know, Mr. Chairman, the LWCF is based upon a simple
    concept: It takes revenues from offshore oil and gas drilling and
    invests them in our country's public land, letting States take the
    lead, and for 40 years this program has had a proven track record and
    benefited from strong bipartisan support.
        When Congress decided to open the Outer Continental Shelf to oil
    drilling, we pledged to use some of its revenues for the public good.
    And with the goal of meeting the nation's growing need for recreation
    sites, Congress established the LWCF trust fund and agreed to reinvest
    an annual portion of OCS revenue into Federal land acquisition and
    State assistance development programs. Even though LWCF takes in $900
    million annually from oil and gas receipts, in recent years just a
    fraction of this funding has been used for its rightful purpose. For FY
    2007, the president provides for only $85 million for LWCF programs,
    and all of these are in the federal-side (not the state-side) part of
    the program.
        The state-side portion of the Land and Water Conservation Fund has
    helped our states and local communities preserve open space, slow urban
    sprawl, and give our children safe places to play. This program is a
    true partnership, with Federal grants requiring a full match from
    states and local communities. It's a program that has worked, and
    worked well. In all, the State-side program has helped communities by
    funding 40,000 recreation projects nationally--success stories that can
    be found in every state and in 98 percent of U.S. counties.
        The elimination of funding for the LWCF state-side grants is
    particularly harmful to our nation's under-served areas. In fact, in
    many low-income urban communities, the state-side grant program is
    responsible for virtually all of their parks and open spaces. At a
    minimum, the FY 2007 Budget Resolution needs to provide full funding
    for the LWCF, Federal and state-side, and ensure that the revenues
    designated by statute for funding the LWCF are used first and foremost
    for the LWCF.
        Fourth, while the International Affairs 150 Account is one of the
    few accounts in the president's budget to receive a modest increase, I
    am deeply concerned that Development Assistance overall and other
    critical international health, education, agriculture, food security,
    clean water, and other core development programs are either reduced or
    receive modest if any increases. Scarcely one-third of international
    affairs funding is devoted to these critical development programs. Once
    again, development assistance for Latin America is short-changed, at a
    time when U.S. relations with our closest neighbors are at their lowest
    point in history. I would like to see the Millennium Challenge Account
    receive the $3 billion in funding requested by the president--a
    doubling of its current funding levels. But this Congress was promised
    by the president when he first announced the creation of the MCC that
    its funding would be in addition to existing foreign aid priorities--
    and not rob funding from other critical accounts. Therefore, I believe
    the Budget Committee must increase the International Affairs by at
    least $1.5 billion, and that the Committee should direct this increase
    at core development assistance programs aimed at increasing access to
    health care, nutrition and education and at reducing hunger and
    poverty, as stated in the first Millennium Development Goal.
        The 9/11 Commission Report said it best when it described how our
    national security requires a strong commitment to economic and
    development assistance if we are to triumph over terrorism,
    fundamentalism and fanaticism.
        And finally, Mr. Chairman, I would like to comment on the
    importance of addressing hunger and poverty, both here in the United
    States and around the world. Once again, the Agriculture Account took
    one of the hardest hits in the president's budget, just as it has for
    the past 4 years in this Committee's reported budget resolutions. I
    would like to read a few sentences from the U.S. Catholic Conference of
    Bishops regarding ``Moral Responsibilities for Public Life,'' from
    their statement on ``A Catholic Call to Political Responsibility":
        The first priority for agriculture policy should be food security
    for all. Food is necessary for life itself. Our support for Food
    Stamps, the Special Nutrition Program for Women, Infants, and Children
    (WIC), and other programs that directly benefit poor and low-income
    people is based on our belief that no one should face hunger in a land
    of plenty. Those who grow our food should be able to make a decent
    living and maintain their way of life. Farmers who depend on the land
    for their livelihood deserve a decent return for their labor. Rural
    communities deserve help so that they can continue to be sources of
    strength and support for a way of life that enriches our nation.
        I cite this passage to underscore the recent reports by the U.S.
    Department of Agriculture and the Census Bureau that find food
    insecurity and hunger are rising rapidly in America and now affect
    nearly 20 percent of all our children. The number of food insecure
    households grew by nearly two million in 2004; in 2005, an additional
    million fell into poverty. Mr. Chairman, now is not the time to reduce
    our commitment to feed the hungry.
        I firmly believe the budget resolution can be a road map that, if
    followed by the Appropriations Committee, could dramatically contribute
    to the fight to end hunger here at home, and to reduce it by half
    around the world. We should focus on these worthy goals in the FY 2007
    budget resolution and provide the necessary funding for the domestic
    and international food and nutrition programs funded and administered
    by the U.S. Department of Agriculture (Function 350), which for the
    fourth year in a row has suffered a severe blow in the president's
    budget proposal; and for those international food aid programs that are
    funded under the jurisdiction of the U.S. Agency for International
    Development (Function 150 International Affairs).
        Domestically, we have an obligation to make sure that our nation's
    children don't go hungry. This is why the school breakfast and school
    lunch programs were developed, along with programs that help provide
    nutritional meals for pregnant women and nursing mothers, infants, and
    children under the age of five.
        Unfortunately, the school breakfast and lunch programs aren't
    universal and they aren't year round. This means that some of the
    poorest families receive a free school meal during the school year,
    while others only qualify for a reduced price meal. To Congress's
    credit, the Child Nutrition Reauthorization Act phased this inequity
    out, but it's subject to appropriations--and appropriations is subject
    to budget caps--and so the inequities remain. Under the president's
    budget, approximately 40,000 low-income children will no longer receive
    a free school lunch. It's past time we fully fund this program so that
    we can finally eliminate the reduced price meal at our nation's
    schools.
        Additionally, millions of our children who receive meals during the
    school year lose access to this food when school is out of session. The
    Summer Food Service Program was designed to combat this problem, but
    its funding is also woefully inadequate. Fifteen million poor and low-
    income children qualify to receive food during the school year, but
    only 2.9 million children receive food during the summer. That's an 81-
    percent decrease, Mr. Chairman. We simply must do better than that.
        The President's budget request eliminated funding for the Commodity
    Supplemental Food Program. Currently, this modest program provides
    vital food assistance to over 420,000 elderly poor, and to 50,000 low-
    income pregnant women and children. Eliminating this $108 million
    program guarantees that these vulnerable people will no longer obtain
    their monthly supply of groceries. I recognize that the Administration
    believes we can simply enroll the women and children in WIC and the
    seniors in the Food Stamp Program, but this program was created
    precisely to fill the eligibility gap WIC and Food Stamps fails to
    cover. In short, Mr. Chairman, most of the recipients of these food
    packages will not be eligible for these other programs, but they will
    end up hungry--and faced with choosing between food, medicines, rent,
    childcare, heat, electricity, and other basic needs.
        On the international level, emergency and other international food
    aid programs provided under PL 480 Title II will receive only $1.2
    billion in funding under the president's FY07 budget proposal. This may
    sound like a lot of money, Mr. Chairman. Unfortunately, by the end of
    the year, just as has been the case in the past 3 years, the U.S. will
    most likely expend between $1.5 billion and $2.2 billion for
    international emergency and other food aid programs. Since we know this
    is the likely reality based on past experience, then we should include
    that level of funding for Title II up front--and not off-budget in
    emergency appropriations or through reprogramming requests that rob
    Peter to pay Paul, taking the funds from other urgent development,
    emergency disaster, and food aid programs.
        Another successful program, the George McGovern-Robert Dole
    International Food for Education Program, is also flat-funded at $99
    million for FY 2007, a level that actually reflects the FY 2006 1-
    percent across-the-board cut to all programs. Mr. Chairman, you might
    not be aware that when USDA puts out the call each year for proposal
    submissions for McGovern-Dole project funding, it receives proposals
    that would total over one billion dollars if all were funded. I'm not
    asking for that level of funding, but such a response clearly
    demonstrates that the need is great, well-identified, and well-
    documented. Yet we are freezing this program just as it begins to make
    a modest recovery from the devastating cuts of FY 2002, when it was
    reduced from a $300 million program to $50 million.
        Last year, Secretary Johanns described some of McGovern-Dole's
    positive results as including ``increased school enrollment, especially
    among girls; declines in absenteeism; improved concentration, energy,
    and attitudes toward learning; and infrastructure improvements,
    includi9ng classrooms, kitchens, storage facilities, water systems, and
    latrines.'' The programs have been so successful that some have begun
    to ``graduate'' and become self-sustaining, such as in Lebanon, Moldova
    and Vietnam. Additionally, the success of McGovern-Dole has resulted in
    other donors becoming involved in school feeding programs, including
    the European Union, Germany, Japan, Canada and the World Health
    Organization.
        Mr. Chairman, all of us support national security and the global
    war on terrorism as priorities, but national security is not just the
    result of soldiers, guns and bombs. Our national security is
    strengthened and safeguarded by thousands of individuals and
    organizations who serve on the front lines of the battle to reduce and
    eliminate hunger and poverty. Their work daily combats the hate, fear,
    despair and hopelessness that contribute to acts of desperation, terror
    and war. The 9/11 Commission Report acknowledged this important reality
    in its final recommendations--and Senator Roberts, Chairman of the
    Senate Intelligence Committee, has stated on more than one occasion
    that initiatives like the McGovern-Dole program are a critical to
    winning the war against global terrorism.
        And quite frankly, Mr. Chairman, you know far better than I, since
    you represent one of our finest farm states, how much our farmers
    appreciate and take pride in the fact that their hard work and their
    crops go to help the neediest Americans and the neediest people around
    the world.
        Mr. Chairman, I would like to enter into the Record and provide the
    Committee with a copy of a letter sent to President Bush on December
    20th from 108 bipartisan Members of this House asking the president to
    restore the funding for the McGovern-Dole program to its original $300
    million level. Since this did not occur in the president's budget, I
    urge the Committee to increase the overall funding for the U.S.
    Department of Agriculture in order to make room for such an increase.
        Given these critical needs, these harsh realities, we need a
    pragmatic approach to addressing them, one that doesn't make believe
    that these needs will simply go away if we do nothing or cut funding
    for the very programs that tackle these difficult problems head on. I
    therefore believe this Committee must restore at least $2.5 billion to
    the Agriculture Account of the budget.
        Mr. Chairman, I know you must be scratching your head and saying to
    yourself, how do I suggest paying for such substantial increases in our
    overall budget?
        I could say that we should reduce the defense spending account--but
    quite frankly, that's something the Pentagon should have done when it
    issued its new Quadrennial Report. Instead, rather than transforming
    their budget the way they describe transforming our armed forces to
    meet the challenges of today and the future, they simply added more
    billions of dollars to the nearly half trillion dollar budget they
    received in FY 2006. And the FY 2007 budget doesn't even reflect the
    so-called emergency supplemental appropriations the president will soon
    send to Congress to fund the wars in Iraq and Afghanistan, once again,
    off-budget.
        The Budget Committee is the only Committee capable of reporting out
    a resolution that makes these subtle shifts of priorities. This
    Committee is capable of shifting $20 billion or so out of defense and
    into education, the LWCF Federal and state-side programs, international
    development assistance, and domestic and international food aid and
    agriculture programs.
        This Committee can also call on Ways and Means to increase revenues
    by that same amount, so as to cover these increased budget allocations.
        These needs won't disappear; they will only get worse the longer we
    neglect them.
        I urge the Committee to rise to this challenge, and to find the
    courage and leadership to increase these accounts and others, so that
    our genuine national security is reflected by our support for strong
    communities, modern infrastructure, a well-educated citizenry, and the
    compassion and fortitude to tackle the challenges of hunger and poverty
    locally and globally.
        Mr. Chairman, I appreciate the opportunity to testify today on the
    priorities that I believe face this nation. However, I want to conclude
    with this one, final point. We have an opportunity and the
    responsibility to prioritize programs that will benefit the populations
    that need the most help today. To me, that means focusing on the
    neediest Americans--whether that's a victim of Hurricane Katrina or a
    poor working family trying to make ends meet or a hungry child in
    Africa, Asia or Latin America. Investing today in programs that help
    support these individuals and families will pay off in the future. The
    FY 2007 Budget Resolution that this Committee will draft can indeed
    provide the necessary funding for domestic and international food and
    nutrition programs, as well as the other needs I have described this
    afternoon, and help provide a road map for a new course for the United
    States.
        Once again, I appreciate you granting me this time, and I welcome
    any questions you might have.

        Mr. Ryun. I don't have any questions, but I certainly
    appreciate your initiative and I know they will be passionately
    debated on this committee as well as before the full Congress.
        Are there members that have questions? Mr. Moore.
        Mr. Moore. Mr. Chairman, I don't have questions either, I
    just want to commend Congressman McGovern for his very
    comprehensive and caring statement, and I agree with almost all
    of the proposals, or at least the thoughts he set forth here. I
    look forward to the debate on these as well. Thank you very
    much.
        Mr. Ryun. I recognize Mr. Diaz-Balart.
        Mr. Diaz-Balart. Thank you, Mr. Chairman. When I was
    listening to you eloquently talking about issues important to
    you and you were asking for more funding, I was actually
    literally scratching my head and asking myself, How do you
    suggest paying for them? And then I noticed, by the way, in
    your statement, that on page 7 you actually mentioned that. You
    say, ``Mr. Chairman, I know you must be scratching your head
    and saying to yourself, How do I suggest paying for such
    substantial increases in the overall budget?''
        I want to make sure I read this right. You then go on to
    say, This committee is capable of shifting $20 billion or so
    out of defense into education, et cetera. This committee can
    also call on Ways and Means to increase revenues by that same
    amount.
        In other words, are you suggesting that we take, if I read
    this correctly--in order to do the initiatives you so
    eloquently spoke of, cut defense--and that this committee,
    according to what it says here, shifting $20 billion or so out
    of defense and also call on the Ways and Means Committee to
    increase revenues?
        In other words, taxes; you are asking to cut defense and
    raise taxes in order to fund the issues that you talked about
    today?
        Mr. McGovern. First of all, it is up to this committee to
    decide how they would want to spend the money. But one of the
    things that I believe is that the Defense Department's budget
    does not reflect the new priorities outlined in the new
    Quadrennial Review. It simply piles on more spending.
        I think the Pentagon can weather a $3 billion shift of
    funds to these food and nutrition programs fairly easily, quite
    frankly. All you need to do is read The New York Times or The
    Washington Post or the Washington Times, if that is what you
    read, over the last several months to look at how so much of
    our defense budget has been squandered and wasted, whether it
    is through graft or corruption or on programs that quite
    frankly don't work.
        The other thing is that I think we have to ask ourselves
    what is more important at this particular point, making tax
    cuts permanent, whether it is a total repeal of the estate tax
    or capital gains tax cut or whatever; or is it to make sure we
    don't have anybody in this country that starves, that is food
    insecure, that is going hungry.
        I don't know about you, Mr. Diaz-Balart, but since we had a
    long winter break here, I spent a lot of time going around to
    hospitals in my district. And one of the things that shocked me
    was going to emergency rooms and finding out there is an
    alarming increase in the number of senior citizens showing up
    in emergency rooms who are taking their medications on an empty
    stomach because they can't afford to pay for their medications
    and food. So they end up in the emergency room because
    literally the medicine has eroded away at their stomachs and
    they have holes in their stomachs as a result of having to make
    these choices.
        So I guess if we are creative enough, we can find ways to
    do this. And I guess the reason why I focused solely on these
    hunger and nutrition programs is because I can't think of
    anything more important, quite frankly, for us to do as a
    Congress than to make sure we don't have people in this country
    who fall through the cracks, children who don't have food in
    the summertime, and senior citizens who can't afford food.
        And internationally I think we can do more to combat
    terrorism. And I quote Senator Roberts, who is a pretty
    conservative Member of the other body, when he says some of
    these international school feeding programs do more to increase
    goodwill and combat terrorism and dry up, the places where
    people like Osama bin Laden go to try to find recruits than
    almost anything else we can do.
        I made some suggestions here, and you can agree or disagree
    with them, but there are ways I think we can cut back and we
    can transfer some of the funding on some of the programs that
    we are now spending and that would be better spent on this.
        Mr. Diaz-Balart. Briefly, Mr. Chairman, if I may. I want to
    commend you, Mr. McGovern. You are one of the few people who
    have actually come up with a list of priorities--again, as you
    say, we can agree or disagree with it--and also ways to fund
    them. And you are saying raise taxes and cut defense?
        I happen to disagree with you, but I think it is important
    that you actually have put in writing here what you believe is
    one of the ways we should look at it. And I think it is
    important for argument's sake and debate to put these things on
    the table. So whether we agree or disagree, I commend you for
    putting this out there
        Mr. McGovern. I appreciate that comment, I think. But let
    me just again end on this note. This is something we can't
    ignore, and it is a problem that is getting worse, and it is
    getting worse each and every year. The documentation coming out
    of this administration's agencies is telling us that. I think
    it would be a shame if we were to come up with a budget that
    didn't address the fact that hunger is becoming a bigger
    problem in America today than it was last year and the year
    before and the year before that. We are going in the wrong
    direction. We have to do something and we have to do it now--we
    cannot put it off.
        Mr. Ryun. I appreciate the gentleman's comments and I
    appreciate his passion for this issue, and of course I invite
    everyone to come back on the evening--and actually the long day
    we have when we have a budget markup, when these issues will be
    very hotly and passionately debated. They are very critical for
    the future of our country, and I welcome the other side to
    present a budget as we look forward to that markup. And I thank
    the gentleman for his time.
        Mr. McGovern. Thank you very much.
        Mr. Ryun. We are going to go into a brief recess as we wait
    for other Members. It will be subject to the call of the Chair
    and we will resume when other Members appear.
        [Recess.]
        Mr. Ryun. We are going to resume the hearing on Member
    initiatives, and we will begin with Ms. Carson.

