    [Senate Hearing 109-528]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 109-528

                        EMPLOYMENT AND COMMUNITY SERVICE
              FOR LOW-INCOME SENIORS: ARE WE GETTING THE JOB DONE?

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

                                    HEARING

                                   before the

                           SPECIAL COMMITTEE ON AGING
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 WASHINGTON, DC

                                   __________

                                 APRIL 6, 2006

                                   __________

                               Serial No. 109-21

             Printed for the use of the Special Committee on Aging

                        U.S. GOVERNMENT PRINTING OFFICE
    28-922                      WASHINGTON : 2006
    _____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
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                           SPECIAL COMMITTEE ON AGING

                         GORDON SMITH, Oregon, Chairman
    RICHARD SHELBY, Alabama              HERB KOHL, Wisconsin
    SUSAN COLLINS, Maine                 JAMES M. JEFFORDS, Vermont
    JAMES M. TALENT, Missouri            RON WYDEN, Oregon
    ELIZABETH DOLE, North Carolina       BLANCHE L. LINCOLN, Arkansas
    MEL MARTINEZ, Florida                EVAN BAYH, Indiana
    LARRY E. CRAIG, Idaho                THOMAS R. CARPER, Delaware
    RICK SANTORUM, Pennsylvania          BILL NELSON, Florida
    CONRAD BURNS, Montana                HILLARY RODHAM CLINTON, New York
    LAMAR ALEXANDER, Tennessee           KEN SALAZAR, Colorado
    JIM DEMINT, South Carolina
                        Catherine Finley, Staff Director
                   Julie Cohen, Ranking Member Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page
    Opening Statement of Senator Gordon Smith........................     1
    Opening Statement of Senator Herb Kohl...........................     3

                                    Panel I

    Sigurd R. Nilsen, director, Education, Workforce, and Income
      Security Issues, Government Accountability Office (GAO),
      Washington, DC.................................................     4
    John R. Beverly, III, administrator, Office of National Programs,
      Employment and Training Administration, U.S. Department of
      Labor, Washington, DC..........................................    44

                                    Panel II

    Shauna O'Neil, director, Salt Lake County Aging Services, Salt
      Lake City, UT..................................................    63
    Carol Salter, National SCSEP director, Easter Seals, Washington,
      DC.............................................................    76
    Melinda M. Adams, State-wide older worker coordinator, Idaho
      Commission on Aging, Boise, ID.................................    89

                                     (iii)

    EMPLOYMENT AND COMMUNITY SERVICE FOR LOW-INCOME SENIORS: ARE WE GETTING
                                 THE JOB DONE?

                                  ----------                              --

                            THURSDAY, APRIL 6, 2006

                                           U.S. Senate,
                                    Special Committee on Aging,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10:05 a.m., in
    room SD-106, Dirksen Senate Office Building, the Hon. Gordon H.
    Smith (chairman of the committee) presiding.
        Present: Senators Smith, Kohl, and Carper.

          OPENING STATEMENT OF SENATOR GORDON SMITH, CHAIRMAN

        The Chairman. Good morning, ladies and gentlemen. We thank
    you all for coming.
        Today, we take the first step toward reauthorization of the
    Older Americans Act. The last reauthorization of this act was
    in the year 2000, and it includes significant changes to Title
    V, the Senior Community Service Employment Program, otherwise
    known as SCSEP.
        The amendments to the Act sought to increase employment
    opportunities for seniors through greater integration with the
    country's workforce training system. Changes also emphasized
    the placement of participants into unsubsidized employment and
    sought greater accountability through the creation of new
    performance measures.
        As part of the critical oversight responsibility of this
    Committee, I have been working with the Government
    Accountability Office to review the progress that the Labor
    Department and SCSEP grantees have made in implementing the
    program changes brought by the 2000 reauthorization. I hope the
    findings discussed at today's hearing will be instructive to
    Congress as we move forward with reauthorization this year.
        As we have previously discussed in this Committee, our
    country is about to experience a dramatic demographic shift. In
    the coming years, baby boomers will begin retiring en masse,
    and by 2030, America's population over age 65 will be twice as
    large as it was in the year 2000.
        To avoid future labor shortages and a ``brain drain'' of
    experienced talent, we must develop policies that encourage
    older Americans to stay in the workforce and remove barriers to
    working longer if they desire it.
        Senator Kohl and I have requested that the Labor Department
    convene an interagency task force to develop legislative and
    regulatory proposals addressing the issues raised by the aging
    of our workforce. Last year, this Committee examined some of
    these issues, particularly the challenges confronting older
    workers when deciding whether to retire.
        SCSEP serves some of our most vulnerable citizens, those
    that often don't have the luxury of a choice when it comes to
    retirement. Therefore, we need to ensure the program is
    functioning properly.
        SCSEP is the sole remaining Federal job training initiative
    specifically designed to meet the needs of our aging workforce.
    For 40 years, the program has provided part-time community
    service employment to low-income adults age 55 and over.
    Program participants help staff community and faith-based
    organizations that without this help might not be able to
    provide their valuable services to the community.
        Today, we will hear from the Labor Department regarding
    their administration of SCSEP. I am looking forward
    particularly with interest in learning why it took 4 years to
    implement the regulations mandated in the 2000 reauthorization,
    and I share the concern of many that the program may be
    restricting the participation of many seniors.
        We will also hear from individuals who are grantees and
    subgrantees of the program. These witnesses will provide
    valuable information about the impact of the Labor Department's
    new eligibility criteria on grantees' ability to meet
    performance standards.
        Congress must move forward in a timely fashion with
    reauthorization, and to provide better oversight of the
    reauthorization, this Committee will continue to work with GAO
    and SCSEP stakeholders to ensure the program best serves the
    needs of current participants and also is equipped to handle
    what will be an influx of potential participants from the
    burgeoning baby boomer population.
        I would like to thank all of our witnesses who have joined
    us here this morning. I am eager to hear your thoughts as we
    engage in a meaningful and productive dialog that will shed
    light on the challenges and the successes of the Senior
    Community Service Employment Program.
        Before I turn to Senator Kohl for his remarks, I would like
    to share with the Committee excerpts from a letter that I
    received from Linda Rae Alvarado, a SCSEP participant who is
    raising her four grandchildren in Washington State.
        Said she, ``I have not felt this good about a program since
    I served as an AmeriCorps VISTA volunteer. I have helped other
    grandparents raising children get qualified and placed. Just
    like me, they cried when the placement was made. I have talked
    with host agency staff who were thrilled with the placements
    and the work they are doing. I have helped place Social
    Security recipients and others who fell through the cracks of
    our safety net.''
        ``I am only 57, but I have been looking for productive,
    full-time work for the past 4 years. It is as if there is a
    glowing sign over my head that blinks 'over 50' whenever I have
    an interview. The SCSEP program has been a God-send. I am still
    able, willing, ready to work. My youngest grandson graduates
    from high school when I am 66 and college when I am 70, so I
    will be working for a while yet.''
        ``This program provides positions, experience, skill-
    building, references that are current and positive for many of
    us who are between 50 and 65, when there aren't very many
    places to receive help. As we all know, work knows no age.''
    With that, I turn to Senator Kohl.

