[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                        USCIS FEE INCREASE RULE 

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

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                CITIZENSHIP, REFUGEES, BORDER SECURITY,
                         AND INTERNATIONAL LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 20, 2007

                               __________

                           Serial No. 110-50

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
                 Joseph Gibson, Minority Chief Counsel
                                 ------                                

          Subcommittee on Immigration, Citizenship, Refugees, 
                 Border Security, and International Law

                  ZOE LOFGREN, California, Chairwoman

LUIS V. GUTIERREZ, Illinois          STEVE KING, Iowa
HOWARD L. BERMAN, California         ELTON GALLEGLY, California
SHEILA JACKSON LEE, Texas            BOB GOODLATTE, Virginia
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
LINDA T. SANCHEZ, California         LOUIE GOHMERT, Texas
ARTUR DAVIS, Alabama
KEITH ELLISON, Minnesota
ANTHONY D. WEINER, New York

                    Ur Mendoza Jaddou, Chief Counsel

                    George Fishman, Minority Counsel






















                            C O N T E N T S

                              ----------                              

                           SEPTEMBER 20, 2007

                                                                   Page

                           OPENING STATEMENT

The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Chairwoman, Subcommittee on 
  Immigration, Citizenship, Refugees, Border Security, and 
  International Law..............................................     1
The Honorable Steve King, a Representative in Congress from the 
  State of Iowa, and Ranking Member, Subcommittee on Immigration, 
  Citizenship, Refugees, Border Security, and International Law..     2

                               WITNESSES

Mr. Jonathan R. Scharfen, Deputy Director, U.S. Citizenship and 
  Immigration Services; accompanied by Mr. Rendell Jones, Chief 
  Financial Officer, and Mr. Michael Aytes, Associate Director 
  for Domestic Operations, U.S. Citizenship and Immigration 
  Services
  Oral Testimony.................................................     5
  Prepared Statement.............................................     8
Mr. Arturo Vargas, Executive Director, NALEO Educational Fund
  Oral Testimony.................................................    21
  Prepared Statement.............................................    23
Mr. William R. (Bill) Yates, Executive Consultant, Border 
  Management Strategies (BMS)
  Oral Testimony.................................................    44
  Prepared Statement.............................................    45
Mr. Rhadmes Rivera, Vice President of 1199, SEIU United Health 
  Care Workers East
  Oral Testimony.................................................    52
  Prepared Statement.............................................    54

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Chairwoman, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     2
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Chairman, Committee on the Judiciary...........................     4

                                APPENDIX
               Material Submitted for the Hearing Record

Letter to David Walker, Comptroller General of the General 
  Accounting Office (GAO) dated September 12, 2007...............    62
Fee Increases Imposed by USCIS Fee Rulemaking for Selected 
  Immigration Applications, Effective July 30, 2007, Compiled by 
  NALEO Educational Fund.........................................    64
Letter to Dr. Emilio Gonzalez, Director, U.S. Citizenship and 
  Immigration Services dated February 20, 2007, from the American 
  Friends Service Committee......................................    66
American Friends Service Committee Recommendations on DHS Docket 
  No. USCIS-2005-0056 of September 19, 2007......................    68
Prepared Statement of Fred Tsao, Policy Director, Illinois 
  Coalition for Immigrant and Refugee Rights.....................    71
Prepared Statement of Michael A. Knowles, President, National 
  Citizenship and Immigration Council (AFGE/AFL-CIO).............    82
``EXHIBIT A (text of petition by USCIS District Adjudications 
  Officers)'' by the National CIS Council 119....................    85
Letter to Linda Swacina, U.S. Citizenship and Immigration 
  Services District Director dated April 11, 2007, from 
  Citizenship and Immigration Services Adjudications Officers....    86
Responses to Post-Hearing Questions from Jonathan R. Scharfen, 
  Deputy Director, U.S. Citizenship and Immigration Services.....    93


                        USCIS FEE INCREASE RULE

                              ----------                              


                      THURSDAY, SEPTEMBER 20, 2007

                  House of Representatives,
Subcommittee on Immigration, Citizenship, Refugees, 
             Border Security, and International Law
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:01 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable Zoe 
Lofgren (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Lofgren, Gutierrez, Delahunt, 
King, and Goodlatte.
    Staff present: Ur Mendoza Jaddou, Chief Counsel; R. Blake 
Chisam, Majority Counsel; George Fishman, Minority Counsel; and 
Benjamin Staub, Professional Staff Member.
    Ms. Lofgren. Since we have sufficient Members here to begin 
our hearing, the Subcommittee will come to order.
    I would like to welcome the Immigration Subcommittee 
Members, our witnesses, and members of the public to the 
Subcommittee's hearing on the immigration fee increase rule and 
H.J. Res. 47, a resolution that would render the recent 
immigration fee increase rule by the U.S. Citizenship and 
Immigration Services null and void and require the Agency to 
issue a new rule to modify its fees.
    Our Subcommittee held its first hearing on the 2007 fee 
increase rule on February 14, when the rule was initially 
proposed. At that time, I had many questions about the 
methodology used to calculate the new fees, including how and 
if actual costs were accurately calculated, whether those 
actual costs included financial mistakes made by the Agency, 
and whether USCIS had properly prepared a plan for technology 
transformation, a cost that was used to justify the increase in 
fees.
    Every answer I received to questions I had at that time led 
to even more questions and concerns about the rule. So, for the 
last 7 months, my staff and I have engaged USCIS and outside 
experts to understand the rule and its methodology, and I am 
still concerned. As a result, I have introduced H.J. Res. 47 to 
render the fee rule null and void and require the Agency to 
issue a new rule to modify its fees.
    The Subcommittee has sought detail on how the technology 
transformation will work. We have asked the basic question of 
how to define success and how to measure that success. After 7 
months, we have not received information sufficient to ensure 
that the money spent on technology will result in a system that 
is sufficient, scalable, secure, and interoperable. I am 
hopeful that today we will get some answers.
    And I would now recognize our distinguished Ranking 
minority Member, Steve King, for his opening statement.
    [The prepared statement of Ms. Lofgren follows:]
 Prepared Statement of the Honorable Zoe Lofgren, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and International 
                                  Law
    I would like to welcome the Immigration Subcommittee Members, our 
witnesses, and members of the public to the Subcommittee's hearing on 
the immigration fee increase rule and House Joint Resolution 47, a 
resolution that would render the recent immigration fee increase rule 
by the U.S. Citizenship and Immigration Services null and void and 
force the agency to issue a new rule to modify its fees.
    Our Subcommittee held its first hearing on the 2007 fee increase 
rule on February 14 when the rule was initially proposed. At that time, 
I had many questions about the methodology used to calculate the new 
fees, including how and if actual costs were accurately calculated, 
whether those actual costs included financial mistakes made by the 
agency, and whether USCIS has properly prepared a plan for technology 
transformation, a cost that was used to justify the increase in fees.
    Every answer I received to questions I had at that time led to even 
more questions and concerns about the rule. So, for the last seven 
months, my staff and I have engaged USCIS and outside experts to 
understand the rule and its methodology. And I'm still concerned.
    As a result, I have introduced H.J. Res. 47 to render the fee rule 
null and void and force the agency issue a new rule to modify its fees.
    The Subcommittee has sought detail on how the technology 
transformation will work. We've asked the basic question of how they 
define success and how they will measure that success. After seven 
months, we have not received information sufficient to assure us that 
the money spent on technology will result in a system that is 
efficient, scalable, secure, and interoperable.
    I am hopeful that today we will finally have some answers.

    Mr. King. Thank you, Madam Chair. I appreciate this hearing 
today.
    In February, this Committee held a hearing on the USCIS fee 
increases, and I welcome back Chief Financial Officer Rendell 
Jones, as well as Associate Director for Domestic Operations 
Mr. Michael Aytes, who were also helpful in our last hearing in 
explaining the rationale and need for the fee increases.
    Holding a second hearing on the fee increases this session, 
when the new fee schedule has been in effect for only 1 full 
month, should certainly allay the concerns of some that fee-
reliant USCIS is not subject to sufficient congressional 
oversight.
    The rule we are reviewing today took effect on May 30 after 
a 60-day public comment period. Thousands of comments were 
received and fully evaluated prior to publishing the final rule 
that resulted in several changes to the proposed rule. Those 
changes included discounted fees for children who are filing 
adjustments of status applications concurrently with their 
parents and the expansion of the fee waiver rules for certain 
applications.
    On July 30, the day the new fee rule took effect, 
Chairwoman Lofgren introduced H.J. Res. calling for the rule to 
be given no force and effect. I am concerned that this was done 
without the benefit of a GAO report on the latest USCIS fee 
study or the resulting fee schedule, especially since the USCIS 
fee study was conducted as a result of the GAO findings in 
2004.
    However, Chair Lofgren first requested such a hearing 
report last week in a letter dated the day before this hearing 
was noticed. I, therefore, must conclude that H.J. Res. is a 
rush to judgment. We should wait for the GAO audit before 
concluding that the fee calculations are flawed.
    Federal law authorizes USCIS to collect fees to cover the 
full costs of adjudicating all of the applications it receives, 
including the cost of adjudicating applications for which it 
does not, for humanitarian reasons, collect fees.
    Full cost recovery includes more than the direct cost of 
providing services. It covers overhead and support costs, such 
as the cost of personnel, facilities and litigation. Most 
importantly, it includes the cost of background checks and 
fraud detection, both of which are critical to ensuring that 
immigration benefits are granted to those who deserve them and 
not to those who do us harm.
    When the examinations fee account was created, it was 
intended that USCIS become a predominantly fee-funded Agency. 
Some disagree with this concept, but I believe that the 
American taxpayer should not have to foot the bill for granting 
a highly sought-after benefit to immigrants, and while I 
certainly agree that our Nation is enriched by legal 
immigration, given the competing needs for tax dollars, it only 
makes sense that those who directly receive an individual 
immigration benefit should pay for it.
    The Office of Management and Budget has stated that when 
the public benefits as a necessary consequence of an Agency's 
provision of a benefit to an individual, the Agency should seek 
to recover from the identifiable recipient either the full cost 
of the Federal Government of providing the special benefit or 
the market price, whichever applies.
    There is no fair market price that can be assigned to the 
privilege of living and working in this country. The ability to 
naturalize is the greatest benefit a country can bestow. 
Indeed, it is priceless. Therefore, USCIS should structure its 
fees to recover its full costs.
    The new fee schedule is based on a comprehensive fee study 
that was conducted at the recommendation of the GAO in the 2004 
report. That was the last report conducted on this issue. 
Although the increases may be substantial in some categories, 
they are not necessarily excessive.
    Even the new $595 fee for naturalization applications only 
requires that a prospective citizen save about $10 per month 
toward the objective during the 5 years of permanent residence 
needed to apply. The application fees for other benefits remain 
a minor portion of the overall costs of bringing a relative, a 
fiance, or an employee to the United States.
    USCIS has structured the fee rule so that there will be 
measurable near-term improvements that will benefit all 
stakeholders. These include a 2-month decrease in processing 
time for the four major kinds of applications by the end of 
fiscal year 2008 and a 20 percent overall reduction for all 
application types by the end of fiscal year 2009.
    Unless GAO finds the fees excessive, the new fee schedule 
should remain in place to allow USCIS to fund continued service 
improvements while enhancing its security and fraud-detection 
capability.
    I look forward to hearing from the witnesses.
    I thank you, Madam Chair, and I yield back the balance of 
my time.
    Ms. Lofgren. Thank you.
    As neither Chairman Conyers nor Ranking Member Smith are 
present, we will invite them either to submit their statements 
for the record or to deliver their statements if they arrive 
later during the hearing. And mindful of our time constraints, 
other Members are invited to submit their opening statements in 
the record.
    The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
in Congress from the State of Michigan, and Chairman, Committee on the 
                               Judiciary
    Today's hearing provides an opportunity for us to obtain answers to 
some very serious questions regarding the substantial fees charged by 
the U.S. Citizenship and Immigration Services to immigrants seeking 
citizenship in the United States.
    As many of you will recall, I expressed deep concern about the size 
and fairness of these fees when we met last February about the agency's 
proposed fee increases.
    Here are just a few questions that I hope will be resolved today.
    First, what is the justification for increasing naturalization 
application fee by 80 percent? Congress has repeatedly appropriated 
funds to USCIS so it can address processing backlogs and make long-
overdue infrastructure and technology improvements. Yet, the agency 
apparently needs additional funding and we need to know that it is 
justified.
    Second, what effect do these increased fees have on legal 
immigrants trying to express their patriotism and commitment to this 
country by applying for citizenship. I am particularly concerned about 
the equity of charging future applicants for the costs of the agency's 
past failures.
    Third, we need an explanation about why USCIS is using funds from 
its Premium Processing Fees to fund operating costs beyond those 
permitted by law. The law specifically states that Premium Processing 
fees must be used solely to cover the costs of adjudicating Premium 
Process Service cases and to make information technology infrastructure 
improvements.
    I want to commend Chairwoman Lofgren for her leadership on this 
issue and for introducing House Joint Resolution 47, which would 
require the agency to reconsider its cost structure and substantiate 
the fee increase it really needs.