     STATEMENT OF HON. JULIA CARSON, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF INDIANA

        Ms. Carson. Thank you very much, Mr. Chairman, I appreciate
    your courtesy and your willingness to let me put my little 2
    cents in on this budget.
        I appreciate the opportunity to testify before the
    committee on the budget resolution. I believe that the
    President's budget proposal leads us perhaps in the wrong
    direction, by depriving our most vulnerable seniors of vital
    resources.
        The budget proposal eliminates funding for the Commodity
    Supplemental Food Program (CSFP). Each month the CSFP provides
    over 475,000 low-income individuals with nutritious food
    packages, including fruits, vegetables, cereals and other
    items. This program provides a balanced dietary supplement for
    recipients, 85 percent of whom are seniors, all with income
    levels below a meager $12,400 a year.
        In Indiana, 4,979 seniors are currently enrolled in this
    program. This year, over 600 of them could go hungry because
    USDA reduced the CSFP caseload for 2006. Next year, the rest
    could go hungry if this program is eliminated. Is this really
    the message we want to send the world about how we care for and
    treat our seniors?
        The budget proposal enables participants in the Commodity
    program to enroll in a transitional food stamp program once the
    Commodity program is eliminated. The food stamp program, while
    extremely important, does not offer the same benefit,
    flexibility, and convenience that the Commodity program does,
    nor does it provide a long-term solution to these cuts. The
    food packages that seniors currently receive from the Commodity
    have a retail value of approximately $30-$40 in Marion County
    in Indiana. Under the budget proposal, seniors would receive
    just $20 per month in food stamps.
        In Indiana, where I come from, the average income for a
    senior enrolled in the Commodity program is between $700 and
    $800 each month. These limited resources must provide help with
    housing, utilities, medical costs, and food. Any reduction in
    benefits would further impoverish seniors.
        In addition to decreasing seniors' monthly benefits, the
    food stamp programs would offer reduced access for seniors. In
    Indianapolis, we have what you call the Gleaners Food Bank that
    administers the Commodity program. Volunteers from Gleaners
    deliver and distribute food boxes in various locations,
    including senior housing sites. These boxes are delivered to
    seniors who are immobilized by ill health, physical infirmities
    or lack of transportation. This personalized service ensures
    that our seniors have access to food and are treated with the
    dignity and respect that they deserve.
        They deliver boxes to homeless veterans who call the space
    under bridges in my district their homes. We have a volunteer
    corps that also gives out blankets to homeless people in the
    freezing cold weather. We travel under those bridges to give
    them some method of warmth and comfort.
        Congress must carefully consider the impact of eliminating
    a program that feeds our seniors and replacing it with one that
    may not. I have heard many stories about how the CSFP has
    changed lives. Pudding is a luxury a woman on the Commodity
    program told us she had not been able to afford until she
    received her first CSFP box. Let us not forget that as we craft
    a budget resolution, something as simple as a pudding cup is a
    great luxury for some of our Americans.
        I would impose upon you, beg you, please, do something
    about this major cutback on these, the very least of these, as
    we move forward to creating the budget resolution for fiscal
    year 2007.
        I appreciate your patience, your indulgence, and I would
    certainly appreciate your consideration for restoring this
    amount to our very most vulnerable citizens in our country.
        Thank you very much, and I yield back.
        Mr. Ryun. Ms. Carson, thank you very much for your
    testimony. I don't have any other questions at this point, so I
    appreciate your coming today before the Budget Committee.
        [The prepared statement of Ms. Carson follows:]

     Prepared Statement of Hon. Julia Carson, a Representative in Congress
                           From the State of Indiana

        Thank you, Mr. Chairman. I appreciate the opportunity to testify
    before the committee on this year's Budget Resolution. I believe the
    President's budget proposal leads us in the wrong direction by
    depriving our most vulnerable seniors of vital resources.
        The President's budget proposal eliminates funding for the
    Commodity Supplemental Food Program. Each month the CSFP provides over
    475,000 low-income individuals with nutritious food packages including
    fruits, vegetables, cereals and other items. This program provides a
    balanced dietary supplement for recipients, 85 percent of whom are
    seniors, all with income levels below a meager $12,450 per year.
        In Indiana, 4,979 seniors are currently enrolled in this program.
    This year, over 600 of them could go hungry because the USDA reduced
    the CSFP caseload for 2006. Next year, the rest could go hungry if this
    program is eliminated. Is this really the message we want to send the
    world about how we treat our elders?
        The budget proposal enables participants in the CSFP to enroll in a
    transitional food stamp program once the CSFP is eliminated. The food
    stamp program, while extremely important, does not offer the same
    benefit, flexibility and convenience that the CSFP does, nor does it
    provide a long-term solution to these cuts.
        The food packages that seniors currently receive from the CSFP have
    a retail value of approximately $50. Under the budget proposal, seniors
    would receive just $20 per month in food stamps. In my home state of
    Indiana, the average income for a senior enrolled in the CSFP is
    between $700 and $800 each month. These limited resources must provide
    housing, utilities, medical costs and food. Thus, any reduction in
    benefits would further impoverish seniors. When $30 could be the
    difference between purchasing medication or food or paying your heating
    bill, how do you decide which to eliminate?
        In addition to decreasing seniors' monthly benefit, the food stamp
    program would offer reduced access to seniors. In Indianapolis,
    Gleaners Food Bank administers the CSFP. Volunteers from Gleaners
    deliver and distribute food boxes in various locations, including
    senior housing sites. CSFP boxes are delivered to seniors who are
    immobilized by ill health, physical infirmities or lack of
    transportation. This personalized service ensures that our seniors have
    access to food and are treated with the dignity and respect they
    deserve. They deliver boxes to homeless veterans who call the space
    under bridges their homes.
        Some seniors are also hesitant to participate in the food stamp
    program because they perceive it as a welfare program. Yet these same
    seniors participate in the CSFP in Indiana because the CSFP does not
    carry the same stigma. Congress must carefully consider the impact of
    eliminating a program that feeds our seniors and replacing it with one
    that may not.
        The Commodity Supplemental Food Program provides a wonderful
    service that touches the lives of many people. I was touched by the
    story of a senior who received her first CSFP box from Gleaners. She
    cried after discovering 12 pudding cups in her box. Her case manager
    explained, ``Pudding is a luxury she has not been able to afford in a
    very long time.'' Let's not forget that as we craft a budget
    resolution, something as simple as pudding cups are a great luxury for
    some Americans.
        The budget proposal not only jeopardizes seniors' food assistance,
    but it also cuts their housing opportunities. In the proposed budget
    for the Department of Housing and Urban Development, the President has
    made across the board cuts totaling $1.5 billion. One of the programs
    receiving a major cut is HUD's Section 202 program, which provides
    grant money to non-profits and faith-based organizations that construct
    or rehabilitate affordable housing for seniors with supportive
    services. Some of these services include transportation, cleaning and
    cooking. The $190 million proposed to be cut from this program would
    have been used to develop new housing facilities or rehabilitate closed
    or dilapidated facilities. These cuts are not how our government should
    react to budget shortfalls. We should not further deprive those who are
    ``the least of these''.
        The proportion of elderly in the population is steadily increasing
    as the affordable housing units are decreasing. Housing units are being
    filled almost immediately, and waiting lists can be as long as 3 years.
    In my hometown of Indianapolis, the demand for senior services and
    senior housing will sharply increase within the next 15 years,
    including the need for LIHEAP funds. It is important that we plan ahead
    and start developing more affordable housing units for seniors before
    it is too late.
        And finally, the President's budget will cut Medicare by $36
    billion over 5 years and $105 billion over the next 10 years. These
    cuts will partially be achieved by shifting costs, a strategy that is
    unpardonable for a group of people who are already living on a fixed
    budget. Medical costs are continuing to rise, with an America that is
    living longer. How can we expect seniors to deal with these rising
    costs as we cut the program that helps ensure they receive affordable
    healthcare? Mr. Chairman, I am afraid that if Congress does not act, we
    are going to find out.
        Our budget is a reflection of our values and priorities. Yet it
    cuts food, housing and medical care for the elderly. In the words of
    Tim Robertson, President of the National Commodity Supplemental Food
    Program, this budget proposal contains ``the unkindest cut for our
    greatest generation.'' Our seniors deserve the very best from us, and
    it is incumbent upon us to keep them in mind when determining our
    budget allocations. I'd like to thank the Committee for giving me the
    opportunity to address these pressing needs.

        Mr Ryun of Kansas. At this point we will turn to Mr. Bishop
    for his testimony.

       STATEMENT OF HON. TIMOTHY H. BISHOP, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEW YORK

        Mr. Bishop of New York. Thank you, Mr. Chairman. Let me
    start by asking unanimous consent to enter into the record my
    full statement.
        Mr. Ryun. Without objection.
        Mr. Bishop of New York. Thank you, sir.
        Mr. Chairman, I thank you for this opportunity to discuss
    with the Budget Committee why the Federal higher education
    programs, as outlined in the President's budget request to the
    Congress, should be a higher priority. I worked on a college
    campus for nearly three decades before I came to the Congress,
    and during that time I came to fully understand how difficult
    it is for students and their families to afford a higher
    education. There was not a day that went by during my time on
    the campus that I didn't work with a student to help them
    figure out how they were going to pay for their education.
        I appear today before this committee as a concerned member
    of the Education and the Workforce Committee, and I appreciated
    hearing the President discuss the future of education during
    the State of the Union message. But I am hopeful, but also
    skeptical, that the reality will rise to the level of his
    rhetoric in terms of what we support financially.
        I share disappointment with the President's budget, as I
    think everyone does who places a high value on a college
    degree. The greatest disservice that we can do to middle- class
    families in America is to convince them of the necessity of a
    college education but then place in their way barriers that
    prevent them from accessing higher education.
        Estimates show that financial barriers will prevent 4.4
    million high school graduates from attending a 4-year public
    college over the next decade--that is, a public college--and
    prevent another 2 million high school graduates from attending
    any college at all. As families face these harsh realities,
    they are right to question why the President and the Congress
    continue to ignore steps that we can take to make college more
    affordable.
        For example, the President's budget freezes the maximum
    Pell grant award at $4,050 for the fourth year in a row,
    despite the fact that the maximum Pell grant being authorized
    in the House version of the reauthorization of the Higher Ed
    Act is $6,000.
        The President's budget also freezes funding for both SEOG
    and the Federal Work Study Program, two programs that provide
    the neediest students additional money for college.
        And in what might be the most disturbing portion of the
    budget, the President proposes recalling the Federal portion of
    the revolving fund for the Perkins loan program. As a result,
    this year more than 460,000 low- and middle-income students
    will be denied low-cost loans to help pay for their college
    education.
        Now, the President made the same request to Congress last
    year and the Congress did not accede to that request, and I
    remain hopeful that our colleagues in the Congress will once
    again validate the importance of the Perkins loan program.
        The President's budget is particularly devastating when one
    views it within the context of the $12 billion cut to student
    loans recently authorized under the Deficit Reduction Act. The
    combination of the President's budget and these cuts will
    present an enormous hardship for students.
        The President has much to say recently about
    competitiveness, and I think all of us agree with that, but I
    think the commitment to increasing the quality of K through 12
    education is best seen as meaningless if we don't offer access
    to higher education. If the American Competitiveness Initiative
    is to have any real meaning, we must ensure access and
    affordability to higher education. And in order to do that, we
    must fully fund Pell Grants, Perkins loans, and other student
    aid programs in the budget resolution.
        Thank you, Mr. Chairman, for your time.
        Mr. Ryun. Mr. Bishop, thank you very much for your
    testimony. These will be issues that will be very passionately
    debated when we come to the budget markup, and I appreciate
    your coming before this committee today.
        Mr. Bishop of New York. Thank you for the opportunity.
        [The prepared statement of Mr. Bishop of New York follows:]

       Prepared Statement of Hon. Timothy H. Bishop, a Representative in
                      Congress From the State of New York

        Mr. Chairman, ranking member Spratt, and distinguished members of
    the Budget Committee, thank you for this opportunity to discuss why
    Federal higher education loan programs should be higher priorities in
    the President's budget if we're really serious about helping students
    pursue the dream of a college education and keeping our workforce
    competitive.
        With every academic milestone, a high school diploma, vocational
    certification, an undergraduate degree or graduate degree, a person's
    lifetime earning potential grows. For many young Americans, higher
    education is the ticket to success. Some even consider it a basic human
    right. But each one of us can agree that every high school senior who
    qualifies academically deserves the chance to go to college.
        After working at Southampton College on Long Island for nearly
    three decades, I have come to fully understand how difficult it is for
    students and their families to afford a higher education. Every day, I
    worked with them--to scrape up the money, grants, scholarships,
    whatever we could find--to help them realize part of the American
    dream--the opportunity to go to college.
        Therefore, I appear before this committee, not on behalf of a
    special interest or a local project for New York's first congressional
    district, but as a concerned member of the Education and the Workforce
    Committee, who appreciated hearing the President say during the State
    of the Union that America's ``greatest advantage in the world has
    always been our educated, hardworking, ambitious people--and we're
    going to keep that edge.''
        Unfortunately, the budget shortfall for education--a decrease of
    $2.1 billion or 3.8 percent below last year's level--belies the
    President's pledge, and deflates the promise of the proposed American
    Competitiveness Initiative, which would fund 70,000 new high school
    advanced math and science teachers. The ongoing impasse over our
    failure to reauthorize the Higher Education Act is another setback
    making it harder to meet this pledge.
        Like many who have always voted to support student loans, and who
    place a higher value on the benefits of a college degree than the
    President's budget request provides, I share your disappointment. And
    those of you who are the proud parents of a college student are
    undoubtedly aware that college tuition at public universities increased
    14 percent last year, with jumps of 20 to 30 percent in several states.
        These rates are increasing faster than the financial assistance
    given to students, which makes attending college all that more
    difficult and limits the choices that graduates can make, discouraging
    many of them from seeking a college education at all. The greatest
    disservice that we have done to middle class families in America is to
    convince them of the necessity of a college education, but then place
    this education financially out of their reach.
        In fact, the Congressional Advisory Committee on Student Financial
    Assistance estimates that financial barriers will prevent 4.4 million
    high school graduates from attending a 4-year public college over the
    next decade, and prevent another 2 million high school graduates from
    attending any college at all. As a result, the United States is
    projected to face a shortage of up to 12 million college-educated
    workers by the year 2020, directly threatening America's economic
    strength and global competitiveness.
        As families face these harsh realities, they are right to question
    why the President and Congress continue to ignore steps they can take
    to make college more affordable and to make sure that this American
    dream does not slip out of reach. Still, we are not yet making the
    investments needed in higher education to support these costs.
        For example, the President's budget freezes the maximum Pell grant
    award at $4,050, for the fourth year in a row, despite rising tuition
    and stagnant Federal investment. In 1975, the Pell Grant covered 80
    percent of the cost of a 4-year public college education. Today, that
    number is closer to 40 percent. President Bush made a promise to
    students 6 years ago, that under his administration the maximum Pell
    Grant award would increase to $5,100, but thus far, that promise is an
    empty one.
        Furthermore, although investing $100 million into an unproven
    school voucher program, the President's budget freezes funding for SEOG
    and Federal work-study, two programs that provide the neediest students
    additional money for college.
        And in what might be the most disturbing portion of this budget,
    the President proposes recalling the Federal portion of the revolving
    fund for the Perkins Loan Program. The funds, which are made up of
    Federal ``capital contributions,'' institutional matches, and repaid
    Perkins loans, are used to make new loans to students from low-income
    and middle-income families. The budget calls for the government to
    recall the revolving funds used by institutions, requiring colleges and
    universities to pay back nearly $644 million. As a result, this year
    more than 460,000 low- and middle-income students will be denied low-
    cost loans to help pay for their college education.
        This cut, when coupled with the $12 billion in cuts to student
    loans authorized under the Deficit Reduction Act, is particularly
    devastating and will present an enormous hardship for the student in
    the future.
        The ``Education'' President has had much to say recently about
    competitiveness. State of the Union rhetoric sounds inspiring but it
    doesn't keep tuition in check or sharpen our competitive edge. Only
    real actions can do that. Therefore, I suggest we back up our promises
    to America's students by fully funding Pell grants, Perkins loans, and
    other student aid programs in the budget resolution. I look forward to
    working with you toward that end and am happy to answer any questions
    you may have at this time.

        Mr. Ryun. We will now go into another brief recess as we
    wait for other Members, subject to the call of the Chair.
        [Recess.]
        Mr. Ryun. We will now resume the Members Day hearing on the
    Budget Committee, and at this point we will turn to Mr. Mica
    from Florida.
        Mr. Mica, first of all, we have not received your written
    testimony, but we will be happy to submit that for the record
    when it is submitted.

     STATEMENT OF HON. JOHN L. MICA, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF FLORIDA

        Mr. Mica. Well, I thank you, Mr. Chairman, and I do have a
    copy and ask unanimous consent that it be included in the
    record.
        Mr. Ryun. Without objection.
        Mr. Mica. Thank you, Mr. Chairman and members of the Budget
    Committee. I come before you today, the chair of the House
    Aviation Subcommittee, and I will not read my testimony but I
    would just like to summarize some of my viewpoints,
    particularly for some of the staff that are here and you, Mr.
    Chairman.
        This is not the official dogma of the Transportation
    Committee or the subcommittee, but I want to just make very
    clear for the record the situation we find ourselves in with
    aviation security and, in particular, passenger screening. The
    administration has proposed an increase in the passenger
    screening fee. The way it is currently proposed, I have told
    Josh Bolten and others that I do have problems with the way it
    is currently proposed.
        As you may know, we now spend some $5.6 billion on aviation
    security. When we set up aviation security fees in the
    beginning, under the original TSA legislation which I helped
    draft, we had proposed having the user pay, which is a very
    fair system. The screening would be a government service, and
    the passenger would pay for it. It was supposed to be a $2.50
    per flight segment, $5 maximum per one-way trip fee, and that
    covered your screening costs.
        The airlines who had previously had the responsibility in
    cost testified before our committee when we were developing
    this formula that their cost was about $1 billion, and they
    agreed to reimburse the Government approximately $1 billion a
    year for giving up that responsibility. They were willing to
    pay just to exempt themselves from the liability of screening.
    So we were to fund the system initially with the $2.50/$5 fee
    and contributions from the airlines.
        Of course initially, the TSA number of screeners was a much
    smaller estimate. I think at one time it went to 19,000 and
    then to 26,000. Finally, Congress capped it somewhere in the
    45,000 range, and we probably have more than that in TSA. We
    have a $2 billion shortfall, which is now contributing to the
    national deficit because we have no money to pay that. It is
    out of the general Treasury and we have no money to pay that,
    so we should be increasing the fee.
        But if we just increase the fee and continue the same
    process, we have a problem because the current process is
    broken. The 9/11 Commission and their predecessor have reviewed
    the performance of passenger screening and given it an F score,
    but not me. In addition, I get audited reports, and I have one
    here I would like to be submitted for the record, OIG-05-16,
    this is a secret classified report. I am only going to give you
    the cover and a summary of what I can deal in public with, but
    I can tell you that the system is a failure.
        Passenger screening is not much better than it was just
    after 9/11, and those are the words of the Inspector General
    who tested the system. This report is on baggage screening, and
    there the failure is even greater. Nearly half of the 45,000
    TSA personnel are behind the scenes in the airport going
    through people's baggage with trace detection equipment or just
    searching, and the more people we have involved, actually the
    greater the failure rate.
        So we are paying $5.6 billion for a system that gets an F
    score and doesn't work well, according to, again, these
    classified reports. What is interesting is, I ordered a report
    by the Government Accountability Office (GAO) to review a
    system for employing high-tech processing and screening of
    checked baggage. They conducted that report, and this is GAO
    report 05-365, and that said you could replace 78 percent of
    the personnel by automating the system and replacing personnel
    with high-tech equipment. And if you did that, the payoff is
    anywhere from a 1 to 3 years to pay for the equipment; and then
    you have savings, perpetual savings in the system.
        So I don't favor the administration proposal of just
    increasing the fee and not putting in a high-tech system. If we
    did this, the failure rate in the few airports in which we have
    these highly automated high-tech passenger baggage screening
    equipment, the failure rate is minimal. So it is a very good
    working system as opposed to what we are paying for in a
    failing system.
        So I propose that we double the passenger screening fee for
    a period of 3 years. It would raise somewhere in the
    neighborhood of $6 billion. We can over that period of time,
    instead of just paying for personnel, put in high-tech
    equipment both for passenger screening and also for checked
    baggage screening. In checked baggage screening, we would
    eliminate 78 percent of the personnel, again, a dramatic
    savings.
        That is the proposal. The airlines have not been supportive
    of the administration proposal last year. They are cool, I can
    tell you, to my proposal because they say we are raising taxes.
    This is a user fee, it is not a tax. We are now $2 billion a
    year into the Federal Treasury, adding to the Federal deficit.
    The current rate at which we are paying for and deploying high-
    tech equipment at our airports and the rate that we are putting
    money into equipment versus personnel, we will have this fully
    automated high-tech equipment complete in 18 years.
        So with $6 billion spent in my plan, you pay this off and
    you would save $30 billion. And the most important thing is the
    operation and performance of the system. You almost now have,
    and I can't quote the exact failure rate, but I can tell you it
    is almost a total failure rate for checked baggage, and very
    poor rate, not much better than after September 11, for
    passenger screening. You replace that system with a high-tech
    system, you sunset the increase in the fee after 3 years, and
    you have $30 billion worth of taxpayer savings and a safer
    system for the American people to fly.
        Incidentally and finally, explosives on an aircraft are our
    most serious threat at this point. More than likely, terrorists
    are not going to take over an aircraft the way they did on 9/
    11. We have secure cockpit doors, we have air marshals, and
    have even more pilots trained now than air marshals that are
    armed and ready to go. And then the final and fourth line of
    defense is that we have an informed public which would never
    let an aircraft be taken over in the manner in which we saw in
    three out of the four instances on September 11.
        So that is my testimony. I have asked the administration
    also to consider sending Congress an amendment, talked to Josh
    Bolten about that, to include this provision as opposed to the
    provision that is in their budget.
        [The information referred to follows:]