                 OPENING STATEMENT OF SENATOR HERB KOHL

        Senator Kohl. I thank you, Mr. Chairman.
        As older Americans live longer and remain healthy and
    active, many are choosing to work longer. Even more would like
    to continue contributing to our communities, businesses, and
    economy, yet many find it difficult to do so. That is why I
    introduced the Older Worker Opportunity Act, which expands
    opportunities for older Americans to work longer if they so
    choose. Chairman Smith and I also requested that the Department
    of Labor convene an Older Worker Task Force to identify
    barriers to working longer and find solutions. We are pleased
    that Labor is moving forward with this task force.
        Today's hearing focuses on another effort to help seniors
    find work in their communities. For over 40 years, the Senior
    Community Service Employment Program has served as the only
    Federal workforce program targeted to low-income older adults,
    providing community service and job opportunities to those over
    age 55. As millions of baby boomers approach retirement age and
    look for ways to keep working or give back to their
    communities, we need to strengthen this important program.
        Of course, the most important way to strengthen SCSEP is to
    make sure that eligible seniors are enrolled. Yet today, the
    GAO will report that because the Department of Labor has
    restricted eligibility, grantees find it difficult to meet
    enrollment goals, leaving too many seniors without the
    opportunity to enroll. In addition, current funding is only
    sufficient to serve less than 1 percent of the eligible
    population. SCSEP funding has declined since 1998, and the
    Administration is proposing another cut of $44 million this
    year. To me, this makes no sense. The Census Bureau estimates
    that by 2008, there will be 6.7 million low-income Americans
    over age 55, many of whom will be eligible for SCSEP. Clearly,
    we need to boost funding, not cut it.
        We must also remember that SCSEP is designed to promote
    both community service and self-sufficient employment. One goal
    should not be sacrificed for the other. Yet the
    Administration's proposal for reauthorizing SCSEP would
    significantly reduce community service opportunities. Some
    seniors may prefer community service to the private sector,
    while others may face barriers that make it difficult to obtain
    paying jobs. So we need to give seniors the flexibility to
    choose.
        Finally, we need to know what is broken before we fix it.
    After Congress made changes to the program in 2000, the
    Department of Labor did not issue final regulations until 2004.
    As a result of this delay, we only have 1 year of performance
    data to evaluate the program. In addition, 2005 will be the
    first year that grantees will be held accountable for
    performance since the 2000 changes were implemented.
        Before we consider a major restructuring of the program, as
    the Administration proposes, I believe we should carefully
    study what has worked and what hasn't worked, and wait until
    the results are in. To that end, this hearing is a step in the
    right direction, and we look forward to the testimony of our
    witnesses today.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator Kohl.
        We have two panels today. We are informed that there will
    be a 10:30 vote, and Senator Kohl and I have agreed that one of
    us will go first, and the other will keep the hearing going.
    Then the other will go when there is a return.
        So we shouldn't be interrupted because we want this hearing
    to be timely and not take any more time of your day than is
    necessary. But it is a very important topic, and as the letter
    I just read indicates, it means so much to so many people in
    our senior population.
        We will call forward our first panel. We have
    representatives from the Government Accountability Office and
    the Department of Labor. Our first witness is Sigurd Nilsen. He
    is the director of education, workforce, and income security
    issues for GAO.
        I certainly appreciate the resources that, Sigurd, you and
    your colleagues have taken to be here today and testify. I look
    forward to hearing GAO's preliminary findings on the impact of
    the 2000 Older Americans Act amendments on the Senior Community
    Service Employment Program.
        We will call up also John Beverly. He is the administrator
    of the Office of National Programs at the Employment and
    Training Administration of the Department of Labor. We also
    look forward to discussing the progress that that department
    has made in implementing the 2000 reauthorization changes to
    SCSEP.
        Sigurd, take it away.

    STATEMENT OF SIGURD R. NILSEN, DIRECTOR, EDUCATION, WORKFORCE,
     AND INCOME SECURITY ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE
                         (GAO), WASHINGTON, DC

        Mr. Nilsen. Thank you, Chairman Smith, Senator Kohl.
        I am pleased to be here today to discuss the Older
    Americans Act amendments of 2000 as they relate to the Senior
    Community Service Employment Program, known as SCSEP.
        My testimony today will focus on three areas. First,
    changes in the distribution of SCSEP funds to national and
    State grantees as a result of the amendments. Second, the
    progress that Labor has made in implementing an enhanced
    performance accountability system. Third, the challenges that
    national and State grantees face in managing SCSEP.
        First, the 2000 amendments have had little effect on the
    distribution of funds between national and State grantees, with
    the national grantees continuing to receive about 78 percent of
    the funds and the States about 22 percent. However, the
    distribution of funding and positions among national grantees
    has changed substantially.
        An open competition for national SCSEP positions held in
    2002 increased the total number of national grantees from 10 to
    13, eliminating 1 incumbent grantee and introducing 4 new
    grantees, and reshuffled funding and positions among existing
    grantees. Of the 9 incumbent national grantees that were
    awarded continuing grants, 2 gained positions, and 7 lost
    positions.
        Second, Labor has implemented new performance measures as
    required by the amendments, for program year 2005 which ends
    this coming June 30, will begin sanctioning grantees that
    demonstrate poor performance for the first time. For program
    year 2005, four SCSEP measures will be used to assess a
    grantee's overall performance. The four measures are placement,
    employment retention, service level, and services to the most
    in need.
        A grantee must meet 80 percent of its goal, averaged across
    the 4 measures or be subject to sanctions. A grantee then could
    meet its overall average performance goal, but not individual
    performance goals and thus avoid sanctions.
        For example, one State that met its overall performance
    goal for 2004, achieved less than half of its placement goal.
    Sanctions for poor performance begin with a corrective action
    plan and end with the grantee losing all funds if it fails to
    meet its goals for three consecutive years.
        Grantees also report on the customer satisfaction of
    participants, host agencies, and employers, but this measure is
    not used for sanctions. Grantees must also report the number of
    community service hours participants contribute, but Labor has
    not developed a performance measure for this, as required by
    the amendments.
        SCSEP grantees must also collect data on three common
    measures as part of a Government-wide initiative to provide
    comparable performance information across Federal programs with
    similar goals and operations--requiring SCSEP grantees to
    collect and report on nine different performance measures--some
    of which overlap, but which are measured differently.
        Labor has designed a data collection system to capture
    performance information, but has not yet implemented the
    Internet-based version. In order to capture baseline
    information data in program year 2004, Labor rolled out an
    early non-Internet version of its data collection system.
        However, this interim system is limited in its usefulness
    for helping to manage the program. For example, grantees are
    unable to access their quarterly progress reports directly and
    must wait for Labor to process and send the data back to them.
        Likewise, grantees receive reports that notify them of
    errors in their data submissions, but the reports do not
    identify which records are problematic. Currently, Labor hopes
    to fully implement the Internet-based system by mid May of this
    year.
        Third, changes to SCSEP eligibility criteria and
    coordination difficulties with WIA and the one-stop system pose
    major challenges to SCSEP grantees in managing the program.
    Although the amendments did not contain provisions changing the
    eligibility criteria, Labor modified some eligibility criteria
    to target SCSEP's limited funds to individuals it believes are
    most in need of SCSEP's intensive services.
        For example, Labor modified the types of income it uses to
    determine the individual's eligibility for the program to
    include Social Security Disability Insurance and unemployment
    compensation, so that only those with the lowest incomes are
    targeted. In addition, Labor changed its previous policy of
    allowing low-income older adults who hold part-time jobs to
    enroll in SCSEP.
        Grantees told us that the requirement that applicants be
    unemployed prevented some low-income older workers from
    receiving SCSEP services. For example, a state grantee noted
    that older workers who may work only 4 hours per week, have
    very low incomes but are not eligible for the program because
    they are not unemployed.
        Another State grantee noted that many older workers who are
    not eligible for Social Security benefits often work part-time,
    and thus would be not eligible under the employment test, but
    would otherwise still meet the income eligibility criteria.
        Many grantees were also concerned that Labor revised the
    period on which income is calculated. Labor requires grantees
    to annualize an applicant's income, using the most recent 6-
    months income prior to application and then multiplying by 2.
    Grantees noted that annualizing 6 months of income could
    distort the income for those who only had earnings during that
    6-month period.
        For example, one grantee noted that many older individuals
    in their State work during the planting and harvesting seasons,
    but are unemployed for the remainder of the year. Doubling the
    individual's 6-month income made many of these seasonal workers
    ineligible for SCSEP.
        Conversely, certain other workers maybe erroneously
    included if they didn't have income in the most recent 6-month
    period, but may have had much higher income prior to that 6-
    month period. They would have been included, while those with
    more recent income were excluded.
        All of the national grantees and most of the State grantees
    told us that they were concerned about their ability to meet
    the performance measures, saying that the program eligibility
    changes was making it harder for them to meet their service-
    level goals.
        The 2004 performance data show that 7 of the 13 national
    grantees and 21 of the 52 State grantees did not meet their
    service-level goals. National and State grantees said that
    coordinating SCSEP activities with WIA services and obtaining
    intensive services and training at One-Stop centers presented
    major challenges for them.
        While coordination with One-Stops for core services is very
    good, access to training or intensive services is very
    difficult. For example, many WIA providers are hesitant to
    provide intensive services or training to SCSEP participants
    because WIA providers are concerned that enrolling older adults
    would negatively affect their performance measures,
    particularly the earnings measure that is used in the WIA
    program. This is something we reported on in a 2003 report as
    well.
        In conclusion, while Labor has made progress implementing
    the 2000 amendments, particularly in terms of increasing the
    programs focused on unsubsidized employment, challenges remain.
    While Labor has taken steps to establish an enhanced
    performance accountability system, as of March of this year,
    the system was still not fully implemented.
        The delay in implementing this system means that program
    year 2005 is the first year that grantees will be held
    accountable for poor performance. In addition, Labor's changes
    to the eligibility criteria appear to target SCSEP funds for
    the most in need, yet how this targeting was operationalized
    excludes certain low-income workers.
        Finally, while the amendments were designed to enhance
    employment and training opportunities for older adults, we
    believe that Labor has not done enough to address unresolved
    issues concerning coordination between SCSEP and WIA and
    helping older adults obtain intensive services and training at
    one-Stop centers.
        This completes my prepared statement. I would be happy to
    respond to any questions members of the Committee may have.
        Thank you.
        [The prepared statement of Mr. Nilsen follows:]