    I am pleased to introduce our first panel this morning. We 
have two panels of witnesses, and seated on the first panel, I 
am pleased to welcome back Deputy Director of U.S. Citizenship 
and Immigration Services, Jonathan Scharfen. Prior to assuming 
his post at USCIS, Mr. Scharfen served for 25 years in the U.S. 
Marine Corps, retiring in 2003 at the rank of colonel. Mr. 
Scharfen is no stranger to the House of Representatives, 
however, where he served as both Chief Counsel and Deputy Staff 
Director to the House International Relations Committee 
following his military service. Mr. Scharfen received his B.A. 
from the University of Virginia, his J.D. from the University 
of Notre Dame, and his LL.M. from the University of San Diego.
    Next, I am pleased to welcome back Rendell Jones, the chief 
financial officer of USCIS. Responsible for the budget, 
accounting and financial planning of the Agency, Mr. Jones 
became USCIS's first CFO in March of 2006. Prior to his 
appointment, he served as the Deputy Budget Director of the 
Department of Homeland Security. His tenure with the Federal 
Government, however, began at the Department of Justice in 1996 
as a Presidential Management Intern. Mr. Jones later worked as 
the management analyst in the Civil Rights Division and also 
served as one of the Department's Congressional Appropriations 
Officers. He earned a bachelor's in finance cum laude from 
Virginia Commonwealth University and a master's in public 
administration from North Carolina State University.
    And finally, we would like to welcome Michael Aytes back to 
the Subcommittee. Mr. Aytes is the associate director of 
Domestic Operations at USCIS. Mr. Aytes began his career with 
the Federal Government's immigration agencies in 1977, after 
graduating with a bachelor's degree from the University of 
Missouri. After then-INS hired him as an immigration inspector 
in Chicago, he quickly rose through the ranks and, in 1990, 
became the first Assistant Commissioner for Service Center 
Operations charged with managing all the INS's service centers. 
Mr. Aytes played a critical role in the information and 
Customer Service Division as it transitioned into USCIS in 
2003, and he has served as an Associate Director since October 
of 2005.
    As I think you all know, we have 5 minutes for opening 
statements, and the lights will alert you with the yellow flash 
when you have 1 minute to go. Your full statements will be 
submitted as part of the record, and when your time is about to 
expire, we do ask that you summarize.
    And without objection, the Chair will recess the Committee 
as necessary when we are interrupted by votes.
    And we invite you, Mr. Scharfen, to begin.

   TESTIMONY OF JONATHAN R. SCHARFEN, DEPUTY DIRECTOR, U.S. 
   CITIZENSHIP AND IMMIGRATION SERVICES; ACCOMPANIED BY MR. 
 RENDELL JONES, CHIEF FINANCIAL OFFICER, U.S. CITIZENSHIP AND 
                      IMMIGRATION SERVICES

    Mr. Scharfen. Thank you very much, Chairwoman Lofgren, 
Congressman King, Congressman Gutierrez. Thank you for the 
opportunity to discuss recent changes made to the USCIS fee 
schedule.
    I am accompanied by our Chief Financial Officer, Rendell 
Jones, and our Associate Director of Domestic Operations, 
Michael Aytes.
    I welcome today's hearing as part of an ongoing dialogue 
regarding how much we charge for the vital services we provide. 
We welcome the Congress's constructive advice and critical 
insight on this matter and look forward to continuing to work 
closely with Members of the Committee.
    As you know, USCIS recently completed a lengthy fee review 
and rulemaking process culminating with the July 30 
implementation of a comprehensive revised fee schedule.
    The new fee schedule took into account more than 3,900 
comments received after the publication of the proposed rule in 
February. We received comments from Members of Congress, 
community-based organizations, refugee and immigrant service 
and advocacy organizations, public policy groups, State and 
local government entities, educational institutions, and 
private corporations, among others.
    We held numerous briefings and discussions with the 
Congress, and the Director testified before this Subcommittee 
in February.
    Based on this valuable input, the final fee schedule 
incorporated a number of substantive changes to the proposed 
fee structure to assist families with children applying for 
immigration benefits and prospective parents trying to finalize 
their adoptions. The new fee structure also expands the 
availability of fee waivers and exemptions for individuals 
seeking political asylum and special refugee status and 
continues to provide benefits at no cost for victims of human 
trafficking and violence.
    USCIS made every effort possible to craft a rule and fee 
schedule that is fair, equitable, and appropriate, given the 
urgent need to dramatically improve immigration services to our 
customers, enhance security and integrity, and build a modern 
and efficient Agency for the long term. Revenue generated from 
the new fees will be reinvested to improve customer service, 
accelerate processing, enhance security, expand our offices, 
hire additional personnel, train those personnel and create new 
business processes to decrease the time it takes to process 
applications.
    Since the final rule became effective, I have been 
convening on a monthly basis our Agency's top leadership to 
monitor progress on the additional hiring, infrastructure 
enhancements, and other improvements discussed in our 
rulemaking to ensure the initiatives are on schedule and 
appropriately coordinated across USCIS.
    Continuing to meet our processing goals will be a challenge 
due to a recent surge in workload. We are presently facing a 
substantial influx of new workload which we believe was driven 
by several different factors, including progression of the 
employment-based visa bulletin and the desire of many 
applicants to file before the new fee schedule went into 
effect. We are also seeing an overall sustained increase in 
filings, perhaps due to anticipation of comprehensive 
immigration reform and outreach regarding naturalization.
    While we are committed to meeting our processing goals, it 
will take several months, if not more, to analyze the 
operational impact of this influx of work on our goals. In the 
meantime, we are developing and implementing operational 
mitigation strategies to address this recent surge.
    With these new challenges on our horizon, preparation is 
key. So that we may quickly and efficiently tackle a future 
caseload that is guaranteed to increase, our core challenge is 
to build a 21st century business infrastructure. Achieving this 
goal will take time. USCIS and DHS leadership have devoted 
significant management attention over the last year to develop 
our business transformation program.
    By replacing our outdated paper-driven system, new 
electronic filing procedures will allow individuals the ability 
to create an electronic profile and online account with USCIS. 
These revised processes will help the Agency to meet customer 
expectations for on-demand information and immediate real-time 
electronics service over the Internet.
    Towards this goal, USCIS has incorporated productivity 
measures into the fee model to ensure that productivity gains 
resulting from automated business processes and better 
technology will be factored into future fee reviews. USCIS 
plans to review and update fees every 2 years. In comparison to 
fee reviews conducted during previous Administrations, fee 
reviews going forward will combine assumptions from recent 
experiences, incorporate productivity gains resulting from the 
modernization of operations, and take account of foreseeable 
changes in national security measures and procedures.
    With this flexible fee schedule, USCIS will obtain the 
resources it needs to bring about the nature and extent of 
operational improvements sought by the Members of this 
Committee and Congress as a whole.
    I am familiar with the view expressed that this Agency 
should be supported to some extent through appropriations 
instead of fees. In general, however, USCIS was given express 
authority to cover the full costs of its operations through 
customer fees. Law and policy have long provided that the costs 
of providing immigration benefits are borne by those applying 
for them.
    In the past, USCIS has relied on temporary funding sources, 
such as appropriations. With a more stable and reliable funding 
source of fee revenue, this Agency can operate more effectively 
and respond to changing operational needs better.
    I want to thank you for your time today, and I look forward 
to a continuing dialogue with you about the strategic direction 
in operations of USCIS in achieving our common goals.
    Thank you, ma'am.
    [The prepared statement of the U.S. Citizenship and 
Immigration Services follows:]
  Prepared Statement of the U.S. Citizenship and Immigration Services