     Prepared Statement of Hon. John L. Mica, a Representative in Congress
                           From the State of Florida

        Thank you Chairman Nussle and Ranking Member Spratt for the
    opportunity to testify before you today.
        I am here to discuss and urge the Committee's support for an
    increase in the aviation security fee that is paid by airline
    passengers.
        The airline security passenger fee was established by Congress
    after the terrorist attacks of September 11, 2001. Together with a fee
    paid directly by air carriers, it was intended to cover the Federal
    Government's cost of taking over passenger and baggage screening
    functions from the airlines.
        In reality, these two fees have covered less than half of the
    Transportation Security Administration's aviation security costs. The
    General Fund has had to make up the difference--roughly $2.5-$3.5
    billion annually in recent years.
        This shortfall between fee collections and TSA's aviation security
    costs is paid by deficit spending and absorbed by people who may never
    fly.
        As Chairman of the House Aviation Subcommittee, it was never my
    intent for the General Fund to pick up any of these costs. Aviation
    security should be paid for by aviation travelers. No other mode of
    transportation has government-funded security, and aviation should be
    no different.
        General aviation, air cargo, cruise passenger and cargo shipping
    lines, trucking, passenger and freight rail, private energy and other
    security sensitive businesses all pay their own security screening
    costs. The U.S. taxpayer pays $0.
        Under current law, the aviation security fee is set at $2.50 per
    enplanement, up to $5 per one-way trip. The President's Budget proposes
    to change this to a flat fee of $5 per one-way trip, which would raise
    an additional $1.3 billion in FY 2007. The Administration proposes to
    use this $1.3 billion to offset the cost to the General Fund.
        I have a different proposal. I believe the increased fee revenues
    should first be used to meet certain critical aviation security needs,
    such as the deployment of technology to detect explosives hidden on
    passengers' bodies, and the installation of in-line explosives
    detection systems (EDS) at airports.
        Since TSA was created in 2002, we have spent over $25 billion on
    aviation security. Despite this massive spending, we are still relying
    on 1960's technology--metal detectors--as our primary method of
    screening passengers. We have yet to deploy more than a handful of
    explosives detection trace portals even though explosives hidden on
    passengers' bodies are a serious threat to aviation. It would take just
    one suicide bomber strapped with explosives to further devastate the
    U.S. airline industry.
        In addition to this urgent need to deploy better passenger
    screening technology, we also have critical unmet needs in the area of
    checked baggage screening.
        The Aviation and Transportation Security Act (ATSA) required TSA to
    deploy EDS at all commercial service airports by the end of 2002. The
    Homeland Security Act extended this deadline by 1 year. To meet this
    deadline, TSA placed hundreds of EDS machines in airport check-in areas
    across the country.
        Incorporating the EDS machines into in-line baggage systems is a
    critical next step, one which is estimated to ultimately cost $4-$5
    billion.
        Although this is a significant up-front investment, in-line
    installation of EDS would significantly reduce TSA operating costs and
    pay for itself in just a few years.
        According to a March 2005 GAO report, TSA analysis shows that
    installing in-line EDS at the nine airports that have received letters
    of intent would result in a savings to the Federal Government of $1.26
    billion over 7 years, with the initial investment in these systems
    recovered in just 1.07 years.
        According to TSA's analysis, in-line EDS would reduce by 78 percent
    the number of TSA baggage screeners and supervisors required to screen
    checked baggage at these nine airports.
        Despite the operational cost savings TSA could derive from in-line
    baggage systems, progress in installing such systems has been slow. To
    date, of more than 440 commercial service airports, only eighteen have
    fully converted to in-line EDS.
        At the current rate of spending, it will take at least 10 more
    years to convert fully to in-line EDS. In the meantime, we will
    continue to waste billions of dollars in TSA's operating budget paying
    large numbers of screeners to do what in-line EDS could do more
    efficiently, and more accurately.
        Rather than wasting billions of dollars on a huge and largely
    ineffective screening bureaucracy, we need to focus on deploying better
    technology as soon as possible.
        Under my proposal, the existing fee would be doubled, from $2.50
    per enplanement to $5 per enplanement. This would raise enough funds to
    install high-tech explosives detection systems at all commercial
    service airports within 3 years.
        I urge your support for an increase in the aviation security fee. I
    also urge you to invest the proceeds from the fee increase in urgently
    needed aviation security technology improvements, such as in-line EDS,
    and better explosive screening technologies at passenger checkpoints.
        Thank you for your consideration.

        Mr. Ryun. Thank you very much for your testimony. I just
    want to make a comment. You offered some reports to be
    submitted. Without objection, I'd like those inserted in the
    record.
        [The information referred to follows:]

        Mr. Ryun. Just one brief comment, because I know I have
    other Members ready to testify, but would this speed up the
    process at the airport, the technology you are talking about?
        Mr. Mica. Absolutely. What is happening now is we actually
    have even more passengers going through. We are back to pre-
    September 11. One of the problems is the system that uses
    nearly half of the 45,000 TSA personnel to hand-search your
    baggage is delaying baggage. So we have had baggage slowdowns
    and meltdowns across the country, people not matching baggage,
    and that is even more dangerous because you really don't know
    what is getting on a plane or left behind at times.
        So this is a very serious situation. It is not popular for
    me, as a conservative right wing Republican, to come and
    advocate increasing any fees, but this is a user fee. It was
    never intended to be the responsibility of the taxpayer from
    the general revenue or add $2 billion a year to our deficit. It
    was a PAYGO, a user fee, collected by the airlines and then
    passed on to the Government.
        Last year, they increased their fees. We monitored some of
    their charges for airline tickets and during not a full year's
    period, they increased their fees--because their costs went up
    or their ticket charges--eight times; yet they oppose the
    Government increasing the fees in our costs which have gone up,
    to put in a safer, securer system.
        And to answer your question, Mr. Chairman, to move the
    baggage through in a more expedited fashion that won't delay
    our flights around the country.
        Mr. Ryun. I thank the gentleman for his testimony and
    appearing before the Budget Committee.
        We will now move to the gentlewoman from the Empire State,
    Mrs. Kelly.

     STATEMENT OF HON. SUE W. KELLY, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF NEW YORK

        Mrs. Kelly. Thank you, Mr. Chairman. I want to just talk
    with you a little bit about small businesses and the needs of
    small business in the Nation.
        You and I both know they are the local engines that drive
    our national economy, so we have to keep their needs as a
    centerpiece in our budget priorities in Congress. I believe we
    need to continue working together to develop ways to provide
    our small businesses with the tax relief and regulatory
    fairness that they need in order to continue growing and
    creating new jobs across the country.
        We need a fiscally responsible Federal budget in order to
    accomplish essential objectives, but we also need to help our
    small businesses. So basically I have three budgetary points.
        Too many small business owners, including those in the
    Hudson Valley communities I represent in New York, have long
    been unfairly punished by the Federal Tax Code. It taxes them
    at a higher rate than individual rates and it limits them from
    taking the same deductions claimed by large companies.
        The Jobs and Growth Tax Relief Reconciliation Act that we
    passed in 2003 is addressing some of the problems that are
    faced by small businesses. It has helped provide critical tax
    relief to 25 million small businesses at an average of more
    than $3,235 in 2005. The lower marginal income tax rates have
    assisted more than 90 percent of small business owners who pay
    their taxes at the individual income tax rates.
        So as we analyze our future budget outlook, I want to work
    with you to extend and make permanent the small business tax
    relief provisions that are addressed in the fiscal year 2006
    budget and the tax reconciliation measures. Continuing the
    increased expensing rules for small businesses is of particular
    importance. It allows our small business owners to plan for the
    future and continue taking much-needed deductions on the
    hundreds of thousands of dollars that they need to spend every
    year on equipment and their other needs to operate and grow
    their businesses. The more we do to help small businesses grow,
    the more jobs they can create for our local residences.
        Another budgetary priority has to be to find a permanent
    solution to stop the growing number of middle-income families
    and small business owners from being victimized by the
    alternative minimum tax (AMT). The AMT has no place in the
    lives of middle-income taxpayers and small business owners, and
    it is counterproductive to our tax relief efforts on behalf of
    small businesses. These and other consensus small business tax
    reforms are contained in the Small Employer Tax Relief Act,
    which is H.R. 3841, that we are cosponsoring in the Small
    Business Committee.
        We are hoping to provide opportunities for growth, and
    those opportunities begin by eliminating the roadblocks that
    small business owners face. We know that duplicative and
    unnecessary Federal regulations do nothing but hamper small
    business growth and success. So we need to work together to
    stop encouraging the expansion of Federal regulations on our
    Nation's small businesses.
        One way of eliminating redundancy and overlap by our
    Federal regulatory agencies is to include language in the
    budget resolution reauthorizing the Truth in Regulating Act, or
    TRA, which we passed into law in 2000. I am sponsoring the Cut
    Unnecessary Regulatory Burden for Small Businesses Act, the
    CURB Act, to reauthorize TRA and to enable Congress to keep a
    more watchful eye on all Federal agencies.
        This would uphold our principles of smaller government,
    less Federal intrusion in the lives of local small business
    owners, and I want to work with you to prevent the
    implementation of unnecessary regulations. Federal agencies can
    issue these burdensome regulations totally outside of
    congressional control, regulations that have the force and
    effect on small businesses of law, and they have to spend
    extraneous time, money, and energy completing a lot of
    burdensome paperwork rather than hiring new workers and growing
    their businesses.
        The time has come to make it a budgetary priority to fund
    TRA and improve the congressional and GAO oversight of Federal
    regulatory decisions that are devastating our small businesses.
        Lastly, fiscal government restraint in our overall budget
    is critical to ensuring that we can continue to provide
    America's small businesses the tax relief and other tools they
    need to grow and survive. I believe we should support President
    Bush's budget request for $28 billion in government-backed
    small business loans for 2007. It is the highest-ever level for
    the SBA, but this will help create and it will help retain an
    estimated 1 million jobs.
        We have to continue to find ways to provide necessary
    government services to help small businesses grow and create
    the new jobs for local residents and their communities and we
    need to do that without growing the size of government. The
    Small Business Administration has shown encouraging promise in
    this area since 2001. It has cut its own agency staff by nearly
    25 percent while at the same time improving customer service
    and making record numbers of government-backed loans to small
    businesses.
        We can work together to hold all Federal agencies to such a
    standard: better service, more productivity, lower
    administrative costs, and a lot less bureaucracy. If we
    eliminate the waste, fraud, and abuse in the Federal budget and
    at our Federal agencies, and help them focus--and help us focus
    more of our resources directly on the needs of small business
    owners or any family across America, I believe we can do this
    and it needs to be done.
        This committee has many areas where it needs to focus on
    budgetary concerns, but I hope this committee will not forget
    the needs of America's small businesses. Expanding tax relief
    to small business owners, stopping unnecessary regulations, and
    eliminating waste and fraud at Federal agencies are all too
    critical to continued economic growth. We can work together to
    adhere to fiscally responsible budget policies in order to rein
    in Federal spending while effectively boosting small businesses
    across America.
        I thank you for allowing me to testify today. I look
    forward to working with you during the budget process to
    consistently support our small business owners and help them
    retain their employees. Let us reduce their taxes and encourage
    their investment and remove these obstacles for our small
    business growth.
        Thank you so much for letting me testify. I hope you will
    truly consider funding at an appropriate level the TRA agency.
    It is something that will help our small businesses.
        [The information referred to follows:]

     Prepared Statement of Hon. Sue W. Kelly, a Representative in Congress
                           From the State of New York

        As a former small business owner myself, I try to keep the
    interests of small businesses as the centerpiece of my own policy
    agenda in Congress.
        Looking both to previous accomplishments in the small business
    field, and ahead to our future budget outlook, we have several
    opportunities to seek fiscal government restraint and to provide small
    businesses--the locomotive of our economy--with the tools to continue
    growing.
        Providing opportunities for growth begins by eliminating the
    roadblocks our small business owners face.
        Too many small business owners, including those in the Hudson
    Valley which I represent, are being unfairly punished by a Federal tax
    code that taxes them at higher individual rates and limits them from
    taking the same deductions claimed by large companies.
        The first place to provide relief is to extend and make permanent
    the provisions addressed on the FY06 budget and tax reconciliation
    measures. Many Americans don't realize a major portion of that tax
    relief bill is direct tax relief for small businesses. We have seen the
    results of this relief from the 2001 and 2003 tax bills--more jobs
    created, more opportunities to enter into high cost businesses, and
    higher revenues to the Treasury.
        Extending increased expensing rules for small businesses is of
    particular importance, allowing small business owners to plan for the
    future and continue taking needed deductions on the hundreds of
    thousands dollars in machinery and operating assets put into use each
    year.
        Another area I have stressed adamantly over the years and will
    continue to do so is the need for permanent relief from the Alternative
    Minimum Tax. This renegade penalty imposed each year on millions of
    small business owners continues to result in less capital and
    investment poured into our economy and less jobs created in towns
    across the country. It is a virtual lease on the growth of small
    business in America. I urge the committee to address the AMT laws and
    find a responsible solution to this now un-ignorable problem.
        Looking forward to the impending explosion of mandatory spending by
    the Federal Government, we must also look to our own side of the
    ledger.
        The Small Business Administration is a good example of an agency
    that is doing its part. Operating a $65 billion loan portfolio to
    millions of Americans helping to grow our economy, as well as owners
    recovering in the wake of Hurricane Katrina and other local disasters,
    the SBA has cut its agency staffing by close to 25 percent since 2001
    while seeing a rapid increase and improvement in its services.
        All Federal agencies should take a page from this play book:
    Greater service, optimal production, less bureaucracy. We must continue
    to find ways to provide needed services to help grow and support our
    citizens and our economy, without growing the size of our government.
        Finally, we need to stop encouraging complication and expansion of
    regulations on our nation's small businesses. Duplicative and
    unnecessary Federal regulations do nothing but hamper small business
    growth and success.
        One new way of eliminating redundancy and overlap by our Federal
    regulatory agencies can be done by including language in the budget
    resolution authorizing the Truth in Regulating Act, or TIRA, which I am
    sponsoring here in the House.
        TIRA would enable Congress to keep a more watchful eye on Federal
    agencies and prevent them from implementing any unnecessary regulations
    that force small business owners to spend extraneous time, money, and
    energy completing burdensome paperwork rather than hiring new workers
    and growing their business.
        Specifically, TIRA requires the GAO, at the request of a
    subcommittee or full committee chairman in Congress, to evaluate any
    promulgated rules and regulations that would have an annual effect on
    the economy of $100 million or more.
        Congress, through the GAO, would have knowledge of and the ability
    to fully evaluate unfair costs or impacts on small businesses before
    new rules are implemented.
        The Truth in Regulating Act is a qualified example of how to
    increase accountability in Congress. This is one method of assuring
    that not only are Federal administrative agencies doing their job, but
    also that Congress is keeping up with its obligation in providing the
    authority to the agencies. Agency personnel is not elected. Because
    Congress is, we must answer to our small business owners and they are
    asking for relief.
        We have many areas to improve. More financial relief to small
    business owners, less growth by Federal agencies, and fewer unnecessary
    regulations to adhere to are all responsible policies to reign in our
    Federal budget and effectively serve our small businesses across
    America.
        Thank you for allowing me to testify in front of the committee
    today and I look forward to the committee's support.

        Mr. Ryun. Mrs. Kelly, thank you very much for your
    testimony. As a Member coming from a small business background,
    I am certainly sensitive to the issues that you are offering. I
    know that small businesses are one of the engines of our
    economic recovery, and I also know that taxes and regulations
    put a chokehold on our small businesses' ability to function.
    So I am certainly warm to those ideas and will carry those
    forward, and I thank you for coming today.
        Mrs. Kelly. Thank you.
        Mr. Ryun. At this point, we will turn to Mr. Kucinich for
    his testimony, and you are welcome to begin at any time.