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        The Chairman. Thank you. We will get to those.
        Now, John Beverly.

      STATEMENT OF JOHN R. BEVERLY, III, ADMINISTRATOR, OFFICE OF
    NATIONAL PROGRAMS, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S.
                  DEPARTMENT OF LABOR, WASHINGTON, DC

        Mr. Beverly. Thank you, Mr. Chairman and members of the
    Committee.
        I am pleased to have the opportunity to testify before you
    today to discuss the reauthorization of the Older Americans Act
    and the Senior Community Service Employment Program, or SCSEP,
    as authorized by Title V of the act.
        ETA has initiated activities in an effort to integrate
    services to older Americans with other ETA programs. I would
    like to first provide you with some context on where SCSEP fits
    in the broader workforce investment system.
        In January 2005, ETA issued a national protocol for older
    workers. The protocol seeks to enhance the services provided to
    older workers through our broader public workforce investment
    system and inspire the system to pursue innovative strategies
    for tapping into this labor pool and connecting them with the
    job market.
        In response to a GAO recommendation and at the request of
    this Committee, the department has convened a Federal
    interagency task force to focus on the aging of the American
    workforce and to examine the impact of this demographic change
    on the labor market. The task force on aging of the American
    workforce will bring together agencies from across the Federal
    Government to address workforce challenges posed by an aging
    population.
        Assistant Secretary for Employment and Training Emily
    Stover DeRocco will chair this task force. The task force will
    identify and assess ways to address the barriers that prevent
    older workers from remaining in or re-entering the labor market
    and the impediments that prevent businesses from taking full
    advantage of this skilled labor pool. That committee should be
    convened and meeting sometime this month.
        I would now like to turn to SCSEP. Based on our experience
    with administering SCSEP, the department has formed a
    legislative proposal to reauthorize the program on the
    principles that we shared with the Congress in May 2005. Those
    principles are, first, streamline the program structure. The
    department is proposing to allocate funds for the SCSEP program
    to States according to a statutory formula.
        Each State would then hold competitions to award those
    funds to grantees, which would operate the program in their
    State. This step would establish one responsible entity per
    State rather than the current overlapping system of national
    and State grantees, some of which operate in the same locality.
        Second, increase the minimum age for eligibility. The
    proposal targets limited SCSEP resources to older, harder to
    serve Americans by increasing the minimum eligibility age from
    55 to 65.
        Next, focus on employment outcomes. Our proposal enhances
    the employment focus of the program in the following ways. No.
    1, increasing the limit on the percentage of grant funds
    grantees may spend on training. Second, authorizing
    occupational training. Third, limiting to 2 years the
    transition from community service to subsidized employment.
    Finally, limiting fringe benefits, including pension benefits.
        The last principle would strengthen performance
    accountability. We are proposing to use the common measures for
    SCSEP. That is entered employment, retention in employment, and
    earnings. The use of these measures will simplify performance
    reporting and hold grantees accountable for employment
    outcomes, though they can track and report additional outcomes
    such as community services as well. These reauthorization
    proposals will streamline the SCSEP program, target resources
    to those most in need.
        Before I conclude, I would like to respond to some of the
    points made by the GAO testimony. We are aware that grantees
    are concerned about One-Stop's ability to provide a consistent
    level of service to older workers throughout the system. We are
    confident that the One-Stop system is not only serving older
    workers and can serve more, but is building the capacity to
    improve these services over time.
        With guidance such as the protocol for serving older
    workers that I referred to earlier, the department continues to
    set standards for the workforce investment system's services to
    older workers. Governors also are required in their State plans
    to identify how they will serve workers with barriers to
    employment, including older workers.
        Notably, the department's reauthorization proposal sets
    aside funding for technical assistance and the distribution of
    best practices to the workforce development system. We will
    continue to share with the One-Stop system those best practices
    in serving this important segment of the labor force.
        We are also aware that grantees are concerned about the
    system used to report performance outcomes. The current system,
    called SPARQ 1, has, in fact, markedly improved the error
    rates, and all of our grantees continue to become more
    proficient in its use through the assistance that we are
    providing and that we will continue to provide.
        SPARQ 2, or the Internet version of the system, will be
    launched this May, with increased functionality and ease of
    use. With continued technical assistance, we believe that
    grantees will master the new system and come to appreciate the
    improvement it represents. We are grateful to the GAO for
    carefully evaluating SCSEP, and we thank them for their
    insights into the operation of the program.
        In closing, Mr. Chairman, we look forward to working with
    you to reauthorize the Older Americans Act. We are hopeful
    that, working together, this important legislation can be
    enacted later this year.
        At this time, I would be pleased to answer any questions
    that you or members of the Committee may have.
        [The prepared statement of Mr. Beverly follows:]