    Ms. Lofgren. Thank you, Mr. Scharfen.
    I think I may have confused matters when I introduced both 
Mr. Jones and Mr. Aytes and then addressed you in the plural as 
to testimony, because Mr. Jones and Aytes are here as resources 
to answer questions and have relied on Mr. Scharfen to make the 
Agency's testimony.
    So we will begin our questioning now, and I would first 
like, without objection, to put in the record the letter sent 
by myself and Chairman David Price to the General Accounting 
Office requesting a review of the methodology that forms the 
basis of the fee measure.
    [The information referred to is available in the Appendix.]
    Ms. Lofgren. I have a number of questions. I guess I would 
just like to note--and I think other Members may pursue this 
more--that if you look at 1991, what the fee was for 
citizenship, for example, and what the fee is today, there has 
been a 750 percent increase in the fee, and I am hard-pressed 
to think of anything else in America that has gone up 750 
percent in that timeframe. Even health care I do not think has 
gone up that much.
    So, certainly, I do not object to having a fee system. I 
think that that has served the system and our Nation of 
immigrants well. The question is whether the magnitude of the 
increase is justified and whether this generation of fiances is 
paying for the accumulated neglect of technology for the last 
several decades, which is really why we have asked the GAO to 
take a look at this.
    This is also an opportunity for us to take a look at what 
you are doing with the money, and it is of great interest to 
me, as I think you know. Recently, the General Accountability 
Office did a report on your transformation program, and among 
their many findings, there was concern expressed about the 
enterprise architecture and whether there were sufficient 
guides and constraints in the transformation plan with that 
enterprise architecture and alignment process. I am wondering 
where the Agency is in the development of its enterprise 
architecture for transformation. How close are we to having 
this component identified?
    And I further have a concern that, you know, you need to 
have your enterprise architecture in place or else you end up 
with willy-nilly acquisition of technology that does not work 
well, does not interoperate, does not serve the mission of the 
Agency, and I have recently learned that CIS is working on a 
whole new system, apparently a relatively new one, on fraud 
detection. For national security, obviously, we want fraud 
detection, but I am concerned that if that is disintegrated--I 
do not mean disintegrating--but not an integrated computer 
architecture plan, it is not going to be interoperable, it will 
not work well, not only with CIS, but with the other agencies 
that we must connect with.
    So I am wondering, Mr. Scharfen, if you can address these 
questions or your team?
    Mr. Scharfen. Yes, ma'am. Thank you very much.
    I will start in reverse order, if I may, please, regarding, 
I believe, the data system that you are referring to, is the 
FDNS-DS System.
    Ms. Lofgren. That is correct.
    Mr. Scharfen. I agree that the going forward the 
transformation system should incorporate all of the different 
systems--computer technology systems or business systems--that 
we have in our organization, and that is our intention, to do 
that.
    In fact, we have met with this Subcommittee's staff and, 
due in large part to some of that interaction with the 
Committee staff and with you, ma'am, and some of the professors 
out on the West Coast with whom we had the benefit of meeting, 
we have increased our efforts to ensure that our transformation 
program is all inclusive and does include the type of systems, 
such as the FDNS-DS System.
    Ms. Lofgren. Could I interrupt just briefly?
    And I thank you for that report.
    And just for the benefit of the other Members, Stanford 
University, at my request, did volunteer their Computer Science 
Department and School of Business as a free advisor to the 
Agency and minority staff and majority staff and staff from the 
Agency did go out and get the benefit of their thinking on the 
computer issues particularly, and we do acknowledge and thank 
Stanford for that donation.
    If you could continue, Mr. Scharfen?
    Mr. Scharfen. And part of that discussion did cover the 
Federal enterprise architecture and where we were on that and 
whether or not we were sufficiently along in identifying the 
different models that make up that architecture. I guess there 
are five all together. You have the performance reference model 
and then the business service data and the technology pieces to 
that.
    We have a relatively new Chief Information Officer who is, 
I think, expert just on these architecture-type issues. He is 
also very good and experienced with large contracting issues. 
And what we have done, in terms of trying to better identify 
the performance reference models or the performance criteria, 
is that the CIO has an effort, within the next 4 months, 
roughly, to better identify some of those performance reference 
metrics and then be able to feed those in to our ongoing 
transformation contracting, and we will try to integrate that 
going forward with that transformation contracting effort.
    As to the GAO report, I would point out that we found the 
report, in general, encouraging, especially on the part of our 
improved planning that we had received. I guess they looked at 
nine criteria.
    Ms. Lofgren. I do not disagree, but we always look for 
needs to improve. We do not need to spend our time patting 
ourselves on the back.
    Mr. Scharfen. Fair enough. The performance measures was one 
of the ones that they said we are falling short on, and so that 
is what we have done, to answer your question, ma'am. The CIO 
is pursuing that portion of the performance reference models. 
And also, on the human capital, we have incorporated the human 
capital officer more in the transformation planning effort, 
which is another shortcoming the GAO identified.
    Ms. Lofgren. I can see that my time has expired. Perhaps 
working with the minority, we can find a time where we can have 
even a workshop type of meeting with the CIO and delve into 
more on the computer plans, not limited by the 5-minute rule.
    At this point, I would yield to the Ranking Member, Mr. 
King, for his 5 minutes.
    Mr. King. Thank you, Madam Chair.
    Mr. Scharfen, thank you for your testimony.
    I look back on the February hearing and Mr. Aytes' 
testimony from that, that 85 percent of the fee waiver 
applications were granted, and my question on that is what 
percentage of the adjudicants are not revenue producing? In 
other words, of all the applicants that we have, what 
percentage of them do not produce revenue and what does that do 
to add to the cost of the fees of those that do produce 
revenue?
    Mr. Scharfen. All together--and I will let my CFO chime in 
here if I do not have the percentages right--as to fee waiver 
applications, only about 1 percent of applicants apply for a 
fee waiver. In terms of both the waivers and those applicants 
that do not have to pay the fee, it covers 6 percent of the 
applicants. That is including people such as refugees that 
would not be paying. So that is 6 percent, to answer your 
question directly, sir.
    In terms of the work that is involved, it represents 8 
percent of the workload that is not covered by fees.
    Mr. King. Thank you. That gives some clarity to it and a 
sense of proportion, and I notice Mr. Jones nodding his head to 
confirm that testimony.
    And I also recognize you are working with the FBI on 
background checks and, when you engage the FBI, does that incur 
a fee on your part? Do you have to compensate them for their 
work?
    Mr. Scharfen. Yes, sir. We have just been working with the 
FBI on those, and going forward, we will be paying an increased 
fee for the FBI name checks and fingerprint checks as well.
    Mr. King. And that is calculated into your analysis when 
you have these fee changes?
    Mr. Scharfen. That is correct. Yes, sir.
    Mr. King. Then I wanted to express something else here that 
is maybe a little bit broader question, and that is that the 
debate that lingers yet--and I think we have come to some sense 
of consensus on fee based and, of course, all Members of this 
Committee do not agree on the fee based part--is that some 
would like to see that borne by the taxpayer, and some would 
like to see that entirely borne by the applicants, and I am in 
that category of entirely borne by the applicants because they 
are the ones that receive the benefit.
    I just wanted to comment that it occurs to me that you are 
in a situation where you are seeking to try to find a proposal 
here that satisfies a consensus of us. In fact, if we could 
come to unanimous consensus, that would be the ideal situation. 
And what strikes me is the idea of the galleon dialectic where 
you lay everything out on the spectrum, and you say, ``Well, 
taxes are objectionable to this group, so they are off the 
table. And these fees are objectionable to this group, so they 
are off the table.'' That would be the fee waiver component of 
it.
    And so it narrows down those areas where we can find a 
consensus that we believe fees are appropriate, and the 
narrower that gets, the higher the fees have to be for those 
who are paying them, and so, at some point, we need to take a 
look at this and identify that maybe 6 to 8 percent of this 
cost that is added to the balance of them is the fee waiver 
component. So those folks that do not have the fees waived have 
a price in that of 6 to 8 percent more.
    I do not know if that is the actual number. I know you have 
given me a percentage analysis. Would you say that is accurate?
    Mr. Scharfen. Yes. In terms of applicants, 6 percent of the 
applicants are not paying fees either through a waiver or by 
the policy decision that the other applicants would be paying 
for them, such as the refugee or victims against violence 
applicants.
    Mr. King. And I want to go on record, I do not object to 
that. I just point out that the narrower that lists get to the 
people that are paying, the higher the rate gets for those that 
pay.
    Then, also, you have premium processing funds that are part 
of this?
    Mr. Scharfen. Yes, sir.
    Mr. King. Can you tell me how those premium processing 
funds are applied across the balance of your costs?
    Mr. Scharfen. Right. In the past, the purpose of those is 
for transformation. In terms of into the new fee rule, those 
funds will be going toward transformation. And one of the 
reasons why we are so keen on getting a new fee rule is that, 
in the past, those funds were not being spent entirely on 
transformation costs. They were being spent on other 
operational costs because there were not enough fees to cover 
the ongoing operations of the Agency, and that is why there was 
interest in that area.
    But the fees were falling so short that we were having 
backlogs developed because of those shortcomings. But with the 
new fee, those premium processing fees will end up being spent 
on transformation, so that there will be over $100 million 
spent annually on the transformation program, so that we can 
make some of the improvements that we need to improve the 
delivery of services to applicants.
    Mr. King. And closed technology infrastructure?
    Mr. Scharfen. Yes, sir. Improved services, business 
processes. It involves infrastructure, it involves technology, 
and it involves transforming all of those to improve the 
services across the board.
    Mr. King. And the fees that go to fingerprints and 
background checks the FBI are doing, will that result in more 
personnel being put on board at FBI to turn this around more 
quickly?
    Mr. Scharfen. Yes, sir. We have been working with the FBI 
and, just recently, we have also had a number of meetings 
trying to work through this difficult problem of the FBI 
backlog. Just in terms of cases that are in a backlog at the 
FBI awaiting background checks, there are 150,000 in that 
backlog. That is unsustainable, and so we are working with the 
FBI on two fronts: one, to modify and improve or re-engineer 
the search criteria, and two is to apply more of resources to 
the name-check process. The FBI is hiring over 30 individuals 
to work just on the USCIS's backlog.
    Mr. King. Then if I could just quickly, in conclusion, pose 
this question, is that once the infrastructure is up in place 
and there are more FBI personnel, you have to have more to work 
the backlog of 150,000 down than you will need to sustain the 
applications after that backlog is worked down. So also into 
this fee, are we building infrastructure that will be in excess 
of our needs once the backlog is resolved?
    Mr. Scharfen. I would answer that in two ways. First, we 
would like to bring down the speed, the time it takes to do a 
background investigation to much less than 6 months. I am 
reluctant to set out a goal here now. I would like to just 
first get rid of that FBI backlog. Some of those cases, over 
50,000, are over 2 years old, and we would like to first get it 
down where we get rid of that backlog entirely.
    But then we want to work hard to get that below 6 months, 
and that is what we are doing. In general, if we make 
improvements and we have overcapacity, in retrospect, as we 
move forward because of these increases in technology gains, 
the idea is that every 2 years, you would have a new fee review 
and you would do a new fee study, a cost analysis, so that you 
could have adjustments to the fee so that you would not have 
that overcapacity.
    Mr. King. That is what I needed to know. Thank you, Mr. 
Scharfen.
    Madam Chair?
    Ms. Lofgren. Thank you. I recognize now Mr. Gutierrez for 
his 5 minutes of questioning.
    Mr. Gutierrez. Thank you for calling the hearing, Madam 
Chairwoman.
    First of all, I would like to just speak to you so that you 
understand that there are two differences of opinion on the 
immigrant community that you serve.
    I think it is a false dichotomy that is being made here 
between permanent residence and the rest of the American 
population. The fact remains that in order to get any means-
tested program in the United States, you have to be a permanent 
resident for 5 years. So you do pay taxes for services you 
cannot receive, because the last time I checked, there was not 
a deduction for the first 5 years.
    Everyone that is a permanent resident--and you correct me 
if I am wrong--is required to register at Selective Service, 
and, indeed, in the war in Iraq, the first fatality was Lance 
Corporal Gutierrez, permanent resident, entered the country, 
interestingly enough, undocumented to the United States and the 
first casualty.
    I mean, when I am on a road, permanent residents paid with 
their taxes for that road that I traveled. When I get a book at 
a library, they paid for that. When I call 911, they are 
helping to pay for the police department and the fire 
department which I benefit from. As a matter of fact, when I 
travel to Iowa, which might not have as many people, but roads 
are just as expensive where there is heavily populated 
populations, they helped pay for that through their income 
taxes and Federal taxes and taxes on gasoline.
    So it is kind of a false dichotomy that we are making here. 
Aren't there 80,000 permanent residents serving in the military 
forces of the United States with much distinction today?
    I just wanted to clear that up so that you might have 
another point of view of how some people look at immigrant 
community.
    I want to ask you a specific question. The proposed fee 
regulation, was sent by you to OMB on October 26 of 2006. That 
is the proposed regulation, your request for fee increases, 
first has to go to OMB. Is that correct?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. Okay. And that was done on October 26 for 
these fee increases of last year. Is that correct?
    Mr. Scharfen. I----
    Mr. Gutierrez. You have no qualms with that?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. We are under the 5-minute rule. You can go 
check and correct your testimony later on.
    A few days later--that is on November the 3rd--you folks 
sent to OMB for a regulatory change on the green card. Is that 
not correct?
    Mr. Scharfen. I assume it is. Yes, sir.
    Mr. Gutierrez. Okay. A week later?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. Okay. Then in February of this year, 
February of 2007, you cleared the OMB hurdle for both the fee 
increases and the green card changes. Is that not correct?
    Mr. Scharfen. Yes, sir. I assume it is.
    Mr. Gutierrez. So, basically, you said, ``We want to send 
this to OMB to follow the regulatory process for fee increases, 
and we want to send a week later to change the green card.'' 
Everybody has to change their green card that has an unexpired 
date. You did both those things basically simultaneously and, 
indeed, OMB within weeks approved both of those for you. Is 
that not correct?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. All right. Good. Now the final rule on the 
fee increase was published on May 30, 2007, and took effect on 
July 30, 2007. Is that not correct?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. Okay. Now what was the old fee for changing 
a green card?
    Mr. Scharfen. $190, sir.
    Mr. Gutierrez. Plus $70 biometrics?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. And what is the new fee?
    Mr. Scharfen. $80 for biometrics and $290 for the green 
card.
    Mr. Gutierrez. So, although you received from OMB the 
authority to go ahead and change the green card selection back 
in February, 7 months ago, you waited until the fee increase 
went into effect, thereby charging the very people who you want 
to have a new green card an additional 40 percent. Is that not 
correct?
    Mr. Scharfen. Yes, sir.
    Mr. Gutierrez. Why did you do that? Why did you do that? If 
you had authority to do both of these things, if you started 
the process at the same time, if OMB approved them virtually 
simultaneously, why did you affect a community of people, 
750,000 people, who had done nothing wrong?
    You issued them a green card without an expiration date. 
You wanted them to change that green card, but is it not true 
that you waited until the fee increase went into effect in 
order to tell them, ``We want you to change your green card''? 
Why did you do that?
    Mr. Scharfen. Well, I think, if I could answer in a general 
fashion, that as a general matter, the whole purpose behind the 
fee rule is that recover our actual costs of----
    Mr. Gutierrez. That is not my question. My question is, you 
asked for the green card regulation to be changed 
simultaneously with the fee increases. You got approval for 
both of them simultaneously, yet you went ahead with the fee 
increases and then said, ``We want to change the rule on the 
green card.'' Is that not true?
    Mr. Scharfen. That is correct.
    Mr. Gutierrez. Why did you do that? That is fundamentally 
unfair to a community of people who have played by the rules, 
but you want additional dollars. As a matter of fact, you knew 
that, but you did not put it in your budget, that you were 
going to get an additional $277 million from green card holders 
here in the United States of America. Is that not true?
    Mr. Scharfen. Well, I think one thing I would point out, 
sir, is that the green card rule is a proposed rule at this 
point and that----
    Mr. Gutierrez. Can I just ask for 30 seconds to----
    Ms. Lofgren. Without objection. We have to vote.
    Mr. Gutierrez. Thank you.
    I understand that, but, you see, that is why I tried to be 
careful.
    You went for the rule change to OMB in October. A week 
later, you went for the green card. OMB approved both of them 
for you in February of this year. You moved forward on the fee 
increase, but waited until the green card change, although you 
had authority at the same time. Why didn't you do it all 
simultaneously? You suggested in your testimony, you said, 
``Members of the panel, many people have gone and applied for 
American citizenship because they saw the fee increase was 
coming,'' right.
    Why didn't you give the same opportunity to permanent 
residents that have green cards to go ahead and take care of it 
before the fee increase? It is fundamentally unfair for us, and 
it demonstrates the inefficiency of your department and those--
and I will end with this--that say, ``Just give your 
department, your Agency all the money it wants,'' because you 
guys have some kind of super efficient model of Government.
    You are not, and, in this case, I would suggest that you go 
back, as you are looking at the rule, and say, ``You know 
something? We made a mistake. It was not really fair. We should 
charge the old fee, not the new fee,'' and give them the same 
opportunity because, indeed, the Government worked for them 
efficiently and in a timely manner.
    Ms. Lofgren. The gentleman's time has expired, and I know 
Mr. Scharfen wants to answer, but we have a vote. We will 
recess and come back, and Mr. Scharfen may want to add 
something in answer to your question after he thinks about it 
while we are voting.
    So we are in recess until after this vote.
    [Recess.]
    Ms. Lofgren. Under the rules, we can proceed with two 
Members, and, ordinarily, we would wait for the Ranking Member, 
but because we took an hour to vote, I am going to--I am sure 
Steve is on his way over--at least introduce the next panel and 
invite Mr. Scharfen to see if there was anything further you 
wanted to add.
    Mr. Scharfen. No, ma'am, other than to say to Mr. 
Gutierrez, I understand your points very well, and as the 
Marines say, sir, I hear you loud and clear, and I will take 
that back and put that into our deliberative process, sir.
    Ms. Lofgren. Thank you.
    And I would hope we would have time for a second round, but 
given how long it has taken, I think we will move to the second 
panel in hopes that Steve is on his way.
    And so thank you very much. We will reserve--Mr. King has 
arrived--the right to have additional questions submitted in 
the next 5 legislative days, and we ask if the Committee will 
forward them to you if we receive them from Members and ask 
that you respond as promptly as you can in that situation.
    Mr. Scharfen. Yes, ma'am. Thank you for the opportunity to 
testify.
    Ms. Lofgren. Thank you very much. Thank you.
    We will now ask our second panel to come forward, and we 
have coming forward Arturo Vargas, the executive director of 
the National Association of Latino Elected and Appointed 
Officials, or NALEO, and NALEO's Educational Fund. Before 
joining NALEO, Mr. Vargas served as the Vice President for 
community education and public policy at MALDEF, the Mexican 
American Legal Defense and Education Fund. Mr. Vargas also 
worked as the Senior Education Policy analyst at the National 
Council of La Raza prior to his work at MALDEF. He serves on 
several community boards in his home of Los Angeles, including 
those of the United Way and Community Technology Foundation of 
California. He holds both his master's and bachelor's degrees 
from my alma mater, Stanford University.
    Next, I am pleased to welcome Bill Yates, an executive 
consultant with Border Management Strategies, an immigration 
and border security consulting firm. Mr. Yates began his career 
as a special agent with the INS in Newark, New Jersey, and 
after 31 years of service to the Federal Government's 
immigration agencies, he retired from USCIS in 2005 as Chief of 
Domestic Operations. The recipient of several awards from USCIS 
for his distinguished service, Mr. Yates also received the 
American Immigration Law Foundation's public service award last 
year. He earned his bachelor's degree in Asian Studies from 
Seton Hall University, and I would note that over these many 
years, Bill was always a source of reliable information to me, 
and I appreciate his being here today.
    And finally, I would like to extend a warm welcome to 
Rhadames Rivera, the vice president of 1199, the Service 
Employees International Union's United Health Care East. Mr. 
Rivera has served as vice president of the union, based in New 
York City, since 2000. Prior to working with SEIU, Mr. Rivera 
coordinated housing and organizer networks for the Urban 
Homesteading Assistance Board in New York; taught as a training 
director and researcher in several schools in Santa Domingo, 
Dominican Republic; and worked as a counselor and job 
development specialist at the Cardinal Cushing Center in 
Boston. He studied at Cornell University's School of Labor 
Relations' Leadership Institute, as well as the Northeast 
Broadcasting School in Boston, and earned his degree in social 
work from the University of Puerto Rico.
    Each of your full statements will be made part of the 
official record of this hearing, but we would ask you to 
summarize in 5 minutes your oral testimony, and when that 
yellow light goes on on the table, it means there is only 1 
minute to go, and then we will move on to questions.
    And, once again, let me apologize for our lengthy 
departure. The House took longer than we thought it would to 
cast three votes, but sometimes that is the nature of the 
House.
    So, if we can begin with you, Mr. Vargas, welcome and thank 
you.