       STATEMENT OF HON. DENNIS J. KUCINICH, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF OHIO

        Mr. Kucinich. Thank you very much, Mr. Ryun. I want to
    thank the committee for giving me this opportunity to testify.
    I represent part of Cleveland, Ohio and many of its suburbs,
    but I am not here today to advocate for local funds. I am here
    to offer a new approach to resolving a national problem. This
    issue affects Cleveland to be sure, but it also limits the
    economy in every congressional district.
        The concern and solution I bring to you today is the
    decline and disrepair of the United States' infrastructure
    system. I am talking about bridges, highways, schools, water,
    wastewater treatment plants, and drinking water systems. Like
    every Member of Congress, every member of the Budget Committee,
    I can think of at least one major infrastructure project in my
    district that laxlacks funding, I am sure every Member has the
    same concern, and today I am offering a solution.
        I am proposing a financing mechanism that taps the Federal
    Reserve as a financing bank to provide zero-interest loans,
    thus greatly reducing the cost of infrastructure improvement.
    We all see the current crisis in our infrastructure. It is
    something we see every day when we sit in traffic, bound by
    orange barrels that line our highways. It is something that
    school children experience at their desks, crowded together
    under leaky roofs, and beachgoers experience, at best the
    sidewalk, when municipal sewer systems overflow. These
    incidents happen every year and happen with increasing
    regularity as systems age. Infrastructure problems threaten our
    productivity, our economy, our environment, and our health.
        What will it take to fix these problems? Well, nationally,
    it will take more than $1.6 trillion to bring our country's
    roadways up to speed, according to a report released in 2005 by
    the American Society of Civil Engineers. It will take $127
    billion to repair and renovate our schools, according to the
    National Center for Education Statistics. That estimate was 7
    years ago, with more recent estimates at $268 billion. And in a
    study by the Water Infrastructure Network, it would take $1.3
    trillion over 20 years to build, operate, and maintain drinking
    water and wastewater facilities.
        If you add these staggering sums of money to the necessary
    funding to replace and repair our devastated infrastructure
    from the Katrina disaster, estimates from Risk Management
    Solutions, a private sector company that provides services for
    the management of insurance catastrophe risk, suggests that
    total losses, insured and uninsured, from both hurricanes
    approach $140 billion, the bulk of which is due to Hurricane
    Katrina.
        Now, the people of Katrina are returning to nothing, and
    the first task is to rebuild the basic infrastructure. The
    Center for Business and Economic Research at Marshall
    University estimated that Hurricane Katrina has generated
    commercial structure damage of $21 billion, commercial
    equipment damage at $36 billion, residential structure and
    content damages of almost $75 billion, electric utility damages
    of $231 million, highway damages of $3 billion, sewer system
    damages of $1.2 billion, and commercial revenue loss of $4.6
    billion.
        The American Waterworks Association estimates the damage
    from Katrina requires water supply infrastructure and repair
    and replacement costs at $2.25 billion. The Mississippi
    Department of Education estimates Katrina damage to
    Mississippi's schools at over $1 billion dollars, to replace 14
    destroyed schools, repair 246 damaged schools, and repair 159
    damaged school buses. Overall, Katrina damaged or destroyed
    over 400 school buildings in four affected States.
        The State of Louisiana's Department of Transportation
    testified to the Committee on Transportation and Infrastructure
    of our United States Congress that damage resulting from the
    hurricane, such as repairing or replacing damaged roads,
    bridges, public ports, airports, railroads, and the maritime
    and transit systems is estimated at $5.5 billion. And to ensure
    future hurricanes do not exact such massive damage to
    Louisiana, it will cost $22 billion for levee protection and
    pumping capacity.
        Now, with these extraordinary needs, it is no wonder
    municipalities have not been able to make up the differences as
    the Federal Government has gradually decreased infrastructure
    support. If you put aside all the partisan issues, the current
    deficit is real and everybody agrees it has to be reduced. That
    reality makes massive Federal investments unlikely. For
    example, the President's 2007 budget is only $18 billion to
    address the damage inflicted by Katrina.
        Now, Mr. Chairman, my solution would create a low-cost
    Federal financing mechanism to administer billions of dollars
    in zero-interest loans every year to localities for
    infrastructure projects. Financing costs for any project adds
    substantially to the cost of the project; therefore, zero-
    interest loans make local dollars go significantly further.
    States would be totally responsible for choosing which projects
    to fund with the loans according to their specific needs.
        This bill that I am speaking of would create the Federal
    Bank for Infrastructure Modernization. The bank, as an
    extension of the Federal Financing Bank under the Treasury,
    would administer the loans. The loans would bear a small fee of
    one-fourth of 1 percent of the loan principal to cover the
    administrative cost of the Federal Bank for Infrastructure
    Modernization. In order to provide the money for the loans, the
    Federal Bank for Infrastructure Modernization would hold a
    portion of the Treasury securities that the Federal Reserve
    normally holds.
        By transferring billions of dollars annually to the Federal
    Bank for Infrastructure Modernization, it would still allow the
    Fed to operate as it does now to add liquidity to the system.
    The Fed, instead of buying securities, would buy the mortgage
    loans of the States. This way, the Federal Bank for
    Infrastructure Modernization's finances would be integrated by
    the Federal Open Market Committee, so as not to disrupt its
    ability to promote economic stability.
        The actual amount would be varied so these funds could be
    used as a tool to foster stable economic growth. During times
    of economic slowdown, the Federal Bank for Infrastructure
    Modernization could make more loans available to spur
    investment. During times of economic boom, the Federal Bank for
    Infrastructure Modernization could make fewer loans available.
        The needs are so great that our old ideas just won't work.
    If we talk about the hundreds of billions needed to make the
    infrastructure a workable, productive system, the sum
    overwhelms nearly every idea we had in the past.
        The President's nondefense discretionary budget is $375.8
    billion. The needs are much greater than that. Even for certain
    needs like school construction, we would have to spend one-
    third of his budget. To repair structurally deficient bridges,
    we would have to spend one-fourth of the budget. It is
    unimaginable we would fully address even one of these issues.
        We have to be creative. We have to think of ways of solving
    problems outside of the box, and that is exactly what this
    proposal is and why it needs the support of the Budget
    Committee. The Committee's backing this bill will reflect an
    understanding that our Nation is asking for innovative
    bipartisan solutions.
        The Federal Bank for Infrastructure Modernization is a tool
    for leveraging the necessary funds. Citizen States would still
    be responsible for paying the net cost of the project, but by
    making available the loans interest free, it cuts the overall
    cost of the project in half. It is a workable solution and it
    goes a long way in addressing infrastructure needs.
        I come here today to seek the support of the Budget
    Committee, and with your leadership this bill could provide the
    ingenuity and the essential boost that projects need.
        Mr. Ryun. I thank the gentleman for his testimony.
        At this point in time I have no further questions. The
    committee will go into recess subject to the call of the Chair.
        Mr. Kucinich. Thank you.
        Mr. Ryun. Thank you.
        [Recess.]
        [The prepared statement of Mr. Kucinich follows:]

      Prepared Statement of Hon. Dennis J. Kucinich, a Representative in
                        Congress From the State of Ohio

        Thank you Chairman Nussle and Ranking Member Spratt for allowing me
    to testify. I represent part of Cleveland and many of its suburbs. But
    I am not here today to advocate for local funds. I am here to offer a
    new approach to resolving a national problem. This issue affects
    Cleveland to be sure, but it also drags down the economy in every other
    congressional district.
        The concern and solution I bring to you today is the decline and
    disrepair of the U.S. infrastructure system. I speak of bridges,
    highways, schools, wastewater treatment plants, drinking water systems,
    etc. Like every Member of Congress, ever Member of the Committee on
    Budget can think of at least one major infrastructure project in their
    district that lacks funding. And today, I offer us all a solution. I
    propose a financing mechanism that taps the Federal Reserve as a
    financing bank to provide zero interest loans, thus greatly reducing
    the costs of infrastructure improvement.
        We all see the current crisis in our infrastructure. It is
    something we see everyday when we sit in traffic bound by orange
    barrels that line our highways. It is something that schoolchildren
    experience at their desks, crowded together under leaking roofs. And
    beachgoers experience at best the sidewalk when the municipal sewer
    systems overflow. These incidents happen every year and happen with
    increasingly regularity as systems age. Infrastructure problems
    threaten our productivity, our economy, our environment and our health.
        What will it take to fix these problems? Nationally, it would take
    more than $1.6 trillion to bring our country's roadways up to speed
    according to a report released in 2005 by the American Society for
    Civil Engineers. It would take $127 billion to repair and renovate our
    schools according to the National Center for Education Statistics. That
    estimate was 7 years ago, with more recent estimates at $268 billion.
    And in a study by the Water Infrastructure Network, it would take $1.3
    trillion over 20 years to build, operate and maintain drinking water
    and wastewater facilities.
        Add to those staggering sums of money the necessary funding to
    replace and repair devastated infrastructure from the Katrina disaster.
    Estimates from Risk Management Solutions (RMS), a private-sector
    company that provides services for the management of insurance
    catastrophe risk, suggest that total losses--insured and uninsured--
    from both hurricanes (Katrina and Rita) approach $140 billion, the bulk
    of which is due to Hurricane Katrina.
        The people of Katrina are returning to nothing and the first task
    is to rebuild the basic infrastructure. The Center for Business and
    Economic Research at Marshall University estimated that Hurricane
    Katrina has generated commercial structure damages of $21 billion,
    commercial equipment damages of $36 billion, residential structure and
    content damages of almost $75 billion, electric utility damages of $231
    million, highway damages of $3 billion, sewer system damages of $1.2
    billion and commercial revenue losses of $4.6 billion.
        The American Water Works Association estimates that damage from
    Katrina requires water supply infrastructure repair and replacement
    costs of $2.25 billion.
        The Mississippi Department of Education estimates Katrina damage to
    Mississippi schools at over $1 billion, to replace 14 destroyed
    schools, repair 246 damaged schools, and repair 159 damaged school
    buses. Overall Katrina damaged or destroyed 400 school buildings in the
    four affected states.
        The State of Louisiana Department of Transportation testified to
    the Committee on Transportation & Infrastructure, that damage resulting
    from the hurricanes, such as repairing or replacing damaged roads,
    bridges, public ports, airports, railroads, the maritime and transit
    systems is estimated at $5.5 billion. And to ensure future hurricanes
    do not exact such massive damage to Louisiana, it will cost $22 billion
    for levee protection and pumping capacity.
        With these extraordinary needs, it is no wonder that municipalities
    have not been able to make up the difference as the Federal Government
    has gradually decreased infrastructure support. Putting aside all
    partisan issues, the current deficit is real and everyone agrees it
    must be reduced. That reality makes massive Federal investments
    unlikely. For example, the President's 2007 budget has only $18 billion
    to address the damage inflicted by Katrina.
        My solution would create a low-cost Federal financing mechanism to
    administer billions of dollars in zero-interest loans every year to
    localities for infrastructure projects. Financing costs for any project
    add substantially to the cost of the project, therefore zero interest
    loans make local dollars go significantly further. States would be
    totally responsible for choosing which projects to fund with the loans
    according to their specific needs.
        This bill would create the Federal Bank for Infrastructure
    Modernization (FBIM). The bank, as an extension of the Federal
    Financing bank under the Treasury, would administer the loans. The
    loans would bear a small fee of one-quarter of 1 percent of the loan
    principle to cover the administrative costs of the FBIM.
        In order to provide the money for the loans, the FBIM would hold a
    portion of the Treasury securities that the Federal Reserve normally
    holds. By transferring billions of dollars annually to the FBIM, it
    would still allow the Fed to operate as it does now to add liquidity to
    the system. The Fed, instead of buying securities, would buy the
    mortgage loans of the states. This way, the FBIM's finances would be
    integrated by the Federal Open Market Committee so as not to disrupt
    its ability to promote economic stability.
        The actual amount could be varied so these funds could be used as a
    tool to foster stable economic growth. During times of economic
    slowdown, the FBIM could make more loans available to spur investment.
    During times of economic boom, the FBIM could make fewer loans
    available.
        The needs are so great that our old ideas just won't work. If we
    talk about the hundreds of billions of dollars needed to make
    infrastructure a workable, productive system, the sum overwhelms nearly
    every idea we've had in the past.
        The President's non-defense discretionary budget is $375.8 billion.
    The needs are much greater than that. Even for certain needs, like
    school construction, we would have to spend one-third of his budget. To
    repair structurally deficient bridges, we would have to spend one-
    fourth of his budget. It is unimaginable that we will fully address
    even one of these areas.
        We must be creative. We must think of ways of solving problems that
    are outside-the-box. That is exactly what this proposal is and why it
    needs the support of the Budget Committee. The Committee's backing of
    this bill reflects an understanding that our nation is asking for
    innovative, bipartisan solutions.
        The Federal Bank for Infrastructure Modernization is a tool for
    leveraging the necessary funds. Cities and states would still be
    responsible for paying the net cost of the project, but by making the
    loans zero-interest, it cuts the overall cost of the project in half.
    This is a workable solution that goes a long way in addressing
    infrastructure needs.
        I come here today to seek the support of the Budget Committee. With
    your leadership, this bill could provide the ingenuity, the essential
    boost that projects need.

        Mr. Diaz-Balart [presiding]. We will start with Mr. Miller.
    Mr. Miller, you are recognized, sir. Thank you for being here
    today.

      STATEMENT OF HON. BRAD MILLER, A REPRESENTATIVE IN CONGRESS
                    FROM THE STATE OF NORTH CAROLINA

        Mr. Miller. Thank you, Mr. Chairman. And thank you for this
    opportunity to testify about our Nation's budget priorities. I
    actually have little quarrel with what the President said in
    his State of the Union about what we need to do to compete in
    an unforgiving world economy, but I am dumbfounded by what came
    just days later.
        Mr. Diaz-Balart. Mr. Miller, if you would press the
    microphone button and make sure we can get your statement on
    the record.
        Mr. Miller. Mr. Chairman, again, thank you for the
    opportunity to appear today and to testify about our Nation's
    budget priorities. Specifically on the point of
    competitiveness, I actually have little quarrel with what the
    President said in his State of the Union, but I was dumbfounded
    by what came just days later when the President submitted his
    proposed budget. I wondered, did any of the people who wrote
    the President's speech actually talk to any of the folks who
    prepared the budget? Did the folks who prepared the budget even
    watch the speech on television? Did they go to the refrigerator
    just when the President talked about American competitiveness?
        Unfortunately, it was not the first time that I have seen a
    jarring difference between what the President said in the State
    of the Union and what was in his budget. Mr. Chairman, I will
    spare you the hackneyed Yogi Berra quotation about deja vu, but
    there is another Yogi Berra quotation that fits here: You can
    observe a lot just by watching.
        Here is what I have observed about this administration from
    watching the President's State of the Union and from the
    proposed budget that comes a week or so later. The President's
    rhetoric about helping working Americans hits the mark. The
    budget completely misses.
        In 2004 and again last year, the President praised the
    important role of community colleges in job training. In 2004,
    the President proposed a new $250 million job-training program
    in community colleges. The funding for that new program was a
    little hard to find in the President's proposed budget, but
    Congress that year did fund, did appropriate $250 million for
    the program. Unfortunately, half of the appropriation came
    dollar for dollar from the Federal Dislocated Workers
    Assistance Program, a program that already did pretty much what
    the President said his new program would do. Last year,
    Congress provided no funds for the new community college
    initiative, but the Federal Dislocated Workers Assistance
    Program did not get the $125 million back. In fact, programs
    that train new and dislocated workers have been cut by about
    $120 million over the last three appropriation cycles. In this
    year's State of the Union, the President did not mention
    community colleges at all, to the great relief of all of us who
    really care about community colleges. But this year the
    President announced a new American Competitiveness Initiative.
        Mr. Chairman, I do care deeply about our need for science
    and math education, for research funding, for energy
    independence. I was pleased to hear the President lend his
    voice to those concerns. I should have known to worry instead.
        The President's proposed budget actually cuts science
    funding. The President would decrease the Federal science and
    technology budget by almost $600 million. Oceanographic and
    atmospheric research is cut almost 10 percent. Now, research
    into nuclear energy would increase by almost a third, but
    research into renewable energy and energy efficiency, including
    the new switchgrass initiative, is increased by only 4 percent.
    Other programs that are vital to our Nation's competitiveness,
    programs that have proven results in creating and saving
    American jobs, would either be eliminated or cut drastically.
        The proposed budget would cut the Manufacturing Extension
    Partnership by 56 percent. The National Institute of Standards
    and Technology (NIST) of the Department of Commerce, would
    suffer a 23-percent decrease in funding, including all funding
    for the Advanced Technology Program, one of the few sources of
    patient capital for commercialization of new technologies.
        Mr. Chairman, if we really want to match action on
    competitiveness to rhetoric, and I do, here is where we should
    start: Fully fund the President's community college job-
    training program and restore the $125 million taken from the
    Federal Displaced Workers Assistance Program. In general,
    protect funding for career and technical programs in community
    colleges that provide help for the unemployed and for those
    trying to improve their job skills.
        Now, we also need to protect funding for microloans and
    business assistance programs that help low-income entrepreneurs
    who do not have access to traditional capital markets, and
    provide full funding for the Small Business Administration
    Small Business Loan Program that has accounted for 30 percent
    of all long-term business lending. And, Mr. Chairman, as you
    must know, the vast majority of new jobs is created by small
    businesses in this country.
        We need to increase funding for the Manufacturing Extension
    Partnership (MEP). The MEP program has helped North Carolina,
    my State, helped North Carolina businesses save $85.6 million
    in 2002 alone. We need to provide full funding for the Advanced
    Technology Program, the ATP, that amounts to $79 million, and
    find other ways to help new technology cross the valley of
    death from the laboratory to the marketplace.
        Mr. Chairman, we need to make a real commitment to science
    and math education, to research and innovation, not just give
    lip service to those needs.
        Mr. Chairman, after having now watched four States of the
    Union and four budgets as a Member of Congress, I can offer
    this observation: If we can't get the speech writers and the
    budget writers to speak to each other, to talk to each other,
    maybe we can get them to switch jobs. Let the speech writers
    write the budget, let the budget writers write the speech. Mr.
    Chairman, the speeches are a lot better than the budgets, and
    the budgets are what really matter. Thank you.
        [The prepared statement of Mr. Miller follows:]

     Prepared Statement of Hon. Brad Miller, a Representative in Congress
                        From the State of North Carolina