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        The Chairman. Thank you very much, John.
        I hear you making a number of recommendations for changes
    to the program, yet I don't believe what was required in 2000
    has even been fully implemented. So I am wondering if it is the
    right time to do that, and have the changes that have been made
    on the basis of 2000's reauthorization, has the program been
    fully implemented? Is it benefiting folks it is supposed to
    serve?
        Mr. Beverly. Well, we believe that we have made sufficient
    progress in implementing the amendments. Certainly, it is a
    start.
        We have put in place the performance accountability
    framework called for by the amendments and have instituted the
    reporting system needed to report on those performance
    outcomes. We have taken steps, such as the older workers
    protocol and organizing the task force that this Committee
    asked for, to bring together the services of the One-Stop
    system and better integrate services provided to older workers
    through SCSEP into the One-Stop system.
        In addition to that, we have provided technical assistance
    to the grantees as they work through the implementation
    process. We are pleased with the progress that the grantees
    have made both in performing under the performance
    accountability framework and in delivering services to older
    workers through the program that was called for in the
    amendment.
        As you know, Mr. Chairman, the program called for and the
    amendment also called for targeting services, at least in terms
    of giving priority of service, to workers who are 60 and older,
    and in particular those who have significant workforce
    disadvantages, that is. Second, it calls for increasing our
    efforts to place older workers in unsubsidized employment.
        I think we have made progress in doing all of those things,
    and I believe we have plans that will help us continue that
    progress.
        The Chairman. John, why negotiate performance standards and
    then require grantees to meet only 80 percent of the goal?
        Mr. Beverly. Well, we want to provide some flexibility. As
    we move forward with this new performance accountability
    framework, we want to have high performance, but at the same
    time, we want to leave a little bit of flexibility to make sure
    that we are prepared to make adjustments as we move forward.
        We believe that we have set our benchmarks for performance
    high enough so that 80 percent achievement represents good
    outcomes for seniors with respect to the measures and
    indicators represented by those performance benchmarks.
        The Chairman. Sigurd, can you elaborate a little further on
    why problems persist and how the lack of coordination impacts
    SCSEP grantees and participants?
        Mr. Nilsen. The main factor associated with how the WIA
    program serves the range of populations that come in for
    service are driven by WIA's performance measures. This affects
    not only the SCSEP program, but other programs as well,
    including dislocated workers and incumbent workers. That is
    workers who come in, are looking for better jobs.
        Those performance measures provide disincentives for
    serving particular populations because, notably, there was in
    the past the earnings increase or earnings replacement goal.
    That is looking at people's prior earnings and then their
    subsequent earnings.
        Problems for older workers are that if they were dislocated
    or came in and were only looking for part-time work or if they
    had a very high-wage job before they came in and then were
    going to have to change occupations, maybe start all over
    again, they were going to be coming in and starting off at a
    much lower wage.
        So there was a disincentive. They would rather--the
    programs would rather, in order to meet their performance
    goals, would rather provide services to someone who was easier
    to place than an older worker, so they would get the placement
    rates, and also where they were most likely to get the earnings
    gain.
        What we have recommended in the past is that they look at
    these measures and that they also collect data on everybody
    coming in the system. Right now, the WIA program only requires
    that people who get intensive services and training are
    reported on. We have estimated that this is less than 10
    percent of the people coming in for services.
        So what they do is, basically, they assess people for their
    likely success. If you are not likely to be successful or if
    they have questions, if you meet whatever profile they decide
    is putting you at risk, they will provide you with general
    services, placement assistance, maybe some help with resumes,
    but they are not going to sit down and provide the intensive
    services for you or recommend you for training, which would
    require that you be enrolled, and then they would be tracked
    for performance.
        If you start having information on everybody, you can see
    how the programs are sorting people.
        The Chairman. Very good. Thank you.
        Senator Kohl.
        Senator Kohl. Thank you.
        Mr. Beverly, GAO reports that grantees found it hard to
    meet enrollment goals because Labor made it more difficult for
    seniors to qualify for the program. In fact, 7 of the 13
    national grantees and 21 of the 52 state grantees did not meet
    their service-level goals in 2004.
        Do you see this as a problem?
        Mr. Beverly. Well, Senator, we certainly are familiar with
    those data, and we are certainly working to provide technical
    assistance to make sure that performance meets the benchmarks
    set.
        With respect to not meeting those and the connection
    between that and the income eligibility guidelines, I guess we
    were confronted with the need to develop income eligibility
    standards against a reference that was widely accepted, given
    the fact that in the rulemaking we received only two comments
    about what standards should guide income eligibility.
        We chose the current population survey standards and
    definitions for what was considered income and how those
    sources of income were defined. Basically, that was our
    starting point. We used that starting point because it is,
    indeed, the CPS--the Current Population Survey--data that is
    used by OMB and the Department of Health and Human Services to
    determine the poverty level.
        As you know, Senator, the current program calls for an
    income threshold of 125 percent of the poverty level as the
    income threshold for participation in the program. So,
    basically, we use the definitions that the Current Population
    Survey use in order to come up with the standard for income
    eligibility.
        We did exclude some income based on those sources that sort
    of spoke to dependency, such as public assistance and other
    sources of that kind. We also worked with the grantees to
    exclude some other sources of income based on exactly what you
    are indicating, Senator, their indication to us that they were
    having enrollment difficulties.
        So we tried to use a standard that seemed to us to be the
    appropriate one. Given the fact that the threshold itself
    derived from the CPS, why not use the definitions and income
    standards in the CPS to at least have a starting point for
    eligibility? Then when we heard that there were still problems,
    we did meet with the national sponsors and made some further
    exclusions from that, hopefully, to get to the point where we
    have the right standards.
        I think the issue of what should be the income standards
    that determine eligibility I think is an issue that we have
    addressed in all legislative proposals, suggesting that we need
    to look at other workforce programs and other programs that
    serve older workers, at least as a starting point, to determine
    what are the appropriate sources of income that should be
    included.
        But again, I think this is an issue where reauthorization
    can provide a forum for working out that issue.
        Senator Kohl. Mr. Nilsen, as you know, Labor is conducting
    a second national grant competition to choose SCSEP grantees. I
    would think that in choosing grantees, Labor would want to
    consider how well a grantee performed in the past. Yet it
    appears from your testimony that Labor does not formally
    consider past performance when awarding grants.
        If we really want to choose the best grantees, don't you
    believe that past performance should be a major factor?
        Mr. Nilsen. Certainly, Senator, I think now that the
    current grantees have had a track record to look at, and I
    think originally we heard from the Department of Labor that
    when they did the 2002 competition, they wanted to open it up
    to get some new blood in, if you will. They didn't have the
    performance measures prior to that, not the ones focused on
    employment.
        But certainly, it is our experience that if you are
    recompeting grants, it is logical to include the performance of
    the grantees you already have in place as a factor as you are
    looking forward to see whether or not you want to give those
    grants back to them, renew their grant for the future. That
    certainly should be a factor to be considered in any
    competition.
        Senator Kohl. I thank you.
        I thank you, Mr. Chairman.
        The Chairman. Thank you, Senator Kohl.
        The Senator from Delaware?
        Senator Carper. Hey, thanks, Mr. Chairman.
        To my colleagues, good morning.
        To our witnesses, good morning and thank you for joining us
    today.
        Just two issues that I would like to explore with you and
    probably more directly with Mr. Beverly. So if I could start
    there, and Mr. Nilsen, if you want to jump in and offer some
    comments, you know, don't hold back.
        First, on the age of eligibility, do I understand that the
    Department of Labor has proposed to raise the minimum age for
    participation for eligibility for the SCSEP program from 55 to
    65?
        Mr. Beverly. Yes, Senator. That is correct.
