[Senate Hearing 109-632]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-632
 
JOBS FOR VETERANS ACT THREE YEARS LATER: ARE VETS' EMPLOYMENT PROGRAMS 
                         WORKING FOR VETERANS?

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 2, 2006

                               __________

       Printed for the use of the Committee on Veterans' Affairs


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

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                     COMMITTEE ON VETERANS' AFFAIRS

                    Larry E. Craig, Idaho, Chairman

Arlen Specter, Pennsylvania          Daniel K. Akaka, Hawaii, Ranking 
Kay Bailey Hutchison, Texas          Member
Lindsey O. Graham, South Carolina    John D. Rockefeller IV, West 
Richard M. Burr, North Carolina      Virginia
John Ensign, Nevada                  James M. Jeffords, (I) Vermont
John Thune, South Dakota             Patty Murray, Washington
Johnny Isakson, Georgia              Barack Obama, Illinois
                                     Ken Salazar, Colorado

                  Lupe Wissel, Majority Staff Director

               D. Noelani Kalipi, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              

                            FEBRUARY 2, 2006
                                SENATORS

                                                                   Page
Craig, Hon. Larry E., Chairman, U.S. Senator from Idaho..........     1
Akaka, Hon. Daniel K., Ranking Member, U.S. Senator from Hawaii..     3
Isakson, Hon. Johnny, U.S. Senator from Georgia..................     4
Murray, Hon. Patty, U.S. Senator from Washington.................     5
Burr, Hon. Richard M., U.S. Senator from North Carolina..........     7
Salazar, Hon. Ken, U.S. Senator from Colorado....................     8
Obama, Hon. Barack, U.S. Senator from Illinois...................     9
Thune, Hon. John, U.S. Senator from South Dakota.................    49

                               WITNESSES

Principi, Hon. Anthony J., Former Secretary of Veterans Affairs..    11
    Prepared statement...........................................    13
    Response to written questions submitted by Hon. Larry E. 
      Craig......................................................    14
Ciccolella, Hon. Charles S., Assistant Secretary for Veterans' 
  Employment and Training, U.S. Department of Labor..............    15
    Prepared statement...........................................    16
    Response to written questions submitted by:
      Hon. Larry E. Craig........................................    21
      Hon. Daniel K. Akaka.......................................    27
      Hon. Barack Obama..........................................    29
Nilsen, Dr. Sigurd R., Director, Education, Workforce, and Income 
  Security Issues, U.S. Government Accountability Office.........    30
    Prepared statement...........................................    31
    Response to written questions submitted by:
      Hon. Larry E. Craig........................................    46
      Hon. Barack Obama..........................................    48
Poriotis, Wesley, Chairman, The Center for Military and Private 
  Sector Initiative..............................................    65
    Prepared statement...........................................    68
      Proposal, Veterans Job Development Corps...................    71
      White paper, Branding the Veteran..........................    80
    Written questions submitted by:
      Hon. Larry E. Craig........................................    83
      Hon. Barack Obama..........................................    83
Sharpe, Jr., Joseph C., Deputy Director, National Economic 
  Commission, The American Legion................................    83
    Prepared statement...........................................    85
    Response to written questions submitted by:
      Hon. Larry E. Craig........................................    89
      Hon. Barack Obama..........................................    92
Weidman, Richard F., Director of Government Relations, Vietnam 
  Veterans of America............................................    92
    Prepared statement...........................................    95
    Written questions submitted by:
      Hon. Barack Obama..........................................   100
      Hon. Larry E. Craig........................................   100

                                APPENDIX

Madsen, Roger B., Director of the Idaho Department of Commerce 
  and Labor, prepared statement..................................   107
Miller, Randy M., Chairman and CEO of ReadyMinds, prepared 
  statement......................................................   108
GAO report.......................................................   113
Table, Fiscal Year 2005 DVOP and LVER Actual FTE Utilization.....   173


JOBS FOR VETERANS ACT THREE YEARS LATER: ARE VETS' EMPLOYMENT PROGRAMS 
                         WORKING FOR VETERANS?

                              ----------                              


                       THURSDAY, FEBRUARY 2, 2006

                               U.S. Senate,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:33 a.m., in 
room SR-418, Russell Senate Office Building, Hon. Larry Craig 
(Chairman of the Committee) presiding.
    Present: Senators Craig, Burr, Thune, Isakson, Akaka, 
Murray, Obama, and Salazar.

           OPENING STATEMENT OF HON. LARRY E. CRAIG,
                    U.S. SENATOR FROM IDAHO

    Chairman Craig. Good morning, everyone. The U.S. Senate 
Committee on Veterans' Affairs will be in order. Let me welcome 
all of you to the Committee this morning. Thank you.
    Today, we will be discussing a most important topic, jobs 
for our Nation's veterans. Each year, roughly 200,000 service 
members are separating from active duty, and for the most of 
them, obtaining a job is a critical step in successfully 
transitioning to civilian life. Last year alone, over 42,000 of 
those separating service members were 20 to 24 years old, who 
served in Operation Enduring Freedom and Operation Iraqi 
Freedom.
    Ensuring a smooth transition for those young service 
members who bravely fought for freedom should be a national 
priority. Yet as the chart behind me shows, these unemployment 
rates among young veterans have risen dramatically since the 
war on terror began and now are approaching double the 
unemployment rate of nonveterans in the same age group. I must 
add, in a strong economy, as is true in most areas of our 
country, these figures just don't fit.
    This trend suggests to me that we, as a Nation, must do 
more to help those young veterans succeed in civilian life and 
in the civilian job market. Much of that help must continue to 
come from leaders in the business community and in the public 
sector who recognize the distinct advantages in hiring former 
service members. Some of that help will come from employment 
programs that can provide veterans with resources, knowledge, 
and assistance that they need to find meaningful employment.
    Today, we will examine the effectiveness of two such 
programs administered by the Department of Labor's Veterans' 
Employment and Training Service, the Disabled Veterans' 
Outreach Program, and the Local Veterans' Employment 
Representative Program. For most of a decade, Congress, GAO, 
and others have expressed concern that these programs are not 
focusing on those most in need of services, including recently 
separated veterans and veterans with disabilities.
    In fact, in 1999, the Commission on Service Members and 
Veterans Transition Assistance found that those groups of 
veterans often did not receive the services they needed because 
the program structure was outdated, inflexible, and unfocused, 
and because there was no real accountability for employment 
outcomes. That led to years of hearings, proposals, and 
reports, which eventually culminated in the passage of the Jobs 
for Veterans Act of 2002.
    In December of last year, the GAO completed a comprehensive 
review of the changes that have been made in the VETS 
employment programs in the 3 years since the passage of the 
Jobs for Veterans Act. Today, we will hear about many of those 
changes, including new performance measures, efforts to reward 
high performance, and increased use of case management 
services. We also will hear that services providers believe 
that these changes have improved the quality of services to 
veterans and have improved veterans employment outcomes.
    However, we will also learn that there are no data showing 
that these changes have led to better employment outcomes for 
veterans, and we will hear that accountability remains 
problematic. Perhaps most significant, we will examine the high 
unemployment rates of young, recently separated veterans and 
veterans with disabilities, which suggest that these programs 
still are not effectively targeting services to those most in 
need.
    As we begin this discussion, I want to stress that I have 
no doubts about the dedication and the sincerity of those who 
provide employment services to veterans and those who 
administer these programs. However, after decades of 
commissions and GAO reports, congressional hearings and attempt 
at reform, it is time to embrace Benjamin Franklin's admonition 
that the definition of insanity, ladies and gentlemen, is doing 
the same thing over and over and expecting different results.
    If these programs, as currently structured, are not helping 
those veterans most in need, I believe we must acknowledge 
that. It is time for fundamental changes in how we provide 
employment services to our veterans.
    To begin this important discussion today, I must tell you 
that I am pleased to welcome back to this Committee the 
Honorable Anthony J. Principi, whose groundbreaking work both 
as Chairman of the Transition Commission and as Secretary of 
Veterans Affairs led to increased scrutiny of veterans 
employment services and the continuing search for ways to 
improve them.
    Welcome to you, Mr. Secretary. It is great to have you, and 
we want to thank you for joining us today.
    We also are pleased to be joined on our first panel by the 
Honorable Charles Ciccolella, the Assistant Secretary for 
Veterans' Employment and Training, and Dr. Sigurd Nilsen, 
Director of Education, Workforce, and Income Security Issues at 
the GAO.
    Welcome to all of you.
    On our second panel, we are pleased to be joined by Wes 
Poriotis--I always struggle at pronouncing names correctly 
because my very difficult name, I enjoy having it pronounced 
correctly--Chairman of the Center for Military and Private 
Sector Initiatives and Joseph Sharpe, the Deputy Director for 
the American Legion's National Economic Commission, and Rick 
Weidman, the Director of Government Relations for Vietnam 
Veterans of America.
    Welcome to all of you. Before we start taking your 
testimony, let me turn to my colleagues on the Committee and, 
of course, to my Ranking Member, Senator Danny Akaka. Danny?

STATEMENT OF HON. DANIEL K. AKAKA, RANKING MEMBER, U.S. SENATOR 
                          FROM HAWAII

    Senator Akaka. Thank you very much, Chairman Craig, for 
calling this hearing today. And Chairman Craig, I just want to 
wish you well this year and wish us well this new year as we 
continue to work on this Committee for veterans across our 
country.
    I want you to know I look forward to working with you again 
because I enjoyed so much working with you in the past and look 
forward to the future. Last year this Committee was very busy 
and I am sure this year will be no different.
    Before I move into the substance of the hearing, I would 
like first to thank Chairman Craig for attending Committee 
hearings in my home State of Hawaii during January.
    Chairman Craig. He drug me out of the deep snows of Idaho 
and pulled me across all of those islands, out in the Pacific, 
warm breezes blowing. Thank you, Danny.
    [Laughter.]
    Senator Akaka. You are very welcome and now you know how 
hard I had to try to do that. Not only Chairman Craig, but his 
staff also, and I really appreciate that. And, my own staff, 
they did a great job in listening to our veterans out there in 
Hawaii. As Senator Craig and his staff can attest, these 
hearings were very well attended on four of the islands in 
Hawaii.
    I hope that VA, the Department of Labor, and this Committee 
will continue to recognize the obstacles that Hawaii's veterans 
face as they assess the benefits and care they have earned 
through their selfless service to this country. Veterans in one 
State must be sure that they receive services as veterans in 
other States do, and the best kinds of services.
    I also want to thank the witnesses for coming to this first 
Committee hearing today. I especially want to welcome back our 
good friend first, the Secretary of Veterans, Tony Principi, 
before this Committee. Mr. Secretary, we appreciate all the 
years you have served this Nation on behalf of our veterans, 
and I want to thank you. I know you are a busy man, and thank 
you for being here with us today.
    Also I want to thank the others on this panel as well and 
the second panel.
    Today, the Committee will look into the employment and 
training services available to veterans. Specifically, we will 
hear about the implementation of the Jobs for Veterans Act.
    I am proud that the Committee has chosen to tackle the 
issue of veterans employment. Holding a hearing on the 
implementation of JVA is a wonderful start this year. I am 
hopeful that we will expand upon this hearing to investigate 
other areas involving veterans employment, such as the 
Uniformed Services Employment and Re-Employment Rights Act. We 
must make certain that we are doing all we can to protect the 
rights of our service members who have set aside their lives to 
serve our country.
    Several years ago, Secretary Principi, you chaired the 
Congressional Commission on Service Members and Veterans 
Transition Assistance. That Commission made several 
recommendations for improving employment and training. I hope 
that you will discuss these recommendations today.
    GAO recently published that a third of our States reported 
that local accountability had either lessened or not improved 
as a result of the Jobs for Veterans Act. I agree that States 
need flexibility to serve their veterans population. However, 
States must provide accurate employment data so the Department 
of Labor can properly conduct oversight. I want to hear from 
the Department of Labor what can be done to rectify the 
situation.
    I thank you again, Mr. Chairman, for holding this, and I 
look forward to the testimony of our witnesses. Thank you very 
much.
    Chairman Craig. Thank you very much, Senator Akaka.
    Let me turn to Senator Isakson for any opening comments he 
would like to make. Johnny?

  STATEMENT OF HON. JOHNNY ISAKSON, U.S. SENATOR FROM GEORGIA

    Senator Isakson. I want to thank you, Chairman Craig, and I 
want to take this opportunity to thank the panelists for being 
here. At this particular time in our Nation's history, this is 
probably as important a topic as we could be discussing, given 
the number of veterans who are deployed.
    But I would like to take a little bit of a different tack, 
Mr. Chairman, if I can, and I know I will be accused of maybe 
being what we refer to in sports as a ``homer'', but I want to 
refer everybody to the cover of this month's American Legion 
magazine and the picture of Bob Nardelli, who is the president 
of the Home Depot. And I want to talk for one second about a 
gentleman by the name of Ted Daywalt in Georgia.
    First of all, the Home Depot--this happens to be an 
interview about their program, where last year they donated 1 
million man-hours and millions of dollars to repair homes of 
veterans who are deployed around the world, for their spouses 
and their children. But in addition, the Administration 
recently gave Home Depot its highest award for their employment 
program of veterans, which, among other things, includes 
obviously what we expect, which is re-employment, but it 
includes the extension of benefits, extension of training, 
compensation, equalization, and everything a person would hope 
an American veteran would receive from American industry.
    As we look to Government programs to solve these programs, 
and certainly we should, I encourage us to use these programs 
to be catalysts in American industry to show vividly and 
demonstrate what corporations in America are doing. The Home 
Depot is not the only one. But I would submit to you there are 
a lot of corporations that could do better. And sometimes it is 
out of sight, out of mind. So as we have this hearing, I hope 
it will encourage us to do that.
    Secondly, I don't have a picture or a magazine about a 
gentleman by the name of Ted Daywalt, but I just want to pay 
tribute. He is a veteran who started a business about 9 years 
ago to employ veterans and find jobs for veterans and match 
veterans with jobs. People like that who are out there and 
those businesses that, in fact, do it should equally be 
encouraged and served by the Veterans Administration to help 
them in those placements because there is no better way to find 
a job than to match it with an activist in the community and an 
employer in the same community.
    In my testimony today I want the record to reflect my 
personal deep appreciation to the Home Depot for not its token 
commitment, but its complete commitment to the veterans of the 
United States of America, both those who are activated that 
work for them, as well as those they employ who return from 
active duty who didn't work for them before.
    If I remember correctly, the number is in the tens of 
thousands of employees. We are not talking about a handful of 
people. We are talking about tens of thousands of employees who 
are service members--Guardsmen, Reservists, and active duty--
who have been touched.
    Then equally to those community activists, former veterans, 
who established their life's business to find veterans jobs and 
employment in their communities upon returning home. The two 
best programs we could have for veterans in our country is a 
corporate America that is equal to the task of providing 
employment when they return and extending benefits while they 
are away and activists with veterans experience who act as job 
finders in our local communities.
    I appreciate the time, Mr. Chairman.
    Chairman Craig. Very well spoke, Senator Isakson. Thank you 
for citing that example. It is really a stellar example.
    Let me turn now to Senator Patty Murray. Senator?

  STATEMENT OF HON. PATTY MURRAY, U.S. SENATOR FROM WASHINGTON

    Senator Murray. Thank you very much, Mr. Chairman, Senator 
Akaka, for calling this really important hearing. I want to 
join in welcoming all of our panelists. Secretary Principi, it 
is great to see you again. Assistant Secretary Ciccolella, 
thank you so much for your work as well, and Dr. Nilsen.
    When our veterans come home from fighting for us, they need 
to come home to a community that will support them and they 
need to come home to a job. That is really why this hearing is 
so important. When it comes to veterans employment, I get to 
see the challenge from three different perspectives.
    First, as the Ranking Member on the Employment and 
Workplace Safety Subcommittee, working with Senator Isakson, 
overseeing the efforts of the Department of Labor to help our 
veterans. Also, of course, serving on this Committee, where we 
look at how the VA is meeting its veterans' needs. And finally, 
when I am home in Washington State, talking with veterans on 
the ground and hearing from them firsthand what the real 
challenges are on the home front.
    I have held 8 roundtables and 1 VA field hearing in 
Washington State, and no matter where I was or what we focused 
on, there was one clear message I was hearing from our 
veterans, and that is veterans are falling through the cracks. 
Whether it is getting health care or getting job training, 
veterans are falling through the cracks today, and I want to 
give you some examples.
    Last August, in Longview, Washington, I met a veteran who 
had been discharged from the National Guard 2 months earlier 
without any financial benefits. He couldn't find a job. He was 
married, had three kids, and he told me he had to go sign up 
for food stamps. That is a man who served our country with 
honor, and he was falling through the cracks.
    Guard members have told me that they are falling behind at 
work after they have been deployed for a year or more, and they 
don't know how to get the training so they can catch up again. 
Other Guard members have been telling me about employers who 
are nervous about hiring Guard members since they might have 
medical issues, or they may be deployed again in a short time.
    One Guard member at our Senate Veterans' Affairs Committee 
hearing testified that he lost his business because the SBA 
programs that are intended to help small business owners and 
the self-employed didn't work with the realities of 
mobilization. I have also heard about the Transition Assistance 
Program, the TAP program, doesn't work within the 3- to 7-day 
timeframe that our Guard members are given to separate, and it 
is too focused on the needs of traditional forces, which is a 
finding that has been confirmed now by a GAO report as well.
    The good news is there are steps that we can take. Three 
years ago, we looked at the problems that veterans were having 
finding jobs, and we saw a broken system. After a lot of work, 
we did pass the Jobs for Veterans Act. That goal was to 
streamline the programs and bring together the stakeholders to 
help veterans find employment.
    I think that law made a lot of progress and it is a great 
thing. The system is working better than it did in 2002. But 
since we passed that law, a lot of things have changed, and the 
veterans job system hasn't kept pace. If we are going to help 
meet the current challenges, we need to recognize three facts.
    First, on sheer numbers, we have got a growing veterans 
population, and those large numbers are outpacing the support 
that we have in place. Compared with past wars, we have more 
disabled veterans who are coming home and they are having a 
very hard time finding a job.
    Secondly, many of the veterans who are now coming home are 
members of the Guard and Reserve, and they face some very 
unique challenges that we are not equipped to handle today. 
About 40 percent of those serving in Iraq today are in the 
Guard and Reserve. Many of those Guard and Reserve members, 
when they come home, live far away from a military base or any 
other kind of support center, and help is not just around the 
corner. So we have got to do a better job of outreach.
    A challenge they often have is the very short transition 
period that they have. If we don't get them the help that they 
need in that very short window, they often fall through the 
cracks.
    Third, many of our returning veterans don't know that help 
is available, and the people who can help them don't know that 
veterans need their assistance. I heard from Guard members who 
were struggling and didn't know that help was even out there.
    Last October, a few months ago, I met with a group of 
veterans and employment leaders in Vancouver, Washington, and 
at the table, there were two Washington National Guard members, 
Nathan Rivera and Doug Dupee. Nathan had come back from the 
Middle East in March, a number of months earlier, 8 months 
earlier, and still had not found a job. Doug told me he had 
given up finding a job and finally had just gone back to 
school.
    Sitting at the same table was a man named Jerry Bloss. He 
is a veterans representative, working at the Work Source Center 
there in Vancouver. Jerry sat there and listened to these two 
stories and he turned and said to them, ``I could help you 
guys, but I didn't know how to find out.''
    Mr. Chairman, we need to do a better job of connecting 
those veterans who need help with the people who are on the 
ground ready to help them. Mr. Chairman, it is great that we 
have made some progress in updating a jobs program from the 
cold war era to the needs of 2002, but now I firmly believe 
that we need to bring this up to date to meet the challenges 
that we are now facing in 2006. Otherwise, we are going to 
continue to see our veterans fall through the cracks.
    Thank you, Mr. Chairman.
    Chairman Craig. Senator, thank you for that very thorough 
statement. It is appreciated.
    Senator Burr, any opening comment?

  STATEMENT OF HON. RICHARD M. BURR, U.S. SENATOR FROM NORTH 
                            CAROLINA

    Senator Burr. Mr. Chairman, I will. I am not sure that I 
can add to what my two colleagues before have said. Let me 
welcome our panelists today. Secretary, it is good to see you.
    I sit here in hopes that one day we won't need legislation 
for U.S. corporations that are successful to realize the reason 
they are successful is because so many brave people have made 
sure they could do what they do. This weekend, I was at a 
university event where Magic Johnson was honored and clearly a 
star.
    As he stood up to be recognized for the over 30,000 jobs he 
has created in 80 cities for minorities, he said, ``I shouldn't 
be here receiving recognition for something I am obligated to 
do, and that is to go back to the communities that I grew up 
in, the communities that supported me in my career, and to use 
my rewards to touch somebody else's life.''
    We need the Act that we have got in place, but we also need 
a spirit in this country where we all go out and remind 
American business companies why they have the ability to 
operate and to be successful. They should fall all over 
themselves to absorb these individuals as they come back.
    I commend Home Depot and the other companies. Johnny is 
right to highlight them. They have been really a leader in it. 
I commend companies like Wachovia that have really handled the 
call-up of Reservists and Guard, and they have done it in a way 
that has not only made sure that they had a job when they came 
back, but that their families were taken care of while they 
were gone.
    Sometimes we are given challenges to make us stronger. I 
hope that is what we are going through now. At the end of this 
process, we will see if American business responds to the 
challenge.
    I thank you, Mr. Chairman.
    Chairman Craig. Senator, thank you.
    Senator Salazar, thank you for joining us. Any opening 
comment?

   STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR FROM COLORADO

    Senator Salazar. Thank you, Chairman Craig, for holding 
this very important hearing. To our distinguished panel, 
welcome this morning. Particularly former Secretary Principi, 
it has always been an honor to watch your work and to know of 
your great service to our country in so many different 
capacities.
    When our service members enter active duty, they are often 
uprooted from their lives, their families and their 
communities. They are also removed from their previous jobs 
and, in many cases, this change becomes a permanent case.
    The transition from a life of relative normalcy to a life 
of military service is an extremely difficult one to make, but 
most of our brave men and women in uniform make it willingly, 
in full recognition of the sacrifice they are about to make for 
our country.
    As we watch these same members of our military return from 
Iraq and Afghanistan, we sometimes overlook the drastic nature 
of the transition that they face. That is why it is so 
important that we have this hearing today. As difficult as it 
is for someone who is 18, 19, or 20 years old to leave their 
home and family to enter a dangerous theater of war, it can be 
equally difficult for them to return to the lives that they 
have left behind.
    Among the more difficult aspects of this transition is the 
need to once again come home to find a way to make a living. 
Often, the jobs they left behind are no longer there. And now, 
several years later, the experience they had gained before has 
lost its value.
    Our Government and our Nation owes it to these veterans to 
help provide them with the resources and guidance they need to 
find good jobs. That is why we have the Veterans' Employment 
and Training Service Program. That is why Congress passed the 
Jobs for Veterans Act 3 years ago. And that is why we are 
holding these hearings today to make sure that we fulfill our 
promise to the Nation's veterans.
    I am troubled, frankly, when I look at the chart that is 
behind the Chairman today, and I compare the unemployment rates 
that apply to veterans and nonveterans. When I look at an 
unemployment rate of 14 to 15 percent for our veterans, it is 
troublesome to me. Because when I look at those kinds of 
unemployment rates, it reminds me of the rural parts of my 
State of Colorado, which sometimes are the most difficult 
places to find any kind of economic revitalization.
    Those kinds of unemployment rates, when you compare it to 
the unemployment rate of the Nation at 5 percent, seem to me to 
be totally unacceptable. How can we have an unemployment rate 
for America where we are at approximately 5 percent, and yet 
among the people who have served our Nation, who have 
sacrificed so much for our Nation, the unemployment rate among 
veterans is 15 percent?
    I believe that we can do better and I believe that the 
Veterans' Administration, working with this Committee, has all 
the right intentions. If there is anything that we can do to 
make sure that we bring that red line down to a point where it 
is more close to the unemployment rate of the Nation as a 
whole, I believe that we would be doing a great service to our 
country.
    Thank you again, Mr. Chairman, for holding this hearing on 
this very important subject.
    Chairman Craig. Senator Salazar, thank you very much.
    Senator Obama, any opening comment?

   STATEMENT OF HON. BARACK OBAMA, U.S. SENATOR FROM ILLINOIS

    Senator Obama. Thank you very much, Mr. Chairman, my 
colleagues, Mr. Secretary, and the other panelists. I want to 
very much thank you, Mr. Chairman and Ranking Member Akaka, for 
calling this hearing.
    At the outset, let me say that the Labor Department's VETS 
program does terrific work across the country. You have got a 
network, as I understand it, of 2,400 veterans employment 
specialists. The reports I have heard back is that VETS 
provides comprehensive services to help veterans get and keep 
high-quality jobs.
    But we are here today to perform a check-up of the program 
3 years after Jobs for Veterans Act went into effect, and I 
have a particular interest in this check-up because it appears 
that there are some problems with Illinois's veterans 
employment system.
    As I understand it, Illinois ranks dead last in the Nation 
for the job placement rate of its veterans. Dead last. 
According to Labor Department statistics, only 34 percent of 
veterans who seek assistance are finding jobs. That is almost 
half the national average of 62 percent and 9 points lower than 
the second-worst State.
    Obviously, I was shocked to hear this news because I think, 
as you are all aware, Illinois is a State with a proud 
tradition of serving veterans. We have a lot of talented, 
dedicated, and hard-working people who work for the State of 
Illinois on this issue. They care about veterans, but for some 
reason, the system is not translating into measurably good 
performance.
    I believe there are two major causes for this problem. One 
is funding. The second is accountability. To the funding issue, 
since the JVA changed the formula, Illinois's funding has 
dropped 18 percent, which has led to a reduction in staff and 
reshuffling of workers between offices. This is a problem that, 
from what I gather, is shared by a number of other States.
    I was just reviewing some statistics here, and it appears 
that there are at least 31 States who saw problems with respect 
to funding as a consequence of the bill that was passed, which 
I wasn't here when the bill was passed. I am trying to figure 
out how that could have occurred. But an 18 percent drop is 
obviously going to have some impact on performance. My 
understanding also is that 8 of the 10 lowest performing States 
saw their funding decrease significantly since 2003.
    We have got a major funding issue, but the problem is more 
than just reduced funding. States like North Dakota and 
Vermont, which each saw their funding drop by a third, still 
remain among the highest performing States in the Nation. 
While, obviously, Illinois is a big industrial State and has a 
different set of problems than small States like North Dakota 
and Vermont, and although I think money makes a difference, I 
am not somebody who is suggesting that we just throw money at 
the problem. So that leads to a second issue, the issue of 
accountability.
    One of the JVA's most important goals was to improve 
accountability in the system. It was supposed to make it easier 
for States to keep track of local performance and, in turn, for 
the Feds to keep track of the States. The GAO reported in 
December that in this crucial area, the Labor Department is 
coming up short. A third of the States said monitoring has not 
improved since 2003, and 21 States couldn't even keep track of 
local-level data.
    In the case of Illinois, the Labor Department argues that 
Illinois is actually doing much better than its raw numbers 
show and that the low job placement rates just reflect a 
difference in counting methods. But we would be wrong, I think, 
to minimize this problem as a minor accounting issue. If we 
can't quantify the problem, we are not going to be able to 
address any problems that may be there. And unfortunately, for 
too long, the Labor Department doesn't seem to have a handle on 
what is going on in Illinois.
    I am encouraged by steps that the Labor Department has 
recently taken, but I think much more needs to be done. Step 
one, I guess, would be to get the numbers right. Part of the 
goal originally of the JVA was to standardize in some fashion 
how we are tracking this stuff. So I am going to be interested 
in figuring out why that is not happening.
    It means figuring out, as Senator Murray eloquently stated, 
which veterans are falling through the cracks and developing a 
plan to improve services across the board, but particularly to 
target those who are in most need of help.
    One last point, Mr. Chairman, I think we also have to draw 
attention to the problem of homelessness among veterans, which 
is so intimately tied to employment. Elaine Knox of the 
Illinois Department of Employment Security said you can't 
concentrate on employment if you don't have a home. This year, 
there are 54,000 veterans--54,000 veterans--who will sleep on 
the streets of Chicago. Fifty-four thousand in one city in 
America, and that is just a remarkable number.
    I have introduced legislation to begin addressing this 
problem. I appreciate the Chairman's commitment to hold 
hearings on this issue later this year. But I think it is 
important for all of us to note, as we are talking about the 
issue of employment, that it is going to be intimately tied 
with stabilizing the lives of a lot of these veterans.
    Thank you, Mr. Chairman.
    Chairman Craig. Senator, thank you. I think, to this panel, 
you have heard the concerns, and there are many. That is why we 
are here. We believe the program is substantially 
underperforming, and we want to know why. So we thank you for 
being with us today.
    Let me turn to the gentleman who started this ball rolling 
in looking at veterans employment. That started 10 years ago 
with the Transition Commission. Mr. Secretary, again, welcome 
before the Committee. The microphone is yours.