        Mr. Chairman, thank you for the opportunity to testify today about
    our nation's budget priorities.
        I actually have little quarrel with what the President said in his
    State of the Union about what we need to do to compete in an
    unforgiving world economy. But I am dumbfounded by what came just days
    later when the President submitted his proposed budget.
        I wondered: Did any of the people who wrote the President's speech
    actually talk to any of the folks who prepared the proposed budget? Did
    the folks who prepared the budget even watch the speech on television?
    Did they go to the refrigerator just when the President talked about
    American competitiveness?
        Unfortunately, it was not the first time that I have seen a jarring
    difference between what the President said in the State of the Union
    and what was in his budget. I will spare you the hackneyed Yogi Berra
    quotation about deja vu.
        But there is another Yogi Berra quotation that fits here: you can
    observe a lot just by watching.
        Here is what I have observed about this administration from
    watching the president's State of the Union address and the proposed
    budget that comes a week or so later. The President's rhetoric about
    helping working Americans hits the mark. The budget completely misses.
        In 2004 and again last year, the President praised the important
    role of community colleges in job training. In 2004, the President
    proposed a new $250 million job training program in community colleges.
    The funding for the new program was a little hard to find in the
    proposed budget, but Congress that year did appropriate $250 million.
    Unfortunately, half the appropriation came dollar for dollar from the
    Federal Dislocated ``Worker Assistance Program, a program that already
    did pretty much what the President said his new program would do.
        Last year, Congress provided no funds for the new community college
    initiative, but the Federal Dislocated Worker Assistance Program did
    not get the $125 million back. In fact, programs that train new and
    dislocated workers have been cut by about $120 million over the last
    three appropriations cycles.
        In this year's State of the Union, the President did not mention
    community colleges at all, to the great relief of all of us who care
    about community colleges.
        This year the President announced a new American Competitiveness
    Initiative. Mr. Chairman, I care deeply about our need for science and
    math education, for research funding, and for energy independence. I
    was pleased to hear the President lend his voice to those concerns.
        I should have known to worry instead.
        The President's proposed budget actually cuts science funding. The
    President would decrease the Federal Science and Technology Budget by
    almost $600 million. Oceanographic and atmospheric research is cut by
    almost 10 percent. Research into nuclear energy would increase by more
    than a third, but research into renewable energy and energy efficiency,
    including the new switchgrass initiative, is increased by only 4
    percent.
        Other programs that are vital to our nation's competitiveness,
    programs that have proven results in creating and saving American jobs,
    would either be eliminated or cut drastically. The proposed budget
    would cut the Manufacturing Extension Partnership by 56 percent. The
    National Institute of Standards and Technology of the Department of
    Commerce (``NIST '') would suffer a 23-percent decrease in funding,
    including all funding for the Advanced Technology Program, one of the
    few sources of ``patient capital'' for the commercialization of new
    technologies.
        Mr. Chairman, if we want to match action on competitiveness to
    rhetoric, and I do, here's where we should start: fully fund the
    President's new community college job training program, and restore the
    $125 taken from the Federal Displaced Worker's Assistance Program. In
    general, protect funding for career and technical programs that provide
    help for the unemployed and for those trying to improve their job
    skills.
        We need to protect funding for microloans and Business Assistance
    Programs that help low-income entrepreneurs who do not have access to
    traditional capital markets, and provide full funding for the Small
    Business Administration's small business loan programs, that has
    accounted for 30 percent of all long-term small business lending.
        We need to increase funding for the Manufacturing Extension
    Partnership. MEP programs helped North Carolina businesses save $85.6
    million in 2002 alone.
        We need to provide full funding for the Advanced Technology
    Programs, $79 million, and find other ways to help new technologies
    cross the ``valley of death'' from the laboratory to the marketplace.
        And we need to make a real commitment to science and math
    education, to research and innovation.
        Mr. Chairman, after watching four States of the Union and four
    budgets as a Member of Congress, I offer this observation: If we can't
    get the speechwriters and the budget-writers to talk to each other,
    maybe they can switch jobs. Let the speechwriters write the budget, and
    let the budget-writers write the speech.
        Mr. Chairman, the speeches are a lot better than the budgets, and
    the budgets are what really matter.

        Mr. Diaz-Balart. Thank you very much, sir. We appreciate
    you coming down here and letting us know what your priorities
    are. Thank you very much, sir.
        Mr. Miller. Thank you.
        Mr. Diaz-Balart. And now we will listen to Mr. Robin Hayes,
    also from the great State of North Carolina. It is a privilege,
    sir, to have you here with us today. It always is.

      STATEMENT OF HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS
                    FROM THE STATE OF NORTH CAROLINA

        Mr. Hayes. Mr. Chairman, I was thinking the same thing. I
    am pleased to appear before you and appreciate your time,
    effort, and patience on this important subject. Thank you for
    allowing me the opportunity to testify before the committee
    today. There are several topics I would like to highlight:
    funding for Community Development Block Grants, veterans health
    care, Impact Aid, and Department of Agriculture programs.
        Mr. Chairman, I would first like to address the proposed
    cuts in funding to the Community Block Grant Program. The
    program provides local municipalities the opportunity to
    provide services to the most vulnerable, create jobs, and
    expand businesses, provide safe and affordable housing, and
    leverage considerable private sector investment in communities.
        In my district, which has been particularly hard hit by the
    loss of textile and manufacturing businesses, CDBG program has
    provided critical assistance to help keep towns on their feet.
    The CDBG enables local governments the flexibility, provides
    them the flexibility to design programs that are most effective
    to meet their specific needs. I urge the committee to make
    every effort possible to keep this important program funded at
    or above fiscal year 2006 level.
        As you know, the 2007 budget proposal for Veterans Affairs
    totals $80.6 billion, including $42 billion in mandatory
    funding to support benefit programs for our Nation's veterans
    and $36 billion for medical care. Though this is a 12.2-percent
    health care funding increase from 2006, as the number of
    veterans grows and health care costs exponentially increase, it
    is important that we provide the maximum possible level of
    funding for your care. As you and your committee begin
    assembling the budget resolution for 2007, I ask you to do
    everything in your power to adequately fund programs for our
    Nation's veterans. Providing quality affordable and accessible
    health care services to our Nation's veterans is a top priority
    for me as a Member of Congress, and must remain a priority for
    us all.
        In my district of North Carolina, I have fought for a new
    community-based outpatient clinic known as CBOC so that local
    veterans would have improved health care access. I am very
    pleased the Department of Veterans Affairs has announced they
    will be establishing a CBOC, and looking forward to working
    with them and fellow Members on providing funding for VA health
    care facilities across the country. During the time we are
    calling on the military to do so much, fully funding VA health
    care sends a strong message that we will take care of those who
    serve.
        As you craft the resolution, there many difficult
    challenges to overcome, central priorities such as providing
    for our men and women in uniform, ensuring our national
    security through continuing operations in the global war on
    terrorism, reducing the deficit and taking care of our domestic
    needs. So when you focus on these important priorities, I ask
    that you consider reducing the funding for foreign operations.
    We have so many needs here at home, sending American taxpayer
    dollars to fund programs in other countries, international
    organizations such as the U.N., should not be a top priority.
    We must take care of our own first before sending aid overseas.
    Before allocating money for foreign programs, I urge you to
    increase funding for veterans programs and fully fund military
    requirements.
        Mr. Chairman, another issue important to our military
    families is Impact Aid. Funded in both defense and education,
    this critical program acts like Uncle Sam's tax payment on land
    owned by the Federal Government and is vital in sustaining
    local school districts that derive no property tax revenue from
    military bases. The overall issue and the importance of Impact
    Aid is illustrated by my district in North Carolina, which are
    typical of many places around the country, with military bases
    often the largest employer and land owner. The Eighth District
    in North Carolina is home to Fort Bragg and Pope Air Force
    Base. Cumberland and Hope Counties are enormously proud of
    their affiliation with the military installations. Impact Aid
    payments, essentially frozen, the numbers of students returning
    to our schools from overseas posts with the military
    increasing, the gap in payments is widening both at home and
    across the Nation.
        Mr. Chairman, we must do more this year to recognize this
    burden on our local school districts and increase funding for
    Impact Aid. As cochair of the 130-member House Impact Aid
    Coalition, I want to work with you to provide a modest increase
    in the Department of Education funding to cover the Federal
    Government's obligation to these school districts; also
    increasingly concerned about how BRAC and global rebasing is
    affecting our local schools. A potential increase of 35- to
    45,000 students, Congress must step up to meet the needs of
    these children in our schools. We cannot leave our school
    districts lacking the funding. Department of Defense funding
    for Impact Aid is essential, and we have to send a clear
    message to the military families we will take care of their
    children.
        As we seek to prepare students for the 21st century
    workforce, community colleges in my district are concerned
    about funding for Carl Perkins vocational and technical
    education. Funding is vital for retraining, and I fear
    eliminating the program may leave behind students in programs
    that provide hands-on workforce education in growing trades of
    our economy.
        Eighth District farmers continue to express to me their
    strong opposition to the President's budget regarding
    agricultural issues, thousands of producers in communities that
    depend on a strong agricultural economy and Federal programs.
    It is important to note, spending on agricultural programs is
    lower than expected when the farm bill was passed. Through
    2005, commodity program costs were $19 billion lower than CBO
    projected when the farm bill was passed, and the recent
    reconciliation bill also was aided by cuts in agricultural
    programs. Appropriation bills have increasingly reduced
    mandatory funding for conservation, rural development,
    research, and renewable energy; 2006 reduction is $1.7 billion.
    In addition, the recently enacted budget reconciliation bill is
    projected by CBO to reduce Agriculture Committee spending by
    $3.7 billion. A disproportionate burden of the reduction is
    placed on America's farmers.
        As you know, the farm bill is a 5-year bill, and the 5-year
    nature of the bill brings certainty to producers who make their
    business plans based upon agricultural programs. Changing
    provisions in the law brings a massive amount of uncertainty to
    farm assistance. The House Ag Committee is right in the process
    of having hearings throughout the Nation, first held in
    Fayetteville, North Carolina. I can assure you there is
    consensus of farmers who attended the field hearing to change
    farm programs during reauthorization for the next farm bill,
    not piecemeal during the annual budget process.
        I also would like to stress my support for funding our
    conservation initiative and other issues that farmers bring up
    during farm bill field hearings. Producers are very supportive
    of incentive-based conservation initiatives such as Equip and
    CRP. Important programs have been a major success in rehabbing
    wildlife and improving the environment. Hopefully, we will
    continue to support these programs that are important to our
    Eighth District farmers.
        Mr. Chairman, thank you very, very much for the
    opportunity, for your attention, and for the ability for me to
    testify before your committee on these programs. I appreciate
    your consideration and look forward to working with you on the
    2007 budget. Thank you very much.
        [The prepared statement of Mr. Hayes follows:]

     Prepared Statement of Hon. Robin Hayes, a Representative in Congress
                        From the State of North Carolina

        Mr. Chairman, thank you for allowing me the opportunity to testify
    before the Committee today. There are several topics I would like to
    highlight: funding for Community Development Block Grants, Veteran's
    health care, Impact Aid, and Department of Agriculture programs.
        Mr. Chairman I would first like to address the proposed cuts in
    funding to the Community Development Block Grant Program (CDBG's). The
    CDBG program provides local municipalities the opportunity to provide
    services to the most vulnerable, create jobs and expand businesses,
    provide safe and affordable housing, and leverage considerable private
    sector investment in communities.
        In my District, which has been hit particularly hard by the loss of
    textile and manufacturing businesses, the CDBG program has provided
    critical assistance to help keep towns on their feet.
        CDBG's enable local governments the flexibility to design programs
    that are most effective to meet their specific needs. I urge that the
    Committee make every effort to keep this important Program funded at or
    above Fiscal Year 2006's level.
        Mr. Chairman, our country's veterans answered the call when America
    needed them, and their service ensures that all Americans can live in
    freedom. This is why it is so vitally important that we honor their
    service by making certain that they receive the quality health care
    they have more than earned. Caring for our older veterans and giving
    them the best access to quality health care is our duty as a nation and
    as we continue to sustain operations in support of the Global War on
    Terrorism, it is imperative we send a strong signal to these active
    duty forces that our nation will indeed care for them when they return
    home.
        As you know, the President's FY 2007 budget proposal for the
    Department of Veterans' Affairs totals $80.6 billion, including $42
    billion in mandatory funding to support benefits programs for our
    nation's veterans and $36 billion for Medical Care. Though this is a
    12.2-percent health care funding increase from 2006, as the number of
    veterans grows and health care costs exponentially increase, it is
    important that we provide the maximum possible of level of funding for
    their care. As you and your committee begin assembling the budget
    resolution for Fiscal Year 2007, I ask that you do everything in your
    power to adequately fund programs for our nation's veterans.
        Providing quality, affordable, and accessible health care services
    to our nations' veterans is a top priority for me as a Member of
    Congress, and must remain a priority for us all. In my District in
    North Carolina, I fought for a new Community Based Outpatient Clinic
    (CBOC) so that local veterans would have improved VA health care
    access. I am very pleased that the Department of Veterans' Affairs has
    recently announced that they will be establishing a CBOC in the 8th
    District of North Carolina and look forward to working with them, and
    my fellow Members of Congress, on providing the necessary funding for
    VA health care facilities across the country. During this time when we
    are calling on our military to do so much, fully funding VA health care
    sends a strong message that we will take care of those who serve.
        As you craft the budget resolution for Fiscal Year 2007, there are
    many difficult challenges to be overcome. We must focus on essential
    priorities such as providing for our men and women in uniform, ensuring
    our national security through continuing operations in the Global War
    on Terrorism, reducing the deficit, and taking care of our domestic
    needs. So that we may focus on these important priorities, I ask that
    you consider reducing the funding for foreign operations. When we have
    so many needs here at home, sending American tax payer dollars to fund
    programs in other countries and international organizations should not
    be a top priority. We must ``take care of our own first'' before
    sending aid overseas. Before allocating money for foreign programs, I
    urge you to increase funding for veterans programs and fully fund our
    military requirements.
        Mr. Chairman, another issue important to our military families is
    Impact Aid. Funded in both Defense and Education, this critical program
    acts like Uncle Sam's tax payment on land owned by the Federal
    Government and is vital to sustaining local school districts that
    derive no property tax revenue military bases. The overall issue of the
    importance of the Impact Aid program is illustrated by my own District
    in North Carolina, which are typical of many places across the country
    with military bases often the largest employers and land owners.
        The 8th District of North Carolina is home to Fort Bragg and Pope
    Air Force Base, and Cumberland and Hoke counties are enormously proud
    of their affiliation with these local military installations. But with
    Impact Aid payments essentially frozen and the number of students
    returning to our schools from overseas posts with the military
    increasing, the gap in payments is widening, both at home and across
    the nation. Mr. Chairman, we must do more this year to recognize this
    burden on our local school districts and increase funding for Impact
    Aid. As Co-Chair of the 165 member House Impact Aid Coalition, I want
    to work with you, Mr. Chairman, to provide a modest increase in
    Department of Education funding to cover the Federal Government's
    obligation to these school districts.
        I am also increasingly concerned about how BRAC and global rebasing
    is affecting our local schools. With a potential increase of 35,000 to
    45,000 students, Congress must step up to meet the needs of these
    children and our schools. We cannot leave our school districts lacking
    funding and facilities to support these children. With this in mind, I
    urge my colleagues to include 50 million dollars in Department of
    Defense funding for Impact Aid and to send a clear message to our
    military families---we are going to take care of their children whether
    they are educated at overseas posts or here stateside.
        As we seek to prepare our students for the 21st century workforce,
    Community Colleges in my District are concerned about funding for the
    Carl D. Perkins Vocational and Technical Education Act. This funding is
    vital to my District for retraining and I fear that by eliminating the
    Perkins program, we may leave behind students and programs that provide
    hands on workforce education in the growing trades of our economy.
        The 8th District farmers continue to express to me their strong
    opposition to the President's budget regarding agriculture issues. We
    have thousands of producers and communities that depend on a strong
    agricultural economy and Federal agriculture programs.
        It is important to note that spending on agriculture programs is
    lower than expected when the farm bill was passed. Through FY 05,
    commodity program costs were $19 billion lower than CBO projected when
    the farm bill was passed. Appropriations bills have increasingly
    reduced mandatory funding for conservation, rural development, research
    and renewable energy. For FY 06, the reduction was $1.7 billion. In
    addition, the recently enacted budget reconciliation bill is projected
    by CBO to reduce agriculture committee spending during the FY 06 to FY
    10 reconciliation period by $3.7 billion. This continues to bring a
    disproportionate burden of deficit reduction on America's farmers and
    rural communities.
        As you know, the 2002 Farm Bill is a 5 year bill. The 5-year nature
    of the bill brings certainty to producers who make their business plans
    based upon these agriculture programs. Changing provisions of the law
    brings a massive amount of uncertainty to farm assistance. The House
    Agriculture Committee is already in the process of having Farm Bill
    field hearings throughout the nation and we most recently had one in
    Fayetteville, North Carolina. I can assure you that the consensus from
    the farmers who attended the field hearing is to change the farm
    programs during reauthorization of the next farm bill, not piecemeal
    during the annual budget process.
        I would also like to stress my support for funding our conservation
    initiatives. This is another issue that farmers continue to bring up
    during Farm Bill field hearings. Producers are very supportive of
    incentive based conservation initiatives, such as EQIP and CRP. These
    important programs have been a major success in rehabilitating wildlife
    and improving the environment. I am hopeful that you will continue to
    support agriculture programs that are important to 8th District
    farmers.
        Mr. Chairman, thank you for the opportunity to testify before your
    Committee about these important programs. I appreciate your
    consideration and look forward to working with you on the Fiscal Year
    2007 budget.

        Mr. Diaz-Balart. Thank you very much, Mr. Hayes. Appreciate
    your leadership and you coming out here and speaking to us
    today, as well as Mr. Miller also from the great State of North
    Carolina. Thank you, both. Thank you, gentlemen.
        Now we will recognize Mr. Mark Kennedy. Thank you, sir.
    Thank you for being here. We appreciate you being here, and we
    look forward to your testimony.