     TESTIMONY OF ARTURO VARGAS, EXECUTIVE DIRECTOR, NALEO 
                        EDUCATIONAL FUND

    Mr. Vargas. Thank you, Chairman, and Ranking Member King, 
and Congressman Gutierrez who has left the room. Thank you for 
the invitation to appear before you today.
    The NALEO Educational Fund is a nonprofit, nonpartisan 
organization that facilitates the full participation of Latinos 
in the American political process. In fact, our founder is a 
past Member of the House of Representatives, the late 
Congressman Edward Roybal, who served in this chamber for over 
30 years.
    In January of this year, we launched our ``ya es hora 


    Ms. Lofgren. Thank you very much.
    Mr. Yates?

  TESTIMONY OF WILLIAM R. (Bill) YATES, EXECUTIVE CONSULTANT, 
                  BORDER MANAGEMENT STRATEGIES

    Mr. Yates. Madam Chairwoman, Ranking Member King, 
Representative Gutierrez, good morning and thank you for the 
opportunity to testify before you today.
    My name is Bill Yates. I am an executive consultant of 
Border Management Strategies and a former INS and USCIS 
employee with over 31 years in immigration service and 
enforcement operations. It is a privilege to share with this 
Subcommittee my professional experience with an insight into 
the USCIS fee schedule.
    No one wants to see fees that are so high that it 
discourages individuals from filing for naturalization or other 
benefits. However, we all want and expect USCIS to operate 
efficiently, serving its customers with timely and accurate 
information and benefit decisions, while, at the same time, 
protecting all Americans by ensuring that benefits only go to 
eligible applicants.
    The fee schedule change that went into effect recently is 
extremely significant because it supports customer service and 
national security goals while providing USCIS with an 
opportunity to invest in badly needed business and IT 
improvements.
    USCIS inherited an enormous financial liability from the 
INS because of the asylum adjustment of status naturalization 
and immigrant visa petition backlogs. During fiscal year 2001, 
INS estimated that the value of the backlogs in deferred 
revenue represented a shortfall in the examinations fee account 
of $700 million to $800 million.
    Prior to the 9/11 terrorist attacks, we believe that a 
combination of President Bush's commitment to fund the $500 
million backlog elimination effort plus savings that could be 
achieved through business re-engineering efforts could 
eliminate that deferred revenue funding gap. The plan was to 
fund the re-engineering efforts through the premium processing 
fees and use appropriations to help eliminate the backlogs.
    Unfortunately, in the post-9/11 environment, those premium 
processing funds had to be diverted to pay for additional 
background checks and increased security for Government 
buildings and employees. During fiscal year 2002, new 
background checks alone necessitated the re-assignment of 800 
adjudicator work years resulting in an even larger backlog. 
Exacerbating the situation was a decision by the Department of 
Justice mandating the reassignment of hundreds of INS 
adjudications officers to conduct National Security Entry Exit 
Registration System, or NSEERS, interviews.
    Then during November 2002, INS learned that it had 
naturalized an individual who was under investigation for 
suspicion of being a terrorist. This occurred despite INS 
having received two negative responses to background checks. As 
a result, INS returned to the FBI approximately 2.6 million 
naturalization and adjustment of status name checks to be 
redone. While that work was underway, those applications were 
ordered held in abeyance.
    The immigration services division of the INS that became 
USCIS faced huge backlogs and enormous challenges as it became 
an Agency under the Department of Homeland Security on March 1 
of 2003. However, by March 2004, production increased and 
backlogs stopped growing. By September 2004, steady progress 
was being made each and every month at reducing wait times, and 
by September 30, 2006, USCIS had met most of its backlog 
reduction targets.
    There are limited options for reducing fees for USCIS 
customers, and most options entail placing additional burdens 
on taxpayers. I think that there are good arguments for 
taxpayer funding for military naturalization and for refugee 
and asylum processing, but I acknowledge that there are also 
good arguments for continuing the current funding requirements.
    I think that the more significant issue is the 
vulnerability of the current funding system to fluctuations in 
receipts. A significant portion of the current fees relate to a 
surcharge that is required to support infrastructure as well as 
the non-revenue-generating applications.
    And, by the way, I just spoke to Rendell Jones, and I 
believe that surcharge is approximately 50 percent of the 
entire fee.
    For example, a drop in asylum filings would be deemed a 
financial blessing for CIS, but a significant decrease in 
naturalization applications could cause serious budget issues 
given that large surcharge that helps to pay for 
infrastructure.
    If Congress decides to maintain the current funding rules, 
then lower fees can only come through transformed business 
practices. I do believe that there are opportunities to succeed 
in this, but it requires a dramatic change in how USCIS 
conducts business. Fortunately, I believe it is possible to 
improve efficiency in operations while also increasing process 
integrity.
    In my written testimony, I offer specific recommendations, 
and I will be pleased to discuss any of those points.
    Thank you, Madam Chairwoman and Members of the 
Subcommittee. I look forward to answering your questions.
    [The prepared statement of Mr. Yates follows:]
             Prepared Statement of William R. (Bill) Yates
                              introduction
    Madam Chairwoman, members of this distinguished subcommittee, thank 
you for the opportunity to testify before you today. My name is Bill 
Yates and I am an Executive Consultant of Border Management Strategies, 
a company that provides immigration and border security expertise to 
both the public and private sectors. Prior to my involvement with 
Border Management Strategies I spent over 31 years with the Immigration 
and Naturalization Service and U.S. Citizenship and Immigration 
Services, serving in a variety of officer and management positions in 
both enforcement and service disciplines. I began my career as a 
special agent at Newark, NJ in 1974, and at the time of my retirement, 
September 29, 2005, I was the senior career official at USCIS. It is a 
privilege to share with this subcommittee my professional experience 
with, and insight into, the fee funding process, the reasons for the 
steep fee increases, the challenges USCIS faces in breaking the backlog 
cycle, and the need to transform core business practices.
                       growth in application fees
    The fee schedule change that went into effect last month is 
extremely significant for USCIS because it is the first time that that 
the fee schedule will actually recapture the full costs of USCIS 
operations. I am familiar with the previous fee schedule changes 
beginning with 1998 and each of those prior fee increases failed to 
fully recapture the full cost of doing business. In each instance from 
1998 through the 2005, the amended fee schedule reflected the results 
of compromises, not calculations Since FY 2002 USCIS has relied upon 
its premium processing fee revenue to meet its base financial 
obligations. Those funds were intended to be used for business process 
improvements, but were necessarily diverted to pay for new background 
checks following the terrorist attacks of September 11, 2001. At one 
point during the third quarter of FY 2002 we calculated that the new 
background checks required the redeployment of over 800 adjudication 
officer work-years, and increased expenditures by over $10 million 
dollars per month. The fee schedule change in 2004 did include funds 
needed to pay for background checks, but premium processing revenues 
continued to be used to pay for other underfunded programs, including a 
portion of the backlog reduction efforts, and for the infrastructure 
requirements needed for USCIS to become a stand-alone agency as 
intended by the Homeland Security Act of 2002.
    Certainly, the fee increases beginning with 1998, when fees 
increased by an average of 76%, have been high, and high fees represent 
a significant burden to many USCIS customers. The reasons for these 
steep increases above the standard inflation costs are due 
predominately to;

          Growth in non-fee and restricted fee application 
        processing costs requiring significant surcharges being placed 
        on fee paying customers to cover those costs.