  STATEMENT OF HON. ANTHONY J. PRINCIPI, FORMER SECRETARY OF 
                        VETERANS AFFAIRS

    Secretary Principi. Thank you, Mr. Chairman. Good morning, 
Senator Akaka and Members of the Committee. It is a pleasure to 
be back before you, and I commend you, Mr. Chairman, Senator 
Akaka, and all the Members, for holding this hearing and for 
everything you do for our Nation's veterans.
    Senator Isakson, I just want to comment on Home Depot as 
well. As Secretary, I learned firsthand about Home Depot's 
commitment to veterans, and I really do believe they are a 
corporate model that should be emulated across the country.
    I know it comes from Bob Nardelli's heart because I 
remember he told me one day that his dad, who is a decorated 
World War II veteran in his late eighties, volunteers every day 
at the VA medical center, Wilkes-Barre, Pennsylvania. I think 
it is that commitment that has made him such a force in 
veterans employment issues and I think it is shared by others 
as well. But I did want to mention that because he is such a 
great man.
    Our Nation depends upon the willingness of the men and 
women who embody our armed forces to assume the risks and 
endure the hardships necessary to secure our freedoms and 
independence, and those risks and hardships are difficult 
realities at all times and in all places. But they are 
magnified now for the service members--active and Reserve, 
Guard--who have responded and are now responding to the demands 
of the global war on terror, particularly in Iraq and 
Afghanistan.
    Just over a year ago, while serving as Secretary of 
Veterans Affairs, I was privileged to share the holiday seasons 
with our men and women in uniform in Afghanistan and the 
Persian Gulf, and I know that I share the same belief of every 
Member of this Committee when I say that they are truly 
America's best.
    Not diminishing my fellow Vietnam veterans and all veterans 
of previous wars and peacetime service, I think we have fielded 
the very best in courage and compassion on the battlefield of 
Iraq and Afghanistan, and they certainly make me proud to be an 
American.
    Just as those men and women assumed an obligation to our 
country when they took their oaths of enlistment, so did our 
country assume a reciprocal obligation to them when they 
complete their service. When they set their uniforms aside, 
assume the honored title of veteran, we owe them the assistance 
they need to make a successful transition to civilian life. And 
suitable employment is the key to a successful civilian life.
    A veteran with a good job is a veteran with a head start in 
overcoming the ``slings and arrows of outrageous fortune'' and 
in laying a firm foundation upon which he or she can build a 
life and a family. Conversely, a veteran searching for a job is 
a veteran burdened with an unnecessary handicap in dealing with 
the challenges of life and a veteran attempting to build a 
future on a foundation of sand.
    That is why the Congressional Commission on Service Members 
and Veterans Transition Assistance placed such a heavy emphasis 
on reform of Federal programs assisting veterans in obtaining 
their first jobs and again why I commend this Committee for 
holding this hearing.
    The Transition Commission's research led us to believe that 
the organizational structure for veterans employment programs 
was not conducive to success. And back then, if I recall the 
statistics correctly, the unemployment rate for recently 
separated active duty service members was 20 percent higher 
than their nonveteran counterparts in the same age group, 20 to 
24.
    We found back in 1997, 1998 that only 300,000 of the 2 
million veterans who registered with the employment service 
obtained suitable employment, and only 12 percent obtained 
permanent employment. We felt that that was really unacceptable 
and that reforms were necessary in this program.
    Most importantly, we found that there was little that the 
Federal Department of Labor Veterans' Employment and Training 
Service could do to effectively influence outcomes at the local 
level because of the statutory limitations with which they had 
to work.
    I am pleased that the Congress enacted reform legislation 
in response to the Commission's findings, and I commend GAO and 
the Congress for following up on the effectiveness of that 
legislation. While I am not in a position to opine on the 
effect of reform legislation or the effectiveness of veterans 
employment assistance programs as they exist today because I 
really haven't been close to it anymore, I will take the 
liberty of suggesting some questions, the answers to which may 
illuminate paths the Committee may desire to follow.
    Do employment program managers and workers, for both 
veteran-specific programs and for programs serving the general 
population, have clearly defined goals and performance 
standards for placing veterans in suitable jobs? This question 
is applicable to employment service processes and especially 
for their outcomes.
    Have program leadership at both the State and the Federal 
level established management information systems that measure 
actual verified performance against those standards?
    Perhaps most importantly, as Senator Obama pointed out, do 
the States hold their local offices accountable for their 
outcomes, and does the Federal Department of Labor hold the 
States accountable for their outcomes in finding veterans 
decent, good jobs upon which to build a successful life?
    Are there sanctions for poor performance? Are there rewards 
for good performance? Are those sanctions and rewards 
effective? If there are States or offices that have not met 
standards, what corrective actions have been taken, and what is 
the effect of those actions?
    While there are virtually limitless nuances to oversight of 
a program this diverse and this important, I believe that the 
answers to these questions will give the Committee a great deal 
of insight into whether the Congress satisfied its obligation 
to America's veterans when it enacted Public Law 107-288.
    Thank you, Mr. Chairman. I would be pleased to respond to 
your questions.
    [The prepared statement of Hon. Anthony J. Principi 
follows:]

  Prepared Statement of Hon. Anthony J. Principi, Former Secretary of 
                            Veterans Affairs

    Good Morning Chairman Craig, Senator Akaka, members of the 
Committee.
    Our nation depends upon the willingness of the men and women who 
embody our Armed Forces to assume the risks and endure the hardships 
necessary to secure our freedoms and independence. Those risks and 
hardships are difficult realities at all times and in all places, but 
they are magnified now for the servicemembers, active and reserve, who 
have responded, and are now responding, to the demands of the global 
war on terror, particularly in Iraq and Afghanistan.
    Just over a year ago, while serving as Secretary of Veterans 
Affairs, I was privileged to share the holiday seasons with our 
uniformed defenders in Afghanistan and in the Persian Gulf and I can 
assure you that those men and women are America's best; and they make 
me proud to be an American.
    Just as those men and women assumed an obligation to our country 
when they took their oaths of enlistment, so did our country assume a 
reciprocal obligation to them when they complete their service. When 
they set their uniforms aside and assume the honored title of 
``veteran'' we owe them the assistance they need to make a successful 
transition to civilian life.
    Suitable employment is the key to a successful civilian life. A 
veteran with a good job is a veteran with a head start in overcoming 
the ``slings and arrows of outrageous fortune'' and in laying a firm 
foundation upon which he or she can build a life and family. 
Conversely, a veteran searching for a job is a veteran burdened with an 
unnecessary handicap in dealing with the challenges of life and a 
veteran attempting to build for the future on a foundation of sand.
    That is why the Congressional Commission on Servicemembers and 
Veterans Transition Assistance placed a heavy emphasis on reform of 
Federal programs assisting veterans in obtaining their first jobs and 
why I commend the Committee for holding this hearing.
    The Transition Commission's research led us to believe that the 
organizational structure for veterans' employment programs was not 
conducive to success. While we found some states provided effective 
services to veterans, other states were ineffective. Most importantly, 
we found that there was little that the Federal Department of Labor 
Veterans Employment and Training Service could do to effectively 
influence outcomes at the local level.
    I am pleased that the Congress enacted reform legislation in 
response to the Commission's findings and I commend the Government 
Accountability Office and the Congress for following up on the 
effectiveness of that legislation.
    While I am not in a position to opine on the effect of reform 
legislation or the effectiveness of veterans' employment assistance 
programs as they exist today;
    I will take the liberty of suggesting some questions the answers to 
which may illuminate paths the Committee may desire to follow.
    Do employment program managers and workers, for both veteran 
specific programs and for programs serving the general population, have 
clearly defined goals and standards for placing veterans in suitable 
jobs? This question is applicable to employment service processes and 
especially for their outcomes.
    Have program leadership, at both the state and the Federal level, 
established management information systems that measure actual verified 
performance against those standards?
    And, perhaps most importantly, do the states hold their local 
offices accountable for their outcomes and does the Federal Department 
of Labor hold the states accountable for their outcomes?
    Are there sanctions for poor performance? Are there rewards for 
good performance? Are those sanctions and rewards effective? If there 
are states or offices that have not met standards, what corrective 
actions have been taken and what is the effect of those actions?
    While there are virtually limitless nuances to oversight of a 
program this diverse and this important, I believe that the answers to 
these questions will give the Committee a great deal of insight into 
whether the Congress satisfied its obligation to America's veterans 
when it enacted P.L. 107-288.
    Thank you Mr. Chairman, I would be pleased to respond to your 
questions.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Larry E. Craig to 
                        Hon. Anthony J. Principi

    Question 1a. In your written testimony, you suggest that this 
Committee attempt to ascertain the answers to several key questions in 
order to measure whether reform legislation--the Jobs for Veterans Act 
(JVA)--has been successful. The questions you posed include: Do the 
states hold their local offices accountable for their outcomes and does 
the Federal Department of Labor hold the states accountable for their 
outcomes? Are there sanctions for poor performance? Are there rewards 
for good performance? And are those sanctions and rewards effective? If 
the Committee discovers that the answers to those questions are 
negative, should we conclude that fundamental reform is still 
necessary?
    Answer. If the Committee determines that states are not holding 
local offices accountable for veterans' employment outcomes, and that 
the Federal Department of Labor does not hold the states accountable 
for their outcomes, then fundamental reform remains necessary.
    Question 1b. If so, what reforms would you recommend that the 
Committee consider?
    Answer. One reform the Committee should consider would be 
competition for DOL funding to provide employment services to veterans. 
The prospect of competition would provide an incentive to state program 
leadership to improve service and, in the event that service did not 
improve, would provide a mechanism to transfer resources to other 
providers better able to provide veterans with the services they need.
    Question 2. Attached is an organizational chart reflecting the 
Government Accountability Office's best attempt to capture the various 
Federal and State entities that administer the Department of Labor's 
grants for veterans' employment services. As the former head of the 
second largest bureaucracy in government, I am sure you are aware of 
the impact organizational structures can have on an agency's ability to 
establish clear lines of program authority and accountability. What is 
your reaction to an organizational chart like this one?
    Answer. More important than an organizational chart are the ability 
to establish performance standards and to hold local leadership 
accountable for their performance.
    The chart indicates that ETA and VETS would be ``accountable for 
national performance goals'' and that the ETA and VETS Regional 
Administrators would ``initiate corrective action as needed''. The 
chart also specifies that the ETA Regional Administrator and the DVET 
would have ``program oversight but not supervisory authority over state 
and local staff''. The State Workforce Agency would be ``accountable 
for state performance goals.'' First-line employees in the One-Stop 
Career Center would be ``accountable to the state agency.''
    The key questions unaddressed in the organizational chart are the 
mechanisms for that accountability.
    Question 3. The report of the Congressional Commission on Service 
members and Veterans Transition Assistance recommended that veterans' 
employment grants to States be subject to competition from other, non-
State providers. Given your role as Chairman of the Transition 
Commission, what did you believe to be the benefit of awarding the 
grants on a competitive basis?
    Answer. As noted in my response to the first question, the prospect 
of competition would provide an incentive to state program leadership 
to improve service and, in the event that service did not improve, 
would provide a mechanism to transfer resources to other providers 
better able to provide veterans with the services they need.
    Question 4a. During your tenure as Secretary of Veterans Affairs, 
the Administration proposed that the Disabled Veterans' Outreach 
Program and the Local Veterans' Employment Representative program be 
transferred to the Department of Veterans Affairs (VA) and that VA 
establish a new competitive grant program. What was your response to 
those who suggested that VA should not administer the grant program 
because veterans would ``lose out'' on the Department of Labor's vast 
infrastructure of One-Stop centers?
    Answer. The validity of that concern is proportional to the extent 
to which veterans' current access to that ``vast infrastructure'' does, 
in fact, meet their needs to obtain suitable employment. The ability to 
establish performance standards and to hold local leaders accountable 
for their outcomes would likely have more impact on program 
effectiveness than the name of the Department administering the 
program. However, there is no reason why a statute transferring overall 
responsibility to VA could not also require DOL funded ``One-Stop'' 
centers to provide veterans with employment services.
    Question 4b. Do you still believe this to be a good idea?
    Answer. VA has no mission other than service to veterans. It has no 
non-veteran constituencies competing for attention or resources. I am 
confident that, if assigned the mission, and entrusted with the 
necessary resources and the ability to hold program managers and 
workers accountable for outcomes, VA could and would provide veterans 
with excellent service.
    This opinion should not be construed as a criticism of DOL since I 
do not believe that DOL has, or has had, the ability to hold the 
organizations and personnel providing services to veterans accountable 
for their outcomes.

    Chairman Craig. Tony, thank you very much.
    And now let us turn to the Assistant Secretary for 
Veterans' Employment and Training, the Honorable Charles 
Ciccolella. Chick, welcome.

 STATEMENT OF HON. CHARLES S. CICCOLELLA, ASSISTANT SECRETARY 
FOR VETERANS' EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF LABOR

    Mr. Ciccolella. Thank you, Mr. Chairman, and thank you for 
holding the hearing.
    I will keep my oral statement to 5 minutes, and I ask that 
my statement be entered into the record.
    Chairman Craig. Without objection, your statement will 
become a part of the record.
    Mr. Ciccolella. I will try to give a brief summary of our 
progress in implementing the Jobs for Veterans Act and the 
program accountability for the DVOP, the Disabled Veterans' 
Outreach Program, and the Local Veterans' Employment 
Representative Program.
    The JVA significantly changed the way in which employment 
services are provided to veterans through the workforce system, 
and we are now in the third year of its implementation. We 
think the law is working well. It is certainly beginning to 
work well, and we think that there is a bright future on this 
law.
    When the JVA first came out, we took a very business-like 
approach to its implementation. We knew that it had to be 
implemented right away. So we took the larger pieces first, and 
we put the issues in priority. We established the funding 
formula very quickly for the DVOP and LVER grants. That took 
regulations to do.
    Some States were, in fact, negatively impacted by the 
funding formula. We made every effort to mitigate the impact of 
that negative impact.
    Working with the Employment and Training Administration in 
the Department of Labor and the other Department of Labor 
agencies, we implemented the priority of service provisions as 
a department. We published general guidance to the State 
workforce agencies, and then we followed that guidance up with 
very specific program guidance for each of the programs for 
which veterans would receive priority of service.
    We changed the way in which we monitored State performance 
to provide more flexibility to the States to operate the JVA 
program, and we publish guidance on the use of part-time staff, 
the veteran representative staff.
    Some things have gone well, and some things are still yet 
to be done. We haven't fully fixed the Federal Contractor 
Program requiring these companies to lift their job openings 
and make them available. We have not implemented a national 
threshold for entered employment from which determinations of 
deficiency can be made in the States because we don't have the 
data yet to do that. We are still working on those items. And 
the States have struggled with the positive incentives issue 
because of particular State laws or prohibitions against the 
use of cash awards.
    But I would like to assure the Committee that the changes 
in the JVA have paid huge dividends. If you look at entered 
employment rates from 1991 to 2001, you find that they range 
from 19 to 32 percent. With the implementation of the JVA and 
other significant changes that we made in the Department of 
Labor and in the Veterans' Employment Training Service, we are 
now looking at much higher veteran employment rates. The 
entered employment rate in the last year was 62 percent.
    A lot of States are exceeding that average. In fact, only 
13 States are not exceeding it, and 4 of those States are very 
close. I will not fail to mention that some of those increases 
are the result of a better reporting system because we get the 
data now from the unemployment insurance wage records that the 
employers in the States actually report. But we believe it is 
also due to better program administration, accountability, and 
leadership.
    Every one of our State directors is focused on higher 
performance goals, and they have specific instructions to do 
that. We recognize that what gets measured gets done. We know 
that what counts are real results, and we think we are 
achieving that in most States. Not every State is where we want 
them to be, but every State has made significant progress.
    We still have a great deal of work to do, but we believe we 
have a very positive agenda in improving employment outcomes 
through the DVOP and the LVER program, just as we continue to 
make progress in protecting service members' employment and re-
employment rights and in improving the transition assistance 
employment workshop.
    We want to work closely with the Committee to continue to 
improve veteran employment outcomes in every State, as well as 
improving employment protections under the USERRA law and our 
transition employment workshops.
    I want to thank the General Accounting Office for their 
review of the JVA because it has been helpful to us. And with 
that, I thank the Committee, and I am prepared to respond to 
your questions.
    [The prepared statement of Hon. Charles S. Ciccolella 
follows:]

 Prepared Statement of Hon. Charles S. Ciccolella, Assistant Secretary 
    for Veterans' Employment and Training, U.S. Department of Labor

    Chairman Craig, Ranking Member Akaka, and distinguished members of 
the Committee:
    It is my honor to appear before this Committee today. Thank you for 
conducting this hearing on the Veterans' Employment and Training 
Service (VETS) programs that provide employment services to our 
Nation's veterans and how VETS is implementing the Jobs for Veterans 
Act with particular emphasis on performance and accountability.
    The enactment of the Jobs for Veterans' Act (JVA), P.L. 107-288, in 
November 2002 has resulted in significant improvements in the provision 
of employment services to veterans and is showing a positive impact on 
veteran employment outcomes. We are starting the third year of 
implementing the law and we have already seen major improvements. My 
testimony today will describe some of those accomplishments and some 
planned improvements for the future.
    The JVA substantially changed how the Federal Government interacts 
with states to provide meaningful employment services to our veterans. 
For instance, the JVA entitled veterans and, in some circumstances, 
their spouses to priority of service under job training programs funded 
by the Department of Labor (DOL). Additionally, the JVA dramatically 
redefined the roles of the veterans' representatives (the Disabled 
Veterans' Outreach Program (DVOP) specialists and the Local Veterans' 
Employment Representative (LVER) staff) and redefined the Federal-state 
relationship as a partnership in providing assistance to veterans 
seeking employment. Under the JVA, states are required to submit grant 
applications to VETS for DVOP/LVER funding, which VETS allocates to 
states in proportion to the number of veterans seeking employment in a 
state. To encourage improved and modernized employment services to 
veterans and to recognize excellence in the provision of these 
services, the JVA also authorized VETS to institute a performance 
incentive awards program whereby 1 percent of the funds made available 
to states could be used to provide incentive awards directly to DVOP 
specialists and LVERs, as well as others in the state workforce agency. 
Moreover, the JVA required that VETS develop a comprehensive 
performance accountability system, including the establishment of 
performance standards and outcome measures. Overall, the JVA has 
provided opportunities to maximize the flexibility afforded to the 
states in providing veterans employment assistance while at the same 
time ensuring states' accountability.
    First, allow me to briefly describe the impact of the JVA. In a 
qualitative sense, the Act has provided the states with greater 
flexibility to adapt their programs to the unique needs of local areas 
where veterans need jobs and employers are seeking capable applicants. 
Our outcome data also indicates progress in helping veterans secure 
employment. During Program Year (PY) 2003, which ended on June 30, 2004 
and encompassed the first year of implementation, the Entered 
Employment Rate was 58 percent for veterans and 53 percent for disabled 
veterans. At the end of PY 2004, outcomes for veterans and disabled 
veterans showed an increase in each category to 60 percent for veterans 
and to 56 percent for disabled veterans. The Employment Retention Rate 
for PY 2003 was 79 percent for veterans and 77 percent for disabled 
veterans. Just 1 year later, at the end of PY 2004, the retention rate 
for veterans increased 2 percentage points. For disabled veterans--
those veterans historically requiring additional assistance to seek and 
find jobs, and to remain employed--the retention rate also increased 2 
percentage points. This comparison of outcome data demonstrates the 
positive impact that implementation of the JVA has had on this Nation's 
veterans.
    As I mentioned earlier, we are just starting the third year of JVA 
implementation. In the first 2 years, we have laid the foundation for 
further improvements. Since the passage of the JVA we have:
     Issued guidance redefining the responsibilities of the 
DVOP specialists and LVER staff;
     Developed training programs that support the JVA by:
         Addressing the new provisions of the law;
         Incorporating the changes in DVOP and LVER 
        responsibilities;
         Emphasizing the integration of DVOP specialists and 
        LVER staff in One-Stop Career Centers, as required by JVA; and
         Disseminating a framework to apply veterans' priority 
        of service to programs funded by DOL.
     Trained over 7,348 participants (including state, Federal 
and Veterans Service Organization staff) in 224 classes held since 
November 2002;
     Published regulations implementing the JVA-required state 
grant funding formula and applied this new methodology to calculate 
state grant allocations for fiscal year 2004, fiscal year 2005, and 
fiscal year 2006.
     Adopted new outcome-based performance measures.
    I'd like to briefly review several of these changes and their 
impact. In addition, I will address our plan to implement some of the 
improvement proposals made by the General Accountability Office 
pursuant to the JVA.

                     DVOP AND LVER RESPONSIBILITIES

    The JVA redefined the roles of the DVOP specialist and LVER staff 
allowing for a more general and flexible application. Both positions 
can now be appointed by the state on a half-time or full-time basis as 
the state determines appropriate, to meet the employment needs of 
veterans at the local level. The DVOP specialist is primarily 
responsible for providing intensive, one-on-one services to the 
individual veteran with an emphasis on the disabled veteran. The LVER's 
emphasis is on providing employment assistance to the veteran, as well 
as the bigger picture of facilitating employment, training, and 
placement services to veterans throughout the workforce system, thereby 
connecting employers with the veterans they require to keep their 
businesses growing. The LVER also assists in reporting on the character 
of services provided to veterans and state workforce agencies' 
compliance with laws, regulations and policies regarding services to 
veterans. The implementation of these changes to enhance services for 
veterans occurred through coordinated workgroups with representatives 
from many stakeholder groups, including VETS, National Association of 
State Workforce Agencies, state workforce agency management staff, 
state veterans program managers, DVOP specialists, and LVER staff.

                                TRAINING

    In response to the new law, we instructed the National Veterans 
Training Institute (NVTI) to conduct initial orientation sessions for 
all states, to redesign the employment specialist training courses and 
to provide readily available information about the JVA on-line, 24 
hours a day. These sessions were attended by DVOPs, LVERs, local office 
managers, and other state workforce agency officials as well as VETS' 
staff.
    The Veterans Services Orientation course was redesigned to provide 
an overview of the law and reflect the new roles and responsibilities 
of the LVER staff and DVOP specialists and how they work with other 
state agency staff. The Case Management course was redesigned to focus 
on the provision of intensive services primarily by DVOP specialists, 
but some LVER staff attend based on requests from the states. A new 
course, Promoting Partnerships for Employment, was specifically built 
around the new roles and responsibilities of the LVER in the workforce 
system. This course focuses on applying labor market information, 
working closely with agency partners, learning to be the veterans' 
representative for office partnerships, informing other staff on the 
requirements under JVA, and developing a public relations plan.
    With the changes and new curriculum development, since November 
2002, NVTI has conducted 224 classes with a total of 7,348 
participants. These participants included:
     2,907 LVER staff and 3,158 DVOP specialists
     388 other state staff (including management)
     447 VETS staff
     52 Department of Defense staff
     396 members of Veterans Service Organizations

                            FUNDING CRITERIA

    In accordance with the Jobs for Veterans Act, VETS provides funding 
to state workforce agencies for the appointment of LVER and DVOP staff 
to enhance the services provided to veterans. State grant allocations 
are determined using a formula that is based on each state's relative 
share of the national total number of veterans who are seeking 
employment. In the state plan submitted and/or updated on an annual 
basis, the state indicates how veterans will receive priority of 
service within that state. The state workforce agencies work in 
cooperation with all partners at the state's One-Stop Career Centers to 
assist veterans, transitioning service members, homeless veterans, 
incarcerated veterans, and the Department of Veterans Affairs (VA) 
Vocational Rehabilitation and Employment program participants.
    To further implement the JVA and to be responsive to the 
President's Management Agenda, VETS made changes to the provisions of 
the fiscal year 2004 Jobs for Veterans state grant application. The JVA 
authorized VETS to phase in over a 3-year period the manner in which 
funds are made available to states. Accordingly, both the fiscal and 
the performance reporting requirements and the reporting systems for 
the Jobs for Veterans state grant program were changed in fiscal year 
2004.
    During fiscal year 2004, VETS shifted the oversight focus from the 
former process, based on inspection checklists, to a more cooperative 
approach focusing on assistance and staff training. This oversight 
shift reflects a stronger emphasis on the partnership between the state 
and VETS in ensuring that the needs of employment seeking veterans are 
met. To further solidify VETS' vision of ``veterans succeeding in the 
21st Century Workforce,'' quantitative performance measures and outcome 
goals for veterans are negotiated with the state.

                               MONITORING

    As part of the JVA implementation, the Department and VETS 
implemented a comprehensive performance accountability system. The 
states submitted their first 5 year plan for fiscal year 2005 and an 
annual plan for fiscal years 2005 and 2006. During the year, states 
submit quarterly manager's reports on services to veterans which 
describe how well the state is achieving its performance goals, and how 
veterans' priority of service is observed with regard to intake, job 
referral, and other One-Stop Career Center activities. Finally, our 
State Directors conduct assessments, which are focused on technical 
assistance and needed training, and reflect a stronger emphasis on the 
partnership between the state and VETS in ensuring the needs of 
employment seeking veterans are met.

                        PERFORMANCE MEASUREMENT

    In order to measure the outcomes associated with veterans served by 
the One-Stop Career Center system, VETS identified three outcome 
measures:
     Entered Employment Rate;
     Entered Employment Rate following Staff-assisted Services; 
and
     Employment Retention Rate.
    These three measures are applied to the outcomes achieved by all 
veterans and to the outcomes achieved by disabled veterans, producing a 
total of six measures for which performance targets are negotiated with 
each state workforce agency. The target levels negotiated for these six 
measures vary widely among the states. However, the establishment of 
target levels provides a useful starting point by which Federal and 
state partners can come together and develop strategies to improve 
employment outcomes for veterans.
    In addition to the performance targets negotiated with the states, 
VETS also adopted the Entered Employment Rate for veterans and disabled 
veterans and the Employment Retention Rate for veterans and disabled 
veterans as Departmental performance targets in the Department of Labor 
(DOL) Strategic Plan.
    To provide a further indicator of performance, VETS initiated a 
program of state Grant-Based Performance Measures for outcomes 
associated with the services provided specifically by DVOP specialists 
and LVER staff.
    The measures negotiated with each state incorporate numerous data 
elements directly related to the provision of services. Grant-based 
performance measures were first implemented in PY 2004. Our initial 
assessment of these grant-based measures is that they have provided a 
good starting point for assessing the employment outcomes directly 
related to the services provided by DVOP specialists and LVER staff. 
Therefore, VETS intends to work with the state workforce agencies and 
other stakeholders in order to further develop and refine these 
measures for PY 2006.
    The attachment to my testimony lists these performance measures. We 
have recommended to the states that they be used in developing DVOP and 
LVER performance plans.
DOL Initiatives:
    Just as the Department and VETS have been implementing the JVA's 
new service delivery system concept, the Department has been making 
major improvements to the One-Stop Career Center system, through which 
the majority of DOL employment services are delivered. Because 
veterans' employment services operate within the One-Stop Career Center 
system, improvements to the system benefit veterans as well as other 
customers.
    Data collection and reporting is an integral part of the nationwide 
One-Stop Career Center system. A major innovation, the Wage Record 
Interchange System (WRIS), implemented in PY 2003, has improved the 
validity of the outcome data reported by the states. WRIS, which is 
funded by DOL and administered by the National Association of State 
Workforce Agencies (NASWA), allows states to exchange quarterly wage 
data regarding individuals who have received workforce investment 
services and match that data across state lines. All states except 
Hawaii, Puerto Rico, and the Virgin Islands participate in WRIS. This 
new methodology is more reliable in tracking and determining outcomes 
on entered employment, employment retention, and average wages.
    Another major innovation is the adoption of Common Measures. Common 
Measures is a Federal Government-wide initiative that uses the same 
definitions across departments and programs to facilitate the 
comparison of different program measurements. Under common performance 
measures, VETS will track entered employment, employment retention, and 
average earnings after participation. Baseline state performance levels 
will be established in PY 2005 and goals will be negotiated with the 
states in PY 2006.

                         GAO REVIEW OF THE JVA

    As previously mentioned, the JVA required a full review of 
employment reforms by the GAO, to include an assessment of the DVOP and 
LVER programs. We worked very closely with the GAO on this review. I 
would like to take this opportunity to comment on some areas in the GAO 
report.
    GAO recommends we ``provide states and local areas with clear 
guidance and assistance regarding the integration of veterans' staff 
into One-Stop Career Centers.'' DOL concurs with this recommendation. 
It is essential that DVOP specialists and LVER staff be fully 
integrated into the state's One-Stop Career Center system so that they 
can assist veterans in accessing the full range of workforce services 
available.
    To improve DVOP and LVER integration in the One-Stop Career 
Centers, DOL has undertaken two collaborative initiatives and has 
planned a third. The first initiative, the ``Key to Career Success 
Campaign,'' involves collaboration between the DOL and the Department 
of Defense. During pre-separation briefings provided at Department of 
Defense transitionsites and Transition Assistance Program (TAP) 
employment workshops administered by VETS, veterans will be given a 
brochure containing a plastic card similar to the cards customers can 
get from major grocery chains. The brochure and card contain 
information on the One-Stop Career Center system and the assistance 
available to veterans seeking employment. There is a toll-free help 
line and a service locator web address that will assist veterans in 
locating the closest One-Stop Career Center by entering their zip 
codes.
    The campaign has been initiated to address priority of service 
among all training programs funded by DOL. It is intended to help all 
eligible veterans with specific targeting to those who have attended 
the TAP employment workshop and pre-separation briefing to leverage the 
power of the nation's network of over 3,400 One-Stop Career Centers. In 
addition, it highlights the acknowledgement of an individual as not 
just an individual, but a veteran seeking employment. Veterans who come 
into the One-Stop Career Centers can be easily identified and afforded 
the priority they so rightly deserve to pursue employment and training 
opportunities. This initiative is just getting into full swing, but we 
expect it to afford the states a greater opportunity to provide 
priority of service to veterans.
    A second initiative launched by the Secretary in October 2004 
mobilizes One-Stop resources to deliver personalized job assistance and 
career development services to veterans and transitioning service 
members who are severely injured in the Global War on Terrorism. 
REALifelines (Recovery and Employment Assistance Lifelines) is a 
person-to-person, face-to-face initiative involving Federal and state 
veteran employment staff in a partnership that provides job training, 
assistance, and placement services whenever and wherever these service 
members need it.
    In support of this initiative, VETS' Federal staff collaborate with 
the Department of Defense and military service representatives in the 
Military Severely Injured Center and throughout the United States, 
including at major military medical centers and medical holding 
companies on military installations. VETS' State Directors and Regional 
Administrators monitor REALifelines in the field. States are responding 
well to REALifelines, and DVOP specialists in particular are becoming 
intimately involved in this important initiative. A Web-based 
REALifelines Advisor (at www.dol.gov/elaws/realifelines.htm) is also 
available to service members and provides job training information and 
services, as well as referral information.
    Finally, VETS plans to sponsor a study during this fiscal year to 
examine JVA's impact on employment services to veterans, as well as the 
impact of other initiatives focused on improving employment services in 
the workforce system. A key objective of that study will be to identify 
specific areas in which clear guidance and assistance are required to 
improve the integration of DVOP specialists and LVER staff into One-
Stop operations.
    The GAO also recommended that the Department ``provide states and 
local areas with clear guidance and assistance regarding the provision 
of priority of service.'' DOL generally concurs with this 
recommendation, but we believe we have worked hard to provide good 
guidance to the states in implementing this important provision. While 
we agree that many of the programs impacted by priority of service 
might benefit from additional clarification or from the provision of 
technical assistance, DOL also believes that the priority of service 
provision has been implemented more completely than the report 
indicates. For example, the Department has disseminated policy guidance 
specifying distinct criteria for applying veterans' priority of service 
for 15 programs in the workforce system. This guidance is consistent 
with our interpretation that veterans are only eligible for priority of 
selection to participate in a specific program after they have met all 
the other statutory eligibility requirements for that program. Because 
of the interaction between priority of service and the specific 
requirements of the impacted programs, the application of priority of 
service will necessarily take different forms, particularly where 
another statutory priority must be applied in conjunction with 
veterans' priority of service.
    GAO recommended we ``disseminate best practices for incentive award 
programs.'' The Department concurs with this recommendation as well. 
Best practices for incentive award programs should be shared among the 
states. Some states are prohibited from providing incentives to 
individuals and, even with a ``best practices'' guidelines, it is still 
unlikely that all states will be able to make use of incentive funds 
for awards to individual employees. DOL believes that there are 
alternatives to the current program, such as a national awards program, 
or the recognition of a service ``unit'' in addition to an individual.
    Another important recommendation from the GAO is that VETS ``target 
monitoring results for program improvement.'' The Department agrees 
with this recommendation. In the past year, DOL has taken a significant 
step to improve coordination of monitoring activities. For instance, we 
have identified VETS field staff as regional accountability contacts. 
These staffs actively participate in bi-weekly conference calls hosted 
by DOL's Employment and Training Administration (ETA). In conjunction 
with ETA's Regional Accountability Specialists, these VETS staffs are 
responsible for working with state workforce agencies staff regarding 
performance measurement of employment services for veterans. Linking 
regional accountability specialists from both agencies provides the 
foundation for jointly planning and conducting monitoring visits and 
jointly enforcing corrective actions as needed. To support these joint 
efforts, we intend to revise the monitoring guide for Jobs for Veterans 
grants by focusing on quality of service and accountability of 
performance.

                                  PART

    During 2005, the DVOP/LVER program was evaluated using the Office 
of Management and Budget's Program Assessment Rating Tool (PART). The 
results of that review will be published in conjunction with the roll-
out of the President's fiscal year 2007 Budget. I believe that the PART 
review has provided us with information that we can use to improve 
program performance, both at the national level and at the grass-roots 
level where veterans are served.