    STATEMENT OF HON. MARK R. KENNEDY, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF MINNESOTA

        Mr. Kennedy. Well, thank you, Chairman. We appreciate you
    taking the time to let us express the concerns we have. And I
    have concerns with a number of areas in the budget, but I am
    here today to have my voice joined with that of Representative
    Terry of Nebraska as we oppose again the misguided proposal to
    eliminate the Edward Byrne Justice Assistance Grant Program
    (JAG).
        Mr. Chairman, the Byrne JAG program is a critical source of
    funding for more than 800 antidrug task forces in practically
    every, if not every, State of the Union. Byrne JAG funding is
    essential to help State and local police officers identify and
    dismantle local, State, and regional drug-trafficking
    syndicates. Federal Government law enforcement agents rely on
    the information from Byrne JAG task force to identify and
    disrupt international drug-trafficking rings. If Byrne JAG
    funding is eliminated, as the President has proposed, the
    successful interagency law enforcement infrastructure that has
    led to the lowest U.S. violent crime rates in 30 years will
    disappear.
        Additionally, Byrne JAG has been a key weapon in the fight
    against illegal drugs like methamphetamine. Mr. Chairman, for a
    long time many thought meth was a problem for the Southwestern
    and Western States, or that it was a rural problem that
    wouldn't get into the suburbs or the cities. That thinking
    brought us a trail of destruction across the country from San
    Diego to the Shenandoah Valley. Since 2001, police officers
    have dismantled over 50,000 clandestine meth labs nationwide.
    However, according to Attorney General Gonzales, the number of
    meth cases filed nationwide quadrupled over the last decade.
    Without Byrne JAG, State and local law enforcement will not be
    able to fight this growing problem in the way they need to.
        Last year the Senate voted to fund at $900 million.
    However, the 2006 Science-State-Justice Appropriations Act
    conference report contained just over $400 million, a
    devastating cut from the previous year's level of $634 million,
    and a far cry from the authorized level of $1.1 billion
    approved just last year.
        The tangible results of last year's cuts have been seen in
    now at least three States that have been forced to respond.
    Texas was forced to eliminate its Byrne JAG Task Force. New
    Jersey is considering the same due to budget constraints. And
    my own State of Minnesota is struggling to fill the void we
    left last year with State money so that it can continue these
    effective law enforcement task forces. Who will be there to
    protect our children from those making and pushing poisons like
    meth if the House approves the elimination of the Byrne Justice
    Assistance Grant program?
        Mr. Chairman, we cannot allow the Byrne JAG grants to be
    eliminated. Maintaining our successful fight against the spread
    of meth and other drugs requires that we fund the Byrne JAG
    program to at least the $900 million figure passed by the
    Senate last year. The Byrne JAG program is an important tool in
    our fight against drugs and violent crime, and it is absolutely
    critical we continue to fund this program this year.
        Mr. Chairman, let us show the law enforcement officers who
    wake up every morning to protect our families that we stand
    with them in the fight against drugs and violent crime. Let us
    save the Byrne JAG program. With that plea, Mr. Chairman, I
    yield back the balance of my time.
        Mr. Diaz-Balart. Thank you, Congressman Kennedy. Thank you
    for that very passionate plea. I appreciate your being here,
    appreciate your passion on an issue that obviously is very
    important to you.
        Mr. Kennedy. Thank you so much, Chairman.
        Mr. Diaz-Balart. Thank you, sir.
        [The information referred to follows:]

        Prepared Statement of Hon. Mark R. Kennedy, a Representative in
                      Congress From the State of Minnesota

        Mr. Chairman, I want to thank you for holding this hearing so that
    you can gain the input of fellow Members as you wrestle with the FY07
    budget request submitted by the president last Monday.
        I want to add my voice with my friend Rep. Terry of Nebraska, as we
    again oppose the misguided proposal to eliminate the Edward Byrne-
    Justice Assistance Grant (JAG) program.
        Mr. Chairman, the Byrne-JAG program is a critical source of funding
    for more than 800 anti-drug task forces in practically every, if not
    every, state of the union.
        Byrne-JAG funding is essential to help state and local police
    officers identify and dismantle local, state and regional drug
    trafficking syndicates.
        Federal law enforcement agents rely on information from Byrne-JAG
    task forces to identify and disrupt international drug trafficking
    rings.
        If Byrne-JAG funding is eliminated, as the President has proposed,
    the successful interagency law enforcement infrastructure that led to
    the lowest U.S. violent crime rates in 30 years will disappear.
        Additionally, Byrne-JAG has been a key weapon in the fight against
    illegal drugs like methamphetamine.
        Mr. Chairman, for a long time many thought meth was a problem for
    the Southwestern and Western states, or that it was a rural problem
    that wouldn't get to the suburbs or the cities.
        That thinking brought us a trail of destruction across the country,
    from San Diego to the Shenandoah Valley.
        Since 2001, police officers have dismantled over 50,000 clandestine
    meth labs nationwide.
        However, according to Attorney General Gonzales, the number of meth
    cases filed nationwide quadrupled over the past decade.
        Without Byrne-JAG, state and local law enforcement will not be able
    to fight this growing problem.
        Last year, the Senate voted to fund Byrne-JAG at $900 million.
        However, the FY2006 Science, State, Justice Appropriations Act
    Conference Report contained just over $400 million--a devastating cut
    from the previous year's level of $634 million, and a far cry from the
    authorized level of $1.1 billion approved just last year.
        The tangible results of last year's cut have been seen in how three
    states were forced to respond: Texas was forced to eliminate its Byrne-
    JAG task forces. New Jersey is considering the same due to budget
    constraints. My own state of Minnesota is struggling to fill the void
    we left last year with state money so it can continue these effective
    law enforcement task forces.
        Who will be there to protect our children from those making and
    pushing poisons like meth if the House approves the elimination of the
    Byrne-Justice Assistance grant program?
        Mr. Chairman, we cannot allow the Byrne-JAG grants to be
    eliminated.
        Maintaining our successful fight against the spread of meth and
    other drugs requires that we fund the Byrne-JAG program at at least the
    $900 million figure passed by the Senate last year.
        The Byrne-JAG program is an important tool in our fight against
    drugs and violent crime, and it is absolutely critical we continue to
    fund this program in FY07.
        Mr. Chairman, let's show the law enforcement officers who wake up
    every morning to protect our families that we stand with them in the
    fight against drugs and violent crime--let's save the Byrne-JAG
    program.
        With that plea, Mr. Chairman, I yield back the balance of my time.

        Mr. Diaz-Balart. Now we go to the great State of Florida,
    Congresswoman Brown-Waite. It is always good to see you again.

       STATEMENT OF HON. GINNY BROWN-WAITE, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF FLORIDA

        Ms. Brown-Waite. Thank you very much, Mr. Chairman. I do
    miss being on the Budget Committee, and welcome this
    opportunity to be back, and appreciate your giving me this time
    to speak to the committee today.
        This hearing is a wonderful opportunity for Representatives
    across our great country to express their views on the
    President's budget proposal for the 2007 fiscal year. Mr.
    Chairman, there is no doubt that the State of our Nation's
    finance is grim. The budget deficit is undeniable and requires
    immediate action. As Members of Congress, we all have an
    obligation to ensure that the burden is not passed on to our
    grandchildren.
        The President's budget takes steps toward achieving fiscal
    responsibility by keeping the growth of government programs to
    a minimum. Most importantly, the budget takes into account the
    dangers America faces every day, increasing funding for
    programs vital to our national security, and providing support
    to the men and women of our great Armed Forces.
        That having been said, we have an obligation to keep our
    promises to those who have defended our freedoms. As you may be
    aware, my district is home to nearly 107,000 veterans. I have
    more than any other Member of this House. I have the
    extraordinary charge to advocate for policies and legislation
    that best care for veterans' needs. Since 2001, before you and
    I were here, Mr. Chairman, and certainly continued since then,
    Republicans have increased the VA's budget authority by 47
    percent. This year is no different. The 2007 proposal would
    increase the budget for the Department of Veterans Affairs by
    another $8.8 billion. At $80.6 billion in total budget
    authority, this request represents a 12.2-percent increase over
    the 2006 budget.
        Among other things, the President's plan would increase
    funding for VA medical programs by 11 percent and take into
    account the growing importance of the mental health of our
    veterans, particularly those returning from Iraq and
    Afghanistan. Total funding for mental health services would
    increase by $339 million, for a total of $3.2 billion. With
    thousands of our young men and women returning from Iraq and
    Afghanistan, some of whom are experiencing the effects of
    posttraumatic stress disorder, it is imperative that Congress
    provide the resources necessary to care for these individuals.
        Despite the many positive effects of this proposal, it
    should be noted that the budget is not perfect. I am troubled
    by this year's budget proposal once again that it includes a
    $250 annual enrollment fee and an increase in prescription drug
    copays for Category 7 and 8 veterans. At the same time we are
    asking veterans to pay more, the President's budget proposes
    increasing foreign aid to organizations and governments that in
    some instances oppose the very foundations of American ideals
    of democracy and freedom.
        As you remember, the President offered a similar proposal
    last year only to meet stiff resistance in Congress. Category 8
    veterans as classified by the Department of Veterans Affairs
    are individuals who have served our Armed Forces and have
    income and/or net worth above a means test threshold
    established by the VA and HUD geographic indexes. Category 7
    veterans are individuals whose incomes are above the VA means
    test threshold, but below the HUD geographic index. Veterans in
    these categories have already agreed to certain copayments for
    health care.
        Proponents of enrollment fees and higher copays actually
    estimate that 200,000 veterans would be discouraged from using
    the VA system, allowing the VA to focus on the neediest
    veterans. I fundamentally disagree that Congress should be
    discouraging veterans from using the VA system. We should be
    encouraging them. Category 7 and 8 veterans fought just as hard
    and just as nobly as their comrades did. This government should
    not penalize them for their financial status once they finish
    their service.
        I believe that veterans, regardless of age, disability, or
    income, deserve respect and help from the very same Nation that
    they served so proudly. These fees would be a monetary barrier
    and unnecessary burden to quality health care for so many
    veterans. It is unfair to ask the hard-working men and women
    who sacrificed so much defending our country to pay ever more
    for their health care expenses. Enrollment fees make the VA
    more expensive without even making it any better. TRICARE
    recipients pay fees and are guaranteed access to care, but
    veterans are once again being asked to pay enrollment fees with
    no such promises of access to care.
        We would be in denial if we didn't realize that health care
    costs are placing an extraordinary burden on the Department of
    Veterans Affairs health system. However, we won't solve this
    problem by merely shifting the burden to Category 7 and 8
    veterans who fought for our country. Congress does have an
    obligation to ensure that these individuals have access to
    quality health care as well. These brave men and women have
    made substantial sacrifices to ensure that we can all enjoy our
    freedom. These individuals answer the call in time of need. It
    is only fitting that we take care of them in their time of
    need.
        As this committee addresses the budget resolution for the
    2007 fiscal year, it is my sincere hope that you heed my advice
    and not include any proposal to increase fees for veterans
    health care.
        Mr. Chairman, thank you again for allowing me to testify
    before the committee today. And I yield back my time.
        [The prepared statement of Ms. Brown-Waite follows:]

       Prepared Statement of Hon. Ginny Brown-Waite, a Representative in
                       Congress From the State of Florida

        Mr. Chairman, I would like to thank you for giving me the
    opportunity to testify before the Committee today. This hearing is a
    wonderful opportunity for Representatives from across the country to
    express their views on the President's budget proposal for the 2007
    fiscal year.
        Mr. Chairman, there is no doubt that the state of our nation's
    finances is grim. The budget deficit is undeniable and requires
    immediate attention. As Members of Congress, we have an obligation to
    ensure that this burden is not passed along to our grandchildren. The
    President's budget takes steps toward achieving fiscal responsibility
    by keeping the growth of government programs to a minimum. Most
    importantly, the budget correctly takes into account the dangers
    America faces every day, increasing funding for programs vital to our
    national security and providing support to the men and women of our
    armed forces.
        That having been said, we have an obligation to keep our promises
    to those who have defended our freedom. As you may be aware, my
    district is home to nearly 107,000 veterans, the most of any Member of
    the House of Representatives. I have an extraordinary charge to
    advocate for policies and legislation that best care for veterans'
    needs.
        Since 2001, Republicans have increased the VA's budget authority by
    47%. This year is no different. The 2007 proposal would increase the
    budget for the Department of Veterans' Affairs by another $8.8 billion.
    At $80.6 billion in total budget authority, this request represents a
    12.2-percent increase over the 2006 budget. Among other things, the
    President's plan would increase funding for VA medical programs by 11
    percent and take into account the growing importance of mental health.
    Total funding for mental health services would increase by $339 million
    to a total of $3.2 billion. With thousands of soldiers returning from
    Iraq and Afghanistan, some of whom are experiencing the effects of
    post-traumatic stress disorder, it is imperative that Congress provide
    the resources needed to care for these individuals.
        Despite the many positive aspects of this proposal, it should be
    noted that this budget is not perfect. I am troubled that this year's
    budget proposal once again includes a $250 annual enrollment fee and an
    increase in prescription drug co-pays for category 7 and 8 veterans. At
    the same time we are asking our veterans to pay more, the President's
    budget proposes increasing foreign aid to organizations and governments
    that oppose the very foundations of America's ideals of democracy and
    freedom.
        As you know, the President offered a similar proposal last year,
    only to meet stiff resistance in Congress. Category 8 veterans, as
    classified by the Department of Veterans' Affairs, are individuals who
    have served in our armed forces and have income and/or net worth above
    both a means test threshold established by the VA and the HUD
    geographic index. Category 7 veterans are individuals whose incomes are
    above the VA means test threshold but below the HUD geographic index.
        Veterans in these categories have already agreed to certain co-
    payments for health care. Proponents of enrollment fees and higher co-
    pays estimate that 200,000 veterans would be discouraged from using the
    VA health system, allowing the VA to focus on the neediest veterans.
        I fundamentally disagree with the position that Congress should be
    discouraging veterans from using the VA system. Category 7 and 8
    veterans fought just as hard and just as nobly as their comrades did.
    This government should not penalize them for their financial status
    once they finish their service. These fees would be a monetary barrier
    and unnecessary burden to quality healthcare for veterans.
        It is unfair to ask the hard-working men and women who sacrificed
    so much defending our country to pay ever more for their health care.
    Enrollment fees make the VA care more expensive without making it
    better. TRICARE recipients pay fees and are guaranteed access to care,
    but veterans are being asked to pay enrollment fees with no such
    promise. There is no doubt that rising health care costs are placing an
    extraordinary burden on the Department of Veterans Affairs Health
    System. However, we will not solve this problem by merely shifting the
    burden onto category 7 and 8 veterans who fought for this country.
        Congress has an obligation to ensure that these individuals have
    access to quality health care as well. These brave men and women have
    made substantial sacrifices to ensure that we can all enjoy our
    freedom. These individuals answered the call in our time of need; it is
    only fitting that we take care of them in theirs.
        As the committee drafts the budget resolution for the 2007 fiscal
    year, it is my sincere hope that you heed my advice and not include any
    proposal to increase fees for veterans' health care. Again, thank you
    for allowing me to testify before the committee today.

        Mr. Diaz-Balart. If I may, Congresswoman, last year in this
    committee you were the strongest vote, the strongest voice on
    behalf of the many veterans that obviously that you represent.
    And it should be no surprise to anybody that even though you
    are no longer on this committee, here you are once again
    advocating for those that you obviously have such passion for.
    We thank you for your leadership there. Last year you were
    instrumental; I am sure that we will see a lot of you on this
    issue in this year as well. I imagine that is going to happen.
    Correct?
        Ms. Brown-Waite. Absolutely, Mr. Chairman. I will
    personally lobby the members of this committee, as other
    Members. And I believe that Members on both sides of the aisle
    do want to do what is right by our veterans, as certainly
    evidenced by the increase historically in the veterans budget.
        Mr. Diaz-Balart. Appreciate that. Appreciate your
    leadership.
        Ms. Brown-Waite. Thank you.
        Mr. Diaz-Balart. Mr. Salazar, from the State of Colorado.
    It is great to have you here.

    STATEMENT OF HON. JOHN T. SALAZAR, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF COLORADO

        Mr. Salazar. Thank you very much, Mr. Chairman. I
    appreciate the opportunity to come before you today and voice
    my views on the Third Congressional District of rural America.
    I ask for unanimous consent to enter my full statement into the
    record.
        Mr. Diaz-Balart. Without objection.
        Mr. Salazar. Thank you, sir.
        I know you have heard from many of my colleagues today
    about where we should be heading as a Nation in our domestic
    programs. Now, this is only my second year in Congress, but my
    first year was a crash course on how this institution works.
    What I did learn is that in time we often forget about the
    people behind the numbers. We forget about the family farmers
    struggling to raise crops during times of drought and record
    high fuel prices. We forget about the lone doctor working to
    provide care for sometimes an entire county. But this is the
    world I live in back in the San Luis Valley of Colorado.
        As a member of the Blue Dog Coalition, I believe in fiscal
    discipline and responsible budgeting principles that include
    PAYGO spending and balancing the budget. This is no fancy math
    tricks, just plain, honest numbers. You may have to count on
    your pennies, but you spend your money most where it matters
    most to you and community.
        Over the past week I spent time reviewing the
    administration's proposed budget, and I am deeply concerned
    about the program cuts that I saw. From cuts to the AG
    commodity programs to downsizing the essential air service
    programs to cutting funds for rural outreach grants, this
    budget, Mr. Chairman, fails rural America, and I urge the
    Budget Committee to consider this as you begin to draft a
    budget blueprint to bring before this House.
        My time here is short, so I will not throw out too many
    numbers. Instead, my goal is to communicate one message: Rural
    America is the backbone of this great Nation, and we should not
    fail rural America.
        I have always said that there are two things that can bring
    this country down: our dependence on foreign oil, and our
    dependence on other countries to produce our food. By cutting
    vital programs such as crop and commodity programs, we place
    our domestic food supply in jeopardy. By reducing crop
    insurance premium subsidies, we again place our domestic food
    supply in jeopardy. Without family farmers, it will get harder
    to sustain efforts to build renewable energy projects. Without
    folks like Ernie Ford out in Central Colorado who grow potatoes
    and canola for canola oil for renewable energy such as
    biodiesel, we will feel the hit on food prices.
        Investing in rural America goes beyond supporting family
    farmers and ranchers. Just like big cities, we need
    infrastructure to keep trade and commerce flowing. Our
    communities need airport services and road expansions to keep
    pace. We need access to health care and good doctors. You
    cannot achieve these when the very programs meant to encourage
    growth are cut.
        We in rural America are working hard to redefine our role
    in the 21st century. We are looking at growth areas such as
    biofuels and capitalizing on unique landscapes for ecotourism,
    which brings valuable dollars and jobs to economically
    depressed areas. I am excited about the possibilities. I ask
    that this Budget Committee not fail rural America and instead
    acknowledge help. Programs like this are an investment in our
    Nation and in rural America.
        Third, I would like to end today by expressing my dismay
    that the President's budget funds his proposal to privatize
    Social Security. Ever since I introduced the Social Security
    Trust Fund Protection Act last year, I have called for both
    Democrats and Republicans to come together, and I was glad to
    hear the President say that he wanted to create a bipartisan
    commission to lead this effort. So the budget this week was a
    big surprise to me, $712 billion to privatize Social Security
    and billions more in benefit cuts. I had really hoped that we
    were ready to come together in good faith to find a solution.
        In rural America, Social Security keeps tens of thousands
    of seniors from falling into dire poverty. I hope that this
    committee will steer clear of efforts to privatize and
    dismantle Social Security. And as I sit before you today, I
    know that each of us has our country's best interests at heart.
        I would like to close by asking each one of you to make a
    personal commitment to support and invest in a region that
    often goes unrecognized for its cultural and economic
    contributions to our Nation.
        Once again, sir, I thank you for allowing me to testify
    today, and I look forward to working with each one of you for
    fiscal year 2007, and I would hope that we have a much happier
    answer and a much happier outcome than what the proposed budget
    is today. Thank you, sir.
        Mr. Diaz-Balart. Thank you, Mr. Salazar.
        [The prepared statement of Mr. Salazar follows:]

        Prepared Statement of Hon. John T. Salazar, a Representative in
                      Congress From the State of Colorado