          Creation of new programs and components, such as the 
        National Records Center (NRC), the National Customer Service 
        Center (NCSC), the Missouri Service Center (MSC), and the Fraud 
        Detection and National Security Office (FDNS)

          Implementation of the Application Support Center 
        contract for fingerprint and more recently biometrics capture

          Implementation of new background checks following the 
        terrorist attacks of September 11, 2001

          Increases in building and personnel security costs 
        due to the threat of terrorism.

          Creation of USCIS as a stand-alone agency within the 
        Department of Homeland Security

          Increased emphasis on eliminating application and 
        petition backlogs

          Operational inefficiencies and maintenance costs for 
        archaic legacy information systems
                   application and petition backlogs
    Backlogs at US Citizenship and Immigration Services (USCIS) have 
developed for a number of reasons, some predictable, and some resulting 
from unpredictable events. Massive surges in application receipts, poor 
computer systems, paper-based labor-intensive processes, a flawed 
funding system, unfunded mandates, inefficient business processes, post 
September 11, 2001 security check processes, Federal Bureau of 
Investigation (FBI) background check delays, lack of a scalable 
workforce, dissolution of the INS, and an immature Department of 
Homeland Security (DHS) that has struggled with immigration regulatory 
processes, have either contributed to backlogs or impeded efforts to 
eliminate them.
    Despite the aforementioned USCIS has made dramatic gains in 
reducing backlogs and wait times for applicants for benefits over the 
past three fiscal years, and many of the agencies identified above have 
contributed substantially to that success. Unfortunately, while these 
achievements are both significant and welcome, the gains are not the 
result of strategies that will prevent the growth of future backlogs. 
That is because eliminating the backlog cycles at USCIS requires 
identification of the chain of responsibility among the USCIS, DHS, 
Department of Justice (DOJ), FBI, OMB, Office of Personnel Management 
(OPM), and the United States Congress. As with any chain, ignore any of 
the links and failure is the likely result.
                    what harm is caused by backlogs
    The consequences of backlogs are varied and often severe; prolonged 
family separations, lost opportunities for families to migrate to the 
United States; companies being unable to get the permanent or temporary 
workers they need when they need them; permanent residents being denied 
employment opportunities reserved for citizens; and the lives of 
unattended minors and relatives of refugees and asylees being placed at 
risk. Academicians and immigration statisticians are hindered in their 
attempts to provide meaningful analysis of migration trends because 
backlogs can lead to incorrect conclusions. The backlog cycle \1\ can 
decrease or increase the numbers of individuals who immigrate, or who 
become citizens during specific periods of time. Because of this it 
becomes extremely difficult to draw conclusions or prepare long-term 
forecasts critical to inform a variety of public policy matters.
---------------------------------------------------------------------------
    \1\ Backlog cycle refers to a repeating pattern of growing volumes 
of pending applications with receipts far exceeding completions 
followed by a period of backlog elimination efforts during which time 
completions far exceed incoming receipts.
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    Backlogs are self generating. Applicants awaiting decisions on 
adjustment of status applications may need to file several applications 
for extensions on temporary stay or for interim benefits including, 
work authorization or foreign travel authorization. Backlogs also cause 
severe stress among USCIS employees and their families as employees are 
routinely required to work overtime during the workweek and often on 
weekends, as well. Because of a succession of workload surges during 
the past 10 years forced overtime has become a fact of life for many 
USCIS employees.
    The DHS Ombudsman argues that backlogs create national security 
vulnerabilities. He notes that significant numbers of applicants for 
adjustment of status will ultimately be deemed ineligible to adjust 
their status, but because of backlogs applicants may remain in the 
United States for long periods of time before a final determination is 
made. Although USCIS background check procedures ameliorate the risk 
identified by the Ombudsman, it is true that backlogs create 
opportunities for ineligible aliens to remain in the United States for 
extended periods of time. It is also true that permitting ineligible 
applicants to abuse the system to extend their residence in the United 
States is not an acceptable condition.
          why hasn't uscis been able to eliminate all backlogs
    Backlogs are generally event-driven. The current backlog cycle has 
its roots in the Immigration Reform and Control Act of 1986 (IRCA). 
That Act generated waves of application surges that overwhelmed the 
adjudicative capacity of the INS/USCIS. Ironically, it was not the 
initial legalization wave that overwhelmed INS records and adjudicative 
processes, as well as FBI fingerprint clearance processes. Instead, it 
was secondary wave consisting of lawful permanent residents who began 
filing for naturalization during the mid to late 1990s in record 
numbers that exceeded the infrastructure capabilities of the INS. 
Between 1981 and 1990 INS received 2.4 million applications for 
naturalization. During the 1991 to 2000 period INS received 7.4 million 
applications, a 208% increase.\2
\\---------------------------------------------------------------------------
    \2\ See 2004 Yearbook of Immigration Statistics, Table 31, 
Petitions for Naturalization Filed . . . Fiscal Years 1907 to 2004
---------------------------------------------------------------------------
    In addition to suffering from its own processing system failures 
the INS was further hampered by the inability of the FBI to timely 
process fingerprint check and name check background requests. From the 
mid 1990s forward immigration application processing would increasingly 
be negatively impacted by processing delays associated with background 
checks. The fingerprint check process with the FBI, however, would 
evolve to become a model process that is better, faster, and more 
secure. The extremely efficient live scan fingerprint system featuring 
electronic capture and transmission between USCIS and the FBI achieves 
response times in minutes or hours as opposed to months for the old 
paper and ink process it replaced. Unfortunately, name check processes 
have become even more problematic than during the 1990s because the 
vulnerabilities are now better understood, but the solutions remain 
complex and labor intensive.
    INS made substantial progress on backlogs during FY 2001, but 
following the terrorist attacks the FY 2002 focus shifted from backlog 
reduction to enhanced identity verification efforts. Adjudicators were 
fearful of approving applications because no one knew which application 
could contain the next potential terrorist. The Attorney General 
ordered mandatory Interagency Border Inspection System (IBIS) checks on 
all applicants for benefits. DOJ also decided to use INS adjudication 
officers to conduct the National Security Entry-Exit Registration 
System (NSEERS) interviews. In addition to the hundreds of adjudicators 
reassigned to conduct background checks, hundreds more were reassigned 
to conduct NSEERS interviews. Then, in November 2002, INS learned that 
it naturalized an individual suspected of being a terrorist. Subsequent 
reviews revealed that INS had received two negative responses from the 
FBI in response to routine background check inquiries despite the 
existence of FBI investigative records. INS ordered field offices to 
halt work on a large volume of adjustment of status and naturalization 
applications, reviewed the incident with the FBI then returned 
approximately 2.6 million name checks to the FBI for rework. 
Unfortunately, the rework resulted in processing delays for hundreds of 
thousands of customers.
    As INS' Immigration Services Division was preparing to become a 
stand-alone agency in DHS on March 1, 2003, it was still growing 
backlogs, still dealing with a workforce that feared making a wrong 
decision, still underfunded, and now lacked an administrative support 
infrastructure since DHS had assigned all INS administration and IT 
support programs to ICE. However, by the end of its first year as an 
agency within DHS, USCIS stopped the growth of backlogs. Within the 
next six months it was reducing backlogs. By the end of FY 2006 it had 
met a majority of its goals to reduce processing times to six months or 
less. During the same period that USCIS reduced backlogs it improved 
the integrity of its processes. These gains were made possible only 
through Congressional appropriations as well as premium processing fee 
funds.
           building integrity into the adjudicative processes
    One new construct that initially caused a fair amount of 
disagreement within and DHS was the creation of the Fraud Detection and 
National Security (FDNS) office. Some argued that it represented a 
USCIS effort to establish its own investigative force in direct 
competition with ICE, and that it did not belong in a service 
organization. I strongly disagree. FDNS was established to assist 
adjudicators make the correct case decisions through evidentiary 
verification activities. If fraud is identified FDNS will review the 
record to determine whether the suspected fraudulent application is 
part of a broader conspiracy or a single party fraud case. Fraud cases 
are referred to ICE for criminal investigation and prosecution. FDNS 
may continue to offer support during the investigation and prosecution 
stages. FDNS enhances ICE's capabilities by eliminating referrals for 
investigation based upon mere suspicion and by offering expertise in 
adjudications requirements and case support activities.
    FDNS also fills the gap between USCIS responsibilities and ICE 
responsibilities. When ICE initiates a conspiracy investigation its 
goals are to stop the criminal enterprise, prosecute the principals, 
seize assets, and initiate removal proceedings where appropriate. It is 
not an ICE responsibility to adjudicate the hundreds or thousands of 
applications that may individually be suspect. That responsibility 
rests with USCIS and each and every decision to deny must stand on its 
own review of case facts. It is FDNS' responsibility to bridge that gap 
by assisting adjudicators to obtain the evidence needed to render the 
correct decision on each and every application or petition filed. FDNS 
also assists in resolution of background check hits, and conducts 
sampling surveys of the various benefit processes to identify high risk 
processes.
    In addition to the obvious benefits described above, the work of 
FDNS sends a clear message to USCIS employees--that agency leadership 
cares about the integrity of the adjudicative processes. This is 
invaluable for the long-term health of USCIS.
                  how can the backlog cycle be broken
    USCIS defines a backlog as the volume of pending application work 
that exceeds the cycle time (stipulated processing time) for that 
particular adjudication. Since different benefit applications have 
different evidentiary and processing requirements cycle times 
necessarily vary by form type.
    Backlogs develop when the load represented by the volume of 
applications and petitions (converted to labor hours) filed with the 
agency exceed its adjudicative capacity.
    Because application volumes or loads can be converted into hours of 
required adjudicative effort, and because the capacity of the USCIS 
workforce can also be converted into hours of available adjudicative 
effort, the solution to backlogs is to ensure that the adjudicative 
capacity meets or exceeds the load at all times.
    Since both the load and capacity can be accurately calculated the 
only remaining variable in eliminating backlogs is utilization. USCIS 
must manage or utilize its adjudicative capacity such that it directs 
sufficient hours within its overall capacity against each and every 
form type so that it effectively meets the load. For example, if the 
total load represented by all of the FY 2007 applications and petitions 
is 12 million hours of adjudications work, USCIS must possess the 
capacity and must manage the dedication of 12 million hours to timely 
complete all FY 2007 filings.
    Workload calculations do not present challenges to USCIS. IT 
possesses the expertise to accurately determine the load that any 
application surge will create. It also possesses the expertise to 
determine its adjudicative capacity. The principal challenges for USCIS 
include; forecasting surges, creating a scalable workforce to meet 
increased and decreased load demands, managing its capacity so that it 
operates as efficiently and as effectively as possible, gaining access 
to the funding authorization before a surge hits, eliminating the 
current practice of paper-based adjudication plus electronic-based 
adjudication of the same application in favor of a single electronic-
based adjudication.\3
\\---------------------------------------------------------------------------
    \3\ The dual adjudication process adopted by the INS and maintained 
by USCIS is inefficient. When INS introduced the CLAIMS 4 
Naturalization electronic processing system agency leadership was 
promised efficiency gains of 25% or more. Unfortunately, processing 
times actually increased by approximately that amount because the 
system efficiencies were more than cancelled out by the requirement 
that the adjudicating officer continue the full paper adjudication and 
then adjudicate the case in the system as well.
---------------------------------------------------------------------------
    USCIS' backlog elimination efforts to date have been made more 
difficult because backlogs, employee attrition rates, and filing surges 
do not occur uniformly throughout its 250+ offices. It may have a 
capacity surplus in one office and a capacity deficit in another. 
Statutes, government rules, customer concerns, and paper intensive 
processes combine to limit its ability to move work from one office to 
another. Details of employees from offices with greater capacity to 
ones with less capacity, as well as mandatory overtime, have become 
routine management tools, however, details are very costly, disruptive 
to employees' lives, limited by available office space, and may result 
in lower quality adjudications. Agency managers have reported that 
overtime and employee details to backlogged offices frequently result 
in diminishing returns as employee burnout leads to increases in 
errors. Adjudicative costs can rise steeply due to overtime payments 
and due to the amount of rework needed on partially-completed cases.\4
\\---------------------------------------------------------------------------
    \4\ Partially-completed casework typically involves continuing a 
case without decision due to an eligibility issue that has been 
discovered during the interview or case review process. When a detailed 
officer returns to her home office it is a common occurrence that these 
partially completed cases will require reassignment to another officer 
who will then review the entire record again to become familiar with 
the case facts and to be certain that the first reviewer did not miss 
any key issues or evidence.
---------------------------------------------------------------------------
    One of the most significant issues confronting USCIS in effectively 
managing load, capacity, and utilization is application surges.\5\ 
Surges are a fact of life for USCIS, and any plan to prevent backlogs 
must have an effective surge response plan. To deal with surges USCIS 
must have certain elements of its infrastructure scalable \6\ as well 
as a scalable workforce.
---------------------------------------------------------------------------
    \5\ Application surges result from a variety of factors including 
new legislation, statutory numerical limitations, grants of temporary 
protected status, reactions to proposed fee changes, modified 
processing requirements or changes in public policy. The annual 
commencement of the H-1B filing period on April 1st, is an example of a 
predictable surge in petitions. A new grant of temporary protected 
status may be unpredictable.
    \6\ Creating a scalable infrastructure is particularly difficult 
for a government entity. However, USCIS developed its Application 
Support Centers (ASC) as scalable fingerprint and biometric 
identification centers. The ASCs are contract facilities with contract 
staff, but each such facility has on-site government oversight. The 
performance record of these facilities is excellent.
---------------------------------------------------------------------------
                identifying the chain of responsibility
    Even if USCIS accurately forecasts the timing and increased 
workload of a surge, it still may not be able to timely process the new 
workload without help from its partners.