                               CONCLUSION

    When I appeared before this Committee for my confirmation, I said 
that I believed we have a tremendous opportunity to move to a higher 
level in helping service members and veterans obtain better training 
for better jobs. Our economy is strong, our country needs workers, 
veterans are outstanding employees, and there are many new career 
opportunities, especially in high growth, high demand industries. We 
are working hard to fully implement all provisions of the Jobs for 
Veterans Act and to improve the delivery of services to veterans in 
America's workforce system.
    Mr. Chairman, the Department of Labor takes very seriously the 
mandate of the Jobs for Veterans Act and believes we have made major 
accomplishments in its implementation. We are pleased that GAO so 
noted. I assure you we will work diligently to address, and where 
appropriate, take corrective action to fulfill this Congressional 
mandate. As always, we stand ready to work with you and your staff.
    I am happy to respond to any questions.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Larry E. Craig to 
                       Hon. Charles S. Ciccolella

    Question 1a. The attached charts, which are based on data provided 
by the Department of Labor's Veterans' Employment and Training Service 
(VETS), reflect that there is little difference between the entered 
employment rate for veterans served by Disabled Veterans' Outreach 
Program (DVOP) specialists and Local Veterans' Employment 
Representatives (LVERs)--61.1 percent--and the entered employment rate 
for veterans served by Wagner-Peyser staff--59 percent. Also, non-
veterans served at the One Stop Career Centers have a better entered 
employment rate (64 percent) than veterans (60.3 percent). Can you 
explain why services provided by staff who are specially trained to 
deal with veterans' employment issues do not lead to higher entered 
employment rates than services provided by staff without that 
specialized training?
    Question 1b. Can you explain why--in a system that is supposed to 
provide priority of service to veterans and has staff designated solely 
to assist veterans--non-veterans are faring better than veterans?
    Answer. The services provided to veterans by DVOP specialists and 
LVER staff are intended to complement and augment, not duplicate or 
substitute for the services available at One-Stop Career Centers.
    Generally, veterans determined to be job-ready receive assistance 
from Wagner-Peyser staff in accessing core services, whereas veterans 
determined to have more barriers to employment are referred to a DVOP 
specialist for help in accessing intensive and training services. 
Although they have been identified as having more barriers to 
employment, veterans served by DVOP specialists have an entered 
employment rate higher than that of the more job-ready veterans served 
by Wagner-Peyser staff.
    On average, veterans who access One-Stop Career Centers are older 
than non-veterans who access the Centers. After adjusting for this age 
difference, veterans accessing One-Stop Career Centers have a slightly 
higher entered employment rate than do non-veterans (61.6 percent vs. 
61.2 percent, respectively). Source: DOL analysis for Program 
Assessment and Rating Tool (PART) Evaluation, June 2005.
    Question 2. One longstanding concern about the DVOP and the LVER 
programs has been a lack of accountability. Now, 3 years after the Jobs 
for Veterans Act, the Government Accountability Office (GAO) has 
reported that greater accountability is still needed. Do you think the 
organization structure depicted in the attached organizational chart 
may explain, at least in part, why accountability remains a problem?
    Answer. The organization structure chart, created by GAO, correctly 
shows the relationship between the state workforce system and the 
Department of Labor VETS. We do not believe that this organizational 
structure has an adverse impact on accountability.
    VETS has implemented a comprehensive performance accountability 
system, as required by the JVA. We believe this is an effective, 
multifaceted system. It includes the following components:
    (a) Five year state plan with annual modifications: This plan, 
devised by each state and reviewed and approved by the DOL, established 
targets for entered employment and retained employment for all veterans 
and disabled veterans.
    (b) Quarterly reporting by the states: Managers Reports on the One-
Stop Career Centers' service to veterans and a state level Technical 
Report are submitted. In addition, each state reports through the Labor 
Employment Reporting System their performance outcomes for entered 
employment and retained employment.
    (c) State assessment tool: The states provide an assessment of 50 
percent of their One-Stop Career Centers on an annual basis. The VETS 
State Director then conducts a validation of 20 percent of those 
submissions.
    (d) DOL/VETS State of the State/Region: As part of the VETS 
performance management review process, state directors submit annual 
reports on the state of veterans' employment in their state. These 
reports include an assessment of how well DVOP and LVER services are 
integrated and delivered.
    Question 3. You noted in your testimony that the entered employment 
rates have increased over the last few years. But, you also noted that 
a new data collection system was implemented during that time. In view 
of the new data collection method, is it possible to tell whether 
employment outcomes for veterans actually improved during that time?
    Answer. The new reporting system has improved the accuracy of data 
for JVA goals, with a corresponding improvement in program management 
and accountability.
    Outcome data collected through the new system is now available for 
two complete program years. During that time, the rate of entry to 
employment increased by 2 percentage points for all veterans (58 
percent to 60 percent) and by 3 percentage points for disabled veterans 
(53 percent to 56 percent). Similarly, the employment retention rate 
increased by 2 percentage points for both groups (79 percent to 81 
percent for all veterans and 77 percent to 79 percent for disabled 
veterans).
    Question 4a. For many years, the GAO and others have recommended 
that VETS clearly identify populations of veterans that should be 
targeted for assistance and set performance goals that will encourage 
service to those target populations. Has this been done? If so, what 
are the target groups? Are 20 to 24 year olds targeted?
    Question 4b. With the current structure of the DVOP and LVER 
programs, is it possible to ensure that state and local service 
providers embrace Federal priorities?
    Answer. VETS has identified several target populations, and has 
established a monitoring system to track outcomes for them. That 
tracking system allows the agency to determine whether our programs are 
serving those populations effectively or whether increased focus is 
needed to better serve them. The targeted populations are:
    (a) Recently separated veterans (a group that includes most 20-24 
year old veterans);
    (b) Returning seriously wounded and injured veterans. VETS, in 
close collaboration with the DOD and the VA, has implemented a new 
initiative, called Recovery and Employment Assistance Lifelines 
(REALifelines), to provide these veterans with personalized services on 
a one-to-one basis;
    (c) Homeless veterans;
    (d) Veterans with barriers to employment; and
    (e) Disabled Veterans.
    The annual negotiation of performance targets allows for the 
incorporation of Federal priorities into state plans.
    Question 5a. In 2001, you testified before the U.S. House of 
Representatives Committee on Veterans' Affairs that ``incentives and 
sanctions are both important to improve performance'' and that you were 
``investigating other forms of incentives to recognize good performance 
or to impose sanctions when performance is consistently 
unsatisfactory.'' Does VETS have any meaningful tools for sanctioning 
states or localities that either do not perform well or do not provide 
the data needed to assess their performance?
    Question 5b. Are those tools used?
    Answer. VETS has the tools to address shortfalls in performance and 
reporting by grantees, including the authority to reduce or withdraw a 
grant. We employ the tools necessary to achieve the desired results.
    The following tools have proven to be the most effective in 
addressing performance and reporting issues:
    (a) Placing a temporary hold on quarterly allocations motivates 
non-reporting states to take steps to ensure timely reporting.
    (b) When a state is identified as a high-risk grantee, VETS' field 
staff provides technical assistance in the form of coaching, 
collaboration and encouraging state-to-state networking to help the 
state remedy any deficiencies.
    (c) We have also found that one of the best incentives is 
disclosure. Publicizing performance improvements by posting the results 
states have attained provides an incentive to sustained performance as 
well as a competitive challenge to other States to bring up their 
levels of performance.
    (d) Corrective Action Plans are employed as necessary to address 
performance and other deficiencies within a state. By accompanying 
Corrective Action Plans with the delivery of technical assistance, VETS 
assures that state grantees are given every opportunity to succeed and 
that employment services for veterans are maintained at the highest 
possible level.
    Question 6. The DVOP and LVER grant funds are non-competitively 
awarded to states. The Commission on Servicemembers and Veterans 
Transition Assistance, and later the Administration's 2002 legislative 
request, urged the Congress to embrace awarding DVOP/LVER grants on a 
competitive basis. What are your thoughts on introducing some 
competition into these programs?
    Answer. By law, DVOP/LVER funds are made available to each state 
whose application has been approved by the Secretary in accordance with 
the allocation formula established in the JVA. VETS has not considered 
awarding the DVOP/LVER grant funds on a competitive basis within a 
state as this would interfere with state flexibility.
    Question 7a. Last year, the ``entered employment rate'' attained by 
states ranged from a low of 34 percent to a high of 80 percent. What 
accounts for the huge variations in state performance? And what 
measures have been taken to address those variances?
    Question 7b. What leverage--if any--does VETS have over state or 
local service providers that either are performing poorly or not 
providing reliable data for assessing their true performance?
    Answer. We find that states are highly committed to serving their 
veterans. Variations in performance often reflect state and local 
economic conditions. VETS staff work directly with a state to resolve 
issues related to data reliability and low performance.
    We do not believe the 34 percent rate reflects that State's actual 
performance.
    (a) Rather, the low reported results can be significantly 
attributed to the State's data collection processes.
    (b) We are working with both DOL's Employment and Training 
Administration and the State to resolve these reporting problems.
    Question 8a. GAO has reported that 21 states are not reporting 
local-level performance data. Does this affect VETS' ability to conduct 
meaningful oversight?
    Question 8b. It is my understanding that VETS has, in some 
circumstances, withheld funding from states that have not submitted 
required reports. If VETS has that authority, why is it not used to 
force those 21 states to submit the local data?
    Answer. VETS negotiates performance targets at the state level, and 
holds the state accountable for its overall performance. In all states, 
local-level performance data is input into a state data system and 
contained in the state data that is reported to VETS.
    The JVA does not specifically require states to separately report 
performance data at the local level.
    Prior to JVA and states implementing new reporting systems, local 
performance data was provided and some states continue to make such 
data available. However, as mentioned in the GAO review, some states do 
not retain the ability to separately identify the local level data that 
went into the statewide data.
    Question 9a. At the hearing, we heard that 17 states have not 
implemented an incentive award program and that other states 
distributed as little as $16 in award money. Based on those statistics, 
it appears to me that the current incentive program is not an effective 
tool for enhancing performance. Is that an accurate assessment? And do 
you believe that continuing an incentive program in a different form 
would provide states with an effective tool for enhancing performance?
    Question 9b. Would linking incentives to employment outcomes for 
recently separated or disabled veterans help target services to those 
groups?
    Answer. Incentive programs have been implemented in most states, 
and some have reported that it is an effective tool for enhancing 
performance. However, it is clear that some states are not able to 
implement incentive programs along the lines that Congress intended.
    VETS hopes to extend both the range and the level of success of 
state incentive programs by sharing the best practices of those states 
that have implemented successful incentive programs.
    In addition, VETS will work with those states unable to implement 
such programs to explore other options available under existing 
authority that are consistent with the goal of state flexibility.
    We are looking at this issue very carefully and plan to make 
recommendations for change on the incentives awards program.
    For those states that are able to implement the incentives, 
flexibility exists for states to link incentives to employment outcomes 
for target populations, and some states are doing so.
    Question 10. You testified at the hearing that VETS has not yet 
established a national standard for employment outcomes. Given the 
varying demographics and economic conditions around the country, will 
it be feasible to establish a realistic, single goal for all states and 
localities? Or should some flexibility be built into the national 
standard to account for those factors?
    Answer. A national standard applied to each individual state might 
set unreasonable expectations for those states that are improving on 
their relatively low levels of performance. At the same time, such a 
national standard might fail to sufficiently challenge high-performing 
states to continuously improve their veteran employment outcomes.
    Instead of a uniform national standard, a performance band could be 
established to include deviations above and below the national average. 
States performing above the performance band would be considered high 
performers; those within the band would be adequate performers; and 
those below the band would be required to develop and implement a 
corrective action plan for producing more effective outcomes within a 
specified time period.
    As soon as sufficient data has been gathered to establish a 
national threshold baseline, VETS will implement this provision of the 
JVA.
    Question 11a. You have testified previously that VETS' mission is 
``to reduce unemployment and underemployment among veterans.'' So, in 
determining VETS' success, should we look at national trends in 
unemployment rates for veterans? And in determining the success of 
states, should we look at trends in the state veteran unemployment 
rates?
    Question 11b. How do you gauge whether VETS is reducing 
underemployment?
    Answer. At the national level, we believe the most appropriate 
criteria for success are the annual performance outcomes of veterans 
entering and retaining employment through the One-Stop Career System. 
For the year ending June 30, 2005, the outcomes met or exceeded 
established targets.
    At the state level, the most appropriate criteria for success are 
whether their outcome results meet or exceed the target performance 
levels established in the State Plans.
    Reducing underemployment is implicit in VETS' programs' objective 
of placing veterans in the best possible jobs, based on their 
individual aspirations, skills and abilities. DVOP specialists and LVER 
staff provide priority service to both veterans who are unemployed and 
to employed veterans that want to attain higher-level jobs.
    Question 12. In its December 2005 report, GAO stressed that 
available performance data are not used to target additional guidance 
or technical assistance. What, if anything, is done when performance 
data indicate that a state or a particular locality is not performing 
adequately? Are states required to file corrective action plans?
    Answer. States are bound by our grant agreement to provide reports 
and to analyze statewide performance against the negotiated State Plan.
    VETS also analyzes state performance and has meaningful tools to 
address shortfalls in performance and reporting by grantees. Those 
tools, which include Corrective Action Plans, are listed in the 
response to question #5.
    Question 13. In July 2005, you testified before this Committee that 
you would work with the Department of Labor's Employment and Training 
Administration to encourage states to implement the Wage Record 
Information System. It is my understanding that this system has some 
drawbacks, such as the inability to capture data about veterans who 
return to Federal service or who are self-employed. Is that the case? 
And what efforts have you made or will you make to compensate for those 
deficiencies?
    Answer. Every state except Hawaii participates in the Wage Record 
Interchange System (WRIS).
    We are making progress on capturing data on Federal employment. For 
example, 21 states are now participating in the Federal Employment Data 
Exchange System (FEDES) project, which provides access to employment 
records maintained by the Office of Personnel Management, the 
Department of Defense and the United States Postal Service. Another 
seven states are negotiating data sharing agreements in order to begin 
participation.
    WRIS does not capture data on self-employment.
    As discussed in the response to question #18, VETS is currently 
assessing research initiatives that would investigate the question of 
what becomes of those veterans served through the One-Stop Career 
System that are not reported as having entered employment. We hope the 
results of that research will help us better assess how to directly 
address the needs of veterans.
    Question 14. As we discussed at the hearing, the Commission on 
Servicemembers and Veterans Transition Assistance recommended that 
Congress consider transferring certain functions of VETS to the 
Department of Veterans Affairs (VA). Then in 2002 the Administration 
submitted a proposal to transfer those functions to VA. Would you 
provide us with any additional thoughts you have about that proposal? 
Is it possible that employment services to veterans could be improved 
by consolidating veterans' employment services with other veterans' 
services, such as vocational rehabilitation?
    Answer. There is no current Administration proposal to transfer 
VETS' functions to the VA.
    The Workforce Investment System is highly specialized in providing 
employment services and providing skills training and linkages to the 
jobs and occupations that employers demand. High quality employment 
services for veterans benefit greatly from operation within that 
system.
    The core function of the Department of Labor and its Workforce 
Investment System is employment. While it is important that the 
veterans' employment programs coordinate with VA programs focused on 
veterans' health and benefits, I believe veterans are best served by 
the specialized employment services administered by DOL.
    Question 15a. Last year, over $500 million was spent on 
unemployment compensation for ex-servicemembers. Are there any specific 
outreach efforts to veterans who are in receipt of unemployment 
compensation? Is information about these veterans communicated to the 
DVOP specialists and LVERs?
    Question 15b. Does VETS use the amount of unemployment compensation 
paid as a gauge of its success?
    Answer. All states participate in Worker Profiling and Reemployment 
Services (WPRS), commonly called profiling. The intent of profiling is 
to identify those individuals who are most likely to exhaust their UI 
entitlement. In some states, veterans who are identified through 
profiling are referred to the DVOP or LVER for employment services.
    States often provide a list of UCX (Unemployment Compensation for 
Ex-servicemembers) claimants to local DVOP specialists or LVER staff so 
that they can proactively contact the service member by telephone or 
email and offer direct employment assistance.
    VETS does not use the amount of unemployment compensation paid as a 
gauge of its success.
    Question 16. It is my understanding that the current funding 
formula is essentially based on the number of veterans seeking 
employment in a state compared to the number of veterans seeking 
employment nationwide. The Department of Commerce and Labor in my home 
state of Idaho has expressed concern that this funding formula does not 
take into account rural or geographical issues, labor market 
conditions, seasonal fluctuations, or underemployment in the state. In 
order to ensure that states have sufficient funds to meet the unique 
challenges in their individual states, should this funding formula be 
broadened to include more factors?
    Answer. The implementing regulations for the DVOP/LVER funding 
formula provide that supplemental funding not to exceed 4 percent (4%) 
of the funds available for program allocation may be made available for 
exigencies, including, but not limited to, needs based on sharp or 
unanticipated fluctuations in state unemployment levels and services to 
transitioning servicemembers.
    States may request additional funds above the amount allocated 
under the funding formula at any time. We recognize that economic and 
unemployment conditions projected at the time of the grant application 
may not reflect actual conditions. We believe that the ability of 
states to request additional funds provides the necessary flexibility 
to address exigencies.
    The JVA also allows the use of half time DVOP specialists and LVER 
staff, and we believe this helps address the challenges of geographic 
dispersion.
    Question 17. It is my understanding that a significant percentage 
of service members come from rural communities. Are One Stop Career 
Centers an effective means for reaching veterans that return to rural 
areas? Do these veterans have access to career counseling by phone or 
internet?
    Answer. Many rural areas have a half- or full-time DVOP specialist 
or LVER staff person who provides services to their local veterans. In 
those instances where the state determines there are not enough veteran 
clients to justify a part time DVOP specialist or LVER staff person, 
priority services are provided to veterans by Wagner-Peyser or other 
One-Stop Career Center staff.
    Many One-Stop services are available to veterans via the internet. 
The CareerOneStop portal (www.CareerOneStop.org) provides an array of 
services electronically, including:
     America's Service Locator (www.servicelocator.org) 
provides local office information on more than 22,000 local locations, 
including 3,500 One Stop Career Centers;
     America's Career InfoNet (www.acinet.org) provides 
information on occupations, training required for those occupations, 
and financial assistance available;
     America's Job Bank (www.ajb.org) lists over 1 million job 
openings with priority of service afforded to veterans who register 
their resumes on-line; and
     Career Voyages (www.CareerVoyages.gov), a career 
information tool providing in depth information on high growth 
occupations.
    Many states have utilized Workforce Investment Act and Wagner-
Peyser funds to supplement these nationally funded electronic tools.
    Veterans and transitioning military personnel can call 1-877-US-
2JOBS or TTY: 1-877-899-5627 toll-free to locate the nearest One-Stop 
Career Center.
    Many One-Stop Career Centers provide services over the telephone.
    Question 18. It is my understanding that no data are collected 
about veterans who do NOT enter employment after receiving services at 
the One-Stops. Do you believe that information could be helpful? Given 
the current organizational structure of these programs, do you have the 
authority to require DVOP specialists and LVER staff to collect 
additional data?
    Answer. Approximately 60 percent of veterans who exit the One-Stop 
Career Centers enter employment. We believe data on what becomes of 
those veterans who exit the One-Stop Centers but are not reported to 
have entered employment might be helpful, and are currently assessing 
research initiatives that would investigate that question.
    The results of that research will help us better assess whether we 
need to collect more information and how to do that.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Akaka to 
                       Hon. Charles S. Ciccolella

    Question 1. In your opinion, should the Federal Government conduct 
site visits more than once every 5 years?
    Answer. I believe that the existing multifaceted performance 
accountability system, described in detail below, is effective. It can 
also be adapted to provide enhanced oversight, and provides the 
flexibility to perform additional site visits as necessary. Examples of 
conditions that might lead to additional site visits include areas 
where available Disabled Veterans' Outreach Program (DVOP) and Local 
Veterans' Employment Representative (LVER) positions remain unfilled, 
or if process data included in the Manager's Report, described below, 
indicates a significant drop in the services provided to veterans at a 
specific One-Stop Career Center. Another example of a condition that 
might lead to additional site visits is the aftermath of a catastrophic 
event, such as Hurricane Katrina. In that specific instance, the VETS 
State Directors from Alabama, Louisiana, Mississippi and Texas 
conducted numerous site visits to assess operating conditions at 
impacted One-Stop Career Centers and related public workforce 
facilities.
    The comprehensive performance accountability system, required by 
the Jobs for Veterans Act (JVA), includes the following components:
    a. Five year state plan with annual modifications: This plan, 
devised by each state and reviewed and approved by the Department of 
Labor (DOL), establishes targets for entered employment and retained 
employment for all veterans and disabled veterans.
    b. Quarterly reporting by the states: Local level Managers' Reports 
on the delivery of services to veterans at One-Stop Career Centers and 
a state level Technical Report are submitted. In addition, each state 
reports their performance outcomes for entered employment and retained 
employment through the Labor Exchange Reporting System. Beginning July 
1, 2006, states will also be required to report on the average earnings 
of participants who enter employment.
    c. State assessment tool: The states provide an assessment of 50 
percent of their One-Stop Career Centers on an annual basis. The VETS 
State Director then conducts a validation of 20 percent of those 
submissions. VETS State Directors have the discretion and the authority 
to conduct additional site visits wherever problems are suspected. In 
addition, where problems exist, it is common for the VETS State 
Director to schedule regular site visits until satisfied that the 
problem has been resolved.
    d. DOL/VETS State of the State/Region: As part of the VETS 
performance management review process, State Directors submit annual 
reports on the status of veterans' employment and training services in 
their state. These reports include an assessment of how well the DVOP 
and LVER services are integrated and delivered.
    Question 2. What, besides priority of service, is VETS doing 
specifically to address the 15 percent unemployment rate of younger 
veterans? I would hate to see a young person who served this nation 
honorably contending with issues of unemployment when he or she 
separates from the military.
    Answer. I share your conviction that no young person who has served 
in the military should struggle with unemployment upon returning to 
civilian life. VETS has a number of strategies to help young veterans 
get good jobs quickly:
    a. Research indicates that service members who participate in the 
Transition Assistance Program (TAP) employment workshops find their 
first post-military job an average of 3 weeks sooner than those who did 
not attend TAP. Therefore, VETS is working to increase the number of 
troops that participate in TAP employment workshops. In addition, we 
are exploring with DOD the possibility of increasing the length of the 
TAP workshops from two and one-half days to 3 days in duration.
    b. Our Hire Vets First campaign is a national outreach campaign 
connecting employers with job-seeking veterans.
    c. The nation's One-Stop Career System provides priority of service 
to all veterans in accessing employment and training programs. DVOPs 
and LVERs deployed throughout the System assist veterans in identifying 
and accessing the services they need.
    d. VETS will continue to target recently separated veterans through 
the Veterans' Workforce Investment Program.
    e. VETS is collaborating with the Department of Veterans Affairs on 
research that will lead to a better understanding of the employment 
challenges faced by young veterans.
    f. VETS' REALifelines program provides one-on-one employment 
assistance to wounded and injured transitioning service members and 
families to assist their reintegration into the civilian workforce. 
These services are supplemented by an on-line employment law advisor 
(elaws Advisor) that provides access to valuable on-line resources and 
contact information for employment assistance in each state 
(www.dol.gov/elaws/REALifelines.htm).
    Question 3. Much of our focus is on services for newly separated 
veterans. In my home state of Hawaii veterans of the first Gulf War and 
the Vietnam War are coming in for retraining. What specifically is VETS 
doing to reach out to some of these older veterans?
    Answer. VETS and its State Workforce Agency partners conduct 
ongoing activities to reach out to veterans who served in prior 
conflicts. For example, during the past 3 months, VETS staff and DVOP/
LVER staff from the Hawaii Department of Labor and Industrial Relations 
(DLIR) attended 30 meetings at Veterans' Service Organizations and at 
Veterans' Centers to reach out to veterans of all ages and from all 
conflict eras.
    During January, VETS staff and DVOP/LVER staff participated in a 
job fair in Honolulu that was attended by 180 employers and over 3500 
applicants. Similarly, the VETS State Director's recent appearance on 
local TV helped to ``get the word out'' to veterans of all ages. In 
addition, the Helmets to Hard Hats program will be reactivated this 
spring and summer on Oahu with strong support from the local 
construction trades unions, DLIR and VETS.
    Question 4. Why is there no coordinated oversight among Labor 
agencies responsible for implementing the Jobs for Veterans Act's 
reforms?
    Answer. VETS and DOL's Employment and Training Administration (ETA) 
are coordinating their oversight of the Jobs for Veterans Act's 
reforms. Initially, this coordination was focused at the national 
level, with the development of guidelines for implementation of 
priority of service. Currently, the focus of that coordination has 
shifted to the regional level. Since ETA's six administrative regions 
include designated regional performance specialists, VETS recently 
assigned regional office staff members to serve as VETS' counterparts 
to those specialists. The focus of this coordination will shift next to 
the state level, as ETA and VETS initiate coordinated monitoring of 
State Workforce Agency performance.
    Question 5. I am very concerned with the unavailability of local 
performance data. This has weakened Federal oversight. Do you suggest 
can be done to rectify this situation?
    Answer. In all states, local-level performance data is input into a 
state data system and contained in the state data that is reported to 
the Department of Labor. As mentioned in the GAO review (Veterans 
Employment and Training Service: Labor Actions Needed to Improve 
Accountability and Help States Implement Reforms to Veterans' 
Employment Services, GAO-06-176, December 30, 2005), some states do not 
have the ability to separately identify the local level performance 
results that went into the statewide performance data. We do not 
believe that this weakens Federal oversight. VETS' and State staff use 
internal state systems to evaluate process data, such as services 
provided and veterans served, to identify potential problems. Note this 
data is different from state performance outcome data, from which local 
performance results might not be separately identifiable. VETS 
negotiates performance targets at the state level, and holds the state 
accountable for its overall performance. However, sufficient local-
level process data are available to support VETS' Federal oversight 
responsibilities.
    Question 6. In some states, including Hawaii, the law prohibits the 
use of the Jobs for Veterans Act's monetary incentives. For these 
states are there better uses for the incentive money?
    Answer. Incentive programs have been implemented in most states, 
and some have reported that it is an effective tool for enhancing 
performance. However, it is clear that some states simply are not able 
to implement incentive programs along the lines that Congress intended.
    VETS hopes to extend both the range and the level of success of 
state incentive programs by sharing the best practices of those states 
that have implemented successful incentive programs. In addition, VETS 
will work with those states unable to implement such programs to 
explore possible options available under existing authority that are 
consistent with the goal of state flexibility.
    Flexibility exists for states to link incentives to employment 
outcomes for target populations, and some states are doing so. We are 
looking at this issue very carefully and we plan to make 
recommendations for change on the incentives awards program.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Barack Obama to 
                       Hon. Charles S. Ciccolella

    Question 1. Illinois ranked dead last in the Nation with an Entered 
Employment Rate of 38 percent. I understand there were some accounting 
problems that make those dismal numbers inaccurate. Could you briefly 
explain those problems, and what steps labor has taken to fix them?
    Answer. Two major reporting problems contributed to Illinois' low 
Entered Employment Rate (EER).
    The first results from a legal opinion, issued by the State, 
stating that job seekers need not provide their Social Security Number 
(SSN) when registering for employment services. This resulted in 
missing SSNs for approximately 20 percent of the Illinois Department of 
Employment Security's (IDES) registrants. Since those who enter 
employment are identified by using their SSNs to match registrant 
records to employer wage records, those registrants who do not provide 
their SSNs cannot be matched. Therefore, in calculating the EER, they 
are not included among those entering employment, even though they may 
have found jobs. The IDES Director has asked for a review of this legal 
opinion.
    In addition to not receiving credit for registrants that entered 
employment but did not provide their SSN at registration, Illinois has 
also not received credit for registrants that did provide their SSN but 
entered into employment in another state. A number of Illinois 
residents obtain jobs in adjacent states with IDES assistance. Wage 
records from other states can be obtained through the Interstate Wage 
Record Information System (WRIS). Illinois began using the Interstate 
WRIS in March, and will apply it retroactively.
    Once the State corrects these two reporting issues, we will be able 
to more accurately assess the outcomes of VETS programs in Illinois.
    Question 2. Your staff has said that in fixing these issues, 
Illinois placement goes up to around 55 percent. I want to parse that 
out a bit. Isn't it true that 55 percent performance rate still among 
the worst in the nation? Isn't it true the 55 percent figure does not 
account for as many as 20 percent of Illinois Veterans seeking care? 
What will Labor do to better account for those missing veterans?
    Answer. The national entered employment rate for veterans is 60.3 
percent. If Illinois were to have an EER of 55 percent, the state would 
be below the national average, but not among the worst in the nation.
    The Interstate WRIS can be utilized to capture future outcomes and 
can also be used to retroactively capture outcomes for past IDES 
registrants that supplied their SSNs and found employment in adjacent 
states. However, the problem of missing SSNs is very difficult to 
correct retroactively. It is estimated that approximately 20 percent of 
IDES registrants did not provide their SSNs. Outcome data will likely 
never be captured for those registrants who leave the system without 
supplying their SSN. This is why it is very important for IDES to 
resolve this problem.
    We have been working with the State of Illinois for several years 
to help it move to a common information system. We will continue to 
encourage and assist Illinois in finding ways the State can improve the 
outcomes for its veterans seeking employment.
    Question 3. My understanding is that you have fixed one of the two 
accounting problems starting with the latest numbers from December 31. 
You expect to fix the second problem beginning with the first quarter 
of this year. So you will have a significantly better numbers May of 
this year at the latest. I would appreciate a commitment from you to 
come back to me at that time with an accurate accounting of what is 
going in Illinois, a plan for accounting for that missing 20 percent 
and a plan to improve service for the state's veterans. Can you make 
that commitment to me?
    Answer. VETS will continue to encourage and work with the Illinois 
Department of Employment Security to modernize and improve its data 
collection and reporting systems, but it is ultimately up to the State 
to change its practices. I will be happy to update you on progress made 
by the State.
    Question 4. Approximately how many homeless veterans would the 
Homeless Veterans Reintegration Program be able to serve if the program 
received appropriations at the full $50 million authorization level? 
How does this figure compare to the number of veterans served through 
HVRP during the last fiscal year in which such data is available? For 
the most recent fiscal year in which data is available, what is the 
entered employment rate for homeless veterans served through HVRP?
    Answer. In fiscal year 2004, the Homeless Veterans Reintegration 
Program served almost 12,500 participants and achieved a 65 percent 
Entered Employment Rate with an appropriation of about $21 million. By 
doubling our appropriation to the authorization level of $50 million, 
we would probably be able to double the number of veterans served.
    Question 5. Last year, our colleagues on the Appropriations 
Committee instructed the Department to add a module on homelessness 
prevention to the TAP curriculum. What steps has the Department taken 
to implement this instruction?
    Answer. A module on homelessness that responds to the Committee's 
instruction has been developed, added to the curriculum of the TAP 
employment workshop, and distributed to the TAP facilitators. The 
module explains issues surrounding homelessness among veterans and 
discusses why veterans are particularly vulnerable. It also provides 
resource and contact information for veterans who find themselves 
homeless or on a path that could lead to homelessness.

    Chairman Craig. Thank you very much, Chick.
    Now let us turn to Dr. Sig Nilsen, director of education 
and workforce and income security issues of the GAO. Dr. 
Nilsen, welcome.