        Senator Carper. Do I understand that there are some
    exceptions? There would be some exceptions to those age
    eligibility requirements?
        Mr. Beverly. Yes, Senator. We would certainly look to see
    whether or not in individual cases denying eligibility because
    the age threshold was not met would be a poor decision, given
    that individual's circumstances. So we would look to see
    circumstances under which an exception to that new age
    eligibility threshold might be made.
        Senator Carper. How would you go about making that
    determination? In a practical sense, how would it work?
        Mr. Beverly. Well, we certainly look to work with the
    Congress in making that determination. But, for example, there
    may be older workers under the age of 65 who have multiple
    barriers to employment and then, in fact, could, in fact,
    benefit from the services of the SCSEP program because it does
    provide intensive and long-term services to older workers.
        Persons with multiple barriers to employment perhaps can
    benefit from that, and certainly it seems to be a circumstance
    where one might consider making an exception to the overall
    threshold that is recommended in the proposal.
        Senator Carper. But again, in a practical sense, how would
    you view the decisionmaking process to make, or how would you
    recommend that it occur for a person in whether in Delaware or
    Wisconsin or Oregon or any other State?
        Mr. Beverly. Well, I think that process would certainly
    have to be worked out by developing criteria to guide decisions
    in that connection, and certainly we would be looking to have a
    rational basis for decisionmaking with respect to offering
    those exceptions.
        Senator Carper. Within our States, who would make the
    decision? Within our respective States?
        Mr. Beverly. Well, again, I think we would like to work
    with the Congress in determining who makes that decision. I
    guess perhaps that is the best way to do it.
        Senator Carper. Mr. Nilsen, any thoughts there?
        Mr. Nilsen. I think it is a policy decision of how to
    target the program. Right now, I know the data show that about
    half of the people participating in SCSEP are between 55 and 64
    years old. So this would radically redirect the focus of half
    the program.
        I would leave it to the department, the States, and also
    the grantees to comment on how difficult would that be to do,
    to change the program that dramatically.
        Senator Carper. You may have said this earlier and I missed
    it, but do you have any views as to the merit of this
    recommendation?
        Mr. Nilsen. No, I didn't comment on it. Like I said, for
    the most part, it is a policy issue. But implementing it would
    be a major change to the program, given that half the
    population that they are serving currently would be eliminated
    from eligibility.
        Senator Carper. OK. I also understand that the Department
    of Labor has proposed to limit SCSEP enrollment to 2 years and
    to eliminate fringe benefit like Social Security, and if we
    could just dwell on that for a moment.
        Could you just tell us, Mr. Beverly, what is the current
    limit on enrollment? I presume it is more than 2 years, but
    what is it now?
        Mr. Beverly. Senator, I may have to provide that for the
    record. But my recollection at this point is that there may be
    no hard and fast limit on enrollment. But I would like to offer
    for the record any amendment to that----
        Senator Carper. OK.
        Mr. Beverly [continuing]. My sense of that.
        Senator Carper. I am looking at the audience to see if
    anybody is nodding their head yes or no. I see some yeses from
    the audience. So we will see. OK. If you could provide that for
    the record, we would appreciate it.
        In my own State, some concerns have been raised about
    limiting the eligibility to 2 years. I am not sure whether
    those concerns are well-founded or not. I just don't know. Two
    years sounds like a reasonable amount of time. It may not be
    for some folks.
        The issue of Social Security eligibility. You know, some of
    the folks who participate, the problem is, as we all know, have
    very, very low income and, frankly, not much prospect for
    Social Security. In my own State, some folks have said that
    they believe that the SCSEP should--the program, if modified,
    should allow these folks to continue to enhance their prospects
    for Social Security income.
        Would you just react to that?
        Mr. Beverly. Well, Senator, my understanding is, is that
    the program really doesn't limit Social Security. What the
    program does do with respect to the income eligibility
    guidelines is to indicate that Social Security income will be
    counted as income that counts against 125 percent threshold.
    Except for those older workers 65 and older, we would exclude
    that Social Security income net of Medicare deductions. That is
    one way Social Security, I believe, comes into the picture, if
    you will.
        The second way Social Security comes into the picture is
    with Social Security Disability Insurance, where we said that
    income from that source would count against the 125 percent
    threshold. The reasoning being is that SSDI is not--to receive
    it, you don't have to pass an income test. You do have to be
    totally disabled, but you do have to also have a work history
    in order to receive it.
        It is my understanding that the program also helps the
    disabled person, when that total disability passes, to
    transition back into the workforce. So those receiving SSDI
    have some support, it seems, re-entering the labor force. It is
    not an income-tested receipt of benefits. Therefore, we thought
    that it was appropriate to exclude that.
        Hopefully, Senator, that is responsive to your question?
        Senator Carper. Yes. Responsive, and then some.
        What I would like to do is we may want to come back and
    explore this with you a bit further as we go forward. Thanks.
        Thanks, Mr. Chairman.
        The Chairman. Thanks, Senator Carper.
        I just have one follow-up question that really gets to the
    heart of my concern in this hearing. I am going to ask the
    question of Sigurd, and John, you can respond to it.
        But, Sigurd, Mr. Beverly has said that the agency has
    adequate information to set a new course for the program and
    with this justifies their request for significant changes for
    this year's reauthorization. Based on your review of the
    system, did you find that adequate information exists to
    evaluate the impact that the 2000 changes have had on the
    program?
        Mr. Nilsen. Given the fact that the first full year of data
    that the grantees will be held accountable for performance
    won't be available. The year ends this June 30. They won't be
    available for several months after that. The fact that, well,
    so far, the Labor Department has commissioned a study of the
    SCSEP program. It has not been issued or made public yet. It
    would seem to me we don't really have enough information to
    make radical changes at this point.
        We just did our first, initial look at your request into
    this program about how well is it working. Given the fact that
    many of the changes have just been recently implemented--the
    new data system, performance measures, eligibility targeting--
    and we haven't really seen the impact of that yet, it seems
    like we would want to know, have more information on how well
    that is working first.
        Mr. Beverly. Mr. Chairman, if I may?
        The Chairman. Yes, John?
        Mr. Beverly. I guess I have confidence in the ability of
    the system to move forward. Based on the information that we do
    have so far in the program year 2005, it certainly appears that
    the vast majority, with perhaps one or two exceptions--and all
    the data is not in--but the vast majority of the national
    grantees will, as well as the State grantees, will meet their
    performance goals if the last three quarters are any indication
    of that.
        So I have confidence in the system. I think the system has
    proven its ability to move forward and to adjust to efforts to
    bring better services to older workers.
        The Chairman. John, the study that Sigurd just referenced
    is from DAH Consulting, and we have asked Labor for the report,
    and they won't provide it. Can you provide it?
        Mr. Beverly. Well, Senator, the report is not quite
    finished yet. It is in its draft stages. As soon as it is, in
    fact, finished and out of its draft stage, I am quite sure that
    it will be provided to the Committee and to you, Mr. Chairman.
        The Chairman. So my understanding that they won't provide
    it is not accurate. It is just that it is not completed to be
    provided?
        Mr. Beverly. Your understanding is correct, sir.
        The Chairman. OK. Thank you very much.
        Senator Kohl, do you have anything further?
        Gentlemen, thank you for being here. It has been very
    helpful.
        With that, we will call up our second panel.
        Our witnesses on the second panel are Ms. Shauna O'Neil.
    She is the director of the Salt Lake County Aging Services. The
    Salt Lake County Division of Aging Services is responsible for
    providing programs and services on behalf of 97,000 residents
    in Salt Lake County who are age 60 and over. In her position as
    director, Shauna administers the county Senior Community
    Service Employment Program.
        She will be followed by Ms. Carol Salter, the national
    director of the Senior Community Service Employment Program for
    Easter Seals. Ms. Salter administers the Senior Community
    Service Employment Program in 9 States with 11 Easter Seals
    affiliate organizations as subcontractors.
        Finally, we will hear from Ms. Melinda Adams, who is the
    State-wide older worker coordinator for the Idaho Commission on
    Aging. Ms. Adams has administered workforce programs for older
    Idahoans for 21 years, and she is also the aunt of one of my
    best staffers.
        We welcome you all here.
        Shauna, let us start with you.