          DHS, OMB, and Congress must provide the funding 
        authority to expand USCIS' adjudicative capacity,\7\ and
---------------------------------------------------------------------------
    \7\ The mere fact that USCIS collects application fees and deposits 
them in its Examinations Fee Account does not mean that it can access 
those funds. DHS, OMB and then Congress must approve any effort by 
USCIS to increase its funding--a process that may be blocked, delayed, 
or simply ignored at any step.

          DHS and OMB must facilitate the timely publication of 
---------------------------------------------------------------------------
        necessary rules and notices in the Federal Register, and

          FBI must have the capacity to process greater volumes 
        of biometric and biographic background checks,\8\ and
---------------------------------------------------------------------------
    \8\ The FBI conducts both fingerprint checks (biometric) and name 
checks (biographic) for the USCIS. Fingerprints provide criminal 
history information. Name checks ascertain whether ineligibility 
information exists in FBI records or whether the applicant is the 
subject of an ongoing investigation by the FBI.

          USCIS' operating plan must include scalable contracts 
        for mail processing, file creation, data entry, biometric 
        capture, records storage, IT services, and facilities 
        expansion. USCIS must review plans with its contractors to 
        ensure viability and must develop its own plans for a scalable 
        workforce and scalable facilities or develop a virtual office 
        \9\ that can obviate the need for space expansion
---------------------------------------------------------------------------
    \9\ A virtual office can be created by developing the capability to 
move an application electronically to an adjudications officer 
regardless of their physical location. Work-at-home programs and 
relocating certain applications from offices that lack sufficient 
capacity to others that possess excess capacity will be enhanced.
---------------------------------------------------------------------------
     the current funding system is flawed and can lead to backlogs
    Fees have long been charged to petitioners and applicants for 
immigration benefits, but the decision to require that USCIS be totally 
dependent on fees is relatively new. There isn't anything conceptually 
wrong with requiring that USCIS recapture the costs of administering 
the adjudications program, however, USCIS and its customers are 
vulnerable to the current bureaucratic processes and appropriation 
policies.
    Although USCIS is a fee funded agency it does not have access to 
fees except through the annual appropriation process, or through the 
very inefficient and unpredictable reprogramming process. Workload 
surges because of legislation or special programs such as TPS may 
generate tens or hundreds of millions of dollars in new fees, but USCIS 
may not receive Congressional authority to access those funds. This 
scenario occurred in 2000 when Congress passed the Legal Immigration 
Family Equity Act (LIFE Act). That Act generated over one million 
additional applications with fees, but because the legislation did not 
authorize INS to access the revenue, and because a subsequent 
reprogramming request was denied by Congress, INS had to hold the 
applications until such time as it received funds needed to adjudicate 
the additional caseload. Access to LIFE Act fees deposited in the 
Examinations Fee Account was not authorized by Congress until the 
following fiscal year.
        the current fee system creates vulnerabilities for uscis
    The non-fee, and Congressionally-restricted fee application work of 
the USCIS now amounts to hundreds of millions of dollars in costs 
annually. The non-fee applications include all asylum applications, 
refugee applications, military naturalization applications, and fee-
waiver applications. Congress has limited by statute the fee paid by 
applicants for temporary protected status to $50, covering only a small 
fraction of the true cost of that adjudication. The financial liability 
that these non-revenue generating applications create for the USCIS 
makes it very vulnerable to increases in non-fee applications and/or 
decreases in fee applications given the significant surcharge placed on 
each fee application. As USCIS reduced its adjustment of status 
backlogs during FY 2005 and FY 2006 it realized that it would receive 
substantially fewer requests for employment authorization. I recall 
that we estimated a reduction in fee revenue of between $50 to $60 
million dollars. The financial ramifications were significant because 
each of those employment authorization application fees carried a large 
surcharge that was needed to fund asylum, refugee, military 
naturalization and other non-revenue generating workloads.
    Transforming USCIS business processes and IT systems
    The future success of USCIS requires that it transform its business 
practices so that it ends the current dual-adjudication process (paper 
and electronic), creates a central view or account that contains 
complete immigration history information, offers customers multiple 
channels for accessing information and filing, and develops a robust 
inventory and case management system.
    Although it is frustrating that these capabilities do not exist 
today we should also recognize the progress that USCIS has made during 
a very difficult time with severe funding constraints.
    Business process improvements that have been initiated include;

          Development of the lock-box initiative with the 
        Treasury Department to deposit fees quickly and to enter 
        application data into a national tracking system

          Case tracking on-line

          Electronic forms distribution

          A web site that provides outstanding information and 
        research capabilities

          Transparency of its operations by providing on-line 
        access to the Adjudicator's Field Manual

          Transformation of the Application Support Centers 
        from fingerprint centers to biometric data capture and identity 
        verification centers.

          Improved processes for permanent residents who need 
        to replace a lost or expired permanent resident card (green 
        card)

          Development of the Fraud Detection and National 
        Security (FDNS) program to assist adjudicators in evidentiary 
        verification efforts, and to assist ICE by identifying, 
        criminal fraud conspiracies, and individuals who pose public 
        safety and/or national security risks

          Digitization of immigration records supporting both 
        long-term storage needs and simultaneous availability of 
        records to all three immigration agencies

          Development of analytical tools to accurately measure 
        workloads in each and every office for staffing purposes, and 
        zip code analysis of application receipts to ensure that 
        offices are located where customers actually reside.

    In addition, USCIS is currently engaged in a number of active pilot 
projects to test establishment of customer accounts, enumeration and 
tracking options, records digitization, and revised adjudication 
procedures.
 the information technology (it) myth--it can eliminate or prevent the 
                           growth of backlogs
    USCIS business processes cannot be transformed into efficient, 
effective, and fraud resistant approaches without dramatic improvements 
in its IT capabilities. Conversely, building new relational databases 
and system interfaces will accrue only very modest gains unless 
business practices are transformed.
    USCIS processes remain primarily paper-based, and even its 
electronic application filing opportunities require the customer to 
mail supporting evidentiary materials in paper format. Agency rules 
require business petitioners to file extensive paperwork with each and 
every petition to prove that it is a legitimate business capable of 
paying the proffered wages. This wastes the customer's time, increases 
the customer's preparation costs, increases the length of time the 
adjudicator spends reviewing evidence, and increases file storage costs 
as the same corporate reports and financial documents may be stored in 
thousands of separate petition files.
    As the DHS agency responsible for immigration records USCIS also 
has the responsibility to make those records available to ICE and CBP 
when needed. This requires not just digitizing records but also 
creating the business rules and governance rules with respect to 
maintenance and updating of record information.
    USCIS faces a complex set of tasks in its efforts to transform both 
its business processes as well as its IT systems. Fortunately, it is 
well-positioned to move forward with that effort now that backlogs have 
been reduced and the premium processing funds can be reserved to fund 
transformation efforts.
                            recommendations
    My first recommendation is that the new fee schedule remain in 
place. The revenue implications for USCIS would assuredly curtail 
business transformation efforts with long-term negative implications 
for all USCIS customers. I do believe that by transforming business and 
IT processes USCIS can reduce its overall operating costs, and this may 
support lower fees in the future or at least curtail the rate of fee 
increases beyond the normal inflation-based increases. USCIS faces a 
complex set of tasks in its efforts to transform both its business 
processes as well as its IT systems. Fortunately, it is well-positioned 
to move forward with that effort now that backlogs have been reduced 
and the premium processing funds are available to fund long-term 
improvements.
    With the new fee schedule in place USCIS can use the resources 
generated by the premium processing fees to fund its transformation 
efforts. Those funds should be protected or reserved for that purpose.
    To ensure success of its efforts to break the backlog cycle and to 
transform its business practices I also recommend that;

          USCIS develop a surge capacity plan and require the 
        same from its contractors

          USCIS continue efforts to eliminate paper, eliminate 
        redundant evidentiary requests, and establish processes for 
        electronic verification of application and petition data

          USCIS implement its transformation efforts in concert 
        with CBP and ICE as all three immigration agencies rely upon 
        USCIS application and petition data, and records systems

          USCIS in concert with the DHS CIO develop IT systems 
        that provide inventory control, case management, case status, 
        and address information, including a capability to populate or 
        flag multiple DHS systems with change of address data

          Congress should consider funding new mandates until 
        such time as new fees can be implemented, or in the 
        alternative, develop a process where funds will be appropriated 
        up front, but must be repaid as the revenue is generated 
        through fees

          DHS develop the capability to efficiently review and 
        publish regulations and regulatory notices and this capability 
        should be sufficiently robust that it not break down during 
        leadership changes at the Department

          OPM assist USCIS in developing a more flexible 
        workforce (position classification for temporary or part-time 
        workers) that can expand and contract to deal with workload 
        shifts

          USCIS improve its officer training to achieve its 
        objective of timely and consistently accurate adjudications

          Background check process delays need to be eliminated

          A decision needs to be made concerning how long an 
        application may be held in abeyance for suspicion of 
        ineligibility, and procedures should be published identifying 
        who has authority to suspend an adjudication and for what 
        period of time

          Background check wrap-back functionality needs to be 
        incorporated into the background check systems so that USCIS is 
        automatically notified if potentially disqualifying information 
        is obtained by intelligence or law enforcement agencies 
        subsequent to a USCIS background check request

    Thank you, Madam Chair and members of this subcommittee. I look 
forward to answering your questions.