    STATEMENT OF DR. SIGURD R. NILSEN, DIRECTOR, EDUCATION, 
            WORKFORCE, AND INCOME SECURITY ISSUES, 
             U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Dr. Nilsen. Thank you, Mr. Chairman.
    Mr. Chairman, Members of the Committee, I am pleased to be 
here today to present the findings from our recent report on 
how the Department of Labor and States have implemented several 
key provisions of the Jobs for Veterans Act.
    As you know, Congress passed JVA in 2002 to improve 
employment and training services for unemployed veterans and 
encourage employers to hire them. The ability of our Nation's 
veterans to quickly obtain quality workforce services and 
employment will become even more important, given the rising 
number of those leaving active duty and returning home to look 
for jobs.
    JVA introduced an array of reforms to two of Labor's 
principal employment assistance programs for veterans--the 
Disabled Veterans' Outreach Program, or DVOP, and the Local 
Veterans' Employment Representative Program, known as LVER. In 
my testimony today, I will highlight, first, actions taken to 
improve performance and accountability and discuss any 
challenges we identified; second, whether such action has 
improved employment outcomes for veterans; and finally, factors 
affecting program oversight and accountability.
    First, Labor and States have taken action to implement most 
JVA reforms, but there are still some challenges. For example, 
Labor has issued guidance and conducts ongoing training classes 
on new roles and responsibilities for the DVOP and LVER staff, 
but it is concerned the current training resources will not 
meet the demand.
    The majority of State workforce administrators also 
reported that staff had transitioned to their new roles, but 
integrating them with other staff in the One-Stops has been a 
persistent challenge in some areas. Yet we heard from some 
staff that it is working very well in their local One-Stops, 
while others said little had changed since JVA was passed.
    As for JVA's incentive awards program, we have heard--the 
program to recognize quality services to veterans--Labor 
allocated funding to States for incentives, but 17 States, as 
you have heard, including Idaho and Hawaii, don't have such 
programs because it conflicts with their laws or policies.
    Mr. Chairman, you may know in Idaho, for example, the 
incentives were not implemented because of potential morale 
problems among One-Stop staff with limited opportunities to 
serve veterans. Moreover, States with award programs express 
mixed opinions on the effect of incentives on improving 
veterans services.
    Labor has also established performance measures like those 
under the Workforce Investment Act, more recently adopted OMB's 
Common Measures as well. However, Labor said that it needs more 
time under the new system before all States can be held 
accountable to the same standard for veterans employment. The 
last estimate we heard was 2007.
    Turning now to whether JVA reforms improved employment 
outcomes for veterans. Most State officials we surveyed, that 
is 33 out of the 50 States, believed that the reforms have 
improved the quality of veterans services and their employment 
outcomes.
    Regarding services, the biggest improvement was in DVOP 
staff spending more time on case management, noted by 42 States 
as a major improvement. Services to disabled veterans had 
similarly improved. State officials also said that employment 
outcomes improved, once again, due to the increased 
availability of case management.
    Finally, Labor's accountability for the DVOP and LVER 
programs is weakened by the lack of local performance data. In 
our survey, for example, VETS directors in 21 States reported 
that performance data from local offices were not available. 
Federal oversight is further limited by lack of coordination 
among labor agencies and monitoring programs and sharing the 
results.
    For example, VETS monitors the DVOP and LVER programs, 
while ETA--the Employment and Training Administration, another 
part of Labor--oversees other programs like the Workforce 
Investment Act that also serve veterans. But all these programs 
provide services through the One-Stop system. But the two 
agencies don't generally work together. Furthermore, Labor 
doesn't proactively use monitoring results to determine why 
certain States and localities are falling behind and targeting 
them for greater assistance.
    In conclusion, our work suggests that the reforms embedded 
in JVA are moving VETS services in the right direction, but 
additional action is needed to enhance employment outcomes for 
veterans. To this end, our December 2005 report recommended 
that the Secretary of Labor provide clear guidance to better 
integrate veterans services into the One-Stops. We also 
recommended that Labor's program offices coordinate their 
oversight of veterans services and that monitoring results be 
used to make program improvements.
    Mr. Chairman, this completes my prepared statement. I would 
be happy to respond to questions for you or other Members of 
the Committee at this time.
    [The prepared statement of Dr. Sigurd R. Nilsen follows as 
an attachment:]

   Prepared Statement of Dr. Sigurd R. Nilsen, Director, Education, 
 Workforce, and Income Security Issues, U.S. Government Accountability 
                                 Office
      
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   Response to Written Questions Submitted by Hon. Larry E. Craig to 
                          Dr. Sigurd R. Nilsen

    This letter responds to your questions following the Committee 
hearing on the Jobs for Veterans Act held on February 2, 2006. Congress 
passed the Jobs for Veterans Act (JVA) in 2002 to improve employment 
and training services for veterans as well as encourage employers to 
hire them. The ability of veterans to quickly obtain needed services 
leading to employment has taken on a greater level of importance given 
the large numbers of service members annually leaving active duty and 
returning to civilian life. JVA reformed two of Labor's programs that 
focus exclusively on veterans and that are administered by the 
Veterans' Employment and Training Service (VETS). These programs are 
the Disabled Veterans' Outreach Program (DVOP) and the Local Veterans 
Employment Representative (LVER) program. Through these two programs, 
DVOP staff provide intensive services to eligible veterans while LVER 
staff conduct outreach to employers, among other duties.
    The information below presents each of your questions followed by 
our responses which were based on information from VETS, the National 
Veterans Training Institute, and our previous work.
    Question 1. In his prepared statement, Mr. Richard Weidman stated--
in response to the December 2005 Government Accountability Office (GAO) 
report--that the ``conclusion that the [Jobs for Veterans Act] has 
generally improved services to veterans is based on nothing that could 
be considered rational, substantiated data.'' Is that an accurate 
assessment? Do we have any objective means of determining whether 
veterans have benefited from the Jobs for Veterans Act reforms?
    Answer. Our findings are based first, on the responses to our 
survey of state workforce administrators who reported that more time 
spent on and better quality of case management were among the improved 
services provided to veterans. Second, veterans' staff in the one-stop 
centers we visited also told us that the increased emphasis on 
intensive services generally improved overall services to veterans. Mr. 
Weidman is correct in his assessment that VETS does not have good 
outcome data. In fact, we have serious reservations about VETS 
performance data--both what is being measured and the quality of data 
being reported. In short, VETS does not have good data to assess 
program performance.
    Question 2. Last year, you testified before the U.S. House of 
Representatives Committee on Veterans' Affairs that ``[a]ssessing how 
well [the Disabled Veterans' Outreach Program (DVOP)] and [Local 
Veterans' Employment Representative (LVER)] programs are serving 
veterans may continue to be difficult due to ongoing concerns about 
data reliability.'' How reliable are the data that we have now? Can we 
accurately assess performance?
    Answer. There are reliability issues with current performance data, 
and while VETS has taken steps to improve reliability, additional 
action is needed to accurately assess program performance. VETS 
officials told us that some states have known data reliability issues 
with their management information systems. In addition, while Labor has 
established data validation procedures, validation does not extend to 
the case file level to ensure that DVOP and LVER staff accurately 
record data at the point of service delivery. VETS officials cited 
concerns that DVOP and LVER staff were inputting erroneous data for 
reasons such as staff not understanding the new definitions of the 
performance measures, lack of training on entering data into an 
automated system, and inconsistent registration policies. Therefore, 
based on our assessment of states' performance data reported to Labor, 
we determined that the data were not sufficiently reliable to use for 
the purposes of our report.
    Question 3. At the hearing, we heard about new performance measures 
that have been implemented since the Jobs for Veterans Act. Do these 
measures allow us to determine whether services provided by a DVOP 
specialist or an LVER had a material effect on helping a veteran find a 
job? In other words, is the ``entered employment rate'' a solid 
performance measure or does it simply measure coincidence--rather than 
a cause and effect relationship between services provided and an 
outcome attained?
    Answer. The DVOP and LVER programs track 3 different types of 
``entered employment rates'' that vary in how closely they are tied to 
services received by veterans, but we believe that VETS' performance 
measures need to be examined and likely changed given the new roles 
that DVOP and LVER staff are performing. For example, there is a 
general veteran ``entered employment rate'' that is not specifically 
tied to services received by veterans. Another measure--entered 
employment following receipt of staff-assisted services--provides a 
link between outcomes and services provided by DVOP and LVER staff. In 
light of their new role, DVOP staff have an additional measure that 
tracks employment following receipt of intensive services such as case 
management. However, there are no measures established for LVER staff 
to evaluate their performance in conducting employer outreach, a key 
role under JVA. Moreover, such performance measures are not capable of 
assessing the effectiveness of the one-stop system in serving veterans. 
Cause-and-effect relationships can be determined only through a 
carefully designed impact evaluation. Examining the relationship 
between services and outcomes is risky using simple outcome data 
because other factors--such as inherent job readiness differences 
between those who need intensive services and those who do not--could 
affect any difference observed in the outcomes these jobseekers 
achieved.
    Question 4. In its December 2005 report, GAO stressed that in 21 
states ``key veterans employment data are not collected at the local 
level or available through other means.'' Can you explain what data are 
not being collected and reported? Does the unavailability of that data 
impact the reliability of statewide performance data? Does it impact 
accountability?
    Answer. DVOP and LVER performance data unavailable at the local 
level in 21 states include those reported quarterly to Labor in the 
VETS 200 report--the number of veterans applying for and receiving 
services and those employed after receiving different levels of 
services by specific categories of veterans (including all veterans, 
transitioning service members, campaign, disabled, special disabled, 
recently separated, and female veterans). While a state may track local 
level data for DVOPs and LVERs in its state data systems, these data 
are not necessarily the same type of data tracked in the VETS 200 
report and are not reported to Labor. We did not assess how the absence 
of local level data impacted the reliability of statewide performance 
data, but identified and reported other data reliability issues at the 
state level that precluded using them to assess program performance. We 
did find, however, that the absence of local level data in 21 states 
hindered oversight and accountability of local workforce offices and 
individual DVOP and LVER staff in those states. In addition, the 
absence of individual performance data may compromise the ability of 
these states to design a performance incentive awards program based on 
a methodology that is objective rather than subjective.
    Question 5. In the December 2005 report, you noted that, under the 
Jobs for Veterans Act, new performance measures are supposed to be 
weighted to provide special consideration for placement of veterans 
requiring intensive services. Are the new performance measures weighted 
to do that? Do current performance measures encourage service to those 
veterans most in need of assistance?
    Answer. VETS has not yet implemented a system for weighting the 
performance measures as required by JVA to provide special 
consideration for such groups as disabled veterans. While VETS issued 
initial policy guidance in June 2003, officials told us that the 
guidance was abandoned because the weighting system was too complex and 
confusing to implement. VETS has not yet specified when it will 
implement a weighted performance measurement system.
    Question 6a. It is my understanding that some veterans who access a 
One-Stop Career Center are assisted by staff funded through the 
Department of Labor's Veterans' Employment and Training Service grant 
program and the remainder are served by other One-Stop staff. As 
reflected in the attached chart, data provided by the Department of 
Labor show that the entered employment rates for those groups are 
virtually the same. Do the similar entered employment rates for these 
groups suggest that there is little ``value-added'' in having a 
separate grant program for veterans?
    Answer. The entered employment rates attributable to services 
provided by DVOP staff cannot be compared to other one-stop staff 
without controlling for differences in the job readiness of the veteran 
populations served. Some one-stop staff we met with told us that DVOP 
staff are more likely to serve veterans in need of intensive services, 
such as case management, while Wagner-Peyser employment services staff 
are more likely to serve job-ready veterans who require fewer services 
before employment. However, there are no data available to corroborate 
this.
    Question 6b. Do Wagner-Peyser staff have similar training as DVOP 
and LVER staff? Do they provide similar services to veterans?
    Answer. Wagner-Peyser staff do not generally receive the same 
training as DVOP and LVER staff primarily because they perform 
different duties. However, Labor's National Veterans Training Institute 
conducted onsite training in Ohio that included Wagner-Peyser as well 
as DVOP and LVER staff. In addition, about 20 percent of participants 
in some of the classes at the Training Institute are staff other than 
DVOPs and LVERs and could include Wagner-Peyser staff, according to 
training officials. There is also an orientation class to veterans' 
programs designed specifically for other one-stop partners. In 
addition, LVERs are responsible for training other one-stop staff to 
enhance their knowledge of veterans' employment and training issues and 
develop their capacity to provide the full range of services to meet 
veterans' needs. Officials from VETS and the Training Institute 
recognized the need for broader training of one-stop staff in serving 
veterans, but cited difficulties related to the current level of 
training resources.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Barack Obama to 
                          Dr. Sigurd R. Nilsen

    Question 1. As Secretary Principi asked in his testimony, do 
employment program managers have clearly define goals and standards for 
placing veterans in suitable jobs? I, too, am concerned about the 
process and outcomes.
    Question 2. While collecting information for your report, did you 
find that there were clearly defined lines of oversight authority from 
the Department of Labor's Veteran Employment and Training Service to 
the states?
    Answer.

Subject: GAO Responses to Questions Following Senate Committee on 
        Veterans' Affairs Hearing on the Jobs for Veterans Act

    This letter responds to your questions following the Committee 
hearing on the Jobs for Veterans Act held on February 2, 2006. Congress 
passed the Jobs for Veterans Act (JVA) in 2002 to improve employment 
and training services for veterans as well as encourage employers to 
hire them. The ability of veterans to quickly obtain needed services 
leading to employment has taken on a greater level of importance given 
the large numbers of service members annually leaving active duty and 
returning to civilian life. JVA reformed two of Labor's programs that 
focus exclusively on veterans and that are administered by the 
Veterans' Employment and Training Service (VETS). These programs are 
the Disabled Veterans' Outreach Program (DVOP) and the Local Veterans' 
Employment Representative (LVER) program. Through these two programs, 
DVOP staff provide intensive services to eligible veterans while LVER 
staff conduct outreach to employers, among other duties.
    With respect to performance and accountability for these two 
programs, you specifically asked whether (1) employment program 
managers have clearly defined goals and standards for placing veterans 
in suitable jobs, and (2) lines of oversight authority from VETS to the 
states were clearly defined.
    Our responses to your questions are based on information from VETS, 
results of our survey of state workforce administrators and directors 
of Veterans' Employment and Training, and our December 2005 report, 
Veterans' Employment and Training Service: Labor Actions Needed to 
Improve Accountability and Help State Implement Reforms to Veterans' 
Employment Services (GAO-06-176).
    Performance goals are not consistently established for local 
offices or individual veterans' staff even though employment outcome 
goals are established at the state level. State workforce 
administrators in 31 states reported establishing local office or one-
stop performance goals for DVOP, LVER, or other employment service 
staff while administrators in 18 states reported not establishing such 
goals. With respect to individual staff, administrators in just over 
half the states reported establishing performance goals for DVOP, LVER, 
or other employment service staff. In the majority of cases, local 
offices either negotiate their own performance goals with the state or 
use the same goals as the state, according to Directors of Veterans' 
Employment and Training surveyed.
    There are clearly defined lines of program oversight authority from 
VETS to the states; however, supervisory authority over state 
employees--including DVOP and LVER staff--lies with the state workforce 
agency. Despite clear lines of authority, however, lack of local 
performance data and coordination hinder oversight and accountability 
at the local level. For example, VETS directors in 21 states noted that 
performance data tracked by the VETS 200 report were not available at 
the local level. In addition, Labor's Employment and Training 
Administration oversees other workforce programs serving veterans--such 
as the Workforce Investment Act and Wagner-Peyser Employment Services--
but does not generally coordinate its monitoring activities with VETS.
    If you have any questions about this letter, please contact me at 
(202) 512-7215. You may also reach me by e-mail at [email protected]. 
Cindy Ayers served as assistant director on this engagement, and Meeta 
Engle was the analyst-in-charge.

    Chairman Craig. Dr. Nilsen, thank you very much. I 
recommend the report to the Committee for their overview and 
reading.
    Before we start the round of questions of this panel, we 
have been joined by our colleague John Thune. Senator, do you 
have any opening comments?

  STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman. I appreciate the 
testimony of the panel, and thank you for holding this hearing 
to examine the effectiveness of programs that are designed to 
provide meaningful and rewarding employment for America's 
veterans.
    I would simply add that that is particular true now in 
light of a lot of our wounded, disabled veterans coming back 
that we really focus on this issue to see that they have, as 
they transition into civilian life, which is going to be 
difficult as it is, that they have meaningful and rewarding 
employment opportunities available to them.
    I appreciate your holding this hearing and look forward to 
entering into questions with our panelists. Thank you.
    Chairman Craig. Thank you very much, John.
    Mr. Secretary, from the commission's overview report and 
the ultimate legislation, in part, some of what was recommended 
didn't come to pass. Behind you is an organizational chart that 
was prepared by GAO. It attempts to capture the various 
Federal, State, and local entities' involvements in providing 
veterans employment services and administering the DVOP and 
LVER grant programs.
    As the former head of the second largest bureaucracy in our 
Government, I am sure you are aware of the impact 
organizational structure can have on an agency's ability to 
establish clear lines of program authority and accountability 
and that there was one underlying theme in most of the 
testimony this morning and a concern by this Committee. Is it 
where are we? What are the measurements? How accountable are 
we? Why is there underperformance, and why can't we get to it?
    What is your reaction to this organizational chart? And the 
rest of the panel, you are going to be asked the same question. 
Tony?
    Secretary Principi. Thank you. You know, Mr. Chairman, I 
think more important than an organizational chart--and I think 
this is a step in the right direction--are the ability to 
establish performance standards in any bureaucracy and to hold 
local leadership accountable for meeting those performance 
standards. I think that is what is most important.
    I do believe that this chart--and I haven't had a long time 
to review it--I think it is a step in the right direction to 
establish clear lines of authority and responsibility and 
holding people accountable. But in the final analysis, you can 
have the best organizational charts in the world, but you have 
got to say suitable employment outcomes for veterans is the 
goal and hold people accountable for achieving those goals, 
whatever they might be, and moving on.
    Although I agree with Secretary Ciccolella and Dr. Nilsen 
that progress is being made, it is obvious from the charts that 
you showed that there is still a lot of work to be done. And 
hopefully, this chart, this organizational chart, if it is 
implemented, will help achieve that goal.
    Chairman Craig. Secretary Ciccolella, can you follow that 
chart without bread crumbs?
    [Laughter.]
    Mr. Ciccolella. Mr. Chairman, the chart appears to be 
accurate. Let me say this about the system and how it works. 
One of the intents of the Jobs for Veterans Act was to provide 
additional flexibility to the States to run the programs. That 
was necessary because in prior years, the role of the Federal 
VETS staff was considered to be rather intrusive with sort of a 
checklist mentality with regard to local offices, One-Stops, 
and because the workforce system is moving more in the 
direction of additional flexibility and, in fact, devolvement.
    The reason for that is that local officials, the local 
workforce investment boards, the One-Stop career centers, which 
are designed to be business driven, they know best where the 
employment opportunities are, what the training opportunities 
are, and how to make or better make the employer-employee 
connection.
    The responsibility that JVA puts on the Veterans' 
Employment Training Service is to hold the State accountable 
for its performance. In that regard, we require each State to 
have a 5-year strategic plan and an annual plan. That plan has 
to address how services to veterans are to be provided. It has 
to address how the DVOP and LVER are to be integrated into that 
system. It has to address the veteran population, the use of 
incentives, the economic conditions in the State.
    We either approve that plan, or we work with the State 
until we get that plan to where it is responsive to veterans' 
needs. That plan then is followed up with quarterly reviews and 
with self-assessments that the State does, which we then 
validate.
    We don't require the local One-Stops to provide local data 
because of the reporting systems, and the law simply doesn't 
require that we get that information in the field, that our 
Federal staff get that information in the field. The reporting 
system forwards that information, and we look at it from a 
State point of view.
    I believe the chart is accurate. I believe it shows where 
the supervisory and the programmatic responsibilities are, 
where they lie. It probably looks convoluted, and I do agree 
with that. But we are dealing with a workforce system that is 
certainly a highly devolved system. It operates a little bit 
differently in each State by design, and consequently, it would 
operate a little bit differently in each locale and area.
    Chairman Craig. Thank you.
    Dr. Nilsen.
    Dr. Nilsen. Yes. Putting this together was no easy task, 
tracking the lines of responsibility. But one of the things I 
would like to point out about this, or a couple of things, one 
is if you look at the left-hand side, that is the Employment 
and Training Administration. They oversee and manage the 
Workforce Investment Act and a host of other job training 
programs. Much of the authority, as Assistant Secretary 
Ciccolella said, in those programs goes down to the State and 
is further devolved down to the local level.
    In contrast, on the right-hand side, you have the VETS 
programs, where there is a lot more authority held at the 
Federal level and even down all the way to the local level. In 
each State, there is a Federal VETS coordinator, who is a 
Federal employee, who works to oversee in some ways, has a role 
in overseeing the VETS program at the local level.
    We found in some of our prior work that this creates some 
conflicts at times between the local office managers at the 
One-Stops, who are overseeing services to all unemployed people 
and figuring out how to help them, when someone else comes in 
from the outside working with the DVOP and LVER staff and 
providing some direction, which may be not necessarily in 
concert with what the local office is trying to do. So there is 
conflict there.
    But that is very different from the other side. There is 
the local autonomy on the ETA side. Local areas decide what are 
the main problems, what are the issues, and how are we going to 
address those issues?
    The second thing is if you look up at the second set of 
boxes, at the regional level, there are not really linkages 
across between the ETA staff and the VETS staff at the regional 
level. It is a responsibility, for example, at the ETA regional 
level to oversee the States and their regions and make sure 
that they are performing adequately, successfully, and to 
identify areas for further improvement, if needed.
    We have criticized ETA for not doing enough to help that as 
well. But at the same time, they are also working on better 
data systems. The other thing that VETS, I think, lacks right 
now and is behind ETA on is good quality data on what they are 
achieving, the number of veterans coming through the door, the 
number of veterans they are helping, who is helping the 
veterans? Because right now, the idea is that the DVOP and LVER 
staff are supposed to focus on, well, the LVER staff on 
employers and the DVOP staff on the hardest to serve veterans 
coming in the door and focusing their assistance.
    The other members of the One-Stops, be they the employment 
service staff or the Workforce Investment Act staff, are to 
provide services to veterans who don't have special needs 
necessarily and help them get work. But I think their data 
systems are not adequate to really capture the full breadth of 
people coming through the door and what is happening to them.
    Chairman Craig. Dr. Nilsen, thank you very much.
    Let me now turn to Senator Akaka for any questions he might 
have.
    Senator Akaka.  Thank you very much, Mr. Chairman.
    Mr. Ciccolella, the entered employment rate for disabled 
veterans in Hawaii as of June 2005 was 49 percent. This figure 
represents the number of disabled veterans in Hawaii who came 
in for services and subsequently entered employment.
    Just 79 percent of those who entered employment stayed 
employed. What can be done with your program to help veterans 
retain their employment?
    Mr. Ciccolella. Thank you, Senator.
    I think the first thing that has to be done, Senator, is to 
catch the service members while they are still in the military, 
in the transition process, as they go through pre-separation 
counseling. We don't get all of the service members, for 
operational reasons, that the Department of Defense has. But 
getting more service members through the TAP, or Transition 
Assistance Program, workshop. That is a 2\1/2\-day standard 
workshop, and the VA also participates in it for the third day.
    That helps a service member make the transition, and it 
provides a service member, I think, very good skills. The 
troops are very, very pleased in general with that workshop. 
Beyond that, Senator, we have taken a very, very close look at 
our disabled veterans, particularly those who are the most 
seriously wounded and injured. So has the VA. And so has the 
Defense Department.
    In fact, the Defense Department has a center over in 
Clarendon, the Military Seriously Injured Center, and they 
track those who are wounded and injured and disabled from the 
war on terror in Afghanistan and Iraq or wherever.
    We have a network of Federal staff, and we use the DVOP, 
the Disabled Veterans' Outreach Program staff to actually put 
them at Bethesda and Walter Reed and Brooke down in Texas and 
at Madigan and Tripler. Now you have got Sergeant Jorge up 
there, DVOP Jorge over at Tripler. He is spending now 4 days a 
week over there.
    With the information that DOD has and what they share with 
the VA and with what we have, we can actually track these 
disabled veterans. We can tell you how many are at Tripler Army 
Medical Center, and a lot more information, and we have their 
Social Security numbers. So putting that Disabled Veterans' 
Outreach Program specialist up there several days a week to 
make contact with them.
    Many of these disabled veterans are not ready to go to work 
right away. Some of them are still in the service. But under 
our program, our Real Life-Lines Program, we have a commitment 
to be there through the workforce system when they are ready. 
We proactively contact them, whether they contact us or not.
    I think that emphasis that I am talking about is a real 
role model. It is a real model practice that improves the 
quality of our DVOPs, our disabled veteran employment 
representatives across the board, and I think it goes a very 
long way toward pointing out that this is what they are 
supposed to do, this is what these service members deserve, and 
this is what has to be done.
    I truly believe that we are seeing some significant 
improvement in this area, and that will continue.
    Senator Akaka. Thank you.
    Secretary Principi, we are now seeing many of our service 
members electing to leave the service, to leave the service 
after completing their commitments abroad. Do you have any 
additional recommendations to ease the transition from the 
military to the civilian workforce that are not outlined in 
your last report?
    Secretary Principi. No. I think our last report, the 
transition commission report outlined excellent recommendations 
to assist separating service members. I am dismayed that the 
unemployment rate for recently separated service members is 
still too high compared to their nonveteran counterparts of the 
same age group. That is very disconcerting.
    I think, again, it is up to the Committee. If the Committee 
finds that Department of Labor and the States are not holding 
their respective organizations accountable for suitable 
employment outcomes, then further reform is necessary.
    I think one option that you should look at is providing 
some competition for the funding, the DOL funding that goes to 
the States to provide this service, to put some teeth into the 
accountability. Hopefully, that would be an incentive to State 
leaders and program managers to do the job that they are 
getting this funding.
    I think back in 1997, when we did our report, there was 
like $200 million was going out to the States from DOL, and we 
had these incredible statistics whereby only 300,000 of 2 
million veterans who were registered are getting jobs. So there 
is no accountability, and there is no teeth.
    But if you say, ``Listen, if you are not meeting certain 
performance standards, you are going to be held accountable, 
and we are going to compete those dollars to someone who wants 
to come in and provide that service,'' then that might tell the 
States, ``Boy, we better do the job.'' And it might provide a 
mechanism to provide it to companies that really specialize in 
finding good jobs for people. So that is one option you have.
    Of course, our report also mentioned transferring this 
program to the VA. That is another, more major reform. But 
hopefully, DOL VETS can get the job done.
    Senator Akaka. Thank you very much for that response. My 
time has expired, Mr. Chairman.
    Chairman Craig. Danny, thank you.
    Senator Isakson?
    Senator Isakson. Thank you, Mr. Chairman.
    Mr. Ciccolella, in the recommendations of the GAO report, 
it says, ``To achieve results from JVA provisions regarding 
veteran hiring practices of Federal contractors, Labor should 
issue regulations as soon as possible to explore effective 
methods of enforcement.''
    Is there any requirement in reporting right now by Federal 
contractors as to their veterans hiring practices? Is there?
    Mr. Ciccolella. Yes, sir. Senator, there is. The Federal 
Contractor Program has been in effect for a significant amount 
of time. This is a complex issue. The responsibility for the 
Federal Contractor Program is in three agencies in the 
Department of Labor, and it is also with the Federal 
contractors because they have the responsibility to list their 
job openings with the State employment service.
    There are problems with this program. The law changed the 
definitions for how Federal contractors report, and we have not 
published the regulations with those new changes. One of the 
reasons for that is that Federal contractors are required to 
report under the old rules and the new rules. So they will be 
reporting on the same workforce, that they will be dual 
reporting.
    We have tried to look at that program and work it out. 
Something needs to be done about the Federal Contractor Program 
because there simply aren't any teeth in it, to just put it 
mildly. There are about 200,000 contractors in our database at 
the Department of Labor. About 100,000 are Federal contractors. 
They self-identify on that equal opportunity form that they 
send over to the Labor Department. Many of them don't do that.
    So we don't know whether we are getting all of the Federal 
contractors to actually identify themselves as Federal 
contractors. Moreover, in the reporting, which my agency is 
responsible for, while the report is required, there are no 
requirements to hire veterans. They have to list their work 
population. They have to list their veteran population, but 
there is no requirement.
    Senator Isakson. Well, let me interrupt you there in the 
interest of time.
    Mr. Ciccolella. Sure.
    Senator Isakson. Because that is the point I was getting 
to. It has been 8 years since I ran my company, so things may 
have changed. We competed to provide some Government services, 
housing services, particularly Government agencies with regard 
to relocation of Government employees and things like that.
    I always remember having to answer specifically the 
percentage of minority participation, minority employment, 
women participation, and it was broken down into subgroups. I 
specifically remember that being a consideration in whether or 
not the Government did business with me.
    Mr. Ciccolella. That is correct.
    Senator Isakson. I think those are all important 
considerations. I am going to make two quick points. One, it 
would seem to me like that would be an equal consideration for 
the employment of veterans, and I don't remember that question 
ever being asked of me as an employer. Now, again, things could 
have changed in the 8 years since I ran the business.
    Second thing, and this came up in a hearing we had in the 
HELP Committee, I just want to make this point. Most of the 
jobs in America are provided by small business. The hardest 
thing for a small business to do is to stay in business while 
one of its employees has been activated for 12 or 18 months and 
have that job waiting for them when they get back.
    It is one thing for our great friend Bob Nardelli to 
provide thousands of jobs out of the tens of thousands that he 
has. It is quite another for a local air conditioning 
contractor with 12 employees--and this is an actual example, by 
the way--to have 2 of their employees called up in the National 
Guard, which is virtually 20 percent of his employment base, 
gone for a year, and provide those jobs back.
    Do we do anything that is an incentive or a preference to 
small business contractors with the Government who hire 
veterans? I mean it seems like to me we ought to be doing 
everything we can. This is a long question, if it is even a 
question. But it seems like we ought to do everything we can to 
make it a positive, when small businesses compete for our 
business, that those small businesses have a proactive veterans 
employment program. Is there such a thing?
    Mr. Ciccolella. Again, your company, even 10 years ago, was 
required to report under the Federal Contractor Program, and 
the problem with that is that there simply is not--there are no 
teeth in that program. There is no requirement to hire 
veterans.
    With regard to incentives or with regard to small 
businesses or any business hiring veterans, we have looked at 
this very carefully. We have a Presidential Committee, which 
has recently expired. But we have gone out to a number of the 
trade associations with businesses. We have held job fairs. We 
have reached a whole lot of employers.
    Today, employers are looking for good employees. We have a 
very active campaign to educate the employer community on the 
advantages of hiring veterans. Not just their hard skills, but 
their soft skills, because that is truly what employers are 
looking for.
    You mentioned Home Depot. Home Depot, when we started 2 
years ago, was hiring 5,000 veterans a year. This year, they 
will hire 15,000. We are now looking at Starbucks. It is 
100,000 employees. McDonald's. These companies are looking for 
small unit leaders. They are looking for young E4s and E5s 
because that is what they are. We are not talking about jobs 
where you are getting somebody's morning coffee or flipping 
hamburgers. These are jobs with career fields.
    We are making some progress in terms of educating the 
employers with regard to the advantage that they accrue for 
hiring veterans. Veterans are good for their business, and I 
think many employers are beginning to realize that.
    We need to reach more employers so that we can tell those 
employers how they make that employer-employee connection. Once 
you get into the companies and you get into their communication 
systems, then their hiring process will follow suit if they 
understand how and what the advantages are of hiring veterans.
    Starbucks is going to hire 400,000 people. Now, through the 
outreach that we are doing through our Committee, they are 
going to start hiring veterans. And they are opening one store 
every day worldwide.
    So it is just a small example, but I am just trying to 
illustrate your point, sir.
    Senator Isakson. Thank you very much.
    Chairman Craig. Thank you, Senator Isakson.
    Senator Murray?
    Senator Murray. Thank you, Mr. Chairman.
    Senator Obama. I apologize. I, unfortunately, have got to 
leave. I just would like to make sure that I can submit written 
questions and would ask responses from all of the panelists.
    Chairman Craig. Of course, you can. And all of us will be 
able to. Time is going to be a little limited today for direct 
questions, but several issues have come up. My notes are 
producing questions as I listen. So, of course, and we will all 
do that. Thank you.
    Senator Murray?
    Senator Murray. Thank you, Mr. Chairman.
    Mr. Secretary, do you know how many veterans are unemployed 
nationwide?
    Mr. Ciccolella. We know how many veterans. Senator Murray, 
we know how many veterans enter the labor chain each year and 
how many are served, and then how many enter employment. So, 
excuse me, we know how many enter the workforce system and how 
many enter employment.
    We know that information, but the information lags. 
Nationwide, we don't know how many veterans are unemployed.
    Senator Murray. Can you tell me why there appears to be a 
drastic difference between the unemployment rates between 
veterans who are ages 20 to 24 and nonveterans who are 20 to 
24? Is this a problem of the Jobs for Veterans Act, or does it 
mean that it doesn't work for them? Do you know why that is 
such a huge difference?
    Mr. Ciccolella. It is a huge problem. It is a problem that 
has been with us for many, many years. We have looked at it 
very, very carefully. We are looking at it now with the 
Department of Veterans Affairs in a joint study. We know some 
of the reasons why this is, but we also know it is a 
longstanding problem. We know what the demographic is of the 
20- to 24-year-olds who come out of the service.
    Senator Murray. Do we need something more specifically to 
focus on 20- to 24-year-olds that is not in the Jobs for 
Veterans Act today?
    Mr. Ciccolella. Senator Murray, I think what we need to do. 
As I said, we know some of the reasons why they are not 
employed. Some choose not to be employed. Some are waiting for 
school. Some will take the unemployment insurance.
    There are first-time entrants into the workforce. So any 
group of people who are first-time entrants into the workforce, 
for example, the 18- to 19-year-olds, their unemployment rates 
are extremely high. But we don't know all of the reasons. I 
believe we need to get to----
    Senator Murray. But there is a huge difference between 
veterans and nonveterans numbers.
    Mr. Ciccolella. Yes.
    Senator Murray. So average 18- to 24-year-olds that aren't 
veterans have a much lower unemployment rate than veterans do. 
So I am asking why is that? It is not like they are all waiting 
to go to school. They are all thinking about different things, 
too. It is a huge difference.
    Mr. Ciccolella. Well, clearly, the issue of transition and 
moving from the military, the adjustment, is a huge issue.
    Senator Murray. Well, if you wouldn't mind, I would really 
like you to think about that and get an answer back to me 
because if there is something we should be doing to change 
that, I think we ought to be focused on that.
    Secretary Principi. Can I just quickly comment? I recall, 
back when the commission was in existence, a four-star Air 
Force general overseas told me, he said how difficult it is for 
him. He was getting ready to retire, and how difficult it was 
for him, a four-star general, to transition into the private 
sector. You can imagine how difficult it is for an E3 or an E4 
who is stationed overseas to transition and get a job in the 
private sector.
    And it is also true in CONUS. If you are separated from 
Norfolk, Virginia, and you live in Des Moines, Iowa, it is 
pretty difficult to find a job. So there are a lot of those, 
you know, the----
    Senator Murray. Well, I would like to hear from you some 
recommendations to focus on that, and I just have a minute 
left. And I raise the issue of Guard and Reserve, the high 
number of Guard and Reserve. And it just feels like these 
programs are not working because of the short timeframe that 
they have, the 2 to 3 days.
    They are not hearing about it, and it doesn't feel like the 
resources are really being allocated to do that. Our One-Stop 
shops are telling us that ``can we get the lists of these 
veterans so we can help them get employed?'' Can you tell me 
what we can do to help these separating service members, to be 
more targeted on them?
    Mr. Ciccolella. Well, I can tell you what we are doing. Of 
course, you know better than anyone in Washington because you 
have had a lot of Guard and Reservists come back. You know that 
the requirements for them have changed with the longer 
mobilizations. They have not only had the adjustment problems, 
but they have the employment and the underemployment problems. 
I think the things that you are doing in Washington are a good 
model.
    The issue with returning Guard and Reservists is that when 
they come back, they demobilize, and there is a very rapid 
demobilization. In my opinion, it is too rapid. That is a time 
or within a very short period of time, certainly within 30 
days, when many of the Guard and Reservists need to have some--
if they have been on a deployment for 14 months--they need to 
have some transition assistance, and they need to know better 
how to contact the workforce system in the State, in addition 
to the other services that are available in the State.
    As it happens, in most cases after they demobilize, they 
are off for 90 days before they have a first drill. In that 
case, when they have their first drill, their training to go 
back over, we have contacted every one of the State AGs in 
writing. We follow up with them. We offer transition assistance 
programs through the workforce system, and our Federal staff 
are also qualified to give this assistance. So we are trying to 
press this.
    Senator Murray. I think that this is an area that we really 
need to focus on, and the TAP program is not working for Guard 
and Reserve in particular. And I want to know if you can--I am 
out of time, but if you can let this Committee know where we 
are in terms of making that transition program work for Guard 
and Reserve because of the high number.
    Second, just a really fast question. What can we do to get 
these One-Stops the lists of veterans who are returning home 
that are there, so that they can start working with them? It is 
disconcerting to me to sit at a meeting and have a Guard member 
tell me he has been out of work for 8 months, and then the guy 
who is supposed to be helping him say, ``I didn't know who you 
were.''
    Mr. Ciccolella. The discharge certificates that come out of 
the Department of Defense are, as I understand it, now made 
available to the Department of Veterans Affairs, and they are 
made available to the Department of Veterans Affairs in the 
States. And I am told that that is the case in Washington.
    If that is the case, then there would be no reason why that 
information could not be transmitted to the State workforce 
agency.
    Senator Murray. There are no privacy concerns or anything 
else that are keeping these lists from being distributed?
    Mr. Ciccolella. I don't know about the privacy concerns on 
something like that, but I do believe that, for example, in 
your State, that is exactly what is happening.
    Senator Murray. Well, thank you, Mr. Chairman. I appreciate 
it.
    Chairman Craig. Senator, thank you for very good questions.
    Senator Burr?
    Senator Burr. Thank you, Mr. Chairman.
    Mr. Ciccolella, let me first say we are asking a lot of 
process questions. I do not want you to lose perspective that 
this is all about outcome. At the end of the day, it is about 
how successful we are in this mission.
    I have noticed that we have a director of VETS, one for 
every State. Is that correct?
    Mr. Ciccolella. That is correct.
    Senator Burr. Can you tell me how many of those directors 
are veterans?
    Mr. Ciccolella. Virtually all of them are veterans.
    Senator Burr. Virtually all of them?
    Mr. Ciccolella. Virtually all of them. And virtually all of 
the veteran employment staff that we fund at the State, 99 
percent of those are also veterans.
    Senator Burr. I appreciate that answer, and I appreciate 
the fact that that is a focus because I think it is essential 
to a successful program that you have individuals involved that 
understand the other side that many in this country don't.
    Let me get to some of Secretary Principi's questions. 
Incentives, specifically. I noticed in the GAO report you 
reported that a third of the States have no incentive program 
for the reasons of State law, policies, or collective 
bargaining.
    I went through your chart as well of the number of States 
that had a balance, I think that is 1 percent of their grant, 
to be used for incentives. Twenty-seven States gave no 
incentives. Clearly, there is an additional number of States 
that have an incentive program, could have an incentive 
program, gave no incentive. Can anybody give me an answer as to 
why?
    Mr. Ciccolella. I think 17 States didn't use the incentive 
program at all, and it is because of the stipulations that you 
just mentioned. Some of them are regulatory. Some of them are 
by law. Some are decisions that the State made where an 
individual who assists a veteran into employment, they didn't 
want for that individual to get an award, but someone else in 
the workforce system, you know, would not get one. So there was 
an equity issue.
    On the other hand, there are States like Illinois that have 
used the incentive systems very well, and the idea behind the 
incentive systems is sort of ``pay for performance.'' It is 
designed to give cash.
    Senator Burr. How about the 10 States that apparently have 
incentives--they can use them, the State law doesn't prohibit 
them, collective bargaining doesn't prohibit them--but they 
gave no incentive. Did they not hit the goals that were 
targeted?
    Mr. Ciccolella. If the States had no prohibition and didn't 
use the incentives, then that is a waste.
    Senator Burr. Well, let me just flag those 10 for 
Department of Labor to look at and work on.
    Mr. Ciccolella. Yes. Sure. And if I could just say, 
Senator, and I know your time is limited, we are looking at 
this very carefully because we are looking at it in conjunction 
with what the GAO found and in consultation with them because 
we don't know whether we have the incentives thing right. And 
we don't know whether that really works best at the State level 
or whether it works best at the national level.
    Senator Burr. Well, given that the State folks are the ones 
on the firing line, I would be willing to bet that that is the 
correct place to put the incentive. It probably is not on the 
State directors that are Federal employees, and I think we have 
got to find a way to make that connection.
    Are there sanctions for people who underperform?
    Mr. Ciccolella. States that underperform. In the grant 
provisions, we require the States to provide their plans on how 
they are going to serve veterans. If they don't come forward 
with a total plan or if they consistently underperform, we do 
have the authority, as does the Employment and Training 
Administration, to withhold the grant. As a general rule, we 
don't do that. We have never done that.
    Senator Burr. Do we threaten? Have we threatened?
    Mr. Ciccolella. What we do is not threaten, we work with 
that State as closely as we can to find out what the reasons 
are. We are solution focused. We do take their money. We will 
not allocate money. In other words, we will recapture some of 
the money.
    Senator Burr. Only four States used all of their incentive 
money. Let me ask you a simple way. Are sanctions and rewards 
successful?
    Mr. Ciccolella. The incentives, in my view, are successful. 
The sanctions, I believe, you know, this is about getting 
veterans jobs. If you take the money from the State and they 
can't fund the DVOP and LVER program, their situation is going 
to be a lot worse.
    Senator Burr. I agree with you totally.
    Mr. Ciccolella. We would much rather work with that State 
and bring them into compliance.
    Senator Burr. I will end my questions the same way that 
Secretary Principi ended his testimony. If a State doesn't 
perform, don't we have an obligation to find another way to do 
it?
    Mr. Ciccolella. I have no argument with that at all, 
Senator.
    Senator Burr. Thank you.
    Chairman Craig. Senator Burr, thank you very much.
    Senator Salazar?
    Senator Salazar. Thank you very much, Mr. Chairman.
    I am continuing to be more and more troubled by this 
statistic that shows that 15 percent of our veterans, at the 
end of 2005, age 20 to 24 are unemployed. Those statistics are 
near depression kinds of statistics that ought to be making us 
all extremely concerned.
    I want to just come back to the concept that Secretary 
Principi spoke about, and that is the notion of standards and 
accountability. We use them in other kinds of programs. I guess 
my question that I would ask Secretary Principi and perhaps 
Secretary Ciccolella to respond to is how would you define 
those standards and goals to create the accountability that we 
all want?
    I think these results are unacceptable. We are going to 
create standards and accountability to get better results so we 
can measure them. How would you define what they would be?
    Second of all, I am new to this U.S. Senate, relatively new 
with, I guess, a couple of my colleagues across the table here. 
But why is it that you threw out a notion kind of at the very 
end, Secretary Principi, that perhaps the veterans training 
employment program may be about to be moved out of the 
Department of Labor and put over in the VA.
    If you look at the health care program that we have in VA, 
it seems that it is one that is touted as a model for health 
care around the country. Why not take this program out of Labor 
and put it out in VA when we have these kinds of very 
unacceptable statistics?
    Secretary Principi. Sure. I agree, Senator. What those 
performance standards should be, certainly that recently 
separated service members do not have a higher unemployment 
rate than nonveterans in the same age group, and I think the 
Department of Labor can come up with those performance 
standards. They are certainly better suited to do that than I 
am.
    But I come back to the notion that--and maybe I am wrong. 
Maybe the JVA did provide some accountability. But there just 
doesn't seem to be any accountability. I mean, the fact that 
the Secretary indicated that there has never been any 
sanctions, that there is no competition, I just think that 
provides a certain incentive to do a job well. And unless that 
is there, I think we are going to be back 2 or 3 years from now 
showing the same unemployment statistics.
    This Committee has held a lot of hearings on this subject 
since I was chairman of the transition commission and 
throughout the time that I was Secretary of Veterans Affairs. 
We are going back now 7 or 8 years. We come here in January, 
February of 2006, and we find that some of the same problems 
still persist. So I think more reform is necessary.
    One option to look at is to transfer the function to the 
VA, entrusted with the resources and the ability to hold 
program managers accountable. But just transferring it, VETS, 
from Department of Labor to the VA without the resources, 
without the ability to hold program managers accountable, I 
don't think it will work.
    But VA only has one mission, and that is to serve veterans. 
There are no nonveteran constituencies competing for the 
resources of the VA. But I think that should be a last resort, 
and I think that improvements are being made. Hopefully, with 
some further reform, veterans will be well served.
    Senator Salazar. Assistant Secretary Ciccolella, if you 
would answer both questions as well on the performance 
standards and accountability as well as the notion of 
transferring the program from Labor to VA?
    Mr. Ciccolella. Sure. On the standards, the standards 
should be the same as they are for the negotiated performance 
rates with the State that our State director and the State come 
up with because that is a uniform standard. And the area of 20- 
to 24-year-olds, we need to look at that very carefully. It 
needs to be a special area of interest, and that needs to be 
conveyed to all of our State directors, which it is, and to the 
State workforce agencies because they have a great deal of sway 
with regard to paying special attention to young veterans.
    With regard to the move to the VA, we looked at this. It 
was a proposal the first year I was in the organization. We 
looked at it, and I worked with Secretary Principi's folks to 
do the plan and whatnot for that.
    Secretary Principi is right. If you look at transferring 
something like this, you have to transfer it with the 
resources. But the other thing that I think is really 
important, you know, we have a $15 billion investment in the 
workforce system in this country every year. So if we transfer 
the VETS program to the VA, what I didn't see in that transfer 
plan was that the veteran employment representatives and 
veterans who were going to be helped would have the advantage 
of all of the programs that are available through the workforce 
system.
    I think that is absolutely critical because I think if they 
don't have that, then they would be at a great disadvantage. 
There is no point in having a $15 billion investment in our 
workforce system if we are not going to avail those resources 
to veterans.
    I guess I ought to look to see whether the OMB surveillance 
people are here. There is one argument that I guess I could 
make to support Secretary Principi's contention, and that is, 
if I am not mistaken, I think the VA is exempted from this 1 
percent rescission. I don't think Labor or the VETS program is.
    So that would be one argument that I guess I could throw 
out there. One percent of a $224 million budget is pretty huge 
for us.
    Senator Salazar. If I may, Senator Craig, just one? I think 
it would be helpful for us as a committee to perhaps 
independently from both of you or perhaps from GAO, Dr. Nilsen, 
just to get a sense of what kinds of standards and 
accountability could be put into place that would measure 
results and that would have the kind of sanctions that would 
lead us to better results than we have here.
    I very much think that would be useful to us as a 
committee. Thank you, Mr. Chairman.
    Chairman Craig. Senator Salazar, we are not through with 
this issue. Go ahead, Dr. Nilsen.
    Dr. Nilsen. Yes. I would like to just make a comment about 
your question about accountability, and it goes back to 
something that Senator Akaka had asked earlier.
    The performance measures that the Veterans' Employment and 
Training Service uses does not really target populations that 
are highest in need. They focus on a total entered employment 
rate. Well, that is not targeting on the 20- to 24-year-olds or 
recently separated veterans.
    Without measures that target the populations you are 
concerned with, that does not send a message down to the local 
level that these are the people we really want you to focus on 
and to provide services to. As we said, I think it was 
Secretary Principi said before, you get what you measure. If 
you are not measuring the outcomes for people 20 to 24 years 
old, you are not going to get the focus on that population.
    And so far, I know in past reports, when we looked at 
earlier strategic plans for VETS, they had discussions about 
who they cared about most, and they cared about all the various 
populations of veterans, which ended up saying we care about 
all veterans, which is fine. But then you don't have any 
targeting within that.
    If you care about everybody at the same time, you are 
saying you care equally, and you are not necessarily focusing 
your resources on those who are most in need. Their performance 
measures also did not represent those most in need. It 
represented just all.
    So if you are not counting, if you don't have the data, you 
are not going to have a focus on those that you really want to 
focus on.
    Chairman Craig. Senator, thank you.
    Senator Thune? John?
    Senator Thune. Thank you, Mr. Chairman. And thank you very 
much, panel.
    Secretary Principi, it is nice to see you again. I don't 
know whether to call you ``Chairman'' or ``Secretary.'' I spent 
much of 2005 shadowing you around, and I hope you don't have 
bad dreams about me.
    [Laughter.]
    Senator Thune. But it is good to see you again, and thank 
you for all your service to our country.
    I guess I am interested in knowing in this particular graph 
if, in fact, is this broken down, do you have State by State on 
this somewhere? This is the one that shows I guess the 
disparity between veterans and nonveterans in that 20 to 24?
    Mr. Ciccolella. It is not broken down. It is not broken 
down by State. The figures for the veteran unemployment rate, 
age 20 to 24, is a category that the Bureau of Labor Statistics 
surveys every month. They survey the 60,000 folks. They ask 
certain questions.
    Senator Thune. So it is that universe, and it is not broken 
down?
    Mr. Ciccolella. It is that universe. Yes, it is a national 
universe. Yes, sir.
    Senator Thune. Is it broken down at all demographically? I 
mean, if there is no geographic----
    Mr. Ciccolella. Yes. They do collect some demographic 
information. They know that it is largely a Caucasian 
population, what the college education rate is, those things, 
yes.
    Senator Thune. Just that data would seem to be important to 
me if we were talking about focusing on this particular 
universe of people, which is very troubling. I mean, this is a 
statistic that I think causes great concern. And I am glad, Mr. 
Chairman, that you have decided to focus on it.
    I have just got a couple of observations and maybe 
questions or just that you could give a reaction to on that 
because it seems to me, at least, that is this a function of 
you have got young people coming back in that age category, and 
maybe who bypass college or tech ed, and are now moving back, 
transitioning into the workforce. Is it a function of training? 
Do they have the skill sets that are necessary for the 
workplace, and is that something that is skewing these 
statistics in a way that creates this disparity?
    Mr. Ciccolella. In general, when a service member exits the 
service, whether it is like with me at 28 years or a service 
member that has served 2 or 3 years, they are making quite a 
transition in their first time coming into the workforce. So 
there are issues with regard to that transition. There are 
obviously stress and issues and things like that.
    With regard to skills, today's military members--Guard, 
Reserve, active component--this is not like the 1960s, where 
people came in with very few skills. They fought in combat. 
They came back. They didn't have much in the way of skills. 
These kids are really skilled today, and they learn more skills 
when they are in the military, even in the combat arms. That is 
a very high technology business.
    So they have very good skills that are translatable. More 
importantly, they have what employers are looking for. They 
have the ability to come to work on time and to take 
instructions and to be dependable and to help businesses grow 
their business. And that is what employers are looking for. At 
least that is what they tell us they are looking for, and we 
talk to them all the time.
    So we have a transition issue that we try to bridge with 
the transition employment workshop that we provide to all the 
service members and that we are trying to provide to the 
National Guard and Reserve. And I think the folks in South 
Dakota actually go to another State. I think they have them go 
to another State for that.
    To me, that is absolutely a critical component of their 
transition because it is, as Secretary Principi mentioned, it 
is a big step. There is no question that when you exit the 
service, in a sense, you are behind those who didn't serve for 
a short period of time. Once our veterans get into the 
workforce, they are generally very, very successful.
    Senator Thune. Right. That is why it would seem to me that 
they would have the character, qualities, the work ethic, all 
the things that people in the workforce would just welcome. 
That is why I was wondering if there was some in the skill set 
area that was lacking, and I am sure there are transitional 
issues as folks come back.
    But I really would think, Mr. Chairman, that to the degree 
that we can get as much detail and data on this problem and 
define it as much as we can so that we can figure out a 
solution for it. And I would just make one final comment and 
question, and that is maybe directed at the GAO.
    Was there anything in your study that suggested that we are 
doing things that are unique to rural areas? Are there things 
that we are doing well there? Are there unique challenges that 
we face in rural areas? Some of these unemployment numbers 
even, that is why I asked the question about if you had any 
geographic breakdowns, if there are things that are unique to 
the part of the country that I represent, States like South 
Dakota?
    Dr. Nilsen. There is nothing unique that we found in the 
course of doing our work to rural areas. But in general, a lot 
of my work focuses on labor issues in general, and rural areas 
do present different sets of issues and problems, as you know. 
Transportation is a biggie. Getting access to these services is 
huge. You don't have a One-Stop down the street that you can go 
to.
    But techniques that people increasingly use are, you know, 
Internet access, particularly through libraries and things like 
that in local communities are increasingly helping people gain 
access to the information in the One-Stops. But beyond that, 
veterans face the same problems that other folks who are 
unemployed and looking for a job in rural areas face and those 
challenges that are different from if you are in a large 
metropolitan area with numerous employers and lots of options.
    Senator Thune. All right. Thank you all. Thank you, Mr. 
Chairman.
    Chairman Craig. Richard, you said you had a small question?
    Senator Burr. Just a quick question, a follow-up to John's 
first question.
    Charles, does Labor know how many unemployed vets are in 
North Carolina? Or, for that fact, any State?
    Mr. Ciccolella. In total, no. I don't believe we do.
    Senator Burr. So, in total, we do, but per State we don't. 
Is that an accurate statement? And I would just make the 
comment that----
    Mr. Ciccolella. Yes.
    Senator Burr. --I think that is absolutely a vital piece of 
information to know. Because we have a State-based program that 
has no idea what the number is, which makes it almost 
impossible for them to know if they are making progress other 
than what we share with them.
    Mr. Ciccolella. I really need to check that because the 
State workforce agency may have that information. But I will 
check that.
    Senator Burr. I would also say for the purposes of 
Secretary Principi, because he has a hotline to DOD that most 
of us don't have, I think it is also a vital statistic that we 
know, as individuals are retiring from the military, leaving 
the armed forces, how many are employed on the way out the 
door? Because there is a function of this, as we know, that 
starts much earlier than the day that they are walking out.
    Just like our higher education today takes great pride in 
being able to say not just to its alumni, but to the Federal 
Government what their graduation rate is, now the hottest thing 
on the university campus is what the employment rate is of this 
year's graduating class. I think that is an important thing for 
DOD to look at.
    Chairman Craig. Gentlemen, thank you all very much. You 
have all made some valuable statements. There have been some 
tough questions asked, and I must tell you some of the answers 
are sketchy at best.
    This Committee will be back to you and to you and to you 
again until we determine if you have got it right or if we are 
going to have to fix it so you can get it right. My next 
question was going to be ``do we need reform?'' I think 
Secretary Principi has asked that.
    But these numbers are startling to all of us, at the least, 
and we are very frustrated by it. We thank you for it, and Mr. 
Secretary, we are going to have you back again. You can't 
measure without statistics. It is critical that we have them, 
that we are able to understand what the scope of the problem is 
beyond these broad measurements.
    This Committee and this Congress is intent upon this 
problem. We will stay with you until we either figure out how 
to get it right or change it in a way that it can be made 
right.
    Thank you all very much.
    Now I will ask our second panelists to come forward, 
please. If I could have the second panelists come forward now, 
we will get started with you. And I am going to ask my 
colleague, after introducing the panel, Senator Richard Burr to 
complete the chairing of this hearing, and I thank you, 
Richard, for your flexibility and time.
    Have we lost the panelists? Is Wes here?
    All right. We will get started. I think Mr. Poriotis will 
be with us soon. And of course, Wes Poriotis is the chairman of 
the Center for Military and Private Sector Initiatives. Joseph 
Sharpe, Jr., deputy director for the American Legion National 
Economic Commission. And Rick Weidman, director of government 
relations for Vietnam Veterans of America.
    Gentlemen, I apologize for having to step away. Our first 
panel went a little longer than we had anticipated, but your 
testimony for the record is critical. As I have said in my 
opening comments and in my response to the first panel as they 
exited, this is a rapidly growing concern amongst those of us 
here.
    As we know over the years, we have spent a lot of time with 
it, but it doesn't quite seem like we are getting it right. A 
lot of reform and yet less response. That is simply 
unacceptable.
    It is the human factor. I could look at resources and a 
failure for those resources to yield what we would hope they 
would. But I think Senator Burr put it well. We are interested 
in outcomes. We are interested in these numbers changing here 
or knowing why they can't change.
    So I will turn it over. Wes, I have already introduced you, 
and we thank you for being with us, and I will turn the hearing 
over to Senator Burr. Richard, thank you.
    Senator Burr [presiding]. At this time, Wes, if you are 
ready, we will recognize you for your opening statement.