        Chairman Nussle and Ranking Member Spratt, thank you for the
    opportunity to testify before you today on the upcoming Budget
    Resolution for Fiscal Year 2007.
        I know you have heard from many of our colleagues today about where
    we should be heading as a nation with our domestic programs. I have
    said time and again that our budget is a moral document, it is about
    our priorities and values as a nation.
        Now, this is only my second year in Congress and my first year was
    a crash course on how this institution works. What I learned in that
    time is we often forget about the people behind the numbers. We forget
    about the family farmer struggling to raise crops during times of
    drought and record-high gas prices. We forget about the lone doctor
    working to provide care for sometimes an entire county. But this is the
    world I live in back in the San Luis Valley of Colorado.
        As a Blue Dog, I believe in fiscal discipline and responsible
    budgeting principles that include pay-as-you-go spending and balancing
    the budget. No fancy math tricks--just plain, honest numbers. I learned
    this lesson while running the family farm. I know what it means to work
    within a budget. You may have to count your pennies, but you spend your
    money where it matters the most to you and your community.
        Over the past week, I have spent time reviewing the
    Administration's proposed budget and I am deeply concerned about the
    program cuts that I saw. I cannot overemphasize how detrimental a
    budget like this would be to rural America. From cuts to the
    Agricultural Commodity programs to downsizing the Essential Air Service
    program to cutting funds for rural outreach grants, this budget fails
    rural America. And I urge the Budget Committee to consider this as you
    begin to draft a budget blueprint to bring before this House.
        My time here is short so I will not throw numbers at you. In my
    time here today, my goal is to communicate one message--rural America
    is the backbone of this great nation and we should not fail rural
    America. We cannot pass the burden of debt onto the backs of our
    farmers who work hard to put food on our family tables.
        I have always said that there are only two things that can bring
    this country down--our dependence on foreign oil and our dependence on
    other countries to produce our food. By cutting vital programs such as
    crop and commodity programs, we place our domestic food supply in
    jeopardy. By reducing crop insurance premium subsidies, we again place
    our domestic food supply in jeopardy.
        Without family farmers, it will get harder to sustain efforts to
    build renewable energy projects. Without folks like Ernie Ford who
    grows potatoes and canola out in Center, Colorado, we will feel the hit
    in prices at the grocery store and our own household budgets.
        Investing in rural America goes beyond supporting family farmers
    and ranchers. Just like the big cities, we need infrastructure to keep
    trade and commerce flowing. Our communities need airport service and
    road expansions to keep pace with the growing number of NAFTA trucks
    that barrel up the trade corridors. We need access to healthcare and
    good doctors, but you cannot achieve that when the very programs meant
    to encourage growth are cut.
        Rural America is working hard to redefine our role in 21st Century
    America. We are looking at growth areas such as bio-fuels and
    capitalizing on unique landscapes for ecotourism, which brings valuable
    dollars and jobs to economically depressed areas. I am excited about
    the possibilities. I ask that this Budget Committee not fail rural
    America, and instead begin to see how programs like these are an
    investment in our nation and in an area that does so much for our
    country.
        Finally, I would like to end today by expressing my dismay that the
    President's budget funds his proposal to privatize Social Security.
    Ever since I introduced the Social Security Trust Fund Protection Act
    last year, I have called for Democrats and Republicans to come together
    and I was glad to hear the President say he wanted to create a
    bipartisan commission to lead the effort.
        So the budget this week was a big surprise--$712 billion to
    privatize Social Security and billions more in benefit cuts. I had
    really hoped we were ready to come together in good faith to find a
    solution, but a sneak in provision is by no means an honest start.
        In rural America, Social Security keeps tens of thousands of people
    from falling into extreme poverty. Around the time we began this debate
    last year, I was approached by Amelia Valdez from Pueblo, CO, a woman
    about my own mother's age. She gave me a photograph of Franklin D.
    Roosevelt signing the Social Security Act into law and said with tears
    in her eyes: ``Hang it in your office as a reminder--please, do not let
    them dismantle my only source of income.''
        I hope this Committee will think of women like Amelia Valdez and
    steer clear of efforts to privatize and dismantle Social Security.
        As I sit before you today, I know each of us has our country's best
    interests at heart. There are many worthwhile and competing interests
    to consider as we move forward with the FY07 Budget Resolution. I would
    like to close by asking each of you to make a personal commitment to
    support and invest in a region that often goes unrecognized for its
    cultural and economic contributions to our nation.
        Mr. Chairman, Ranking Member Spratt: Once again, thank you for
    allowing me to testify today. I look forward to working with each of
    you this year to develop a budget that truly reflects America. I would
    be more than happy to answer any questions you may have at this time.

        Mr. Diaz-Balart. Appreciate you coming down here and
    testifying on issues that are important to you. It is important
    that the Budget Committee have an opportunity to hear you, so
    we thank you for your time.
        Mr. Salazar. We thank you for allowing me, sir.
        Mr. Diaz-Balart. Thank you, sir.
        We are waiting for one Member of Congress that we think is
    on his way here, so what we will do is take a short break at
    the call of the Chair until the time that Member shows up.
        [Recess.]
        Mr. Diaz-Balart. We are called back to order. Mr.
    Fitzpatrick from Pennsylvania is here to testify before the
    Budget Committee now.
        And it is a pleasure to have you here, sir. The floor is
    yours.

     STATEMENT OF HON. MICHAEL G. FITZPATRICK, A REPRESENTATIVE IN
                CONGRESS FROM THE STATE OF PENNSYLVANIA

        Mr. Fitzpatrick. Thank you for the opportunity to appear
    before you today to express my hopes and my reservations with
    respect to the President's Federal budget request for fiscal
    year 2007.
        After taking a week to carefully review the President's
    budget request, I discovered some encouraging proposals to
    assist the Nation on the road toward ensuring our independence
    on foreign oil, expanding math and science education, and
    supplying our troops with the equipment they need to fight and
    to win the war on terror. While there are many encouraging
    proposals incorporated within the President's budget, there are
    some spending decisions that do concern me, especially one that
    directly affects my constituents. That program is the USDA
    National Resource Conservation Service Flood Mitigation
    Program. And I want to focus on the President's decision to
    zero out his funding today.
        I agree that the government must be fiscally responsible
    with taxpayers' money. Federal spending over the course of the
    past 5 years has risen faster than at any time during the past
    four decades. In addition, the Nation faces a costly war in
    Iraq, Hurricane Katrina clean-up costs, and rising entitlement
    spending. The largest entitlement programs, Medicare, Medicaid,
    and Social Security, are projected to cost $1.132 trillion this
    year and account for about 42 percent of the entire Federal
    budget, as Congressional Budget Office figures show. By
    comparison, defense is 15.8 percent of the 2007 budget. As a
    result, budget deficits remain high and are expected to soar
    when the baby boom generation begins to retire over the next
    few years.
        We need to slow the growth of Federal spending in order to
    regain control over the spiraling costs of our mandatory
    programs. The recent passage of the Deficit Reduction Act will
    place the government on the path to fiscal responsibility and
    slowed growth. The economy is primed for this, as yesterday's
    announcement of the government posting its first surplus in 3
    years demonstrates. Tax receipts surpassed spending by $10.98
    billion in December, the result of congressional action to cut
    taxes and spur investment in our economy. Our policies are
    working, and Congress must now focus on cutting spending.
        However, such reforms should not be made on the backs of
    America's most needy citizens. The President's call to curb
    Medicare spending, to reduce funding for national critical
    health research assets such as the National Heart, Lung and
    Blood Institute and the National Cancer Institute, a $100
    million reduction in the Department of Homeland Security's
    Assistance to Firefighters Grant Program, and the inclusion of
    an increase in the copay and enrollment fee for veterans
    seeking care from the VA are all issues that concern me greatly
    and must be addressed through congressional action.
        As a Member of Congress representing eastern Pennsylvania
    and the greater Philadelphia region, I am concerned that Amtrak
    is severely underfunded in the President's request. Thousands
    of commuters rely on Amtrak's Northeast corridor rail service
    each day to commute to their jobs up and down the east coast
    from Boston to Washington, D.C. Although Amtrak has been the
    target of criticism for its management system and business
    structure, its operation is integral to the health of our
    economy. Additionally, as more Americans take the train each
    day, they leave their cars behind, which means there are fewer
    cars on the road contributing to pollution as well as gasoline
    demand.
        I support the full funding of Amtrak rail service. The
    President's proposed $900 million for Amtrak falls woefully
    short of the estimated $1.5 billion necessary to prevent cuts
    in service and will not allow for future investment in
    America's rail system.
        However, one specific program that has a direct impact on
    my constituents in the Eighth District concerns me the most,
    the elimination of funding for the NRCS and flood mitigation
    programs. I have written to Chairman Nussle on this subject;
    however, I wanted to come here to speak to you personally and
    have my concerns placed in the record.
        We must continue to protect Americans from the threat posed
    by natural disasters--Katrina and Rita demonstrate this need
    clearly. Flooding continues to destroy homes, businesses, and
    communities throughout America. I am concerned that the
    President's fiscal year 2007 budget eliminates all funding for
    the NRCS Watershed Protection and Flood Prevention programs.
    The budget proposes zero for watershed planning, zero for
    watershed operations, and $15.3 million for rehabilitation of
    aging watershed dams, in spite of the fact that these watershed
    programs have improved the safety of lands previously
    considered to be in a constant threat of flood damage.
        Even before Katrina, flood damage in the United States was
    estimated to cost $2 billion each year. Hurricane Katrina has
    taught us that an adequate infrastructure is vital to protect
    and maintain our communities' homes, businesses, and roads from
    flooding. Zeroing out funding for watershed planning and
    watershed operations will have a severe effect on flood
    mitigation projects like elevating and flood-proofing
    properties and implementing resource management systems across
    the United States.
        In my district alone, severe flooding has caused millions
    of dollars in damages to homes along the Nishamany Creek. A
    combination of State and Federal funding has allowed many of
    these houses to be raised or elevated to prevent future damage.
    Those projects and nearly 2,000 other projects like it across
    the Nation would be restricted, if not terminated, if the
    President's request is to go forward. Therefore, I strongly
    support continued funding for the USDA and RCS watershed
    programs. This funding is essential to the preservation of
    storm-ravaged areas of our Nation, and I encourage my
    colleagues' support of this necessary program.
        Thank you, Mr. Chairman, for making the time for me to
    testify today.
        Mr. Diaz-Balart. Thank you, sir. And I appreciate you
    taking your time coming out here. We know how important these
    issues are to you, so we really appreciate that.
        [The information referred to follows:]

    Prepared Statement of Hon. Michael G. Fitzpatrick, a Representative in
                    Congress From the State of Pennsylvania

        Mr. Chairman, members of the committee, thank you for the
    opportunity to appear before you today to express my hopes and
    reservations on the President's Federal budget request for fiscal year
    2007. After taking a week to carefully review the President's budget
    request, I have discovered some encouraging proposals that will assist
    the nation on the road toward assuring our independence from foreign
    oil, expanding math and science education and supplying our troops with
    the equipment they need to fight the War on Terror. While there are
    many encouraging proposals incorporated within the President's Budget
    there are some spending decisions that concern me; especially one that
    directly affects my constituents. That program is the USDA-NRCS Flood
    Mitigation Program and I want to focus on the President's decision to
    zero out its funding today.
        I agree that the government must be fiscally responsible with
    taxpayer's money. Federal spending, over the course of the past 5
    years, has risen faster than at any time in the past four decades. In
    addition, the nation faces a costly war in Iraq, Hurricane Katrina
    clean-up costs, and rising entitlement spending. The largest
    entitlement programs; Medicare, Medicaid and Social Security, are
    projected to cost $1.132 trillion this year and account for about 42
    percent of the entire Federal budget, as Congressional Budget Office
    figures show. By comparison, Defense is 15.8 percent of the 2007
    budget. As a result, budget deficits remain high and are expected to
    soar when the baby boom generation begins retiring in the next few
    years. We need to slow the growth of Federal spending in order to
    regain control over the spiraling costs of our mandatory programs.
        The recent passage of the Deficit Reduction Act will place the
    government on the path of fiscal responsibility and slowed growth. The
    economy is primed for this, as yesterday's announcement of the
    government posting its first surplus in 3 years demonstrates. Tax
    receipts surpassed spending by $10.98 billion in December--the result
    of congressional action to cut taxes and spur investment in our
    economy. Our policies are working, and Congress must now focus on
    cutting spending. However, such reform should not be made on the backs
    of America's most needy citizens.
        The President's call to curb Medicare spending; to reduce funding
    for critical national health research assets such as the National
    Heart, Lung and Blood Institute and the National Cancer Institute; a
    $100 million reduction in the Department of Homeland Security's
    Assistance to Firefighters Grant Program; and the inclusion of an
    increase in the copay and enrollment fee for veterans seeking care from
    the VA are all issues that concern me greatly and must be addressed
    through congressional action.
        As a Member of Congress representing Eastern Pennsylvania and the
    greater Philadelphia region, I am concerned that Amtrak is severely
    under-funded in the President's request. Thousands of commuters rely on
    Amtrak's Northeast Corridor rail service each day to commute to their
    jobs, up and down the East Coast from Boston to Washington, DC.
    Although Amtrak has been the target of criticism for its management
    system and business structure, its operation is integral to the health
    of our economy. Additionally, as more Americans take the train each
    day, they leave their cars behind which means there are fewer cars on
    the road contributing to pollution as well as gasoline demand. I
    support the full funding of Amtrak rail service. The President's
    proposed $900 million for Amtrak falls woefully short of the estimated
    $1.5 billion necessary to prevent cuts in service and will not allow
    for future investment in America's rail system.
        However, one specific program that has a direct impact on my
    constituents in the 8th District of Pennsylvania concerns me the most--
    the elimination of funding for USDA-NRCS flood mitigation programs. I
    have written to Chairman Nussle on this subject, however, I wanted to
    come here and speak to you personally and have my concerns placed into
    the record.
        We must continue to protect Americans from the threat posed by
    natural disasters. Hurricanes Katrina and Rita demonstrate this need
    clearly. Flooding continues to destroy homes, businesses and
    communities throughout America. I am concerned that the President's
    FY07 Budget eliminates all funding for USDA-NRCS watershed protection
    and flood prevention programs. The budget proposes $0 for Watershed
    Planning, $0 for Watershed Operations and $15.3 million for
    Rehabilitation of aging watershed dams in spite of the fact that these
    watershed programs have improved the safety of lands previously
    considered to be in a constant threat of flood damage. Even before
    Hurricane Katrina, flood damage in the United States was estimated to
    cost $2 billion annually.
        Hurricane Katrina has taught us that adequate infrastructure is
    vital to protect and maintain our communities' homes, businesses and
    roads from flooding. Zeroing out funding for watershed planning and
    watershed operations would have a severe effect on flood mitigation
    projects like elevating and flood proofing properties and implementing
    resource management systems across the United States. In my district
    alone, severe flooding has caused millions of dollars in damage to
    houses along the Neshaminy Creek. A combination of state and Federal
    funding has allowed many of these houses to be razed or elevated to
    prevent future damage. Those projects; and nearly 2,000 other projects
    like it across the nation would be restricted, if not terminated, if
    the President's request is to go forward.
        Therefore, I strongly support continued funding of the USDA-NRCS
    Watershed Programs. This funding is essential to the preservation of
    storm ravaged areas of our nation and I encourage my colleague's
    support of this necessary program. Thank you, Mr. Chairman, for the
    time to speak to you today. With that, I yield the balance of my time.

        Mr. Diaz-Balart. We are waiting for one more Member, and we
    will take a short pause until he shows up, and then we will
    reconvene the meeting.
        [Recess.]
        Mr. Diaz-Balart. We will reconvene the Budget Committee
    once again. And we are privileged to have Mr. Bass.

    STATEMENT OF HON. CHARLES F. BASS, A REPRESENTATIVE IN CONGRESS
                    FROM THE STATE OF NEW HAMPSHIRE

        Mr. Bass. Thank you very much. And they have made things a
    lot fancier here since I was on this committee. I was honored
    to serve here for 8 years, and I am here today to submit
    written testimony, and I will make my testimony very, very
    brief. I have three issues I would like to bring up.
        First, I am hopeful that the Budget Committee can pay the
    kind of attention that is necessary to adequately fund
    individuals with disabilities education, otherwise known as
    special education. When I was on the committee, we were able to
    get in essence approximately $1 billion to $1.5 billion a year
    increase in these programs, in this program in particular. It
    is certainly the most important, in my opinion, education
    funding initiative, because it does represent an unfilled
    obligation that the Federal Government needs to make to
    adequately fund its fair share of that program.
        Secondly, I would like to address the issue of the
    President's Advanced Energy Initiative. I hope the Budget
    Committee can focus on a great opportunity that exists that the
    President began with the State of the Union Address to assure
    that we develop alternative energy resources for this country.
    We are indeed addicted to oil, and we need to have a Congress
    that recognizes that and moves in that direction.
        And, thirdly, and not inconsistent with my prior discussion
    about alternative energy, is the need not to use drilling in
    the Arctic National Wildlife Refuge (ANWR) as a revenue
    enhancer for reconciliation. We have been through this debate
    already this year. I am hopeful that we can leave NWAR out of
    the budget documents so that we at least begin the process of
    not having that long debate which was so difficult in this last
    fiscal year.
        So, with that, Mr. Chairman, I will conclude my remarks and
    thank you very much.
        Mr. Diaz-Balart. Well, thank you very much. And without
    objection, your full remarks will be placed in the record.
        Mr. Bass. Thank you, sir.
        Mr. Diaz-Balart. Thank you very much.
        [The prepared statement of Mr. Bass follows:]

        Prepared Statement of Hon. Charles F. Bass, a Representative in
                    Congress From the State of New Hampshire

        I would look like to thank Chairman Nussle and Ranking Member
    Spratt for providing members the opportunity to testify before the
    Committee today. As a former member of this committee, I am well aware
    of the challenges that you face when trying to craft a budget that
    meets our needs at home and abroad in a responsible manner. In this
    fiscal climate we must prioritize and ensure that the programs that
    have the biggest impact on our local communities and nation are
    adequately funded. It is for this reason that I would like to focus on
    the importance of increased special education funding and a commitment
    to a comprehensive renewable energy policy.