     STATEMENT OF SHAUNA O'NEIL, DIRECTOR, SALT LAKE COUNTY AGING
                      SERVICES, SALT LAKE CITY, UT

        Ms. O'Neil. Thank you.
        Chairman Smith, Ranking Member Kohl, it is a pleasure to be
    here today to talk about the SCSEP program.
        I was struck listening to the report from the General
    Accounting Office because our experience of the last 2 years
    has really very markedly followed every one of their points.
    So, to some extent, I am just here re-emphasizing the points
    that Mr. Nilsen made.
        I am proud to say that Salt Lake County, which has 68 of
    Utah's 82 SCSEP slots, is the reason that Utah has ranked in
    the top 5 States nationally for 4 of the last 6 years in the
    percent of participants placed in unsubsidized jobs. In recent
    years, our placement rate is down with the new rules, but we
    are still 18.5 percent above the national standard.
        Serving people with employment barriers is one of SCSEP's
    most important goals. We have enrolled widows in their late
    50's who have not worked for 30 years because they were raising
    families, who found themselves with no income, little savings,
    not eligible for Social Security, Medicare, or welfare
    benefits.
        We have found jobs for ex-convicts immediately after their
    release from prison, for long-term alcoholics and drug addicts,
    as well as Vietnam and Korean War veterans still suffering from
    PTSD.
        Many older work seekers face barriers, have few marketable
    skills, and little or no recent job-hunting experience, and we
    are proud of our experience in working with all of them.
        The 2000 reauthorization of SCSEP did not truly start until
    the rules took effect 4 years later. These rules substantially
    changed the focus of the program and, largely because they
    continue to evolve and change, have created real challenges for
    agencies like ours that are struggling to implement them.
        My written testimony goes into some detail. I would like to
    give you just some examples today. We used to be able to enroll
    underemployed participants. We now can only serve those who are
    unemployed. Thus, an older worker who is paid for baby-sitting
    on weekends isn't eligible.
        The stricter income guidelines have radically changed the
    type of older worker. We couldn't enroll a 66-year-old divorced
    woman who had multiple age-related barriers because we had to
    count all of her Social Security income. Without a job, she
    lost her home and is now in subsidized employment.
        The performance measure reporting has changed numerous
    times, and it has caused us real problems. Also, other
    reporting requirements have become far more complex and have
    added significantly to our administrative expenses.
        For example, we are required to gather wage information for
    1 year after somebody moves to an unsubsidized job. An employer
    will give us that information once, frequently won't give it to
    us after that. But two of our performance measures require us
    to have that information.
        In short, the program has significantly changed its focus,
    and we are still undergoing major transition. The ground
    continues to shift, and we really have not reached the point
    where we are operating smoothly under the 2004 rules.
        I have three policy recommendations for you today. First is
    to maintain the independence of the SCSEP program. This is a
    specialized program serving a population with different needs.
    The needs of low-income older people with multiple employment
    barriers should remain the focus of an independent program.
        Continue to serve those under 65. Of all of the people we
    serve, those under 62 years of age, who often have little or no
    income, little job history, and are ineligible for any other
    kind of assistance, are often in particularly desperate
    straits.
        Three, retain the dual emphasis on community service and
    employment. Our program's 68 participants give 70,000 hours of
    important service annually, while gaining critical skills to
    help them find permanent unsubsidized employment, and they do
    find employment.
        In closing, it is far too early to make an accurate
    assessment of the success or failure of the 2000
    reauthorization. The system itself is still in flux. The
    reporting system that we are all relying upon to give the
    Federal Government data as to the program's success is not yet
    error free or operating at a fully functioning level.
        SCSEP's significance through the years is that it has
    successfully blended two important policy goals for older
    Americans. It has bolstered their ability to return to and
    remain productive members of the labor force, while permitting
    them, as they have developed marketable skills, to serve the
    community in important ways.
        Thank for you holding today's hearing. I would be pleased
    to answer any questions.
        [The prepared statement of Ms. O'Neil follows:]

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        The Chairman. Thank you, Shauna, very much. Those are good
    recommendations.
        Carol Salter.

      STATEMENT OF CAROL SALTER, NATIONAL SCSEP DIRECTOR, EASTER
                         SEALS, WASHINGTON, DC

        Ms. Salter. Thank you, Senator Smith and Senator Kohl.
        On behalf of Easter Seals and as their national director of
    the SCSEP program, I am very pleased to have the opportunity to
    testify before you today and to discuss the implementation of
    the 2000 Title V amendments.
        I am pleased to tell you, through SCSEP, seniors are
    engaging in valuable community service across this Nation, as
    well as using SCSEP as a bridge to employment.
        As one of the new grantees in 2003, Easter Seals faced
    several challenges--developing SCSEP policies and procedures,
    finding and transitioning participants to our payroll system
    and into our program, establishing a brand-new data collection
    system, and enhancing our partnerships. All this had to happen
    before we could actually get to our primary task of recruiting
    and training participants and helping them find sustainable
    employment opportunities.
        In our second year, changes to the program regulations,
    coupled with learning the new DOL data collection and reporting
    system, presented new challenges to administrative operations.
        Now, in our third year, we are finally starting to see some
    positive outcomes resulting from those changes made in 2004. We
    still face significant challenges in providing some Title V
    services. While our written testimony explains a number of
    these, I would like to address two specific areas, and I would
    like to provide some suggestions for consideration.
        First, Department of Labor's modified eligibility rules now
    require inclusion of Social Security Disability Insurance
    payments as a countable source of income. Because SSDI
    eligibility requires that all other possible employment
    opportunities are exhausted, recipients are, by definition, in
    need of training in a new vocation.
        This and other inclusions in countable income has
    significantly cut the number of seniors found eligible for
    services. In many locations, and especially in rural areas,
    these changes have made it extremely difficult to maintain a
    full enrollment level. We believe, at a minimum, SSDI income
    should not count against applicants' eligibility determination.
        Second, a co-enrollment of SCSEP participants in the WIA
    programs. Easter Seals advocates for co-enrollment of SCSEP
    participants in WIA programs. However, WIA providers have a
    disincentive to enroll our participants. Often, seniors only
    want part-time employment, and WIA only receives credits for
    placements in full-time jobs. We believe that allowing WIA
    providers to receive performance credit for placement of
    seniors into part-time employment would create incentives for
    serving older adults.
        While there have been some challenges in operating the
    program, there are a number of facets of SCSEP that have proven
    to work well since the 2000 amendments. First, Title V
    authorizes two distinct, yet connected service delivery
    partners--national and State grantees.
        National grantees are able to identify and disseminate best
    practices across States and local regions. We are able to
    partner with national corporations and employer associations,
    national social service agencies, and training providers.
        Our State agency partners coordinate all Title V services
    in their respective States. That enables SCSEP as a whole, to
    achieve Congress's vision of equitable distribution.
        Second, Easter Seals also supports the concept of building
    relationships with One-Stops. Although initially One-Stops were
    hesitant to work with us, we have found that by educating
    managers on the benefits of collaboration, they have become
    valuable training sites. Many One-Stops have even hired our
    participants as core service providers in permanent jobs.
        When SCSEP participants are co-located in One-Stops, they
    become onsite advocates for other older job seekers, using
    their expertise as peers in guiding seniors through the system.
        Third, allowing us to continue providing services to those
    55 and above remains essential. Over half of SCSEP participants
    this past program year were between the ages of 55 and 64.
        In addition to being low income, many have poor work
    histories, undiagnosed disabilities, and limited education, and
    they are not eligible for programs such as Social Security or
    Medicare. SCSEP is designed and intended to meet these
    individual needs in unique and effective ways.
        Last, Section 502(a)(1) of Title V establishes two unique,
    yet interrelated purposes for SCSEP--community service and
    unsubsidized employment. Department of Labor reports that in
    the program year 2004, SCSEP participants provided in excess of
    46 million hours of community service. Those hours translate to
    over $230 million of wages earned for real work, supporting our
    Nation's public and private nonprofit sectors.
        Community service supports the Act's overall principles of
    independence, socialization, and community engagement for
    seniors. Unsubsidized employment offers better wages and
    possible fringe benefits, enabling participants to find
    meaningful jobs and become self-sufficient. We believe that the
    current structure allows us to achieve both of these goals,
    meeting the original intent of Congress.
        In conclusion, I would like to tell you the story of Ms.
    Gloria Mabry. She is a current SCSEP participant from Mobile,
    AL. Ms. Mabry, who is visually impaired, was referred to us by
    the State vocational rehabilitation agency this past December.
        Although she earned her degree in gerontology as a young
    adult, she never had the opportunity to work in her field. The
    only jobs ever offered to her consisted of low-skill tasks,
    like assembling brooms.
        Ms. Mabry's unique background was recognized, and she was
    placed at a local senior center. She now works in the
    Grandfriends Program, training as an activity aide, a role that
    has rekindled the energy and desire Ms. Mabry felt so many
    years ago when she received her degree.
        Her confidence has been boosted, and her colleagues
    describe her as ``blossoming.'' I am happy to tell you that the
    prospect looks very good for Ms. Mabry to be hired this summer
    as a full-time activities director in the same host agency.
        Ms. Mabry is just one of thousands of seniors whose lives
    are better because of SCSEP. We are honored to be a part of her
    story, as well as many other participants who have come through
    our doors.
        On behalf of Easter Seals, I again would like to thank you
    for inviting us to testify, and I would be happy to answer any
    questions you have.
        [The prepared statement of Ms. Salter follows:]