STATEMENT OF WESLEY PORIOTIS, CHAIRMAN, THE CENTER FOR MILITARY 
                 AND PRIVATE SECTOR INITIATIVES

    Mr. Poriotis. Thank you. On a note of levity, Mr. Chairman, 
when you introduced me as ``Wes,'' and you paused, I chuckled 
because being this is the fourth time I have testified, I was 
introduced as ``Mr. Psoriasis''----
    [Laughter.]
    Chairman Craig. I didn't do that badly.
    Mr. Poriotis.--in front of the House Veterans' Affairs 
Committee.
    Chairman Craig. I see.
    Mr. Poriotis. But is an honor to be here----
    Chairman Craig. Thank you.
    Mr. Poriotis.--to share ways to improve and enhance 
employment for veterans. In 1994, at the request of the Joint 
Chiefs, I undertook a scientific study of the transition and 
post transition experiences of military veterans seeking to 
enter the private sector job market.
    My research found that there was a deselective bias, very 
analogous to that which it historically affected, women and 
people of color, entering into the job market. That deselective 
bias was about military service, not about veterans, because 
military service had lost its value, and its brand had been 
lowered in the minds of many American employers, especially 
those in the nondefense sector.
    I have examined this problem over the past decade, and I 
find that, despite all of the work that has been done by the 
Veterans' Employment and Training Service, they do come up 
short. They are not equipped. They don't have the corporate 
relationships. They don't have the network. They are not tasked 
to place.
    They don't have the hardened, tough, job acquisition 
experience that would transcend the hurdles and the challenges 
that all folks face when they try to access the quality jobs in 
the private sector. ``The quality jobs'' being the hidden job 
market jobs. Those that are not publicized. Those that are not 
advertised. Those that don't come across the screen on the Web 
sites, the career.coms, the other monster boards.
    Let me explain the problem this way. In the 
telecommunications industry, they divide the work of building 
network infrastructure into four general categories--the 
backbone, the middle mile, the last mile, and the last 100 
feet. You can lay thousands of miles of fiber optic cable, but 
without that final connection to the home or the business, the 
last 100 feet, you don't have a customer.
    That is what has been missing in Federal veterans 
employment programs, the placement services that connect 
veterans that last 100 feet. Forgive my being out of breath. I 
think the DayQuil is getting to me from the cold. But I 
sometimes feel like Mark Twain, when looking at the VETS 
program these last 4 or 5 years and trying to bring them to 
performance standards to enhance their capability. His quip 
was, ``Everybody talks about the weather, and very few people 
do anything about it.'' And I think we do have to do something 
about it, including some ideas I have.
    There already exists a backbone analogous to the 
telecommunications industry in the VETS program. One-Stop 
centers and thousands of dedicated and often caring LVERs and 
DVOPs working that middle and last mile to help prepare 
veterans for employment. But these Federal employees, again, 
have neither the training, the time, the resources to make that 
final connection between the veteran job-seeker and the private 
sector employer.
    To make that final connection, the last 100 feet--and I 
have included that as attached to my testimony and would hope 
that it would be inserted in the record--the Center for 
Military and Private Sector Initiatives, which we established 
to bridge the gap between corporate America and the veteran 
community, we propose the creation of a Veterans Job 
Development Corps, which would be a public-private partnership 
dedicated to placing veterans in quality jobs.
    This outsourcing of the placement function would transform 
VETS. It would be the ``hamburger helper'' to the hamburger to 
sell the hamburger. Right now, the hamburger is not being sold. 
I call it a transformational outsourcing.
    In some cases, outsourcing has a negative connotation. But 
in this case, why try to change city hall? Why try to change an 
institution that is so embedded politically it is not going to 
change, and it is doing a good job in the context of what its 
training is? I say we transform it. We take the placement side. 
We outsource it.
    The corps would be composed of what we call--and I have to 
tell you that a group of volunteers spent hundreds and hundreds 
of hours over the summer and the early fall looking at this. 
The corps would be composed of what we call career navigators, 
employment market openers, and job developers. All trained and 
experienced in the private sector. All with demonstrated track 
records of placing hundreds and hundreds and hundreds of 
people.
    There are people who make a market and make a living doing 
this. We are not reaching out to them to imbue their talents 
into this whole placement debacle. The Veterans Job Development 
Corps would tap into a network of hundreds of thousands of job 
search, placement, and human resources professionals through 
organizations like the Society for Human Resources Management, 
which I find has 200,000 human resources, talent acquisition, 
and staffing persons who have never been influenced to 
influence the influencers, their own corporate executives and 
hiring managers, to embrace this asset called military service, 
this wonderful asset.
    The Veterans Job Development Corps would locate, nurture, 
mine, and exploit the hidden job market. We haven't today 
talked about the hidden job market where the quality jobs are. 
It would market veterans to employers. It would connect 
veterans and champion them directly to persons with hiring 
authority, and it would, most importantly, secure interviews 
for them. Without an interview, you don't get a job offer.
    Most importantly, work that final few parts of the process 
to close and negotiate compensation and implicitly sustain 
their career mobility through retention programs.
    The corps would have--and I think this is very important--
the corps would have a mobile ``delta force.'' We thought about 
this at length. This delta force would be teams of individuals 
for the marketing, for the placement, to the championing, to 
the counseling, who would actually go into the homes, 
especially for the disabled and wounded service persons.
    We held a conference and brought 138 of the most wounded 
and severely disabled veterans free of charge in a ``road to 
recovery'' program, and most of them told us if there was such 
a thing as a delta force that could come into the home, give 
them counsel and help, and work the local employers and, most 
especially, help the spouse.
    In many cases, the spouse is much more appropriate in a 
disabled veteran's home for immediate employment, and this 
delta force could do that. But I do think we need a delta force 
to go into these troubled employment areas and work that as one 
would a firefight in troubled times.
    The Veterans Job Development Corps would have strict 
metrics for determining success, and those metrics would be how 
many veterans get jobs? Funding for the corps could be tied 
directly to results in the form of successful job placements, 
and part of the cost could be recovered from the companies who 
hire veterans.
    We have analyzed this, and we think that for less than 5 
percent of the budgets and the funding that are being spent for 
the LVER and DVOP and workforce programs, you could actualize a 
corps, including the delta force, throughout the Nation to 
enhance opportunities and bring veterans that last 100 feet.
    Finally, let me again urge this Committee to strongly 
consider authorizing a new marketing campaign to change the 
image and perception of military veterans in the private 
sector, utilizing classic consumer packaged goods techniques to 
rebrand military service as having value to the private sector.
    What has not been talked about amongst those within the 
Beltway who talk to one another is the need to create the pull. 
Most of the Federal programs are pushing veterans into the 
workforce as opposed to creating demand and a pull through 
using the classic marketing and branding techniques.
    Two weeks ago, we convened Coca-Cola, IBM, Motorola, 
MasterCard, Colgate Palmolive and a series of senior marketing 
executives, and we gave them the product called ``veteran'' and 
military service. We said if you were relaunching this product 
to your own companies and to the consuming public, how would 
you do it?
    I can share those results with you at a later date. There 
is a branding paper I have included with my testimony. But Mr. 
Chairman, we need to increase the demand for veterans among 
private sector employers, focusing on that final connection, 
the last 100 feet.
    I would say to you that we need to work together to 
traverse that last 100 feet, and I would like to close and 
conclude my testimony by quoting that famous American 
philosopher Yogi Berra, who said, ``If you don't know where you 
are going, chances are you will end up somewhere else.''
    That is where we have ended up today, and I think we should 
change it.
    [The prepared statement of Mr. Poriotis follows with 
attachments:]

    Prepared Statement of Wesley Poriotis, Chairman, The Center for 
                Military and Private Sector Initiatives

    Mr. Chairman and distinguished Members of the Committee, I want to 
thank you for the honor of appearing before you today to discuss how we 
might work together to improve the transition of servicemen and women 
from the military into private sector jobs. Having spent almost my 
entire career helping connect people with jobs, I am grateful for the 
opportunity to share some perspectives of the private sector as you 
consider what to do with Federal veterans' employment programs.
    Over the past 4 years, I have been called upon to testify three 
times on this very subject by the House Veterans' Affairs Committee, 
offering them advice on how to fix, strengthen, or perhaps even replace 
the Veterans Employment and Training Service. As I am sure you are 
aware, despite continuing improvements, the VETS program does not have 
a strong record of successfully placing veterans into jobs. Looking at 
DOL's annual performance report, they set the bar of success at just 60 
percent--so if 60 percent of the veterans who contact them find 
employment within 6 months, the VETS performance goal has been met. But 
what about the other 40 percent--hundreds of thousands veterans--most 
of whom have come into the One-Stop Career Centers because they lost 
their jobs or couldn't find one in the first place?
    Mr. Chairman, I have been working on how to connect corporate 
America with this untapped and underutilized quality resource called 
military service since the early 1990s while performing executive and 
management searches for Fortune 500 companies. As we were able to 
achieve pre-eminent status in corporate America in terms of diversity, 
I became acutely aware that the difficulties military veterans 
encountered were the same that had been earlier experienced by women 
and people of color.
    In 1994, at the request of the Joint Chiefs of Staff, I undertook a 
scientific study of the transition and post-transition experiences of 
military veterans seeking to enter the private sector job market. My 
research found that there was indeed a ``deselective'' bias against 
people with military experience that often kept them from even being 
considered for private sector jobs even when they were well qualified 
for that position.
    In my report I recommended that military transition assistance and 
veterans employment programs be restructured to meet the challenges of 
placement in the modern private sector market. Four years later, the 
Congressional Commission on Servicemembers and Veterans Transition 
Assistance, headed by the Honorable Anthony Principi who testified 
earlier, came to a very similar conclusion. The Commission recommended 
replacing the existing LVER and DVOP programs with new and different 
programs: one of which would be focused in part on job development and 
the other on marketing veterans to local employers. These 
recommendations were not implemented. So despite some modest 
refinements made by the Jobs for Veterans Act in 2003, the VETS program 
today is substantially the same program, with the same methodology and 
personnel that existed a decade ago.
    Let me explain the problem this way: in the telecommunications 
industry, they divide the work of building our network infrastructure 
into four general categories: the backbone, the middle mile, the last 
mile and the last 100 feet. You can lay thousands of miles of fiber 
optic cable, but without that final connection to the home or 
business--the last 100 feet--you don't have a customer. And that's what 
has been missing in Federal programs to help veterans find quality 
employment--the last 100 feet.
    There already exists a backbone of One-Stop Centers and thousands 
of often dedicated and caring LVERs and DVOPs working that middle and 
last mile, counseling and helping prepare veterans for employment. But 
these Federal employees have neither the training, resources, nor time 
to make that final connection between the veteran job-seeker and the 
private sector person with hiring authority. They simply don't have the 
necessary private sector experience or contacts.
    This is exactly what our Vice President for Employment Programs 
found as he visited with numerous LVERs and DVOPs over the past year. 
They told him that their biggest problem is a lack of quality job 
opportunities, and that they did not have enough time to market 
veterans directly to local employers. So despite their hard work, the 
best they can do is to get veterans prepared for job searches, and then 
direct them to data bases or websites where employers are being 
encouraged to post job openings.
    However, in the private sector, most good jobs are either not 
publicly advertised, or by the time they are advertised, they have 
already been filled or wired for a specific candidate. Mr. Chairman, if 
you want to find jobs in the private sector, you need to engage persons 
with private sector experience to find those jobs, and then connect 
veterans to those jobs. To be truly successful, you need to bring in 
private sector expertise to connect that last 100 feet between veterans 
and jobs.
    That's why The Center proposed the Veterans Job Development Corps, 
a public-private partnership to place veterans in quality jobs. This 
Corps would be composed of what we call career navigators, employment 
market openers and job developers, all trained and experienced in the 
private sector. The Veterans Job Development Corps also taps into the 
network of hundreds of thousands of job search, placement, and human 
resource professionals through organizations like the Society for Human 
Resource Managers, or SHRM.
    The Veterans Job Development Corps can locate the hidden jobs, 
market veterans to employers, connect them directly to persons with 
hiring authority, get them interviews and job offers, and support them 
as they begin their new jobs. The Corps would also have mobile ``Delta 
Force'' teams that would be sent to help veterans with significant 
barriers to employment by going directly into their homes and their 
local job markets. They would be responsible for ensuring that the 
veteran makes it that last 100 feet.
    The Veterans Job Development Corps would have strict metrics for 
determining success: how many veterans get jobs. Funding for the 
Veterans Job Development Corps could be tied directly to results in the 
form of successful job placements. Part of the cost could even be 
recovered from the companies who hire veterans through placement fees. 
In addition, getting veterans off unemployment rolls and into quality 
jobs will increase revenue increases from income taxes paid by newly 
and more fully employed veterans.
    Mr. Chairman, for about 5 percent of amount of funding currently 
spent on the LVER and DVOP programs, you could implement this plan and 
increase the number of positive outcomes for veteran job-seekers very 
significantly. Or you could reallocate 5 percent of existing program 
funding to enable the Job Development Corps, giving you much greater 
bang for your buck.
    Let me take this opportunity to also strongly recommend that the 
Committee consider authorizing a new marketing campaign to change the 
image and perception of military veterans in the private sector using 
classic ``re-branding'' techniques. In addition to improving how we 
connect veterans to employers, we need to increase the demand for 
veterans by private sector employers. This was one of the dozen 
recommendations I made to the Joint Chiefs and the President back in 
1995, and it was also echoed by Secretary Principi and the Transition 
Commission in 1999 when they called for a national campaign to raise 
awareness of the many advantages of hiring veterans.
    Although this idea was incorporated into the Jobs For Veterans Act 
in the form of the President's National Hire Veterans Committee, in the 
course of passing and enacting legislation, promulgating regulations, 
and implementing programs, the original goals and purposes were lost in 
translation. This 'Hire Veterans' Committee directed their time and 
resources in the wrong direction. Rather than marketing veterans to 
employers to increase the demand or what I call the ``pull'' from the 
private sector, they focused upon trying to ``push'' the private sector 
into using the public sector workforce system. This resulted in a 
flawed implementation of a sound idea.
    In fact, The Center is currently engaged in a feasibility study on 
marketing veterans to the private sector that was authorized by the 
Veterans Benefits Improvements Act of 2004 (Public Law 108-454) and is 
being directed by the Deputy Assistant Secretary for Policy in the 
Department of Veterans Affairs. Just a couple of weeks ago, we convened 
a summit of corporate branding and marketing experts in New York City 
to apply proven consumer marketing techniques to re-brand veterans as a 
valuable business asset. Whether such a campaign should or would be 
funded by DOL, VA or DOD remains to be seen, but there is no question 
about the need to change corporate perceptions about the value of 
military veterans to private sector employers.
    Mr. Chairman, we can think of veteran job-seekers as a product that 
we are trying to sell to private sector employers, who are the 
customers. Like any consumer product, we need to create strong demand 
and build a distribution system to get the product to the customers 
when and where they are ready to make a purchase. To create demand, we 
need to re-brand military veterans as a competitive business asset and 
market them directly to the persons involved in the hiring process. To 
strengthen our distribution system, we need to develop a new program of 
completing that last 100 feet, by locating the hidden jobs and 
connecting veterans directly to the persons with hiring authority. The 
end result will not only be higher employment rates for veterans, but 
as important, a big improvement in the quality of career opportunities 
for veterans.
    Mr. Chairman, that concludes my testimony. I have attached a copy 
of the Veterans Job Development Corps proposal and a ``white paper'' on 
Branding the Veteran, and I would ask that they both be made a part of 
the record. I thank you for your attention and would be happy to answer 
any questions you or other members of the Committee may have.
      