                                  IDEA FUNDING

        Since 1975 when Congress first passed the Individual with
    Disabilities Education Act, we outlined the steps communities must take
    to ensure that all students, regardless of any disability, receive a
    free and appropriate education. As a result of this Federal mandate, we
    also promised to provide 40 percent of the national average per pupil
    expenditure (APPE) for special-needs students. It has been over 30
    years and we have yet to fulfill this promise.
        I believe that it is safe to say that every Member of Congress has
    heard from at least one community in their district regarding the
    strain that rising special education costs has placed on their local
    budgets. In fact, I am positive that 105 of our colleagues have heard
    because they joined me in signing this letter that I will present to
    you asking that we fund special education at the level we agreed to in
    the 2004 IDEA reauthorization law. It was in this law that 397 members
    recognized the significance of fully funding IDEA by supporting a glide
    path that will allow us to reach full funding by 2011. As Majority
    Leader Boehner stated on November 19, 2004--``Our bill also puts the
    Federal Government on a 6-year glide path to reaching our original goal
    of funding up to 40 percent of the excess cost of educating students
    with special needs. And as we get closer to that goal, we are also
    going to give local communities more control over how they spend their
    own local dollars.''
        Since I arrived in Congress, IDEA spending has increased from $2.3
    billion in FY 1995 to $10.7 billion in FY 2006. While this overall
    increase in funding is certainly impressive and one that we should be
    proud of, the reality is the Federal share in special education costs
    is actually dropping. In FY 2004, we reached an all time high of
    18.6%--almost half of what we promised but an improvement--the
    President's budget request would bring the Federal share to 17%. We
    cannot afford to go backwards.
        Giving our communities more control over how they spend their own
    local dollars should be our goal when debating education funding.
    Providing IDEA with the Federal funds that we promised does exactly
    that. Every extra dollar that the Federal Government provides to
    special education is an extra dollar that is freed up on the local
    level. The local school boards do not have an option when it comes to
    funding what is necessary for its learning disabled population but if
    the Federal Government provides the share it promised, local funds
    could be used for other equally important educational measures of their
    own choosing. Increasing special education funding is my number one
    education priority and I will not be asking for an increase in any
    other line item under the Department of Education. Mr. Chairman, I
    would request that you would assist me by establishing a clear path for
    appropriators to follow in this budget with regards to IDEA funding.
        I recognize that we are facing fiscal restraints and agree that we
    need to reign in spending to control rising deficits but I believe that
    school boards should not have to cut education budgets, taxpayers
    shouldn't have to pay higher property taxes, and families with special
    needs students should never feel isolated or be criticized because the
    Federal Government is not paying its fair share of the cost of special
    education.

                                RENEWABLE ENERGY

        In his State of the Union just 2 weeks ago, the President declared
    ``America is addicted to oil.'' He continued, ``By applying the talent
    and technology of America, this country can dramatically improve our
    environment, (and) move beyond a petroleum-based economy. We'll also
    fund additional research in cutting-edge methods of producing ethanol,
    not just from corn, but from wood chips and stalks, or switch grass.
    Our goal is to make this new kind of ethanol practical and competitive
    within 6 years.''
        Mr. Chairman, the President is right. If we accomplish the goals of
    the Advanced Energy Initiative, we will not only free ourselves from
    the entanglement of foreign energy, we will also clean the air, water
    and land we all enjoy, and we will develop new technologies and
    industries that provide jobs and a higher quality of life for all
    Americans. This must be among our highest national priorities.
        I ask you to not only meet the President's goals, but to exceed
    them. The U.S. Department of Energy Biomass Fuels Initiative funds
    research, development, and technology validation on advanced
    technologies that will enable future biorefineries to sustainably
    convert cellulosic biomass to fuels, chemicals, heat and power. The
    President has requested $120 million, up from $91 million in FY06 for
    this task. I challenge this committee to support an even higher level
    and to anticipate higher levels in the future until we are able to
    power the automobiles we drive with the crops, forestry, and other
    biomass we produce.
        I also urge the Committee to recommend at least $1.42 billion for
    basic energy science, which supports a substantial basic research
    budget for materials sciences, chemical sciences, energy biosciences,
    engineering, and geosciences.
        As a member of the House Energy and Commerce Committee, I intend to
    work toward greater support and parity for these clean and renewable
    energy sources. The Energy Policy Act of 2005 was the best effort yet
    to pass Congress, but I know we can still do better.

                        ARCTIC NATIONAL WILDLIFE REFUGE

        Finally, I want to comment on the issue of including any
    instructions for ANWR in the budget. We are all aware of last year's
    effort and outcome and I don't see any reason why this year would be
    different.
        Using the budget process to open ANWR is a gimmick and must be
    resisted. An instruction to create a stand-alone reconciliation bill on
    ANWR would place the separate legislation containing the rest of the
    reforms and savings, regardless of how valuable, in jeopardy. As a
    conference and Congress, we must ask ourselves where our priorities
    lie.

                                         U.S. Congress,
                                                Washington, DC,
                                                     February 14, 2006.
    Hon. Jim Nussle, Chairman,
    Hon. John Spratt, Ranking Member,
    House Budget Committee, Cannon Building, Washington, DC.
        Dear Chairman Nussle and Ranking Member Spratt: In 1975, the
    Individuals with Disabilities Education Act (IDEA) was enacted into law
    to ensure that students with disabilities received the quality
    education that they both need and deserve. With this legislation came a
    promise to federally fund 40 percent of special education costs, a
    promise that still has yet to be honored. For nearly 30 years, this
    lack of adequate federal funding has unfairly burdened local school
    districts and taxpayers struggling to meet the educational needs of all
    students, including a growing number of students with disabilities.
        In 2004, the House of Representatives approved and the President
    enacted the Individuals with Disabilities Education Improvement Act,
    establishing a concrete timetable of incremental funding increases in
    order to obtain the full 40 percent of promised Federal funding for
    special education by Fiscal Year 2011. This commitment was agreed to by
    an overwhelming majority of both the House and the Senate, and yet we
    were still unable to meet the goal we set for the first year of that
    timetable.
        As you prepare your Fiscal Year 2007 House Budget Resolution,
    please honor our commitment and include the $16.94 billion authorized
    in this law for the Part B State Grants, thereby putting the Federal
    Government back on track to fully funding our share of IDEA costs.
    While we recognize the challenges and tough decisions that you face in
    the current fiscal climate, we believe that increasing IDEA funding
    enables our local communities to devote the scarce resources that are
    currently being spent to meet the unfunded Federal requirements of the
    IDEA law to other areas of significant need. Even during this time of
    restrained spending, we must help ease the burden that this current
    unfunded mandate places on state and local budgets.
        We look forward to working with you on this critical matter, and
    are hopeful that our efforts will afford our schools greater financial
    freedom and the local control necessary to best serve their students
    and communities.
                Sincerely,

    Charles F. Bass,   Rob Simmons,       Mike Ferguson,    Ed Case,
    William Lacy       Brian Higgins,     Mike Doyle,       Bob Etheridge,
     Clay,
    Rush Holt,         Michael McNulty,   Tammy Baldwin,    Doris O. Matsui,
    Rick Boucher,      Elliot L. Engel,   Jay lnslee,       Patrick F.
                                                             Kennedy,
    Jim Marshall,      Major R. Owens,    Sanford Bishop,   Darlene Hooley,
    Sherrod Brown,     John M. McHugh,    Sandy Levin,      Chris Smith,
    Earl Pomeroy,      Jim Saxton,        James McGovern,   Tom Udall,
    Zoe Lofgren,       Todd R. Platts,    Lynn Woolsey,     Lane Evans,
    Dennis Moore,      Carolyn McCarthy,  Lincoln Davis,    Stephanie Tubbs
                                                             Jones,
    Sam Farr,          Albert Wynn,       Raul M.           Carolyn B.
                                           Grijalva,         Maloney,
    Mark Udall,        Eleanor H.         Silvestre Reyes,  Jerrold Nadler,
                        Norton,
    Bob Filner,        Sue Kelly,         Juanita           Bart Gordon,
                                           Millender-
                                           McDonald,
    Betty McCollum,    Jim Matheson,      Loretta Sanchez,  Judy Biggert,
    Ben Chandler,      Danny K. Davis,    Diana DeGette,    C.A. Dutch
                                                             Ruppersberger,
    Emmanuel Cleaver,  Grace F.           Michael Honda,    Barbara Lee,
                        Napolitano,
    Chris Shays,       Greg Walden,       Jim Ramstad,      Rick Larsen,
    Joe Schwarz,       Tom Lantos,        Frank Pallone,    Tim Ryan,
    Madeleine          Shelley Berkley,   Michael Michaud,  Ted Strickland,
     Bordallo,
    Ed Whitfield,      Jim Davis,         Elijah E.         Jim Leach,
                                           Cummings,
    Ruben Hinojosa,    Frank A.           John F. Tierney,  Collin C.
                        LoBiondo,                            Peterson,
    Adam Smith,        Debbie Wasserman   David Price,      Nick Rahall,
                        Schultz,
    Xavier Becerra,    Linda Sanchez,     Anthony Weiner,   Timothy Johnson,
    Robert Scott,      Steve Israel,      Peter King,       Tom Osborne,
    Dennis J.          John Conyers,      Gwen Moore,       Ben Cardin,
     Kucinich,
    Donald M. Payne,   Rosa L. DeLauro,   Jim McDermott,    Vic Snyder,
    Shelley Moore      John Dingell,      Leonard Boswell,  Nancy Johnson,
     Capito,
    William Delahunt,  Maurice Hinchey,   John T. Salazar,

                                                   Members of Congress.

        Mr. Diaz-Balart. Also, I would just remind that all Members
    have until Friday to submit their statements for the record,
    without objection.
        [The prepared statement of Mr. Price follows:]

    Prepared Statement of Hon. Tom Price, a Representative in Congress From
                              the State of Georgia

        Our economy is thriving as more and more Americans are finding
    jobs. Over the last two-and-a-half years, we have added over 2.5
    million jobs and the country's unemployment rate is 4.7 percent--the
    lowest level since July 2001. Our revenue growth is strong and is
    expected to be so for years to come. We have had many successes--over
    the past 5 years we increased funding for veterans, education, and many
    other programs.
        Yet, in light of all these successes our spending continues to
    exceed our revenues and the rate of inflation. As a result, even though
    we have made major strides to bring the economy back on track, deficits
    persist. Mandatory spending for programs such as Medicare, Medicaid,
    and Social Security continue to grow at rates that endanger their
    viability.
        It is becoming increasingly clear that we do not have a revenue
    problem, we have a spending problem. We must slow the rate of spending
    growth if we are to get our economic house in order. As we examine ways
    to exercise fiscal responsibility I ask you to be open to ideas that
    aim to rein in spending.
        The recently passed Deficit Reduction Act is a step in the right
    direction. It allowed Congress to re-examine our spending priorities.
    It also has let our committees here in the House of Representatives to
    further eliminate waste, fraud, and abuse in programs that has been
    long overdue.
        If we are to reduce our deficits we must have sound fiscal
    discipline. I ask the committee to slow the rate of growth for
    automatic programs in a fair and responsible manner.
        One of the items of legislation that I have introduced is an
    earmark resolution to bring greater transparency to the appropriations
    process. Each earmark would have the name of the Member of Congress
    next to their appropriations request. Adding sunlight to this process
    will ensure that the hard-earned money of the American taxpayers is
    spent in the most appropriate manner.
        Sound fiscal discipline is the key to accelerating economic growth
    and reducing deficits. We must continue deficit reduction measures to
    reduce spending and allow economic growth to flourish.

        [The prepared statement of Mr. Evans follows:]

      Prepared Statement of Hon. Lane Evans, a Representative in Congress
                           From the State of Illinois

        Chairman Nussle, Ranking Member Spratt, thank you for hearing my
    views regarding the proposed FY 2007 budget for the Department of
    Veterans Affairs (VA). As Ranking Democratic Member of the Committee on
    Veterans' Affairs, I am currently working with my colleagues in
    developing our views and estimates, which we will submit to your
    Committee next week. I, and my fellow Democratic members, will agree
    with the Majority in areas where we can, but we will be charting an
    independent course in making our recommendations as to the resource
    levels required by the programs under the jurisdiction of the Committee
    on Veterans' Affairs.
        I am pleased that the Administration asked for an increase in
    appropriated dollars this year for veterans' medical care. This stands
    in sharp contrast to last year when the Administration requested an
    increase in appropriated dollars of less than 1 percent. At first
    glance the requested increase looks like a step in the right direction,
    however, compared to veterans' needs and demand for services, it
    clearly does not deliver the necessary resources to provide veterans
    with the health care and benefits they have earned. Although the
    proposed increase was a welcome surprise, I do not believe we should
    applaud too loudly when the job is not done.
        Last Congress I testified before this Committee, stating:
        I have been concerned that the Administration's budget submission
    falls far short of what is necessary to address serious problems within
    the system. I am also concerned about the practice the Administration
    continues to employ of proposing unpalatable legislative initiatives in
    the budget as if Congress had already authorized them. This puts
    Congress at a distinct disadvantage from the start. Instead of leaving
    Congress with the ability to fund its own priorities, we are forced to
    compensate the VA for legislation we have never authorized.
        Once again this year, the Administration has included legislative
    proposals that would levy a health care enrollment fee and sharply
    increase pharmaceutical co-payments. Once again, we will need to
    provide the funding to cover these legislative proposals, proposals
    rejected by Congress time and time again. This will provide an
    additional $800 million in appropriated dollars for VA health care.
        The Administration uses its legislative proposals to diminish its
    appropriation request, then turns around and uses a portion of the
    proposed cost savings again to increase its collections estimate.
    Therefore, we will need to provide an additional $544 million. In
    addition, the Administration's estimated collections amount of $2.3
    billion may not be realized, and may not represent the actual net
    amount being realized by the VA. Additional dollars will be needed to
    fill this gap.
        The Administration includes a total of $1.1 billion in ``management
    efficiencies'' in this year's budget. To quote its budget submission,
    ``VA is estimating cumulative efficiencies of $1.1 billion in 2007
    which results in additional efficiencies of $197 million over the 2006
    level of $884 million.'' On February 1, 2006, the Government
    Accountability Office issued a report, ``Veterans Affairs: Limited
    Support for Reported Health Care Management Efficiency Savings'' (GAO-
    06-359R), that concluded the ``VA lacked a methodology for making the
    health care management efficiency savings assumptions reflected in the
    President's budget requests for fiscal years 2003 through 2006 and,
    therefore, was unable to provide [GAO] with any support for those
    estimates.'' So there is no actual proof this $884 million exists, but
    it is in the budget this year, and is used to offset increased
    appropriations. Additional resources will be needed to account for
    these phantom ``savings.''
        The Administration, again this year, estimates a decline in the
    number of unique patients, from the current estimate of 5.4 million to
    5.3 million. Last July, the Administration conceded that it had
    underestimated the number of patients and requested an additional $677
    million in supplemental funding. I hope we are not going to have to
    seek an additional $700 million because of this lower estimate. The
    Administration relies on a change in ``unobligated balances,'' totaling
    $442 million to offset its appropriation request. This was a strategy
    employed in last year's budget, a strategy that proved to be
    shortsighted and unrealistic. Additional resources will need to be
    provided to ensure that the VA is not faced with budgetary shortfalls
    triggered by bad estimates and unrealistic assumptions again in FY
    2007.
        The Administration proposes continuing its ban on enrollment by new
    Priority 8 veterans, a ban instituted in January 2003. I know I speak
    for many of my colleagues when I voice my strong opposition to this
    ban. We will be recommending additional resources to bring these
    forgotten veterans, many of them lower-income and combat-decorated,
    back into the system.
        I am also concerned that not enough has been provided to meet the
    needs of veterans returning from Iraq and Afghanistan. In fact, the VA
    estimates that it will see fewer OIF/OEF veterans in FY 2007. We need
    to do more. We also need to do more in the areas of mental health and
    post-traumatic stress disorder (PTSD) and prosthetics. We need to
    restore the Administration's proposed cut in VA medical and prosthetic
    research, and provide additional resources to cover inflation.
        Finally, I will be looking closely at the ability of the VA to
    handle benefits claims quickly and accurately. I will also be looking
    to make improvements in the Montgomery GI Bill, and in providing job
    training and employment opportunities to veterans.
        Mr. Chairman, and Mr. Spratt, providing for veterans is a
    continuing cost of war, and a continuing cost of our national defense.
    We simply have no excuse for not meeting their needs. It is sometimes
    easy to forget that budgets and numbers ultimately come down to real
    people. We must not forget them. I hope that you will carefully
    consider the views and estimates that I and my Democratic colleagues
    will be submitting to this committee next week. Working together, we
    can make sure that our veterans are not forgotten, and that we meet our
    obligations to them as a nation.
        Thank you.

        [The prepared statement of Mr. Gibbons follows:]

     Prepared Statement of Hon. Jim Gibbons, a Representative in Congress
                            From the State of Nevada

        It should come to no surprise to anyone here today that I am in
    strong opposition to Yucca Mountain, because it is an unsafe and
    unsuitable solution to our nuclear waste problem. I also represent Nye
    County, where unfortunately the Yucca Mountain project is located.
        The Yucca Mountain project was based on 1980's science and has no
    place in our country today. We need to focus on 21st Century solutions,
    like reprocessing and transmutation, which will help to reduce our
    nuclear waste. Going forward with Yucca Mountain is like still using
    cassette tapes or even 8-tracks, in the era of mp3 players and ipods.
        As Members of Congress, we have the constitutional obligation to
    objectively oversee the Federal Government. This includes objective
    analysis regarding the feasibility of the Yucca Mountain Project as a
    deep geologic repository.
        Unfortunately, it is extremely disturbing to see that since the
    birth of this project, the Department of Energy (DOE) has consistently
    failed to use science as their guide and has instead been blinded by
    it's obsession to do anything to rubber stamp this project so it can be
    finished. Allegations have been made that workers at the project have
    falsified their data to make the project work, and these allegations
    are now being investigated by my colleague Jon Porter on the Government
    Reform Committee. Such utter disregard for scientific integrity should
    be completely unacceptable to Members of Congress. And it is completely
    unacceptable to the people in Nevada and throughout this country who
    will have to live with the reality of the deadliest substance known to
    man being shipped past our schools, hospitals, and communities to a
    hole in the Nevada desert where it will endanger our water supply,
    environment, and public health.
        Most recently, it was reported that only after 9 years, the Yucca
    mountain project is in need of repairs. To quote DOE spokesman Allen
    Benson from the Las Vegas Sun ``Everything in there is old * * * this
    is a safety issue.'' This is a project that is expected to safely hold
    highly dangerous material for hundreds of thousands of years, and after
    only 9 years in its existence and already is requiring additional
    upgrades and repairs. Again, this is unacceptable to the people of
    Nevada and should be unacceptable to every tax-payer in this country.
        If the DOE scandal over falsification of science and the need for
    repairs were not enough, even the National Research Council of the
    National Academies has found that there are serious challenges that
    still need to be addressed before moving forward and that these
    challenges should not be underestimated. Their list included the need
    to more closely analyze the security risks for any plan to move nuclear
    waste on a large scale.
        As Members of Congress, we must fulfill our constitutional
    obligations and hold DOE accountable to these challenges and failures.
    While the Yucca Mountain Project might reside in Nevada, the dangers of
    transporting this waste will impact every community and every
    constituent across this country. It is my hope that when you examine
    the feasibility of this project, you reject the proposed $544 million
    for the failed Yucca Mountain Project in the President's FY 2007
    Budget. It is time to stop wasting taxpayer dollars on a project that
    is unsafe and unnecessary. It is the 21st century, we have better and
    safer solutions to reduce the amount of nuclear waste, and it time to
    invest in them.

        Mr. Diaz-Balart. And, with that, I believe this committee
    now will adjourn.
        [Whereupon, at 6:03 p.m., the committee was adjourned.]