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        The Chairman. Thank you, Carol. Thanks for all the great
    work of Easter Seals. You have got some very valuable insights
    for us.
        Just so the witnesses and the audience know, there is a
    vote going on. Senator Kohl will come back, and then I will go
    vote.
        But in the event that we don't want you to feel short-
    circuited if we don't get all our questions asked, we may
    submit questions for written responses because we need to hear
    what you are seeing on the ground and how we can better improve
    this important program.
        Melinda, I am happy to tell you on the record that Betsy is
    terrific, and you can be proud of her. But we look forward now
    to your testimony.
        Ms. Adams. Betsy is a terrific niece.
        The Chairman. Yes, she is. I am sure.

        STATEMENT OF MELINDA M. ADAMS, STATE-WIDE OLDER WORKER
           COORDINATOR, IDAHO COMMISSION ON AGING, BOISE, ID

        Ms. Adams. Chairman Smith and members of the Special
    Committee on Aging, good morning.
        Thank you for this opportunity to testify.
        I represent the Idaho Commission on Aging, which is our
    State unit on aging. We are responsible for all Older Americans
    Act and State-funded services for older Idahoans.
        I serve as staff to Governor Kempthorne's State Workforce
    Council, am on the One-Stop Career System Leadership Team, and
    have administered Idaho's Title V program for the past 21
    years.
        We hold the Title V program in high regard for the unique
    population it serves, for the economic opportunities it
    affords, and for the vital community service it provides.
        In the past, our State Title V program, which serves the
    rural stretches of the State, has been very effective. To
    illustrate, the U.S. Department of Labor ranked Idaho's program
    first in the Nation 7 of the past 15 years for success in
    placing seniors in jobs.
        However, since the U.S. Department of Labor initiated
    policy and eligibility revisions, our placement rate has
    decreased from 58 percent to 26 percent. Enrollments have
    decreased by 28 percent, and the number of community service
    hours has declined by 46 percent from 52,000 to 28,000 hours.
        The negative impact of the policy changes appears
    significantly greater in rural areas. Unfortunately, we find
    ourselves in the predicament of having to return unspent funds
    to the Department of Labor while, at the same time, turning
    away low-income seniors in dire need of work experience and
    training.
        Why is that? In large part, our agricultural base and
    seasonal economy, coupled with the frontier spirit of taking
    any short-term job just to put food on the table, make many
    older people ineligible because any part-time or short-term
    employment is prohibited.
        A case in point. Our Title V participants were unable to
    take a 1-weekend job delivering telephone books to rural
    communities because the short-term job would render them
    ineligible for the program.
        Moreover, the cost structure of the program does not
    acknowledge the higher costs of providing services where towns
    are far from each other, and the lack of public transportation
    severely limits options available to participants.
        For these reasons, we propose the creation of a ``Frontier
    Section'' within Title V of the Older Americans Act. The
    ``Frontier Section'' would allow each Governor to designate as
    ``Frontier'' planning and service areas where there is a
    majority of frontier counties.
        For States having 80 percent or more of planning and
    service areas designated as frontier, the entire State could be
    deemed frontier. Each State could amend income eligibility
    inclusions and exclusions based on the characteristics of
    ``Frontier'' economies.
        Individuals in ``Frontier'' areas could take occasional
    short-term jobs and remain eligible for Title V, as long as
    their income at application and recertification remains at or
    below 125 percent of poverty. The existing cap on enrollee
    wages and fringe benefits would be reduced to 50 percent. This
    would allow greater use of existing grant funds for
    transportation assistance, distance learning, skill training,
    and front-line staff.
        This proposal is budget neutral. It does not take any money
    away from anyone. What it does is provide both national and
    State grantees the flexibility we need to better serve frontier
    participants.
        With regard to the U.S. Department of Labor's
    reauthorization proposal, we oppose raising the age at
    eligibility from 55 to 65 because that neglects a significant
    population who are underserved by other programs, who are
    largely ineligible for Social Security, and discouraged about
    their employment future.
        We support formula funding to the Governor and State Unit
    on Aging. We oppose national-level procurement in favor of
    State-based open competition. We support the 65 percent cost
    structure revision, but with 50 percent designated for frontier
    planning and service areas.
        We endorse inclusion of underemployment as an eligibility
    factor, as well as the proposal to change income requirements
    to make them uniform with other similar Federal programs. We
    heartily support inclusion of Community Service as a
    performance measure against which program success is judged.
        With reauthorization impending, it is critical to make the
    right changes for the people this program is intended to serve.
    The Title V program is too great to lose.
        With that, I thank you.
        [The prepared statement of Ms. Adams follows:]