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 Written Questions Submitted by Hon. Larry E. Craig to Wesley Poriotis
    Question 1a. It appears to me that some of the functions that would 
be performed by the Veterans Job Development Corps would overlap with 
functions that already should be performed by Disabled Veterans' 
Outreach Program (DVOP) specialists and Local Veterans' Employment 
Representatives (LVERs), such as job search and interview training. So, 
could it be redundant to fund those programs as well as the Corps you 
proposed?
    Answer. No response.
    Question 1b. If so, would the Veterans Job Development Corps be 
prepared to compete for a portion of the funding now allocated to the 
DVOP and LVER programs?
    Answer. No response.
    Question 2. In your testimony, you expressed concern about the 
roughly 40 percent of veteran participants who do NOT enter employment 
after receiving services from the One Stop Career Centers. I share your 
concern. Do you think: more should be done to track these veterans--to 
find out who they are and why the One-Stop services did not help them 
to find employment? Could that information be useful in figuring out 
what more could be done to help these veterans find jobs?
    Answer. No response.
    Question 3. One on-going concern about the structure of the DVOP 
and LVER programs is that it does not encourage service to those most 
in need--those veterans who may require the most time-consuming 
assistance. How would you ensure that the Veterans Job Development 
Corps would provide all necessary services to those veterans? Would 
performance measures be weighted in some fashion?
    Answer. No response.
                               __________
  Written Questions Submitted by Hon. Barack Obama to Wesley Poriotis
    I want to thank the panel. Mr. Poriotis, your Veterans Job 
Development Corps is a promising idea. Mr. Sharpe and Mr. Weidman 
provided detailed and valuable critiques of the VETS program and the 
GAO report.
    Question 1. Monitoring and accountability seem to be the Achilles 
heel of the VETS program. What steps would you recommend to improve the 
Labor Department's performance in this area?
    Answer. No response.
    Question 2. One of major barriers to employment is homelessness. Do 
you think the Department of Labor is doing enough to reach out and 
provide services to our homeless veterans? What steps could VETS take 
to improve its outreach?
    Answer. No response.

    Senator Burr. Thank you. Thank you for that testimony. I 
assure you I will cover some questions related to your 
testimony and would make all aware that all of the information 
that you have to supply us will be made a part of the record.
    Mr. Sharpe?

 STATEMENT OF JOSEPH C. SHARPE, JR., DEPUTY DIRECTOR, NATIONAL 
            ECONOMIC COMMISSION, THE AMERICAN LEGION

    Mr. Sharpe. Mr. Chairman and Members of the Committee, we 
appreciate this opportunity to share the views of the American 
Legion on the performance of Department of Labor's Veterans' 
Employment Training Service, its resource needs, and the State 
grant program, which funds Disabled Veterans' Outreach Program 
specialists and Local Veterans' Employment Representatives.
    Every year, 250,000 service members are discharged from the 
armed services. These former service personnel are actively 
seeking their employment or the continuation of formal or 
vocational education. The VETS program offers transitioning 
veterans the assistance they need to obtain employment.
    President Bush's fiscal year 2006 budget request for VETS 
was $224 million. This marks a modest $3 million increase from 
the final funding allocated in the fiscal year 2005 Omnibus 
Appropriations bill. The American Legion remains steadfast 
supportive of the VETS within Department of Labor, as 
administered by the Assistant Secretary of Labor for Veterans' 
Employment and Training and the critical role each program 
continues to have in the lives of America's veterans and their 
families.
    The American Legion recommended $339 million for the 
Veterans' Employment and Training Service in fiscal year 2006 
and is recommending $345.8 million for fiscal year 2007. This 
would provide funding for the State grants for the LVERs and 
DVOPs, the National Veterans Training Institute, the Homeless 
Veterans Reintegration Program, and the Veterans Workforce 
Investment Program.
    Additionally, the American Legion supports stronger 
oversight over funding for DVOP and LVER to ensure that the 
State grants are, indeed, earmarked for veteran-specific 
employment services. It is important that States be held 
accountable for the funds they received under the DVOP and LVER 
grant program.
    The American Legion is also concerned that the rate of job 
placement of veterans, training programs, and other vital 
services has decreased. Under the previous performance data 
reporting system, veterans seeking employment and those 
entering employment can only be counted after a mediated 
service was provided.
    Under the current system, individuals only have to register 
and enter the employment system to be counted as assisted 
veterans, thereby giving the false impression that the One-Stop 
career centers are actually doing a better job of finding 
employment and training opportunities for veterans.
    The American Legion is concerned with not only how 
employment services are delivered by the One-Stop, but also 
with veterans seeking priority of service, as outlined by the 
2002 Jobs for Veterans Act. The American Legion is pleased to 
hear from the Department of Labor officials that veterans are 
actually receiving priority of service. However, VETS has not 
published any data for determining how effective its priority 
of veterans services are, nor have they reported to Congress on 
progress made in implementation of some key aspects of the 2002 
Jobs for Veterans Act.
    The American Legion strongly recommends a revision of 
existing VETS reporting requirements for measuring performance 
standards and for determining compliance with requirements for 
providing employment services to veterans. The rolling quarter 
reporting system should be administered in a timely manner to 
better project the employment services being sought by veterans 
and to more accurately reflect the efforts of the DVOPs and 
LVERs.
    The LVERs and DVOPs are the heart and soul of VETS. 
However, underfunding and understaffing has limited the success 
of these programs. The American Legion strongly believes the 
funding levels for DVOPs and LVERs should match Federal 
staffing level formulas established before enactment of the 
Jobs for Veterans Act to ensure services are available to 
achieve the goals and aspirations of VETS. A veteran in 
California should expect the same quality services available to 
a veteran in Maine.
    With the dramatic increase in the number of veterans from 
the wars in Iraq and Afghanistan being discharged and the 
increasing importance of One-Stop centers assisting all 
transitioning veterans, the American Legion strongly recommends 
that VETS continue frequent monitoring, visits to the centers, 
and provide strict oversight of these programs.
    The Department of Labor must ensure that veterans receive 
priority in all department-level programs and services created 
especially for their unique needs.
    Mr. Chairman, this concludes my testimony. I appreciate the 
opportunity to present the views of the American Legion, and I 
would be happy to answer any questions that you may have.
    Thank you.
    [The prepared statement of Mr. Sharpe follows:]
Prepared Statement of Joseph C. Sharpe, Jr., Deputy Director, National 
                Economic Commission, The American Legion
    Mr. Chairman and Members of the Committee:
    The American Legion appreciates this opportunity to share its views 
on the performance of Department of Labor's (DOL) Veterans' Employment 
and Training Service (VETS) and its resource needs, and to review the 
state grant program which funds Disabled Veterans' Outreach Program 
Specialists (DVOP) and Local Veterans' Employment Representatives 
(LVER).
    The mission of VETS is to promote the physical, emotional and 
economic security of America's veterans. Its vision is to create a 
seamless transition back to civilian life for veterans. The American 
Legion views VETS as one of the Federal Government's best-kept secrets. 
It is composed of many dedicated professional veterans who struggle to 
maintain a quality, veteran-oriented program. However, VETS is 
presently lacking in:
     Staffing;
     Funding;
     Proper oversight by VETS;
     Reliable performance data; and
     A comprehensive mandatory transitional assistance program 
for returning reservists.
    With regards to staffing, currently, VETS is one of the smallest 
divisions of the Department of Labor. This severely limits the number 
of staff available to assist veterans with employment issues. In 
addition, the current system of management within VETS includes 
Regional Offices, which continue to increase their number of staff that 
do not provide direct services to veterans, conduct investigations or 
provide any identifiable services or products that directly benefit 
veterans. Thus the continued growth of staff in the Regional Offices 
has had a negative and adverse impact on the delivery of services to 
veterans seeking and needing employment assistances. The President's 
Management Agenda calls for elimination of the middle level management 
of the Federal Government. The American Legion seeks and supports 
legislation that will eliminate the Regional Offices and use that 
funding to increase the numbers of DVOPs and LVERs.
    President Bush's fiscal year 2006 budget request for VETS was $224 
million. This marks a modest $3 million increase from the final funding 
allocated in the fiscal year 2005 Omnibus Appropriations bill, 
especially since every year 250,000 service members are discharged from 
the Armed Services. These former service personnel are actively seeking 
either employment or the continuation of formal or vocational 
education. This is available through VETS, which offers:
     Creative outreach designed to improve employment and 
training opportunities for veterans;
     Information in identifying military occupations requiring 
licenses, certificates or other credentials at the local, state, or 
national levels; and seeks to
     Eliminate barriers faced by former service personnel 
transitioning from military service to the civilian labor market.
    The American Legion remains steadfastly supportive of VETS within 
DOL as administered by the Assistant Secretary of Labor for Veterans' 
Employment and Training (ASVET). The American Legion recognizes the 
positive impact each program continues to have in the lives of 
America's veterans and their families. The American Legion recommended 
$339 million for VETS in Fiscal Year 2006 and is recommending $345.8 
million for fiscal year 2007. This would provide funding for State 
Grants for LVERs and DVOPs, the National Veterans Training Institute 
(NVTI), the Homeless Veterans Reintegration Program (HVRP), and the 
Veterans Workforce Investment Program (VWIP).
    With the enactment of Public Law 107-288, the Jobs for Veterans 
Act, The American Legion remains skeptical as to whether VETS can truly 
improve employment and training services to meet the needs of today's 
local veterans' community. Especially since VETS has not reported its 
progress to Congress as mandated by the implementation of Public Law 
107-288. The American Legion has some serious concerns with the 
implementation of the new approach to local staffing levels and job 
performance standards.
    The American Legion is concerned that the rate of job placement of 
veterans, training programs and other vital services has decreased. 
Under the previous performance data reporting system, veterans seeking 
employment and those entering employment could only be counted after a 
mediated service was provided. Under the current system, individuals 
only have to register and enter the employment system to be counted as 
an ``assisted veteran,'' thereby giving the false impression that the 
One Stop Career Centers are doing a better job of finding employment 
and training opportunities for veterans.
    A General Accounting Office (GAO) report of October 30, 2001, 
noted, ``VETS needs the legislative authority to grant each state more 
flexibility to design how staff will fit into the one-stop center 
system.'' However, The American Legion has found some DVOPs and LVERs 
are unofficially reporting that they spend 90 percent of their time 
assisting non-veterans, while only spending 10 percent of their time 
assisting veterans seeking employment. In some states, several part-
time LVERs and/or DVOPs are assigned to the same office in a metro 
area. In some cases, converting current full time LVERs and DVOPs to 
part-time employees has drastically limited the effectiveness of the 
program. In other cases, specialists or representatives are so over-
tasked with clerical duties and office administration that they have 
little time to provide much-needed outreach to job-seeking veterans. 
Stronger oversight needs to be provided to ensure that DVOPs and LVERs 
are given the resources needed to provide the services for which they 
are responsible.
    The American Legion is concerned not only about how employment 
services are delivered by the One Stops, but also with the priority of 
service as outlined by the 2002 Jobs for Veterans Act (JVA). The 
American Legion is pleased to hear from DOL officials that veterans are 
receiving priority of service. However, according to the recent GAO 
report of December 2005, ``Labor has only partially implemented the JVA 
requirement to give priority service to veterans in its many employment 
training programs.''
    VETS has not published any data for determining the effectiveness 
of its veterans priority services. VETS is only now, in 2006, reporting 
to Congress on their progress in the implementation of JVA's key 
aspects. The current reporting timeframe reflects a 6-month delay. The 
American Legion strongly recommends a revision of existing VETS 
reporting requirements for measuring performance standards and for 
determining compliance with requirements for providing employment 
services to veterans. The rolling quarter reporting system should be 
administered in a timely manner to better project the employment 
services being sought by veterans and to more accurately reflect the 
efforts of DVOPs and LVERs. According to VETS representatives surveyed 
by The American Legion, it currently takes 18 months to receive data on 
how well a program is functioning. Most report to The American Legion 
that they cannot make changes or improvements after 18 months; in many 
cases, the contractor or person responsible is no longer available.

                        THE FRONT LINE WARRIORS

    The LVERs and DVOPs are the heart and soul of VETS. The unique 
roles of these two programs are outlined in Title 38, Chapter 41, 
United States Code. However, annual underfunding and understaffing have 
limited the success of these programs.
    The role of VETS is to augment local employment service offices and 
handle the hard-to-place veterans, not just any veteran that walks in 
the door, whether the veteran is job ready or not. Clearly, an LVER is 
required to effectively perform many different roles. The American 
Legion believes that all LVERs should be expected, at a minimum to:
     Ensure veterans are receiving quality services from local 
employment services employees;
     Maintain regular contact with community leaders, 
employers, labor unions, training programs, and veterans' service 
organizations;
     Provide directly or facilitate labor exchange services to 
eligible veterans;
     Job development with employers and labor unions--to 
include on-the-job training and apprenticeship programs;
     Promote and monitor the participation of veterans in 
federally funded employment and training programs;
     Monitor the listing of jobs and subsequent referrals to 
Federal contractors;
     Work closely with VA's Vocational Rehabilitation Program;
     Refer veterans to training, supportive services, and 
educational opportunities;
     Assist in securing and maintaining current information on 
employment and training opportunities;
     Assist in identifying and acquiring prosthetic and sensory 
aids and devices needed to enhance employability of disabled veterans; 
and
     Facilitate guidance and counseling service to certain 
veterans.
    The LVER has no counterpart in a local employment service office. 
The only supervisory control the LVER has is over any assigned DVOP. As 
taxed as the LVER may be, the DVOPs job is just as demanding. The 
American Legion believes all DVOPs should, at a minimum:
     Develop job leads and job training opportunities through 
contacts with employers;
     Promote and develop apprenticeship and on-the-job training 
opportunities with employers;
     Carry out outreach activities to locate veterans in need 
of job assistance;
     Provide assistance to employers in securing job training 
opportunities for eligible veterans;
     Assist local employment services office employees with 
their responsibilities for serving veterans;
     Promote and assist in the development of entry-level and 
career job opportunities;
     Develop outreach programs with VA Vocational 
Rehabilitation (VOC Rehab) Program participants; and
     Provide case management.
    Like the LVER, DVOPs have no counterpart in the local employment 
service office.
    The American Legion believes these two Federal programs were 
designed to support local employment service office personnel, not 
supplant nor integrate. VETS must retain complete autonomy in order to 
be successful. Through the creation of these positions, Congress sought 
to assure:
     All veterans received priority of service;
     Certain veterans received extensive case management;
     Employers hire veterans;
     Outreach activities recruited and assisted chronically 
unemployed or underemployed veterans;
     Close contact was established and sustained with the 
veterans' community;
     Effective marketing of Federal and state vocational 
training opportunities;
     Monitoring of veterans' hiring practices by Federal 
contractors; and
      The presence of veterans' employment advocates throughout 
the local community. The American Legion strongly believes the funding 
levels for DVOPs and LVERs should match Federal staffing level formula 
established before enactment of JVA to assure services are available to 
achieve the goals and aspirations of VETS. A veteran in California 
should expect the same quality services available as a veteran in 
Maine.
    VETS was created to work with the local employment service office, 
not to be incorporated into those offices. Prior to the creation of 
VETS, the local employment service offices were failing to meet the 
employment and training needs of veterans, especially disabled and 
minority veterans. Many veterans were faced with significant barriers 
to employment and needed more focused case management and personal 
assistance because there was no appropriated funding for veterans. In 
the beginning, VETS had the necessary funding and staff to deal 
effectively with the employment problems throughout the veteran 
population.
    With the dramatic increase in the number of veterans from the wars 
in Iraq and Afghanistan being discharged and the increasing importance 
of the One Stop Centers in assisting all transitioning veterans, the 
American Legion strongly recommends that VETS continue frequent 
monitoring visits to the centers and provide strict oversight of these 
programs. DOL must ensure that veterans receive priority in all DQL 
programs and services created specifically for their unique needs.
    Title 38 USC, 4103A required that all DVOP specialists shall be 
qualified veterans and that preference be given to qualified disabled 
veterans in selecting and filling DVOP specialist positions. This 
provision was changed by P.L. 107-288, which allows the appointment of 
non-veterans to these positions for up to 6 months without any 
justification. For over 20 years, these positions have been filled with 
veterans and this has proved to be a winning combination. The American 
Legion opposed non-veteran appointments and urges Congress to rescind 
this change. The American Legion believes that military experience is 
essential to understanding the unique needs of the veteran and that all 
LVERs, as well as all DVOPs, should be veterans. In addition, The 
American Legion is in strong opposition to part time DVOP and LVERs 
because that may lead to limited services to veterans. Properly 
monitoring and ensuring that the half time DVOP or LVER serves veterans 
adequately is overly dependent on management within the career centers, 
and nearly impossible. In our opinion, the use of part time positions 
has led to examples of less than adequate services creating managerial 
challenges and should only be allowed with the concurrence of the DVET 
in the state.
    The American Legion is also concerned with the reported numbers of 
National Guard and Reserve troops that have returned from the war in 
Iraq and Afghanistan only to encounter difficulties with finding 
suitable employment. The Department of Labor transitional assistance 
program (TAP) was designed to help prepare separating service members 
and their families in making a successful transition back into the 
civilian workforce. DOL estimates that 70 percent of all separating 
active duty service members attend the employment TAP seminars and only 
30 percent of all separating National Guard and Reservists attend a 
portion of TAP. The American Legion believes this low attendance number 
is a disservice to all transitioning service members. Many service 
members and most National Guard and Reservists are unaware of the 
assistance and resources offered by TAP. Without this program service 
members who have served their country bravely return to the civilian 
workforce less equipped than their counterparts who took advantage of 
the information provided by TAP. The American Legion reaffirms its 
strong support of TAP/DTAP program and also encourages the Departments 
of Labor and Defense to work together in mandating that all separating, 
active-duty service members, which includes the Reserves and the 
National Guard, be given an opportunity to participate in TAP/DTAP.
    The American Legion recommends adequate funding for the National 
Veterans Training Institute (NVTI) budget. The NVTI provides 
standardized training for all veterans employment advocates in an array 
of employment and training functions. This excellent program helps to 
prepare employment service personnel to professionally address the 
vocational needs of veterans, especially those with barriers to 
employment.
    Over the past 6 years, VETS has endeavored to reinvent itself 
within the confines of continued funding constraints, while faced with 
major changes made under the Workforce Investment Act. VETS makes up 
about 15 percent of the system operated in the states by the Employment 
and Training Administration.
    Approximately 56.2 percent of all unemployed veterans are over the 
age of 45; therefore, many of these veterans are victims of corporate 
restructuring, technology changes, or age discrimination. These 
veterans need training to remain in their previous professions or to 
begin new careers. Section 168 of the Workforce Investment Act 
(formerly JTPA N-C) is that portion of the statute, which provides for 
this type of training for veterans.
    For the past 3 years, the $7.5 million annual funding for the 
Veteran Workforce Improvement Program has allowed the program to 
continue to operate in only 11 states. This is absolutely unacceptable. 
There are thousands of veterans available for work in this new economy, 
but they may lack marketable technological skills. The problem is 
clearly a lack of funding. The only participants in this specific 
program are military veterans. The baseline funding for it needs to be 
at least increased to allow VETS to begin training in all fifty states. 
Therefore, The American Legion would recommend $17.34 million for 
Veteran Workforce Improvement Program in fiscal year 2007.
    Although P.L. 107-288 requires that veterans receive priority in 
all DOL programs, the American Legion urges the reinstatement of the 
Service Members Occupational Conversion and Training Act (SMOCTA). 
SMOCTA was developed as a transitional tool designed to provide job 
training and employment to eligible veterans discharged after August 1, 
1990 and provides an incentive for employers to hire veterans. Veterans 
eligible for assistance under SMOCTA were those with a primary or 
secondary military occupational specialty that DOD has determined is 
not readily transferable to the civilian workforce; or those veterans 
with a service connected disability rating of 30 percent or greater.
    Eligible veterans received valuable job training and employment 
services through civilian employers that built upon the knowledge and 
job skills the veterans acquired while serving in the military. This 
program not only improved employment opportunities for transitioning 
service members, but also enabled the Federal dollars invested in 
education and training for active duty service members to be reinvested 
in the national job market by facilitating the transfer of skills from 
military service to the civilian workforce.
    The American Legion continues to encourage Congress to reauthorize 
and adequately fund SMOCTA. Many LVERs and DVOP publicly praised the 
effectiveness of SMOCTA in successfully returning veterans into the 
civilian workforce. The American Legion recommends $45.9 million for 
SMOCTA funding in fiscal year 2007. Should SMOCTA not be reauthorized, 
these training dollars should be added to Veteran Workforce Improvement 
Program (VWIP) job training opportunities.

                                SUMMARY

    Messrs. Chairmen and members of the Committee, in this statement, I 
have laid out the priorities for The American Legion regarding the many 
programs and services made available to the veterans of this nation and 
to their dependents and survivors.
    The American Legion has outlined many central issues in this 
testimony today regarding VETS. If there is an attempt to take the 
DVOP/LVER grants and fully integrate them into WIA/ETA, there will no 
longer be any veteran identity to these services. To allow the 
individual state Governor to decide where the national program for 
Veterans Employment and Training will reside within the respective 
state means it is no longer a national program, but rather a state 
program. The American Legion official position is that this should be a 
national program with Federal oversight and accountability. And 
finally, The American Legion strongly opposes any attempt to move VETS 
to the Department of Veterans Affairs (VA).
    The Department of Labor (DOL) is the nation's leading agency in the 
area of job placement, vocational training, job development, and 
vocational counseling. Due to the significant barriers to employment 
experienced by many veterans, VETS was established to provide eligible 
veterans with the services already being provided to job ready 
Americans. Working with the local employment services offices, VETS 
gave eligible veteran the personalized assistance needed to assist in 
the transition into the civilian workforce. VA has very limited 
experience in the critical areas of job placement, vocational training, 
job development, and vocational counseling through its Vocational 
Rehabilitation Program.
    We realize in a time of war there are many other important issues 
before the Congress of the United States. However, The American Legion 
believes that Congress must focus on finding effective solutions to 
veterans' concerns. The veterans of this nation have always answered 
when their country called. Medals, awards, and citations recognize the 
remarkable achievements of citizen soldiers, sailors, airmen and 
Marines, but the true gratitude paid to American's veterans comes in 
the form of meeting their post-military needs, especially those with 
any service-connected disabilities. The American Legion believes it is 
time to make a meaningful commitment to the programs and services that 
are an earned recognition for our veterans from a truly grateful 
nation.
    Thank you for granting me the opportunity to appear before you 
today.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Larry E. Craig to
                         Joseph C. Sharpe, Jr.

    Question 1. You stressed in your testimony the need to provide 
additional resources for the Disabled Veterans' Outreach Program (DVOP) 
and Local Veterans' Employment Representative (LVER) program. However, 
you also acknowledged that you are ``skeptical as to whether [the 
Department of Labor's Veterans' Employment and Training Service (VETS)] 
can truly improve employment and training services to meet the needs of 
today's local veterans' community.'' Should we infuse more funds into a 
system that may not be able to succeed? Or should we first determine 
how to structure the system so that it will be able to succeed?
    Answer. The VETS program is composed of many dedicated 
professionals.
    It is crucial to re-structure the system so it can be successful 
and maximizes the benefits of every dollar spent. The objective of any 
veteran program must be to ensure that the veteran is clearly served, 
with built in performance data that can measure results. The workforce 
structure needs to be understood by all interested parties whereby the 
DVOP and LVER programs are merely a part of the structure. Another 
important point to take into consideration is that DVOPs and LVERs were 
originally instituted by Congress to serve veterans. They were mandated 
to serve only veterans and not to replace existing workforce staff 
directed to focus on veterans and their needs. This requirement is 
still valid and needed more today than ever before due to the nation's 
greater reliance on Reserve and Guard units to help fight the war on 
terror.
    Any successful job placement program requires two components: 
meaningful jobs and qualified workers.
    Either placing qualified workers in meaningless jobs or placing 
unqualified workers in meaningful jobs is a formula for vocational 
disaster--unhappy employees and employers. Repeated good job matches 
are the true measures of success. VETS should be the job placement 
office of first-choice rather than last resort with meaningful job 
openings and providing highly qualified employees to fill those job 
openings. Satisfied customers mean both employers and employees.
    DVOPs and LVERs need to spend as much time in job development 
efforts (finding those employers with meaningful job openings) as 
matching up quality candidates to fill those positions. That means 
repeated marketing the benefits of hiring former military service 
members to potential employers.
    Currently, there are no incentives in place to motivate employers 
to seek out former military personnel for employment--such as tax 
credits, government contracts, or vocational training subsidies to help 
cover training costs earmarked specific for employment of veterans.
    Equally important is identifying those hard-to-place candidates and 
helping them to become job ready--through vocational training (on-the-
job training, apprenticeship, or technical training) or vocational 
counseling (job-finding workshops). Both require funding to achieve.
    The former Service Members Occupational Conversion and Training Act 
(SMOCTA) was a highly successful vocational training and job placement 
tool effectively used by DVOPs and LVERs, with measurable results, that 
is no longer authorized by Congress. By all accounts from by DVOPs, 
LVERs, participating employers, and participating employees, it was 
money well spent.
    Question 2. In support of the President's ``WIA Plus'' proposal, 
the Department of Labor's Employment and Training Administration has 
stressed that ``the current system of Federal job training programs is 
too complex'' and that ``states and local communities have been 
hindered by archaic rules that make it difficult to train workers and 
respond quickly to economic downturns, natural disasters and shifts in 
industry skill needs.'' Despite those criticisms, you have strongly 
opposed removing veterans employment programs from the Labor system. If 
this ``archaic'' system is not capable of quickly responding to 
veterans' needs, don't we owe it to veterans to explore whether other 
means of providing employment services would be more effective?
    Answer. The American Legion is well aware of the statements by the 
DOL Employment and Training Administration regarding the needs to 
reinvent the workforce system. The American Legion has come to the 
conclusion that ETA prefers to shift the veterans' program into the 
mainstream where they are no longer seen as veterans' programs rather 
than make them accountable, effective or efficient. A case in point is 
the Jobs for Veterans Act of 2002, which tasked DOL to ensure priority 
of services to veterans in all DOL funded programs. However, 3 years 
later, there is absolutely no evidence that this has been implemented 
or if implemented how it has improved opportunities for veterans. 
Legionnaires at the local level report that the State Workforce 
Agencies and Local Boards have not instituted any priority for veterans 
and there is no indication that DOL, has taken any actions to enforce 
the law.
    The Jobs for Veterans Act of 2002 (JVA) gave the states much more 
flexibility with the DVOP/LVER programs and made sweeping changes in 
the prescriptive nature of the previous law. In exchange for such 
changes it was mandated that veterans would be afforded, by law, 
priority for services in all DOL funded programs. The DOL, State 
Agencies and Local Boards have readily accepted those specific items of 
the JVA that they supported but have failed to implement all of the 
requirements.
    Presently, DOL, including ETA and VETS have not fully instituted 
the JVA, basically ignoring Congress, and they are not enforcing 
veterans priority for service as prescribed by existing law. The states 
claim the system is too complex. To us this is a credibility issue. At 
a time when veterans' issues should be important DOL seems to be paying 
lip service to veterans.
    The American Legion believes that the Federal job-training program 
is complex. We concur in some instances with ETA's premise that the 
Federal job-training program is complex. However, we do not believe the 
non-training services such as Employment Services (ES), Public Labor 
Exchange, and the DVOP/LVER programs are overly complex. It appears 
that the current belief system is, that training and employment service 
type programs are basically the same. That is not a true statement. The 
differences between WIA training programs and the services offered by 
the Public Labor Exchange ES and DVOP/LVER are miles apart.
    For example the training programs serve less than 10 percent of the 
total population in the workforce, while ES and DVOP/LVER serve over 80 
percent. The cost per individual in a training program is at least ten 
times the cost for those being served by ES and DVOP/LVER. The success 
of a training program is dramatically higher than that of ES and DVOP/
LVER; of course we should remember that we just spent thousands of 
dollars in training an individual in a skill needed in his community so 
the success rate will be higher.
    Moreover, with the loosening of restrictions on the DVOP/LVER 
programs there has been a steady increase in DVOP/LVER staff providing 
service to non-veterans. When DVOPs and LVERs should be contacting 
employers about potential job openings, they are busy meeting the needs 
of non-veterans. in some situations the DVOP/LVER staff is being used 
in place of other paid staff in the centers. This is a contradiction of 
the basic premise of the DVOP/LVER program. The Local Board and center 
managers are calling upon these dedicated veterans' employment 
specialists to serve non-veterans; therefore the resultant lower 
service level to veterans should not be a surprise.
    The DVOP/LVER program is not performing up to desired expectations, 
but then neither is the ES, WIA or entire workforce system. The State 
Workforce Agencies, DOL, and Local Boards have had 3 years under JVA to 
operate with fewer restrictions, less accountability and no enforcement 
and yet there is no marked improvement in services to veterans.
    The American Legion believes that DOL has had its chance to show 
that more flexibility and less restriction would be good for the 
overall system but the results are the exact opposite. The American 
Legion strongly believes that DOL should increase accountability, 
ensure accurate reporting and enforce the laws enacted to serve 
veterans.
    Until DOL, the State Workforce Agencies and Local Boards fully 
enact JVA and respect the requirements inherent in the DVOP/LVER 
programs, moving the DVOP/LVER programs to any other entity is a moot 
point.
    Question 3a. As you know, the Commission on Service members and 
Veterans Transition Assistance concluded that employment services to 
veterans could be improved by awarding grant funds competitively on a 
state-by-state basis. If a non-State provider can demonstrate that it 
has the ability to more effectively and efficiently provide employment 
services to veterans, would you support allowing that provider to 
compete for some or all of the grant funding that is now awarded on a 
non-competitive basis?
    Answer. The American Legion strongly feels that the DVOP/LVER 
program should be a state program, period. The current WIA system 
relies on private providers to deliver services. What we have heard 
from Legionnaires at the local and state level is that these providers 
change quite often. This constant change of service delivery contractor 
results in a lower level of performance, more time to train staff and 
slower response times to serve the communities. It is difficult to hold 
people responsible or accountable when the structure and or management 
scheme constantly changes. We have seen first hand that privatizing 
service delivery looks good on paper but does little to enhance or 
improve the actual service to the client. We need only to look at WIA 
to see these results. For DVOP/LVER programs we believe management and 
staff stability is a key component toward success in meeting the needs 
of the entire veterans' population, to include those facing significant 
employment barriers. This can only be garnered via a state program.
    Question 3b. On the flip side, if a state or locality has 
demonstrated an inability to effectively provide employment services to 
veterans, would you support allowing other entities to compete for the 
funds that have been provided to that state or locality?
    Answer. The above response is incorporated by reference. The 
American Legion feels that the Federal agencies which are responsible 
for funding MUST also hold those entities to which funding is given 
accountable for performance and that is not being done now. If DOL does 
not hold the States accountable, or the States do not hold the Local 
Boards accountable, who can say that DOL would hold any other entity 
accountable.
    On the other side, if DOL indicates that other service providers 
could do better or will be held to a higher standard, then one only has 
to ask why those same measures or steps are not being applied to the 
States and Local Boards now. To us the problem lies squarely in the 
lack of accountability by DOL over the States and Local Boards.
    Question 4a. In your testimony you were critical of the Jobs for 
Veterans Act. That Act implemented many of the recommendations of the 
Transition Commission report which was replete with criticisms of the 
law that sustained the DVOP and LVER programs as being outmoded, 
inflexible, process-oriented, and overly prescriptive. Did The American 
Legion not agree with the Transition Commission's conclusions?
    Question 4b. When, in your opinion, were the DVOP and LVER programs 
most effective and what evidence was there of that effectiveness?
    Answer. The American Legion feels the DVOP/LVER programs were most 
effective when DOL-VETS had an active hand in monitoring the States and 
local centers and when corrective sanctions were applied for non-
performance or fiscal abuse. When the State Workforce Agencies operated 
and administered the DVOP/LVER programs as a state operation they did 
not abrogate their responsibility by giving the programs to the Local 
Boards. There were performance standards that:
    (1) Measure the services to veterans as compared to non-veterans;
    (2) Are timely, at least monthly;
    (3) Do not have a time lag of nine to 12 months; and
    (4) Measure what is being done not just who went to work.
    To get a better understanding of this, we recommend that you 
examine current performance measurements used by DOL for WIA, ES and 
veterans. The measurements are Entered Employment, Entered Employment 
with Staff assisted services, job retention and in some cases wage 
gain.
    The way DOL measures success now is that any individual who 
registers with the system in one quarter and goes to work within two 
quarters thereafter is considered a success. The data processing system 
and tax records track this automatically. Note that nowhere in the 
formula does it require that the individual be provided any assistance 
in securing employment! So in essence we are merely measuring the 
ability of individuals to find their own jobs. Since the formula works 
by quarters the number of individuals considered as the base 
registrants is smaller and allows a higher success percentage than 
previous methods of measurement.
    For job retention, the measurement is done on those individuals who 
entered employment in a quarter where they are still receiving wages 
two quarters after entering the job. The data processing system and tax 
records track this automatically as well. It is significant to note 
that the individual does not have to be in the same job with the same 
employer as when hired but merely that they have earned wages in both 
quarters. We are concerned that this is not a proper way to measure 
employment. One would expect that spending time in training and 
providing employment services to an individual would help match the 
individual's needs to the needs of an employer. The match would allow 
an employer to select and hire that individual. If the individual does 
not stay with that one employer for 6 months does that not call into 
question the system's ability to train, serve and screen people for 
employment?
    The American Legion believes that in the rush to prove the success 
of training and employment programs, lax measures were employed to give 
the false impression of success.
    In private business it is called performance inflation and those 
corporations who did just that, have failed.