    Ms. Lofgren. Thank you very much, Mr. Yates.
    And finally, Mr. Rivera. Thank you.

   TESTIMONY OF RHADMES RIVERA, VICE PRESIDENT OF 1199, SEIU 
                UNITED HEALTH CARE WORKERS EAST

    Mr. Rivera. Good morning, Chairwoman. Good morning, Mr. 
Gutierrez. Good morning, Mr. King.
    On behalf of 1199 SEIU Citizenship Program, we thank you 
for the opportunity to address this Subcommittee and other 
distinguished guests that are here today. I will be able to 
talk about the fee increase and the impact on the health-care 
workers that we serve.
    The 1199 Citizenship Program began in January 2001. The 
program is administered by our benefit fund and pension fund 
and training and education fund and provides an array of 
innovative and comprehensive benefits, including educational 
and training programs that are designed to accommodate the 
needs of more than 300,000 union members.
    We are the largest health-care workers union in the Nation, 
representing workers in homecare settings, hospitals, nursing 
homes, pharmacies, clinics, and other health-care agencies. Our 
membership reflects the diversity of immigrants to this Nation, 
particularly in New York City. Our members include health-care 
workers from continents and countries from around the world, 
including the Caribbean, South America, Central America, 
Canada, Africa and Europe, with the majority of members who 
utilize the program coming from the Caribbean.
    The top countries of the top percent are Jamaica, Trinidad, 
Dominican Republic, and Guyana. We are proud that our 
membership embodies such rich diversity, and are reminded that 
our Nation indeed is a land of immigrants.
    Our program overview: The benefits of U.S. citizenship are 
numerous. Citizenship provides our immigrant members with more 
opportunities and a greater feeling of belonging and a sense of 
security. They are able to fully integrate themselves into our 
country. More importantly, through our citizenship, our members 
gain the right to vote and participate more fully in the 
democratic process.
    We are committed to designing programs that expand the 
rights and empower our members, who are the health-care workers 
who keep our hospitals, nursing homes, clinics, and other 
health-care agencies running.
    The Citizenship Program has served more than 7,000 in the 
process of naturalization and benefits. Yearly, our program 
averages more than 1,000 member participants. Through the 
efforts of a dedicated and competent group of professionals, 
applicants are offered free legal assistance and educational 
support, including application preparation, review and filing 
of the form N-400, N-600, I-90, N-565, N-648, AR-11 and others.
    The program offers a different class choice for applicants 
to study U.S. Government and civics while reviewing interview 
techniques. We have developed an academic curriculum, video, 
and book highlight program stories that we provide to you.
    To date, our office has submitted over 6,178 N-400 
applications. We proudly brought up almost 4,677 persons that 
are naturalized U.S. citizens through the help of our program. 
Yet hundreds of our applicants are at an advanced stage of 
naturalization, awaiting interview or having the oath.
    We note more than 500 applications that are in backlog 
waiting adjudication. Some of these applications have not 
received any information through the form G-28 Notice of 
Appearance as Attorney or Representative submitted along with 
the application.
    The 1199 SEIU Citizenship Program is accredited and 
recognized by the Board of Immigration Appeals.
    The fee impact: Recently, the fee increased effectively 
July 30, 2007, is the biggest immigration application fee 
increase recorded in the history of immigration. The USCIS 
reported that overall applications and petitions were increased 
an average of nearly 86 percent. Most agree that the new fees 
are unprecedented. The fees for naturalization applications 
have increased five times since 1999, from $225 in 1999, to now 
the new fee of $675.
    Our program is currently experiencing a drop in 
participation during the weeks since the new fees took effect. 
The scheduled appointments dropped by 50 percent during the 
month of August. Many of our members are voicing concerns of 
the struggle of saving money for the application.
    In contrast, during the months leading up to the increase, 
we serviced double our normal capacity. Our members 
participated in record high numbers in an effort to get their 
applications processed before the scheduled increase.
    Ms. Lofgren. Mr. Rivera, your 5 minutes has expired a 
little bit. I wonder if we could ask you to summarize, and then 
we can get to our questions. We do appreciate your testimony.
    Mr. Rivera. Okay. Essentially, our main concern is that 
normal family, normal union members will not be able to pay the 
increase, knowing that regular workers probably get paid $650 a 
week, and the fee for a whole family will be rising over 
$2,000-something. It is our concern that we need to change this 
approach and be able to provide working people with the right 
to become a citizen in this country.
    [The prepared statement of Mr. Rivera follows:]
                 Prepared Statement of Rhadames Rivera
                              introduction
    Good morning Chairwoman, on behalf of the 1199SEIU Citizenship 
Program, thank you for the opportunity to address the Subcommittee and 
other distinguished guests on the important topic of USCIS fee 
increases and the impact on the healthcare workers we serve.
    The 1199SEIU Citizenship Program began in January 2001. The program 
is administrated by our Benefit and Pension and Training and Education 
Funds. The funds provide an array of innovative and comprehensive 
benefits including educational and training programs that are designed 
to accommodate the needs of the more than 300,000 union members of 
1199SEIU United Health Care Workers East. We are the largest healthcare 
workers union in the nation, representing workers in homecare settings, 
hospitals, nursing homes,, pharmacies, clinics and other healthcare 
agencies.
    Our membership reflects the diversity of immigrants to this 
nation--particularly to New York City. Our members include healthcare 
workers from continents and countries from around the world, including 
the Caribbean, South America, Central America, Canada, Africa and 
Europe, with the majority of members who utilize the program coming 
from the Caribbean. The countries in the top percentile are Jamaica, 
Trinidad, Dominican Republic and Guyana. We are proud that our 
membership embodies such rich diversity and are reminded that our 
nation is indeed a land of immigrants.
                            program overview
    The benefits of U.S. citizenship are numerous. Citizenship provides 
our immigrant members with more opportunities and a greater feeling of 
belonging and a sense of security--fully integrating them into our 
country. Most importantly, through citizenship our members gain the 
right to vote and participate more fully in the democratic process. We 
are committed to designing programs that expand rights and empower our 
members, who are the healthcare workers who keep our hospitals, nursing 
homes, clinics and other healthcare agencies running.
    The Citizenship Program has served more than 7,000 people in the 
process of naturalization and related benefits. Yearly our program 
averages more than 1,000 member participants. Through the efforts of a 
dedicated and competent group of professionals, applicants are offered 
free legal assistance and educational support. Assistance includes 
application preparation, reviewing and filing of the forms N-400, N-
600, I-90, N-565, N-648, AR-11 and FOIA's.
    The Program offers an array of different class choices for 
applicants to study U.S. Government and Civics while reviewing 
interview techniques. We have developed an academic curriculum, video 
and book highlighting immigrant stories.
    To date our office has submitted over 6, 178 [N-400] applications. 
We proudly boast 4,677 persons that are naturalized U.S. citizens 
through the help of the program. Yet hundreds of our applicants are at 
advanced stages of naturalization (awaiting interviews and oaths). We 
note more than 500 applications that are in backlog and waiting 
adjudication past USCIS established average processing time frames. 
Some of these applicants have not received any information although the 
form G-28 Notice of Appearance as Attorney or Representative was 
submitted along with the applications. The 1199SEIU Citizenship Program 
is accredited and recognized by the Board of Immigration Appeals.
                          fee increase impact
    The recently imposed USCIS fee increase, effective July 30, 2007, 
is the biggest immigration benefit application fee increase recorded in 
the history of immigration fee changes. USCIS reported that the overall 
application and petition fees were increased an average of nearly 86%. 
[USCIS Press Release January 31, 2007] Most agree that the new fees are 
unprecedented. The fees for naturalization applications have increased 
five times since 1999 from ($225 in 1999 to now $675 including the 
biometrics).
    Our program is currently experiencing a drop in participation 
during the weeks since the new fees took effect. Scehduled appointments 
dropped by 50 percent, during the month of August. Many members are 
voicing concerns as they struggle to save money for the application. In 
contrast, during the months leading up to the increase, we serviced 
double our normal capacity. Our members participated in record high 
numbers, in an effort to get their applications processed before the 
scheduled increase. We had such high numbers that we partnered with 
other community service providers to accommodate the increased 
participation in our program.
    Our union members have good jobs with fair contracts negotiated 
that include comparable pay and comprehensive benefits. However, they 
voice that the new fee is a lot of money for working class people to be 
able to afford. Some are saving up or borrowing money so they can 
afford to file for citizenship. Still others--even before the latest 
increase--expressed that they were having difficulties raising the 
money when the fee was $400.00. We often learn of workers using 
vacation pay or even tax refunds to pay for naturalization application 
fees.
    Citizenship is a benefit that typically families often want to do 
together. Husbands and wives often naturalize together with their 
children over the age of 18. The increase makes it difficult for a 
working class family to simultaneously apply for citizenship.
    A family of three would need $2,025 to file for U.S. citizenship 
together.
    And Home Care and Nursing Home workers--who provide care to some of 
the most vulnerable members of our society--still earn low wages and 
are fighting for more equitable earnings. The high naturalization fees 
are especially hard for these workers.
    For too many of the healthcare workers we represent, the cost for 
naturalization application fees is a grave economic burden and they 
sometimes must sacrifice basic needs in exchange for a chance to live 
the American dream.
                               conclusion
    Individuals eligible to naturalize are lawful permanent residents 
working and paying taxes. They already contribute to the United States 
economy. Lawful permanent residents share the same tax responsibilities 
as Untied States citizens. Consequently, they already pay their share 
for the operation of government services.
    We predict that the newly imposed fees will reduce the number of 
working-class immigrants who can obtain citizenship because they will 
not be able to afford it. American citizenship is a privilege and 
financial cost should not deter hard working, lawful, permanent 
residents from fully participating in this great nation.
    The forms N-400, I-90, and N-600 should not be increased by the 
same percentage as other applications, since these forms are used to 
provide immigration benefits to the population of immigrants that are 
already permanent residents. And all of us should work together to 
support hard-working immigrants, like the healthcare workers who are 
1199SEIU members, so that they can live the American dream just like 
the many generations of immigrants who came before them.
    Thank you, Chairwoman Lofren for the opportunity to testify today.