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        The Chairman. Melinda, I thank you for what you do in Idaho
    and for your service to this program in that great neighboring
    State of Oregon.
        On an unrelated matter, has Dirk Kempthorne been a good
    Governor? [Laughter.]
        Ms. Adams. Senator Smith, we are very sorry to see him come
    to Washington. Yes, we will miss him.
        The Chairman. Well, he was a great U.S. Senator. Just want
    your opinion, should I vote to confirm him as Secretary of the
    Interior?
        Ms. Adams. I would say yes.
        The Chairman. OK. Well, now onto the matter at hand. Any of
    you can answer this. How has limiting the eligibility for SCSEP
    affected your ability to run other Older Americans Act
    programs? Anyone have a comment on that?
        Ms. O'Neil. I think in one way, we are enrolling far more
    troubled, far more difficult clients in a much higher
    percentage of our enrollees. Wherever possible, we are assuming
    them and providing other Older American Act services to them
    and to their families. I am really pleased that we are serving
    them in those ways.
        Administratively, the difficulties with the data system,
    the changes in the reporting structure, the whole problems with
    the performance measures has been a real burden. So, we are
    diverting what limited administrative costs, staff, monies we
    have not only from the program, but from other resources within
    the agency in order to support that part of the system.
        We have spent a lot of time, our information technology
    staff has spent a lot of time trying to work with the data
    system. So it is in that regard that the pressure has been most
    difficult.
        The Chairman. Anybody else have a comment different than
    that?
        Ms. Salter. Well, we don't run any other programs. But I
    can tell you some of the things that we have heard and some of
    the things that we experience at the local level.
        One of those is, because of the added pressure to get
    people into unsubsidized employment which is not bad; but at
    the cost of less community service, one of the things that we
    have to do is use their individual employment plans and maybe
    rotate them out of a position so that they can go somewhere
    else to get new experiences.
        Often, it is other aging programs where the people are
    going out of, and those programs are hurting when we take the
    individuals away from them. They let us know that.
        Ms. O'Neil. Senator Smith, might I follow up with that?
        The Chairman. Please do follow up with that. I apologize. I
    am going to go vote and turn the gavel over to my colleague.
        Senator, you can conclude the hearing, if you would like,
    after your questions. I will likely have some written follow-up
    questions.
        Thank you so very much, all of you. You have contributed
    measurably to our hearing today.
        Ms. O'Neil. A critical point in terms of the impact on
    other programs. One of the areas that we have liked to place
    appropriate enrollees has been working in our system, and we
    have hired many of them.
        Because we are now enrolling a much higher percentage of
    people who have criminal backgrounds and very difficult
    backgrounds, we are not able to place--just in terms of the
    protection necessary, we are not able to place them in
    situations in which the enrollees would be working with
    vulnerable adults. We are not able to place them with the
    sheriff's office because they will not accept people who have
    criminal backgrounds.
        It really has shifted our ability, both in terms of
    community service, but it has required us to work very hard to
    find a whole new set of community placements.
        Ms. Adams. If I might add, the Title V program provides
    valuable infrastructure support to our aging network in Idaho,
    to the area agencies on aging, and all the services they
    provide, especially to frail homebound.
        As I indicated earlier, in Idaho, with these new
    eligibility requirements, the number of community service hours
    has dropped from 52,000 to 28,000 hours in just 1 year. That
    has a serious impact on the support this program provides via
    Title V enrollees doing data entry for the Adult Protective
    Service Program, seniors delivering meals to frail homebound,
    seniors working as educational aides in Head Start and in our
    schools, and seniors working at the Red Cross.
        You can see the dramatic effect that these eligibility
    policies are having on our communities and aging services.
        Senator Kohl [presiding]. Ms. Salter, according to the
    AARP, in 2004, the national sponsors provided over 40 million
    hours of community service with an estimated value of more than
    $680 million. That value far exceeds the program's cost of $432
    million.
        How would Labor's proposal affect the community service
    opportunities of participants, and why should that be of
    concern?
        Ms. Salter. I think it affects it in a couple of different
    ways. One is lowering the requirement for tracking community
    service hours. Right now, DOL is not even measuring how many
    community service hours that we provide. They do collect that
    information, but it is with the emphasis on employment and
    making the employment goals. It de-emphasizes the community
    service.
        What we do is move those individuals out of those
    situations where they are providing those services. About half
    of our host agencies are in the sector supporting the other
    types of older worker programs. Once we start moving people
    out, we want to find appropriate people to move back in.
    Sometimes that leaves large gaps.
        I think that the Department of Labor's proposal would
    significantly de-emphasize the good work that people are doing
    in community service.
        Senator Kohl. Ms. O'Neil, in your written testimony, you
    say that implementing changes to your program has been costly
    in terms of both productivity and employee and participant
    morale. You also noted that you are still struggling to operate
    smoothly in the face of ongoing changes in the program.
        Would you tell us what effect further changes would have on
    your program?
        Ms. O'Neil. Well, it would exacerbate it. I think that with
    the changes--when the program is required to make a change,
    there is a learning curve. The staff, we must develop new
    forms. We have to develop new data entry systems. We have to
    develop new strategies for recruitment for training because the
    nature of the trainee has changed.
        The changes have--it wasn't that they just changed in 2004.
    It was that they changed in 2004 and then have been modified
    kind of on an unexpected ongoing basis since then. So, we are
    constantly kind of rethinking what we are doing.
        We need a chance to figure out how to really work with the
    existing system and settle into it and refine and modify and
    sharpen recruitment, training, follow-up strategies.
        As I mentioned in my testimony, one of the things we are
    having to do is figure out ways to work with unsubsidized
    employers to get them to do post hiring reporting. They don't
    want to do that. You know, they have never been involved in a
    Government program. They just hired somebody.
        We need to figure out how to create those relationships and
    how to improve to do that. There is a myriad of those kinds of
    situations. We need to have a chance to settle in and operate a
    program.
        Staff actually get confused about what is the rule today.
    It was ``I know it was something yesterday. It is something
    today. What is it?'' So if we can settle in and operate
    smoothly, then staff morale is improved, and our effectiveness
    increases.
        But from your perspective, I would think, more importantly,
    you can see the impact of the system you have designed and that
    you have legislated. Where it is continually in a flux and we
    are not quite sure where we are functioning, you know, you
    can't get good data from us because we are not performing at
    our most effective.
        Senator Kohl. Good answer.
        Ms. Adams, you stated that because Labor has restricted who
    is eligible for SCSEP, your agency is in the position of having
    to return unspent funds at the same time that you are turning
    away low-income seniors who need help, but don't fit the
    restrictive criteria.
        Wouldn't Labor's proposal for reauthorization make this
    problem even worse? How can we make sure that the money we
    appropriate for this program truly does find its way to the
    people whom it is designed to help?
        Ms. Adams. The eligibility criteria must be revised, or we
    will continue to be unable to serve seniors who, as I said
    earlier, desperately need this program. At the very least, I
    know our Idaho Commission on Aging requested that the previous
    eligibility criteria, those that were in place before the 2000
    amendments, be reinstated.
        We have to look at exclusion of a portion of Social
    Security. Underemployment must be restored as an eligibility
    factor. We are losing so many people, turning them away because
    of a 4-hour a week job or as my colleague mentioned, because of
    a baby-sitting job on a Saturday.
        Unemployment Benefits is another issue. I think it is very
    important that we exclude Unemployment Insurance Benefits when
    we determine eligibility for this program. There are huge
    disparities between how income is counted for the purpose of
    the Title V program and how it is counted for the purposes of
    the Workforce Investment Act (WIA) program.
        For example, in WIA, 100 percent of Social Security is
    excluded. In Title V, 100 percent is included. In WIA, 100
    percent of UI--unemployment insurance--payments are excluded.
    In Title V, 100 percent of unemployment insurance payments are
    included.
        WIA excludes SSDI. Title V includes it. In WIA,
    underemployed individuals are eligible. In Title V,
    underemployed individuals are not eligible. In WIA, the
    eligibility threshold--this varies State by State--is 200
    percent of poverty. In Title V, it is 125 percent of poverty.
    WIA includes Workers' Compensation payments. Title V excludes
    it.
        I urge the Department of Labor and Congress and all
    grantees and States to take a hard look at what eligibility
    criteria makes sense for the people this program should be
    serving.
        Senator Kohl. Thank you.
        Any other comments members of the panel would like to make?
        Ms. Salter. I would like to give one example of a
    participant that we have up in Arizona in Yavapai County, a
    very rural part of Arizona.
        She has been diagnosed as morbidly obese. She is a
    diabetic. She uses a walker. She has to carry her oxygen tank
    around with her. There are no job openings in her town, and
    there are actually no other host agencies in her town either.
        With the implementation of the suggested changes from the
    Department of Labor, this person would have to be sent home.
    She would have to be put out of the program because she won't
    ever become employed. Well, chances are very slight that she
    would ever become employed.
        Because of that and because of her lack of the little bit
    of income that she gets from the stipend from her training, she
    would probably have to go into assisted living and couldn't
    continue living on her own.
        So I think that keeping the emphasis on community service
    as well as unsubsidized employment is very important.
        Senator Kohl. That is a good comment.
        Ms. O'Neil.
        Ms. O'Neil. I just want to say thank you very much for your
    interest in this issue. It is an important one.
        Senator Kohl. Thank you so much.
        It is very important, and your testimony has been very
    helpful in trying to figure out what works and doesn't work and
    what needs to be done.
        So we thank you all for coming, and this hearing is
    adjourned.
        [Whereupon, at 11:26 a.m., the committee was adjourned.]