          Written Questions Submitted by Hon. Barack Obama to 
                         Joseph C. Sharpe, Jr.

    Question 1. Monitoring and accountably seem to be the Achilles heel 
of the VETS program. What steps would you recommend to improve the 
Labor Department's performance in this area?
    Answer. No response.
    Question 2. One of the major barriers to employment is 
homelessness. Do you think the Department of Labor is doing enough to 
reach out and provide services to our homeless veterans? What steps 
could VETS take to improve its outreach?
    Answer. No response.

    Senator Burr. Mr. Sharpe, thank you very much.
    Mr. Weidman?

    STATEMENT OF RICHARD F. WEIDMAN, DIRECTOR OF GOVERNMENT 
             RELATIONS, VIETNAM VETERANS OF AMERICA

    Mr. Weidman. Thank you, Mr. Chairman.
    On behalf of John Patrick Rowan, the national president of 
Vietnam Veterans of America, and all of us, thank you--Chairman 
Craig, Senator Akaka, and you, sir, and your distinguished 
colleagues--for the opportunity to present here today.
    We have, since the inception of Vietnam Veterans of America 
in 1978, held that employment is finally, in the end, the key. 
That is the best veterans benefit. It doesn't matter whether 
you are in a wheelchair, whether you have PTSD, whatever.
    Helping people get to the point where they can obtain and 
sustain meaningful employment should be the goal of all 
veterans programs. It is the nexus. If, in fact, we are 
successful with the other programs, then people will be at the 
point where they can obtain and sustain a decent job that leads 
somewhere.
    The history of the job service goes back to 1933, and 
priority of service to veterans was written into that, largely 
because in 1931, as you know, we had the spectacle of American 
troops firing on American veterans on the Mall. And people were 
still sensitive to that.
    It was not working well by the time we got to 1944, in the 
middle of World War II, and therefore, as part of the laws that 
were created that became known as the G.I. Bill, the LVERs, or 
Local Veterans' Employment Representatives, were created. Later 
on in the 1950s, we created the Veterans Employment Service and 
put a DVET in each State to help monitor what was going on.
    In 1976-1977, in this room, Senator Cranston held a set of 
hearings where the workforce development agencies came in and 
said they weren't placing any Vietnam or disabled vets because 
they couldn't find them. And therefore, the DVOP program was 
created by Executive Order by President Carter for a variety of 
reasons, not the least of which is he had a political pressing 
need at that time.
    But Mr. Ron Drach, who is currently in the room, was one of 
the two authors of that program, along with Dennis Rhoades. 
They came up with it within 24 hours. Later on, it was locked 
in the Title 38, Chapter 41.
    From 1977 on--and I am as guilty of this and VVA is, as 
every other veterans organization--we have tinkered with 
Chapter 41 of Title 38, adding more and more proscriptive and 
prescriptive measures to try and get the local office manager 
to let the DVOP and LVERs do their job. That is basically what 
it comes down to. And it didn't work.
    Beginning in the late 1990s, we moved toward a more 
outcome-driven system. Now at the same time, since the 1980s, 
GAO has pushed the idea of the One-Stops, and let us take all 
the fetters off of all the systems, and therefore all boats 
will rise. That was never true of veterans. Otherwise, there 
wouldn't have been a DVOP and LVER program, and there wouldn't 
have been the strong system of monitoring.
    At the same time, they switched over from counting 
placements to entered employment rates. The entered employment 
rates, as my colleague Mr. Sharpe just pointed out, is 
absolutely meaningless. It is a classic example of the ``post 
hoc, ergo prompter hoc'' fallacy, where you walk in and you are 
technically registered at the job service or at the One-Stop, 
and you get a job later on, and you have never been back there. 
In fact, they made you so mad you wouldn't go back. They are 
taking a positive termination because you went out and got your 
own dog-gone job.
    In that system, the bad news is that we have no measure. 
The good news for Senator Obama is the stats that he is looking 
at are absolutely meaningless in terms of how well they are 
doing in their State versus other States.
    The question then is what do we need to do now? The first 
thing, as you point out rightly, we need decent stats. I don't 
know if you are familiar with this, sir, but this is a special 
survey of veterans. It is done every 2 years. This latest one 
was released in July 2004, but it was actually done in 2003.
    There is another one that is already due, and it needs to 
be broken out by combat versus noncombat, theater of operation. 
Then you get an idea of who is coming back from OIF, OEF, who 
has a problem, number one. And number two, they used to break 
this out with a table that was percentage of disability.
    Those who were 60 percent or more service-connected 
disabled, virtually all of them were out of the labor force, 
and those that were in, their unemployment rate was also in the 
20 percent range. They stopped doing that and masked it with 
those who were doing better, who were the 10 and 30 percent 
service-connected disabled. We need to go back to getting stats 
to getting back at the crux of the issue.
    The keys that drive this are two things. You have no 
sanctions now. You only have what we call the ``nuclear 
option,'' which is take all the money away. It has only ever 
happened once, in the State of Maine, and it happened in the 
1970s. And they contracted with the State American Legion for 1 
year. They cleaned up their act with the State workforce 
development agency, and they gave them the grant right back.
    Most Governors will go crazy. They don't have the political 
clout to take all of the money away. So you have no sanctions. 
You have no flexible option. In terms of what you have is 
either incentive grants or non-incentive grants. By not getting 
incentive grants, then it essentially becomes a sanction. And 
we believe that that is what we need for DVOPs, LVERs. That is 
believed what we need on other grants from Labor. It works.
    Seven percent of the money, of the WIA money that goes into 
every State is kept by the Governor as an incentive grant. And 
they give that out to the local service, to the local WIB, 
based on whether or not they meet the State's priorities, and 
those priorities never include veterans. They are usually 
people on welfare, dislocated homemakers, and youth. It never 
says veterans.
    When they first come in, 51 percent of that WIB by law must 
be business people. They look at the proposal. They open it to 
the back. They look at the budget, and they say, ``What is this 
7 percent?'' And they say, ``Well, that is the incentive 
grant.'' ``Well, you mean that is like a bonus?'' ``Yes.'' 
``What do we have to do to get the bonus?'' And they direct 93 
percent of their activities and their funding toward getting 
that 7 percent.
    We have repeatedly suggested to the Secretary of Labor, 
three succeeding Secretaries now, that out of the Secretary's 
incentive grant that they set aside some for veterans and 
disabled veterans. We would urge that that now be locked in the 
statute, that it has to be there. People will study to the test 
if there is cash, American, involved. That is that.
    HVRP, Homeless Veterans Re-Integration Program, I didn't 
talk about. But it is important to talk about here because, in 
fact, it is the only part of Labor where there is true 
accountability, where they track for 180 days what happens to 
that person after they get a job, and it has the best cost per 
placement of any of the programs administered by Department of 
Labor. Not veterans programs, of any program.
    It is administered through the community-based 
organizations. Many of them are the same ones who were created 
in the 1970s because the job service was not responding to 
returning veterans then to deliver employment services and deal 
with supportive services and barriers to employment.
    There is a great deal that needs to be addressed here. Most 
importantly, we need a national strategy. We believe that the 
only way you can get there is essentially a convocation. There 
is no national strategy now, despite some people saying that 
there is or it is the Hire Vet Committee.
    We would encourage this Committee to get together with your 
colleagues on the other side of the aisle--you, sir, and 
Senator Craig and Senator Akaka--as well as with the folks on 
the other side of the Hill and invite in industry, invite in 
the administration, invite in all the players, including the 
veterans service organizations, and say we are going to take 2 
days and come up with something that makes sense.
    This kind of colloquia was done on the House side a number 
of years ago, and we thought we had a deal. And the workforce 
development agencies kicked holes in it. It said that most JVA 
provisions have been carried out, but not without some 
challenges.
    In fact, that is not true. The only parts of JVA that were 
implemented were the parts that the workforce development 
agencies wanted, that the States wanted, that gave them ``more 
flexibility.'' All the ones having to do with accountability, 
they haven't even begun to make a plan to make a plan to 
implement.
    We believe that that begins with regulations, begins with 
FCJL regulations--Federal contract job listings regulations--
and last, but not least on that, if you have a question on 
FCJL, I have more to say.
    I thank your indulgence, Mr. Chairman, for giving me a 
little bit of time into the red light.
    [The prepared statement of Mr. Weidman follows:]

   Prepared Statement of Richard F. Weidman, Director of Government 
                 Relations, Vietnam Veterans of America

    Good morning, Mr. Chairman. On behalf of our National President, 
John P. Rowan, Vietnam Veterans of America (VVA) thanks you for the 
opportunity to appear here today to express our views on this vital 
veterans' issue of how well the Local Veteran Employment Representative 
(LVER) program and the Disabled Veteran Outreach Program (DVOP) is 
working, particularly for disabled veterans, recently separated service 
members, and those veterans most at risk of becoming homeless. My name 
is Rick Weidman, and I serve as Director of Government Relations for 
VVA.

                         HISTORY AND BACKGROUND

    The Employment Service was created as a non-statutory entity in 
1915, under President Wilson. The United States Employment Service was 
created as a statutorily mandated entity in 1933 as part of the Social 
Security Act, along with the legislation that established unemployment 
insurance. The Wagner-Peyser Act, as it is commonly known, established 
``priority of service'' for veterans who sought assistance in finding 
employment. Employers made the argument to Congress that if business 
was going to pay taxes to pay for unemployment checks to former 
workers, there needed to be a strong effort to get them back to work, 
thereby reducing the UI tax rate for the employer.
    From the outset of the reconstituted Employment Service, veterans 
were legally accorded ``priority of service.'' Veteran's organizations 
made the argument that veterans should be first in line for any such 
assistance. As this was a mere 2 years following the World War I 
veterans' march on Washington, and the spectacle of American troops 
firing on American veterans on the national Mall, Congress and the 
President agreed and saw fit to ensure that veterans, who had 
sacrificed the most, received priority in referral to job openings and 
for other services.

                      CREATION OF THE LVER PROGRAM

    Unfortunately, a mere decade later (and in the middle of World War 
II), ``veterans priority of service'' was not working very well at the 
local level in many instances. Essentially Congress found that there 
was no meaningful quality assurance system to ensure that veterans 
received their rights to priority. Therefore, in 1944, as part of the 
set of laws known as the GI Bill, ``priority of service was reiterated, 
and the Local Veterans Employment Representative (LVER) program grants 
to the states created, in order to help ensure that priority of service 
actually happened in each and every office. The theory was that all 
local employment service office managers were intent on obeying the 
law, and that where veterans did not receive ``priority of service'' 
the LVER would monitor all activity, make the office manager aware of 
any problems caused by a few ``bad apples,'' and the problem would be 
corrected. That is why the LVER, by law, was supposed to report 
directly to the local office manager. While this ``fix'' helped in many 
instances, it was still problematic and uneven in how well it 
functioned.
    Also beginning in 1944 and 1945, many cities began to emulate the 
model first promulgated in Bridgeport, Connecticut, to establish 
veterans multi-service centers, with VA benefits counselors and other 
VA services providers, employment service representatives, unemployment 
claims examiners, and any other available public and private resources 
all existing under a single roof, in order to coordinate the response 
of the entire community to welcome home the returning veterans. Most of 
these had governing boards that were like a model Rotary club, with 
representatives of the various aspects of the business community, the 
clergy, political leaders, veterans' organizations, civic organizations 
such as the Elks, labor unions, and other key elements of that 
particular community. In this way it really was a total response of 
each community to the returning veterans, and therefore an evolving 
strategy in each community.
    Similarly, the GI Bill provided for farm training, vocational 
training, and other skills training as well as attending college (which 
for many was training that led to better jobs than they could have ever 
dreamed of before their service in the war). In fact, more than 51 
percent of the GI Bill usage was for training other than accredited 4-
year colleges. Many veterans were able to attend college because of the 
educational benefits and the ``52-50'' club, which allowed them to have 
$50 unemployment payments (what we today call UCX) for a full year to 
get themselves settled and to find a college to attend or a program to 
pursue.

      SELF EMPLOYMENT AND SMALL BUSINESS AS A MEANS TO EMPLOYMENT

    For many, the VA also administered a program to help veterans 
establish small business concerns that included direct loans to start 
their business. This resulted in countless very small businesses, as 
well as many firms that grew into medium and large companies, all 
because it was part of a true nation strategy to assist returning 
veterans to develop a way to earn a living, either by working for 
someone else, or by starting their own small businesses. Among many 
other symbols of this highly successful program was the ubiquitous 
``Veteran's Taxi'' found in cities and towns all across America.
    In response to continuing problems, a system of ``Director, 
Veterans Employment Services'' was created with a Director in each 
state who was a Federal employee. One of the problems from the outset 
was that there was inexact control at the state and local level as to 
the actual performance of staff because all of the employees were state 
workers who were funded by Federal dollars, and therefore not subject 
to direct Federal control or means of accountability. Some of these 
Directors were very good, but others were not as responsible or 
energetic. While they were all ostensibly civil servants, the selection 
process was (and still largely is) highly political. In many states the 
employment service was not responsive to the needs of Vietnam veterans.

                    VETERAN COMMUNITY-BASED PROGRAMS

    The League of Cities/Conference of Mayors created a network of 
community-based organizations (CBO) to attempt to deal with this 
problem in medium sized ties. Some of those, such as the Veterans 
Outreach Center in Rochester, New York, and the Rhode Island Veterans 
Assistance Center in Providence, Rhode Island still exist. Other CBOs 
came into being because the need was great and Vietnam veterans stepped 
forward to organize and find funding sources to meet the need. Many of 
the CBOs who are providers of multiple services to homeless veterans 
and other very low-income veterans came into existence this way. These 
include Swords to Plowshares in San Francisco, Vietnam Veterans of 
California (formerly Flower of the Dragon), and others. In fact, the 
community-based model works to deal with the multiple barriers that 
many veterans face and must surmount in their quest to obtain and 
sustain meaningful employment at a living wage.
    There were several other efforts to help returning Vietnam 
veterans, including the National Alliance of Business (NAB) initiative 
for veterans using a good deal of Federal money, which had mixed 
results at best in terms of actually placing veterans, particularly 
disabled veterans and veterans with barriers to employment, into 
permanent jobs.

                CREATION OF THE DASVE POSITION AT LABOR

    In 1976, legislation was enacted that created the position of 
Deputy Assistant Secretary of Labor for Veterans Employment, in an 
effort to try and bring some cohesion and accountability to an 
employment service system that was clearly not working for veterans. 
Similarly, the Comprehensive Employment & Training Act (CETA) was 
problematic in regard to any of the funds going to programs to assist 
veterans. CETA had succeeded the Manpower Development Training Act 
(MDTA), which in turn had succeeded the Office of Employment 
Opportunity (OEO).
    These entities were created to make available cognitive and skill 
training funds, as well as funds for paying participants while they 
were being trained in public service jobs. An additional goal of these 
programs was to circumvent what was perceived as sexist and racist bias 
in some of the state employment service agencies.
    However, these entities in many states were often not any more open 
to meeting the needs of Vietnam veterans than the employment service 
agencies were. In response, the Congress created what was known as 
Title II-D of CETA that could only be used for Vietnam veterans. Sadly, 
many states and sub-state entities returned these funds unused rather 
than let them be utilized for the intended use of assisting younger 
veterans with problems to surmount their difficulties and secure decent 
jobs with a future.
    The Job Training Partnership Act (JTPA) replaced the CETA system 
itself in 1982. Despite efforts by the veterans' service organizations 
the Act included no special provision for veterans.

                      CREATION OF THE DVOP PROGRAM

    As the problems remained with the employment service agencies 
themselves, the Disabled Veteran Outreach Program (DVOP) was created in 
1977, and enacted into law in 1979 in response to the state 
unemployment services testifying to Senator Cranston's Committee that 
they were not placing many Vietnam or disabled veterans because they 
``could not find them.''
    As the Employment & Training Administration (ETA) at the Department 
of Labor was still ignoring the problems of veterans in securing proper 
services in many states, despite there now being a Deputy Assistant 
Secretary of Labor who was supposed to be able to focus attention of 
ETA and the U.S. Employment Service on the needs of veterans. 
Therefore, Senator Strom Thurmond, with the close cooperation of the 
Honorable G.V. ``Sonny'' Montgomery, took steps to secure an additional 
modification in the law that created the post of Assistant Secretary of 
Labor for Veterans Employment & Training. It also established the 
Veterans Employment & Training Service (VETS) as an entity separate 
from the Employment & Training Administration (ETA). Theoretically, the 
Assistant Secretary for VETS and the Assistant Secretary for ETA are 
equals. The reality, particularly in the wake of WIA which wiped out 
the legal requirement on the states for ``priority of service'' to 
veterans, the fact that ETA has many billions in comparison to the 
millions that VETS is allocated, and the dismantling of many of the 
accountability mechanisms that had existed prior to WIA and the advent 
of the One Stops, the positions can no longer be realistically 
considered equal by anyone.
    Enhancements and additional provisions were added to Chapter 41 of 
Title 38, United States Code almost every year during the 1980s and 
1990s to try and get the state employment services to consistently, in 
each state, accord proper treatment and services to veterans, 
particularly disabled veterans.

                                  NVTI

    The most important of these enhancements was the creation and 
funding of the National Veterans Employment & Training Institute 
(NVTI), currently operated by the University of Colorado at Denver. The 
VSOs had been pushing hard for this move, as there was little or no 
substantive training for DVOPs, LVERs, and others within the system, 
and no place to get such quality training that would improve 
performance. Creation of NVTI and its utilization had more positive 
impact than any other step taken during this period. NVTI training 
remains first rate, and for those who use it, the NVTI Resource Center 
is just extraordinary.

                             PASSAGE OF WIA

    In 1998 Congress passed the Workforce Investment Act (WIA) that 
replaced the JTPA as well as most of the Wagner-Peyser Act. WIA was 
designed to promote, if indeed not force, the creation of the ``One 
Stop Centers'' at the service delivery level where all of the workforce 
development funds and programs, both public and some private, could be 
found at one central location. Much of the thought and philosophy that 
drove the various provisions of WIA came directly form GAO reports that 
were principally the work of Sigurd R. Nilsen, who was also the leader 
of the team that performed the work in the recently completed report, 
GAO-06-176, ``Veterans' Employment and Training Service: Labor Actions 
Needed to Improve Accountability and Help States Implement Reforms to 
Veterans' Employment Services.'' (December 30, 2005)
    The primary idea behind the One Stop centers that Mr. Nilsen has 
been promoting for almost 20 years is that if we just eliminate all of 
the fetters on ``special programs'' we will eliminate duplicative 
services, and be able to have more than enough resources to provide 
better services to all sub-sets of the population.
    VVA doubts that this is the case in general, and it certainly is 
not true for veterans, particularly disabled veterans and other 
veterans with who require significant assistance. VVA notes that 
despite the best efforts of the late Senator Strom Thurmond, the 
amendment he attempted to insert into the WIA bill that would have 
preserved ``priority of service'' for veterans, and which contained at 
least some provisions that would promote accountability, was brushed 
aside in the rush to eliminate all fetters. With Senator Thurmond's 
help, we were able to fend off efforts to lift all restrictions in how 
LVERs and DVOPs could be used by the states.
    By 1998 it was clear that ``prescriptive'' and ``proscriptive'' 
solutions would simply not work, for all of the reasons noted above. An 
extraordinary series of roundtables and semi-formal sessions were held 
on the other side of the Hill, but with at least some staff 
participation from this Committee, with all stake holders to try and 
achieve a results based model that would focus on outcomes, and not on 
activities that may or may net help a veteran get or keep a job. That 
legislation, which would have rewarded real performance with additional 
funds, was ultimately stymied in September 2000 by the (in the view of 
VVA) inappropriate lobbying activities of the then Assistant Secretary 
of Labor for Veterans Employment and Training.

                         JOBS FOR VETERANS ACT

    The Jobs for Veterans Act was passed in response to problems with 
properly serving returning service members, and in response to the call 
of VSOs to take steps to restore ``priority of service,'' but to do so 
to ALL programs funded by or through the Department of Labor, 
reflecting a much changed reality from the situation in 1933. To some 
degree, the model was the ``Veterans Bill of Rights for Employment 
Services,'' which was propagated as an Executive Order in 1988 in New 
York, and subsequently codified as Chapter 554 of New York State law. 
The problem with both the JVA and the New York law is that there are no 
sanctions for ignoring the law. Frankly, money needs to go to those 
doing a good job, and less to those who do not do a good job.
    Please let me note that I cannot emphasize too much that nothing in 
this statement should be taken as a criticism of DVOPs and LVERs. Some 
of the finest and most dedicated veterans' advocates (and finest 
people, period) I have ever had the pleasure and honor of knowing are 
DVOPs or LVERs. These folks are eclectic, as any large group would be, 
and some are more skilled and effective than others. However, as a 
group, these fine Americans who often do great work, no matter what 
they have to do to accomplish the mission, always impress me and no 
matter how much they may be punished for trying to do their job 
correctly, and despite how poorly they are paid in some states.
    Just as there are many individual veteran staff doing a great job, 
there are some states, like South Carolina, North Carolina, South 
Dakota, North Dakota, and others that have always done a great job for 
veterans because it is ingrained in their corporate culture by 
consistently having fine leadership that is committed to veterans over 
a long period of time. There are also individual office managers who 
fully support services to veterans, and who go out of their way to 
support the DVOPs and LVERs in their area, as well as using other 
resources to help get the job done.
    GAO Report 06-176 has some severe methodological faults, and 
therefore draws conclusions based on suspect information. VVA points 
out that GAO sent out questionnaires to the DVETS and to the 
Administrators of each of the Workforce Development Agencies, after 
verifying the instrument. However, the report stated that they made 
little or no effort to attempt to verify any of the information 
provided. Therefore, their conclusion that the JVA has generally 
improved services to veterans is based on nothing that could be 
considered rational, substantiated data. This is just silliness.
    Similarly, the report notes that veterans can receive services from 
a non-DVOP or non-LVER if they are considered job ready. VVA agrees 
that this should be the case, given that ``priority of service'' has 
been re-established as the law. However, there are so few what is 
called ``Wagner-Peyser'' staff left out there; in many instances all 
veterans are sent to the veteran's staff.
    The system is every bit as ``broke'' today as it was before the 
passage of the Jobs for Veterans Act, with even more financial and 
operational problems. It is still not performance and results oriented 
in any meaningful way. The current measure of ``placements'' is 
intellectually dishonest, and a preposterous example of the ``post hoc, 
ergo proper hoc'' logical fallacy.
    The Secretary of Labor put the Assistant Secretary of Labor for ETA 
in charge of implementing the Jobs for Veterans Act. Given the history 
of ETA, it should come as no surprise that they are refusing to 
promulgate regulations implementing the various aspects of the law. 
Because the local entities under the WIA set up are primarily 
controlled by former JTPA entities, who never had any ``priority of 
service'' in their programs before, it is the view of VVA that without 
regulations there is not even a chance of proper and accountable 
implementation.

       CHALLENGES? ACCOUNTABILITY PROVISIONS ARE NOT IMPLEMENTED

    Similarly, the report notes in very large type, ``Most JVA 
Provisions Have Been Carried Out, but not without some Challenges.'' In 
fact, ETA and USDoL only implemented the aspects of JVA that reduce 
oversight and provide greater ``flexibility'' (e.g., only one onsite 
inspection every 5 years, new and more general job duties for veterans 
staff), while NONE of the provisions that accord veterans ``priority of 
service,'' improve states accountability for increasing veterans' 
employment in their state, or even having a plan to make a plan as to 
how to gather data to monitor what is happening to veterans in a given 
state. The report does note that 21 states did not have ANY data 
available more than 3 years after enactment of JVA, but considers that 
fact one of the ``some challenges'' remaining.
    The Department of labor has moved to implement all of the 
provisions that the Workforce Development Agencies wanted, and none of 
those that those entities did not want in the JVA (but that the VSOs 
argued hard to include). This should perhaps not be surprising, as 
there was extensive contact between the Assistant Secretary for ETA and 
the representatives of those agencies and virtually no contact with the 
veterans' service organizations.

                           WHAT IS NEEDED NOW

    First and foremost, we need a true national strategy to deal 
properly with the returning service members. The Employer's Committee, 
which was touted as the President's plan, was simply inadequate in 
concept. It is time for a National Veterans Employment Conference to 
assemble the key players and produce a plan that is funded and backed 
by the Administration as well as this body.
    Further, what is needed today is a system that focuses on placement 
of the highest priority veterans, who are special disabled veterans 
(especially catastrophically disabled veterans), recently separated 
veterans and recently d-mobilized members of the National Guard and 
Reserve, and on veterans who are homeless or ``at risk.'' We must move 
to a system that has additional monetary rewards for placements and 
strong measurable results for veterans, particularly disabled veterans, 
as opposed to just putting out the same amount of funds whether a state 
does a good job or a poor job. The entire system must be placed on a 
system of monetary rewards that follow good or outstanding performance.
    We must also get away from the notion that this is a ``cheap'' 
process, and focus on quality placements for those most in need. The 
veterans' staff members need to be unleashed from the yoke of the local 
office managers who in some cases hold them back. As with their agency, 
they too must be held accountable for measurable performance. The state 
work force development agencies at the state and local levels should 
have first bid on the funds available, but if the performance is not 
there, then state directors for USDoL, VETS should be free to contract 
with other public or private entities who will get the job done.
    Further, there must be all-out resistance and rejection of the ill-
conceived and cynical ``WIA-Plus'' effort to use veteran program 
dollars for other purposes that was proposed last year. If the states 
were going to pay attention to the special needs of veterans without 
monitoring and veteran specific grants, they would have already done 
it. Additionally, we need additional employer incentives similar to the 
veterans job training act of the early 1980s that worked so well, as 
well as further latitude in the Montgomery GI Bill that will allow more 
focus on vocational and apprentice training.

               A NATIONAL STRATEGY AND PLAN IS IMPERATIVE

    There simply must be a national strategy to deal with the returning 
service members from the Global War on Terrorism. More than one million 
service members have already rotated through Iraq alone. If the 
administration will not move to fashion such a results-oriented plan, 
then we call on you, Mr. Chairman, and Chairman Buyer, as well as your 
colleagues on the other side of the aisle to reach out and call a 
convocation of public and private entities to put together a real 
action plan to make a difference, as was done after World War II.
    I have here two books that describe what was done at the local 
level in the majority of American cities that fashioned such results 
focused efforts after that war, and made a positive difference in the 
lives of the majority of veterans returning home. Perhaps it is time to 
look to the successes after World War II to learn what is the best 
course of action today.
    We must think anew, in order not to fail the brave young men and 
women defending us in military service today.
    Mr. Chairman, on behalf of all of us at VVA, I thank you for the 
opportunity to present our views here today. We would be pleased to 
answer any questions.
                                 ______
                                 
 Written Questions Submitted by Hon. Barack Obama to Richard F. Weidman

    Question 1. Monitoring and accountably seem to be the Achilles heel 
of the VETS program. What steps would you recommend to improve the 
Labor Department's performance in this area?
    Answer. No response.
    Question 2. One of the major barriers to employment is 
homelessness. Do you think the Department of Labor is doing enough to 
reach out and provide services to our homeless veterans? What steps 
could VETS take to improve its outreach?
    Answer. No response.
                                 ______
                                 
   Written Questions Submitted by Hon. Larry E. Craig to Richard F. 
                                Weidman

    Question 1a. It appears to me that some of the functions that would 
be performed by the Veterans Job Development Corps would overlap with 
functions that already should be performed by Disabled Veterans' 
Outreach Program (DVOP) specialists and Local Veterans' Employment 
Representatives (LVERs), such as job search and interview training. So, 
could it be redundant to fund those programs as well as the Corps you 
proposed?
    Answer. No response.
    Question 1b. If so, would the Veterans Job Development Corps be 
prepared to compete for a portion of the funding now allocated to the 
DVOP and LVER programs?
    Answer. No response.
    Question 2. In your testimony, you expressed concern about the 
roughly 40 percent of veteran participants who do NOT enter employment 
after receiving services from the One Stop Career Centers. I share your 
concern. Do you think: more should be done to track these veterans--to 
find out who they are and why the One-Stop services did not help them 
to find employment? Could that information be useful in figuring out 
what more could be done to help these veterans find jobs?
    Answer. No response.
    Question 3. One on-going concern about the structure of the DVOP 
and LVER programs is that it does not encourage service to those most 
in need--those veterans who may require the most time-consuming 
assistance. How would you ensure that the Veterans Job Development 
Corps would provide all necessary services to those veterans? Would 
performance measures be weighted in some fashion?
    Answer. No response.

