[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
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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.]

                                 
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