    Senator Burr. We certainly thank you for your testimony, as 
I do all of you.
    I know that the Committee and the Chairman may have some 
questions. Rather than try to wade through his, I am going to 
suggest that you may get them writing, where it is appropriate 
if, in fact, his questions haven't already been answered.
    Which allows me to go to some areas that really come 
directly from your testimony, and I will be very candid on some 
of the questions that I ask. Some of them will be leading to 
try to figure out areas that you might have stimulated some 
thought where we can achieve the outcome, maybe not exactly 
like we are doing it today.
    Clearly, Richard, I heard you say incentives, incentives, 
incentives. I am pleased at the fact that the Department of 
Labor stayed in the room for your testimony. That doesn't 
always happen, and I commend them for doing that.
    I think it would be very interesting for them to look at 
the States that say that they can't offer incentives because of 
regulations, policies, collective bargaining to see if, in 
fact, they do incentives on other programs in their States, and 
they just use this as a convenience to say ``we can't do it in 
this case.'' I think I have probably said enough to get them to 
look at that.
    Clearly, I think it is difficult to believe that you can 
truly assess the success of a program if, in fact, there is no 
downside, meaning there is no threat that without performance, 
you don't lose something. And I understand that to take it away 
and do nothing is no value. I agree.
    But you went into an interesting area because in this 
country, we have an industry that flourishes with job 
placement. You were on a specific area, but we have a much 
broader area. And you know, I would ask you to comment. If we 
took all the money that we are trying to put into veterans 
employment today and we took it over into the private placement 
world and say, ``For everyone you place, here is what you 
get,'' what would happen?
    Mr. Poriotis. Rick used the term ``incent by cash.'' There 
are 38,000 retained executive search firms with siloed 
functional and professional areas. They make a living doing 
this. They make a living accessing and championing and finding 
those hidden jobs and putting people in it. Often, their 
candidates are turned down two, three, four times, and they 
will go back a variety of ways to push the edge of the envelope 
to get them across the threshold.
    Senator Burr. And most of these are in a profession where 
they get zero unless they have a successful job.
    Mr. Poriotis. You asked the question before. How many LVERs 
and DVOPs were veterans? But you didn't ask the corresponding 
question. How many of them have ever placed anyone? How many of 
them have ever worked in the corporate human resources or 
talent acquisition or staffing area?
    Because if you coupled that criteria together with the DVOP 
and LVER, you have circled the loop. But I don't think that is 
going to happen. I think what they do is very, very fine in 
terms of the nurturing and the care for the veteran. What they 
can't do is and what they haven't been doing is corralling and 
influencing the influencers who do the hiring at all of the 
small and mid and large size businesses by corralling this 
industry.
    This industry of careerists who make a living in doing what 
we want the VETS to do have never been approached to find the 
hot buttons, be it cash or kudos. In all these hearings I have 
been at, no one has ever brought in these senior search and 
recruitment entities to ask them to work with VETS. So it is an 
interesting proposition you make.
    Senator Burr. I don't want anybody in the room to believe 
that I am suggesting that we chart a new course today. But I 
believe that highlighting some of the options that exist might 
be a stimulus for us to look a little deeper at the programs 
that we currently have and figure out how to make them work 
because now there are some alternatives that come into play.
    I am particularly touched by the chart that was up earlier 
with the 20- to 24- year old veteran and the disparity, as John 
Thune alluded to it. You know, from my background in business, 
it would tend to make me look at that and ask one obvious 
question.
    Is this age group of vets actually a group that never went 
through the interview process for a job because they entered 
the military at 18 or 19 years old, they are now kicking out of 
the military, and for the first time, they are going into an 
interview process with many people who are seasoned at it?
    Mr. Poriotis. We brought on Evan Gattis, a general, to run 
our center, who had run all of Army recruitment, and he often 
quipped that most of these programs at the Federal level, 
including TAP and VETS, teach you how to write a resume, dress 
for success, and develop charm school. He said, ``We don't need 
that. We need a network.''
    I believe that the higher unemployment for that group is 
because they don't have a navigational guide to connect with 
the local employer. I have talked to hundreds of persons in 
that category who are surrounded by local employers for whom 
the people trying to help them have never met.
    So we can't entrust the VETS folks to meet those local 
employers and sustain relationships with them because they 
don't have the time or the resources or the training. But I do 
think that lack of a navigational connection, and I think none 
of this will work and will take many more years unless you can 
create what I call the ``rebranding'' of military service among 
America's employers.
    While a Bob Nardelli is doing this within the framework of 
Home Depot, what I would do from a marketing perspective is 
bring Nardelli to the conventions of retailers and home 
builders and building supply folks and have him articulate this 
to develop corporate envy.
    Senator Burr. Let me stop you, if I can, because I want to 
get the comments of our other two panelists relative to the 
branding concern that was raised. That military service is no 
longer perceived by an employer as a benefit to that 
individual, but it could be perceived as a negative. Is that 
accurate?
    Mr. Poriotis. I am just saying that when you look at these 
brilliant marketing and branding people, and they look at the 
equity in the brand, military service has a brand, but the 
equity has been diluted over the last 30 years of all-volunteer 
service because of the distancing of the American employer and 
the staffing people and the gatekeepers from this asset.
    Senator Burr. Agreement, disagreement? Comment?
    Mr. Weidman. ``Vetism,'' as we call it, is very much for 
real. Unfortunately, sexism and racism in this country are very 
much alive, but so is vetism. And what makes it even more 
insidious, sir, is that people won't admit to it.
    There was a study done in 1985 by a gentleman by the name 
of James Bordieri. He headed up a team at Depauw University 
that looked into Fortune 500 companies. And they used dummy 
resumes that where the only major difference was you were a 
veteran, clearly a veteran, but not in Vietnam; clearly a 
veteran that served in theater, a combat vet in Vietnam; or you 
were clearly a nonvet.
    And they found, as you went up the chain, significant 
prejudice by these employers against veterans in general, but 
particularly against those who served in a combat theater of 
operation. And these were human resources types. And when asked 
why that was true, they said, ``We don't want any problems.''
    So it was all the negative stuff. It was all the things the 
Assistant Secretary here said a minute ago that when we went in 
1960s, that we didn't have a lot of skill sets. That is just 
not true. The Vietnam army was the best army ever fielded in 
terms of education, and these young people far outstrip us. 
Personally, I was a college graduate and one of 13 George Cobb 
fellows at Colgate University. So I resent to say that I didn't 
have any skill sets whatsoever.
    So vetism is for real. How do you change that perception? 
It takes a number of things, and frankly, we should bring back 
Veterans Job Training Act to do the incentives with the small 
business because it worked.
    Senator Burr. I want to apologize because I have got a 
place I have got to be at 1 p.m., and I think we are going to 
go into votes. And I want to get a couple of other questions 
in, if I could.
    Should we have incentives for companies that hire vets?
    Mr. Poriotis. No.
    Senator Burr. No?
    Mr. Poriotis. No. It is sort of radical. It is 
counterintuitive. I think the Veterans' Employment and Training 
Service, by the very fact that it is positioning these people 
free of charge, no good deed goes unpunished. No good deed goes 
unpunished. The value to the employer is when they pay for 
something in terms of the placement side.
    The other side is we went around and visited 200 senior 
executive corps from 1997 to 2001, and we began to call it 
``operation forehead slap.'' Because when we would articulate 
the value of this asset, many of the senior people developing 
the strategy for staffing in their major corporations would 
actually literally slap their forehead.
    But I don't think incentives are going to--it will work 
with some companies, but I think the overall creation of a 
demand that this asset brings dollars and P&L to a company. 
Because we have asked the brilliant person who developed the 
Volvo campaign, and he said, as he did a study for us, well, 
answer this question. ``I would buy a Volvo because?'' ``It is 
safe.''
    We have asked American employers, ``I want to hire a 
military person because?'' You can't get the answer.
    Senator Burr. Mr. Sharpe?
    Mr. Sharpe. I just think many of the service members aren't 
ready for the job market, and I can use my own unit as an 
example. We deployed to Iraq in 2003, returned 2004. I was 
really shocked at the number of lower enlisted who became 
unemployed. Many of them left the military because they just 
weren't ready for the job market.
    Many of them that were in school, it was turning out was 
taking them 5 to 7 years to graduate because of these constant 
deployments. And as you know, if you don't have your degree, it 
is going to be difficult to find a decent job.
    And there were many others who were under employed. Out of 
those individuals, many of them just gave up. Others who worked 
for the Federal Government returned to a hostile work 
environment and also started looking for other jobs. I thought 
this was just a symptom of my own unit, since I spent 14 years 
on active duty and then went to the Reserves.
    But a few months later, I was involved in the training 
program where we were training 1,100 soldiers to take our place 
in Iraq. Those of us that were doing the training were ones 
that had already been to Iraq, and I was really shocked to find 
out a lot of those individuals were unemployed, or they were 
either fired from their jobs, or they returned homeless.
    And again, many of those, the younger ones that were in 
school, had put off their education and were trying to find 
part-time jobs just to make ends meet. It would seem more 
appropriate if these individuals had some sort of TAP program 
to go to.
    We can talk about Department of Labor and the One-Stops, 
but it is really interesting that a lot of these individuals 
don't even know the One-Stops exist. Those on active duty, it 
seems like in some cases we have visited various TAP programs 
around the country. We visited Aberdeen Proving Grounds a few 
months ago. They actually have DVOPs and LVERs as part of the 
TAP program. And those individuals made an effort to have job 
fairs on that particular post, and they seemed to have quite a 
bit of success getting people employed prior to their 
departure.
    They even had a program for the Reserves and National 
Guard, and it didn't depend on if they were coming from another 
State or not. They were still assisted. They were still able to 
find individuals who were interested in what they did have. I 
think that is an important factor too.
    The other thing was the licensing and certification. The 
military really does a good job as far as training individuals, 
but it always doesn't transfer over to the private sector. I 
think there should be a closer relationship between those 
private entities that would be interested in the training that 
these individuals receive, and that would also help transfer 
them into decent employment once they leave.
    Senator Burr. You raise some very important points, and I 
think the one thing that I walk away from this hearing truly 
believing is there is no silver bullet. There is not one thing 
that, all of a sudden, over night makes the employment of vets 
an automatic thing. That it does take a level of cooperation 
that we have yet to fine-tune to the degree that we have.
    Let me make two statements, if I can. For me personally, 
the thing that concerns me the most right now is that we have 
this incredible blueprint, which is the current activation, to 
tell us in some numbers of years exactly what the pressure on 
this program is going to be. I think for any of us to ignore 
the fact that we are going to have an influx of people, in 
addition to what we have seen in the past, that have this need 
is to hide our head in the sand. So I hope we realize that it 
is going to begin to ramp up the need.
    The second thing is that as we talk about employers, I am 
not sure that I yet know whether it is a reluctance by 
employers to hire vets or whether it is a problem in our 
placement process to get vets placed? And it may be a 
combination of the both of them.
    Mr. Poriotis. Senator, the President's National Hire 
Veterans Committee was engaged to educate America's employers, 
but never did a baseline to do a corporate perception analysis 
to actually answer your question. What do the employers 
perceive, and how do they perceive, and how do you quantify 
that perception? How can you market and place if you don't have 
a base from which to come?
    Senator Burr. That is why it makes it difficult for me to 
look at Labor and downstream from Labor and be overly critical. 
It makes it impossible for me to meet with anybody other than 
the CEO of Home Depot or a participating company and scold them 
because it all has to come together.
    And I think on behalf of the Chairman and the Ranking 
Member and the Committee, I want to thank you for your 
willingness to come in to share your insight with us, your 
commitment to continue to work with this program to see that 
the outcome changes. I assure you that this is an issue of high 
interest to all the members. So expect some questions, and 
please give us your honest and candid views as to how we move 
forward with this in a true partnership.
    At some point in the future, if we have got all the answers 
to the questions and we still haven't succeeded with the 
outcome, then maybe the discussion will be exactly what we do 
next to make sure that that outcome changes.
    Again, I thank you for your testimony today. This hearing 
is adjourned.
    [Whereupon, at 1:05 p.m., the Committee was adjourned.]

                            A P P E N D I X

                              ----------                              

Prepared Statement of Roger B. Madsen, Director of the Idaho Department 
                         of Commerce and Labor

    Thank you for this opportunity to comment on the ``Jobs for 
Veterans Act''. As the Director of the Idaho Department of Commerce and 
Labor and former Chair of the Veterans' Affairs Committee of the 
National Association of State Workforce Agencies (NASWA), I appreciate 
the Committee's dedication to enhancing employment and training 
opportunities for our job-seeking veterans and your commitment to 
helping us bring skilled veterans together with our businesses.
    The ``Jobs for Veterans Act'' that modified Title 38, Chapter 41 in 
2002 was a significant improvement over previous legislation in that it 
now allows for flexibility in how we serve both veterans and employers. 
Overall it has been a resounding success and a giant leap forward in 
several areas. We believe the following are areas of significant 
improvement:
     Integration of Local Veterans Employment Representatives 
(LVERs) and Disabled Veterans Outreach Program (DVOP) personnel into 
One-Stop operations at the local office level in a carefully crafted 
state plan--much like a business plan. We believe the law helps ensure 
that veterans who need help getting back to work have ready access to 
information, trained personnel, specially trained veterans 
representatives and other resources that will help them integrate into 
the local workforce.
     The change in the roles and responsibilities outlined in 
the Jobs for Veterans Act gives us specific guidance about the roles 
and responsibilities, but allows us the flexibility to decide on duties 
and assignments within the prescribed roles. While we would like even 
more flexibility (to allow veteran representative to help with 
Unemployment Claims for veterans, for example), the Jobs for Veterans 
Act is a significant step in the right direction that allows us to put 
our efforts toward current and emerging challenges with Idaho's veteran 
population.
     The option to have part-time DVOPs in some of our offices 
has increased our flexibility. Because of cutbacks in recent years, we 
have funded veterans' representatives in only eleven of our 24 offices, 
a decrease of 50 percent from 10 years ago when we had VETS-funded 
representatives in 22 of our offices. Now that we have the option of 
using both LVERs and DVOPs in a part-time role, we can focus our 
limited resources on where they are most needed. Although we still 
don't have the option of having an LVER or DVOP funded partially from 
both programs, the Jobs for Veterans Act did give us significantly 
increased flexibility.
    The Jobs for Veterans Act has had a very positive impact on 
services to veterans and we laud the congressional efforts to give us 
the tools necessary to serve our veteran population the best way 
possible. However, there have been a couple of provisions in the law 
that impacted us negatively.
    The revised state funding formula has an unfavorable impact on 
Idaho's Veterans Representative staffing. The current formula ties our 
funding to Idaho's veteran population and Idaho's unemployment rate--
averaged over a 3-year period. These two factors (population and 
unemployment) are the only two factors considered in allocating 
resources to Idaho, and unfortunately, they don't take into account 
Idaho's rural & geographical issues, labor market conditions, seasonal 
fluctuations, underemployment and historical use of funds.
    In rural states like Idaho, we try to be all things to all people, 
at least in our smaller, more rural areas. In these rural areas, our 
employment service is sometimes the principal resource for information 
to meet a variety of needs such as homelessness, health care, education 
and employment. While employment eventually resolves many of these 
issues, some of the best work, the life-changing work that attracts 
people to the social services we provide, does not result in immediate 
employment.
    We have about 89,928 working aged veterans in Idaho. A 2005 GAO 
report mentions that nationally, 9.4 percent of veterans participate in 
a One-stop System. In Idaho, about 16.5 percent--nearly double the 
national average--of employment aged veterans (18-65 years of age) 
received service from our Idaho One-Stops each year and over a 3-year 
period, we have worked with 42 percent of the state's veterans.
    For all of these reasons we would recommend that a revised funding 
formula be devised to put more emphasis on rewarding the processes that 
lead to positive changes in the lives of our customers as much as the 
eventual act of helping them obtain employment--and not just 
unemployment rates.
    Additionally, we are one of 26 states that did not participate in 
the Incentive Award Program established by the Jobs for Veterans Act in 
fiscal year 2004. While there is no state law that forbids 
participation, perspectives from three different working groups in the 
past 2 years have come to the same conclusions . . . that the potential 
negative effects of any awards outweigh the benefits. We believe the 
Governor should be given the option of using the money as he or she 
sees fit in support of the state's veteran population.
    Finally, please consider asking enforcement agencies to put some 
``teeth'' in the Federal Contractor requirements that mandate those 
companies that contract with the government to list job openings with 
their local employment service office. This very good requirement has 
been on the books for a long time, but because of limited enforcement, 
both Federal Contractors and Federal Contracting offices have failed to 
follow the rules all of the time. We think that the veteran citizens of 
Idaho should have easy access to these higher paying jobs and we 
recommend that these regulations be more strictly enforced and 
responsibility for the program be unified in a single agency in the 
U.S. Department of Labor.
    I commend the establishment of the ``President's business customer 
ultimately determines who is to provide quality service to that 
customer. It is National Hire Veterans Committee.'' We know that the 
hired and we welcome support in our on-going efforts the mission of our 
agency to assist business in solving employment and training related 
challenges. The added influence of our Federal partner in marketing the 
skills and experience of our veterans is most welcome.
    We applaud and support the key aspects of the Jobs for Veterans Act 
and believe it has helped to enhance the employment and training 
services provided to veterans in Idaho. However, I believe with some 
minor modifications in fiscal policy and allocation and enforcement 
procedures, we will have a law that will provide exceptional, priority 
service to the veterans that is worthy of the sacrifice they made to 
defend our country and our way of life.
    Thank you for the opportunity to provide comments on this Act. As I 
stated previously, we at Idaho Commerce and Labor respect the 
dedication and skills of our veterans and desire only to help build an 
employment and training service that meets their needs with a minimum 
of bureaucracy and a maximum of responsiveness and efficiency. Anything 
less would not be worthy of their service.
                                 ______
                                 
 Prepared Statement of Randy M. Miller, Chairman and CEO of ReadyMinds

    Mr. Chairman, thank you for the opportunity to submit a statement 
for the record regarding ``The Jobs for Veterans Act Three Years Later: 
Are VETS Employment Programs Working for Veterans?'' Considering the 
unacceptably high and steadily increasing rate of unemployment that 
veterans of Operations Enduring Freedom (OEF) and Iraqi Freedom (OIF) 
are experiencing this hearing is both timely and important.
    I am President and CEO of ReadyMinds--the nation's leading distance 
career counseling organization. The services provided by ReadyMinds 
Counselors enhance the way individuals select, prepare for and manage 
their careers. The ReadyMinds solution incorporates comprehensive on-
line content and customized development tools with personalized 
guidance and counseling provided by degreed certified professional 
counselors who have met the rigorous standards established by the 
National Board for Certified Counselors. Additionally, ReadyMinds has 
been chosen to be the exclusive national training provider for those 
counselors who wish to become knowledgeable in and receive national 
credentials related to the best practices in distance counseling.
    ReadyMinds has provided distance career counseling services to 
students and alumni representing colleges and universities across the 
country and to thousands of displaced workers transitioning from one 
career to another. A portion of this displaced worker population that 
ReadyMinds has provided services to include those individuals who were 
adversely affected by the events of 9/11/01. ReadyMinds is also engaged 
with the Department of Defense (DOD) providing distance career 
counseling to military spouses.

                          DEFINING THE PROBLEM

    The Department of Labor (DOL), Bureau of Labor Statistics (BLS) 
reported that the 2005 average monthly unemployment rate for 20-24 year 
old veterans was 15.6 percent compared to 8.7 percent for 20-24 year 
old non-veterans, and 4.0 percent for all veterans. This disparity in 
the rate of unemployment for young, recently separated veterans is not 
new. The Congressional Commission on Servicemembers and Veterans 
Transition Assistance (Commission) reported in 1999 that 20-24 year old 
veterans' unemployment was 10.6 percent compared to 3.4 percent for all 
veterans.
    Why is the unemployment rate for recently separated veterans so 
much higher than their non-veteran peers and veterans in general? Some 
will suggest that these young veterans are unemployed by choice. Others 
will suggest that we don't know why and that the issue needs to be 
studied. Mr. Chairman, I believe that the high unemployment of recently 
separated veterans is so unacceptable as to compel immediate action and 
that solutions can be found if we focus on what we do know and apply 
proven remedies.
    Regarding the suggestion that young veterans choose to be 
unemployed doesn't hold up if one understands BLS's definition of 
unemployed persons. ``All persons who had no employment during the 
reference week, were available for work, except for temporary illness, 
and had made specific efforts to find employment sometime during the 4-
week period ending with the reference week.'' (emphasis added) To 
suggest that the BLS data does not represent the true employment status 
of young veterans is to suggest that veterans, or members of their 
household, deliberately misled Census Bureau surveyors.
    Unfortunately, the realities of unemployment are only too real for 
the 34,000 monthly average unemployed 20-24 year old veterans in 2005.
    Regarding the suggestion that we don't know enough about recently 
separated veterans and that the issue should be studied, I believe we 
can draw on the earlier work done by the Commission. It reported that 
of the veterans who used the DOL funded state labor exchange system 
(One-Stops):
     ``Fewer than 25 percent were separated from the military 
for less than 5 years'' suggesting that older veterans are their 
primary client users.
     ``That 68 percent reported that they did not receive 
career counseling. Of this group, 60 percent said they would like to 
have received such counseling.''
     ``Seventy percent of the veterans did not receive 
information on career preparation, and of those veterans, 70 percent 
would like to have received such information.''
    The conclusion that I draw from the Commission's earlier work is 
that young recently separated veterans generally do not avail 
themselves to the DOL funded One-Stop labor exchange services and, if 
they did, one of the most important services essential for making 
informed career choices--personalized career assessment and career 
counseling by professionally trained counselors--is generally not 
available.
    I respectfully emphasize the above as it is this young veteran 
group that is a population most in need of career assessment and 
counseling.
      characteristics of 21st century recently separated veterans
    What are the characteristics that reflect today's separating 
service members?
     According to the Defense Manpower and Data Center (DMDC) 
of the 212,000 service men and women who separated from active duty in 
fiscal year 2005:
         96,000 (45 percent) were 20-24 years old.
         94,000 (44 percent) were OIF/OEF veterans.
         102,000 (48 percent) were married.
     The Washington Post reported on November 4, 2005, that 44 
percent of military recruits come from rural areas.
     The majority of the veterans entered the military right 
out of school and have no prior experience in searching for jobs in the 
private sector labor market.
     Today's veterans are more computer literate than any prior 
generation. Many carried their laptops, their handhelds and GPS 
locators into battle.
     Almost all of the separating service members make both a 
career transition as well as a geographic transition, relocating to 
someplace other than their last duty station.
     More than 1.2 million service members have been deployed 
to the ongoing conflicts OW and OEF. An increasing number of separating 
service members are combat veterans--the first in a generation to be 
engaged in sustained hostilities.
     For many, their combat experiences may make their 
transition to civilian careers more difficult.
     Of the veterans who do not return to school, the majority 
eventually may find suitable jobs/careers but it is through time-
consuming trial and error.
What services can be helpful to a veteran's career search?
    Our extensive experience at ReadyMinds shows that people in career 
transition have several basic ``needs''. The earlier these needs can be 
addressed the greater the likelihood of a successful career transition. 
Informing individuals that such services exist should always be the 
initial step.
    Basic career search needs include:
     An assessment of individual interests, skills and 
strengths--a solid picture of where the service member stands and what 
types of careers would be a good fit.
     Career related information--education/training/experience 
prerequisites; job availability; career path opportunities.
     Translation of the service member's military skills, 
training and experience into a civilian resume and into college credit 
recommendations.
     Assistance with self-marketing--the networking and 
interviewing process.
     Regular professional feedback during career/job search--a 
reality check.
     Ongoing relationship, via online interaction, with a 
dedicated, professional career counselor throughout the career planning 
and employment process.
     Easy and convenient access to employers who want to hire 
veterans--a virtual marketplace for veterans.
    Does distance career counseling make a difference? Let me share 
with you three ReadyMinds participants' answers in their own words.
    ``What was most helpful and effective about my session with my 
counselor was the clarity and surety I felt afterwards about my career 
path. She was able to take all the diverse strands of my search--which 
often feel quite tangled to me and showed me where they're leading me. 
It was good to have another voice from outside my usual support network 
comment on the direction I'm going in my career change.''
    ``The counselor was able to offer specific/personalized suggestions 
and provide advice and suggestions that I had not even considered 
before, thus potentially opening many more doors.''
    ``My counselor was on the same `page' as I. There was a definite 
synchronicity in the session. She was courteous, was not intimidating 
and offered direct information. My counselor provided possibilities and 
timely concrete suggestions that would have passed me. I feel as if my 
world has opened up again.''

                               CHALLENGES

    Veterans' employment and career transitional services are complex 
issues and will not be solved with a silver bullet. I believe there are 
two broad subject areas that must be addressed to ensure that veterans, 
and particularly recently separated veterans, make a timely and 
satisfying career transition from serving their country to a civilian 
career.
    One is mission systemic--how, where, by whom and under what 
authority are labor market services offered to veterans. This is not my 
area of expertise so I will leave it to others to offer suggestions for 
improvement. We should note, however, looking back at one of the 
Commission findings, if few recently separated veterans avail 
themselves to the One-Stop menu of services that by design are passive 
in nature and delivered at a fixed location during set hours, then 
improving the delivery of these services may have little impact on the 
unemployment plight of the young recently separated veteran. Active 
outreach may be required either prior to separation at DOD transition 
centers or after separation through DOL's unemployment insurance 
system.
    The second core issue is what services do the recently separated 
veterans need/want and how can these services best be delivered. 
Bearing in mind that this cohort of veterans is highly trained, 
disciplined, motivated and often well educated I believe one of the 
most important services that can be provided is timely, accurate and 
personalized career information so that the individual veteran can make 
a more informed career choice and conduct an efficient job search. 
Simply engaging a young veteran, who is entering the civilian job 
market for the first time as a professional, in job-placement activity 
such as providing access to massive and often generic job posting 
boards that identify jobs that happen to open today, prior to the 
veteran making an informed career choice, will frequently be premature, 
time consuming and counter-productive for the individual veterans.
    The earlier professional career services become available, 
preferably well in advance of separation, the more likely the veterans 
will have greater opportunity to make informed decisions. This is 
particularly true if the veteran is willing to ``return'' to someplace 
other than his/her home of record if it leads to the most fulfilling 
career. There is a distinct advantage to the recipient if there is 
continuity in the service provider e.g. he/she works with the same 
provider regardless of where they are separating from or where they are 
returning to. Services should be convenient to the veteran.
    The solution ReadyMinds has successfully pioneered is distance 
counseling. Distance counseling is cost efficient--doesn't need 
unnecessarily large infrastructure; convenient--24/7; scalable and 
portable--same counselor can serve the veteran from beginning to end 
regardless of where they live, the region in which they are searching 
for a job or the location they are relocating to. One of the key 
components of the ReadyMinds Program is the proper matching of the 
needs of each participant with the expertise and experience of their 
specifically assigned counselor, regardless of geographic location. 
Additionally, technology has been developed and is in place allowing 
for monitoring, reporting and integration between career services 
provided and organizations or departments associated with the overall 
service provided to each veteran. This results in a sophisticated 
reporting platform identifying those individuals that do (and do not) 
participate in the services provided and track eventual employment 
related outcomes. This can ultimately aid in preventing individuals 
from ``falling through the cracks.''
    There are scores, if not thousands, of electronic job boards and 
resume services available. A number of them even focus exclusively on 
veterans. Sometimes too much of a good thing isn't necessarily good. An 
individual veteran could easily be overwhelmed with so many places to 
look for a job. One can assume that some career/job opportunities will 
be missed or overlooked simply because of the sheer number of different 
sites to explore. While job boards and resume services are not the 
business of ReadyMinds, it does seem reasonable to conclude that if 
there was one portal, one site that gathered the jobs into a single 
place, noting those that come from self-described veteran-friendly 
firms and allowed a single registration to have the veteran's resume 
posted on multiple sites, the probability of successful outcomes would 
be greatly enhanced.
    While I stated earlier that I would refrain from discussing 
systemic related issues, I can't help but note that DOL is charged with 
the mission of employment and training services for veterans. The 
Department of Veterans' Affairs (VA) on the other hand is mandated 
under 38 U.S.C. 3697A to provide educational and vocational 
counseling--a service that ReadyMinds believes would go a long way to 
assisting separating veterans make more informed career decisions. How 
is this career counseling service provided? How do service members/
veterans find out about the service? How accessible is the service to 
the majority of separating veterans? It would be helpful to know the 
answers to these questions in order to ensure that veterans aren't 
inadvertently denied every opportunity for a successful transition to 
civilian careers.

                    SOLUTION OPTIONS/RECOMMENDATIONS

    As I stated above, I don't believe there is a silver bullet that 
can solve all the issues relating to improving delivery of employment 
related services to veterans. Following are some specific options and 
suggested constructive solutions that I urge the Committee to consider.
    (1) Fund a pilot to evaluate the value added of offering 
personalized distance career assessment, counseling and self-marketing 
strategies. Because of the unique nature of transitioning service 
members/veterans being geographically dispersed prior to separation and 
even further dispersed post separation this pilot could focus on 
service members separating from particular sites and/or returning to 
specific regions e.g. north-western states.
    In this pilot the effectiveness of offering distance counseling to 
veterans who return to rural communities (approximately 44 percent) and 
are not easily accessible to traditional employment related services 
provided in One-Stop centers should also be evaluated. The outcomes of 
this new pilot could then result in the establishment of new, overall 
performance standards regarding the servicing of the entire veteran 
population.
    (2) Train VA counselors who currently provide educational and 
vocational counseling in best practices of ``distance counseling'' 
techniques so that their services are consistent, convenient and user-
friendly for the veterans and so that an individual counselor can 
provide continuity of service to veterans as they relocate at and after 
separation.
    (3) Establish an ``identify and refer'' protocol at VA medical 
centers, VET Centers and regional offices to identify recently 
separated veterans who come to these facilities for other services and 
inform them of the career transition and distance/online career 
counseling services that are available.
    DOL could identify and fund an entity to create a dedicated portal 
through which veterans could easily access a substantial portion of job 
listings from both public e.g. America's Job Bank (AJB), and large 
private job boards. Such a site could also be used by national trade 
associations to inform veterans about careers in their industry sector. 
In the same way, create a single resume site for separating veterans 
making it easier for employers to find the veterans.

                               CONCLUSION

    Mr. Chairman thank you for the opportunity to share my thoughts on 
an issue that is so critical to both our country and the individual 
veterans who have served us so well. Having paid close attention to the 
transitional needs of separating veterans and their spouses and having 
interacted with DOL, VA and DOD over the last four and one-half years, 
I know you agree with me that America owes her young veterans a 
successful transition into civilian careers. It's good for the 
veterans, good for business and good for America's future.
    ReadyMinds stands ready to work with committee staff and 
representatives from DOL, VA and DOD to design and implement specific 
strategies that address the unique needs of the young separating 
veterans of the 21st Century.
      
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                              Fiscal Year 2005 DVOP and LVER Actual FTE Utilization
----------------------------------------------------------------------------------------------------------------
                                                                                            Total FTE
                                                 DVOP FTE  DVOP Non-   LVER FTE  LVER Non-             Total Non-
                     State                      (Includes   Veteran   (Includes   Veteran   (Includes   Veteran
                                                 Non-Vet)     FTE      Non-Vet)     FTE      Non-Vet)     FTE
----------------------------------------------------------------------------------------------------------------
Boston Region:
  CT..........................................       8          0          8          0         16          0
  ME..........................................       5.5        0          4          1          9.5        1
  MA..........................................      21          0         17          1         38          1
  NH..........................................       5          0          5          0         10          0
  RI..........................................       2.5        0          3          0          5.5        0
  NJ..........................................      33.5        0         16.5        0         50          0
  NY..........................................      52.5        0         48          0.5      100.5        0.5
  PR..........................................       5          0          6          1         11          1
  VT..........................................       2          0          3.5        0          5.5        0
  VI..........................................       0          0          1          0          1          0
                                               -----------------------------------------------------------------
    Total.....................................     135          0        112          3.5      247          3.5
                                               -----------------------------------------------------------------

Philadelphia Region:
  DE..........................................       5          0          3          0          8          0
  DC..........................................       3          0          2          0          5          0
  MD..........................................      23          0         18          0         41          0
  PA..........................................      37.5        0         44          0         81.5        0
  VA..........................................      32          0         32          0.5       64          0.5
  WV..........................................      11          0          6          0         17          0
                                               -----------------------------------------------------------------
    Total.....................................     111.5        0        105          0.5      216.5        0.5
                                               -----------------------------------------------------------------

Atlanta Region:
  AL..........................................      16.5        0         21          2.5       37.5        2.5
  FL..........................................      81.5        0         57          0        138.5        0
  GA..........................................      43          0         31          0         74          0
  KY..........................................      21          0         13          0.5       34          0.5
  MS..........................................      13          0         19          0         32          0
  NC..........................................      24          0         69          0         93          0
  SC..........................................      22          0         25.5        0.5       47.5        0.5
  TN..........................................      30          0         32          0         62          0
                                               -----------------------------------------------------------------
    Total.....................................     251          0        267.5        3.5      518.5        3.5
                                               -----------------------------------------------------------------

Chicago Region:
  IL..........................................      37.5        0         34.5        0         72          0
  IN..........................................      31          0         34          0         65          0
  IA..........................................      15          0          3          0         18          0
  KS..........................................      18.5        0         12          0         30.5        0
  MI..........................................      29          0         36          2         65          2
  MN..........................................      21          0         14          0         35          0
  MO..........................................      22          0         31.5        0         53.5        0
  NE..........................................       5          0         10.5        0         15.5        0
  OH..........................................      64          0         24.5        0         88.5        0
  WI..........................................      20.5        0         17          1         37.5        1
                                               -----------------------------------------------------------------
    Total.....................................     263.5        0        217          3        480.5        3
                                               -----------------------------------------------------------------

Dallas Region:
  AR..........................................      11          0         14          0         25          0
  CO..........................................      22          0         14          1         36          1
  LA..........................................      20          0         20          0         40          0
  MT..........................................       8.5        0          1          0          9.5        0
  NM..........................................       8          0         11          0         19          0
  ND..........................................       2          0          6          0          8          0
  OK..........................................      17          0         25.5        0         42.5        0
  SD..........................................       7          0          1.5        0          8.5        0
  TX..........................................     100          0        103.5        0        203.5        0
  UT..........................................       9          0          9.5        0         18.5        0
  WY..........................................       5          0          1.5        0          6.5        0
                                               -----------------------------------------------------------------
    Total.....................................     209.5        0        207.5        1        417          1
                                               -----------------------------------------------------------------

San Francisco Region:
  AK..........................................       4.5        0          3.5        0          8          0
  AZ..........................................       3.9        0         19          0         58          0
  CA..........................................     142.5        6.5       67.5        3        210          9.5
  HI..........................................       5          0          6          0         11          0
  ID..........................................       5.5        0         10          0         15.5        0
  NV..........................................       8          0          7.5        0         15.5        0
  OR..........................................      19          0         18.5        0         37.5        0
  WA..........................................      36          0         24          0         60          0
                                               -----------------------------------------------------------------
    Total.....................................     259.5        6.5      156          3        415.5        9.5
                                               -----------------------------------------------------------------
    National Total............................    1230          6.5     1065         14.5     2295         21
----------------------------------------------------------------------------------------------------------------


  

                                  
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