    Ms. Lofgren. We thank you for your testimony, as well as 
your tremendous service to our country.
    I know that Mr. Gutierrez has a competing hearing in 
Financial Services, so rather than begin the questioning, I am 
going to start with him and then go to Mr. King.
    Mr. Gutierrez. I thank you so much. Thank you so much, 
Madam Chairwoman. I really appreciate it.
    Sorry. My glasses broke. I will do the best I can. I am 
blind here.
    But I want to thank Mr. Vargas and Mr. Yates and Mr. Rivera 
for taking the time to be here this morning and for their 
wonderful testimony--it is going to be very, very helpful to 
us--and especially to SEIU in New York City and the NALEO 
National League for all their endeavors and their citizenship 
and in defense of immigrants. I want to thank you for that.
    I want to just take a moment as we re-examine this just to 
go back to the immigration examination fee account. This is in 
the Immigration Nationality Act, page 309, and it says that 
``fees for providing adjudication and naturalization services 
may be set at a level that will ensure recovery of the full 
cost of providing all such services, including the cost of 
similar services provided without charge to asylum applicants 
and other immigrants.''
    So, you know, we are very careful here about ``must,'' 
``may,'' and what kinds of words we use, and, indeed, we have 
appropriated funds, at least since I have been in the Congress. 
I arrived here in 1993, and I can remember on several occasions 
voting for additional funds. So this notion that the 
immigration naturalization, the citizenship brings to us from 
the Federal Government that they must is really not true 
because I just read it from page 309. It says, ``may.''
    Now, of course, I might have a little difficulty because 
you know English is not my first language, but I had good nuns, 
and they taught me the use of verbs, and it seems to me that 
``may'' is ``may'' and ``must'' is ``must,'' and when they told 
me I may do something, I might not do it, and, indeed, they do 
not need to do it.
    Would anybody disagree on the panel with that assertion 
from the Immigration Nationality Act? No. Good.
    Ms. Lofgren. The record will note that all the Members 
shook their heads no.
    Mr. Gutierrez. Okay. Because I think it is fundamentally 
important.
    The other thing is it seems to me when Government does 
infrastructure improvement, for the most part, what it does is 
it sells bonds. There is a bond issue.
    This is rather expensive endeavor, and the citizens 
affected, whether it is a municipality or a State or whatever 
locality, just those taxpayers at that particular moment, are 
not going to benefit from it, so, therefore, you know, future 
people are going to benefit from that road, that bridge, that 
school, that infrastructure, whether it is the sewer or water.
    I mean, there are huge infrastructure improvements that are 
being shouldered by one particular group of immigrants, the 
group of immigrants today that wish to become citizens of the 
United States, and so I think it would be fair and incumbent 
upon us to see how the payment of this infrastructure is paid 
by all of us.
    The other thing is we just heard testimony on 6 percent. 
Mr. Yates, do you know what 6 percent would be of the total? Do 
you know what the total increase is in terms of dollars?
    Mr. Yates. Not off the top of my head, I do not.
    Mr. Gutierrez. Approximately? Is it $5 billion more? What 
amount are they looking for?
    Mr. Yates. Oh, I believe the figure is closer to $600 
million.
    Mr. Gutierrez. $600 million.
    Mr. Yates. Right.
    Mr. Gutierrez. Okay. So, as we look at this additional $600 
million that we are looking for, let me just ask the members of 
the panel if any of them would object to their tax dollars 
being used for the citizenship processing fee of a soldier in 
the armed forces of the United States at this particular time 
of war.
    Mr. Vargas?
    Mr. Vargas. Not only would I not object, I think it would 
be an honor to be able to help finance that.
    Mr. Gutierrez. Mr. Yates?
    Mr. Yates. I agree. I do not object to that.
    Mr. Gutierrez. Mr. Rivera?
    Mr. Rivera. I agree.
    Mr. Gutierrez. I think most Americans would say that those 
are the armed forces, we should all contribute, and it would 
be, as Mr. Vargas said, not only the right thing to do, it 
would be an honor and a privilege to pay for them. And yet we 
have the immigrant community shouldering and bearing the brunt 
for those that are on the front lines in defense of this Nation 
today.
    The fact remains that there 35,000 permanent residents of 
the United States serving in the armed forces. There are an 
additional 45,000 to 50,000 members of the armed forces that 
were once permanent residents, today who are naturalized 
citizens, a huge body of people that are serving in our armed 
forces, and statistically we see time and time again about 
their heroics.
    I know my time has expired, so I would just simply say, in 
conclusion, I think we need to look at this in a different way, 
and I thank Mr. Rivera and Mr. Yates and Mr. Vargas for coming 
before the Committee and helping us with this dilemma, and I 
thank the gentlelady so much.
    I am going to go see Mr. Bernanke with the prime market and 
what is going on with their----
    Ms. Lofgren. Help us out there.
    Mr. Gutierrez. Thank you.
    Ms. Lofgren. The gentleman's time has expired.
    The gentleman from Iowa is recognized for 5 minutes.
    Mr. King. Thank you, Madam Chair.
    You know, I listen to this dialogue that has taken place 
here, the gentleman from Illinois, a couple of times on these 
panels, and I trust each of the witnesses were here to hear the 
previous testimony in the room, you know, the question of who 
is shouldering the burden. Now we have a lot more people than 
that in the military, and then there will be all of those that 
are shouldering the burden. They all deserve to be equally 
recognized and honored and revered for that, as well as those 
who are immigrants.
    Something that emerges, as I listen to this testimony, is 
the constant blending of the term ``immigrant,'' and I want to 
draw that distinction, and I would ask Mr. Vargas, in our 
dialogue, ``immigrant'' is used interchangeably between legal 
and illegal, and could you draw a distinction between the two 
for us and tell us when you use the word ``immigrant?'' Does it 
mean both legal and illegal, or are you referring and implying 
that they be legal in your testimony here?
    Mr. Vargas. Mr. King, in my testimony today, my comments 
have been exclusively limited to legal permanent residents. 
These are individuals who have entered our country legally, 
have played by the rules, are taxpayers, and want to be full 
participants in American society.
    Mr. King. Thank you. I appreciate that answer.
    And do you say the same, Mr. Rivera, or do you have a 
different view?
    Mr. Rivera. No, that is our view.
    Mr. King. Okay. It is just important because of this 
national dialogue we have had for the last several years. It 
gets blended and merged between the two.
    And then I would go to Mr. Yates, and I would ask you, Mr. 
Yates, the issue was raised by the gentleman from Illinois in 
previous testimony, the number that I see is that had the fees 
for green cards not been increased when the update was 
requested, that would have made a difference of $82.5 million. 
Can you tell me what would have been the alternative if those 
fees had not been increased before the renewal of the green 
cards?
    Mr. Yates. Based upon the Agency's testimony, they would 
have basically had a deficit. They would have operated at a 
deficit in adjudicating those applications. So they would have 
been faced at some point in time with putting a body of work 
aside that could not adjudicated because they would not have 
been able to pay their contractors and others to process that 
work.
    Mr. King. Or could they have, as Mr. Vargas has 
recommended, come to Congress and asked for an $82.5 million 
appropriation, or could they have calculated in the rest of the 
fee structure an increase on the balance of everyone else's 
fees to make up for that $82.5 million?
    Mr. Yates. Those are options. Yes, sir.
    Mr. King. And I understand that it would not necessarily be 
valid to ask you to speculate on what they are, but I did want 
those options in the record for the consideration of the 
Committee and also the public, and I thank you for that 
analysis.
    I want to make sure also that people do not guess where I 
am, and I believe that U.S. citizenship is precious, and I am 
hearing discussion here that puts a value on citizenship, and I 
look at the dollars that are required to go down the path of 
lawful permanent residence and then naturalization application, 
and I would ask Mr. Vargas--and you are the one that has 
advocated that this be a taxpayer-funded endeavor, at least in 
a significant degree--could you tell me how you come to that 
conclusion? And do you put a dollar value on citizenship, and 
if you do not, how do you come to the conclusion that taxpayers 
should fund it?
    Mr. Vargas. Mr. King, I put a tremendous value on 
citizenship. I think this country benefits when legal permanent 
residents become citizens. I think our country is stronger for 
that. I think you and I benefit when a legal permanent resident 
becomes a naturalized citizen.
    What we are advocating is partnership between the newcomer, 
the legal permanent resident, and this country. People should 
pay a fee for a reasonable service, but what we are doing is 
asking people to pay a fee for a service plus. They are being 
asked to pay surcharges. They are being asked to pay for one-
time modernization improvements that benefit the whole country. 
So----
    Mr. King. I apologize. But I see your testimony says 
according to data from the 2000 Census, 43 percent of 
noncitizen households pay at least $700 in rent each month, and 
you have numbers at 36 percent that have annual incomes of less 
than $25,000.
    Have you seen the Robert Rector study from the Heritage 
Foundation that shows that low-skilled households, regardless 
of their immigration status, are a net burden, high school 
dropout-headed households are a net burden on our taxpayers to 
the net cost of $22,449 a year. This is an economic 
recommendation you make. Have you evaluated that study, and do 
you have a response?
    Mr. Vargas. I have not evaluated that study. I would be 
happy to look at the study, but I do also know that naturalized 
citizens also over the course of their life in the United 
States end up having higher incomes, meaning they pay more in 
taxes.
    Mr. King. You also know they draw down more in services as 
well at the same time, and so I think we have some clarity on 
that, and I appreciate your testimony, everyone's, and I yield 
back the balance of my time.
    Ms. Lofgren. Thank you. The gentleman's time has expired.
    Given the time, I am going to be very brief, and I think 
perhaps I will submit some of my questions in writing.
    I would just note that I have been complaining about the 
lack of technology in this Agency for several decades, and Mr. 
Yates knows that because he has heard me complain, and actually 
I complained about it before I was ever a Member of Congress. 
It has been a tremendous frustration to me. We are still 
creating paper files in the Agency. It is absurd.
    On the other hand, I cannot help but note that over the 
years we have done a variety of things. We have allocated tax 
funds to improve the technology, and we never got it. We did a 
premium processing fee for well-heeled applicants. I mean, they 
were happy to pay the additional fee, and yet they did not get 
what they paid for, and I actually think that is illegal.
    I mean, you are not allowed to make a profit off of the 
applicants, and those fees were diverted. I mean, we took their 
money, and they did not get what they paid for.
    And I note on the fee structure, for example, the FBI fee 
structure right now, the FBI, as I understand it, is charging 
the Agency an average of $10. For the most extreme case, the 
cost is $22. But the Agency is charging the applicants $80. So 
that is a little profit center for the Agency, and I question 
even the legality of that.
    And it is not so much for the well-heeled applicant. I do 
not have a concern. I mean, if you are earning a good salary 
and you can pay, you should pay this fee, and the companies 
certainly that are filing for, you know, scientists and 
engineers are happy. They are not complaining about it. They 
are happy to pay the fees.
    But for your average working family, this is a very high 
amount, and we have had hearings in this room where every 
Member of this Committee has said we want people to become 
Americans. We have differed sometimes in our approaches on how 
best to help the immigrant community become thoroughly part of 
the fabric of the United States, but really there is no 
disagreement that we want immigrants to become completely part 
of the fabric of American society, and an important element of 
that is to help people become American citizens.
    We want immigrants to become American citizens, and it just 
seems to me counterproductive, since we all believe that, to 
then put a financial barrier for people who are working and not 
getting a lot of money. And so I guess one question I will ask 
before we close, maybe to Mr. Rivera and Mr. Vargas, in 
particular, because you are doing hands-on work with people in 
that category and helping them.
    We have a fee waiver in place that the Agency expanded a 
bit after our hearing and further discussions. Is that going to 
help at all or help enough with the group of people that you 
are working with filing for citizenship and, if not, what 
adjustments should be made on that waiver provision so that the 
person working in the nursing home helping the baby boomer's 
parent can actually afford to become an American with us? Can I 
ask you that, of if you do not know now, you could get back to 
me?
    Mr. Rivera. That is funny. I mean, placing the entire 
burden on the fee is very difficult----
    Ms. Lofgren. Right.
    Mr. Rivera [continuing]. To sustain the Agency. We think 
that essentially Congress needs to allocate some money to fund 
this process.
    Ms. Lofgren. Right.
    Mr. Rivera. And there are a significant amount of services 
that are provided that are sustained by the fees paid by 
immigrant workers that should be allocated to something else, 
the cost of the administration of this Agency to be allocated 
in something else. There are a tremendous amount of ways that 
you can be moved out of the fee pay to somebody else.
    Ms. Lofgren. Mr. Vargas?
    Mr. Vargas. If I can reply, I would certainly answer more 
detail in writing, Chairwoman, but we do know that the 
applicants largely are unaware of the availability of the fee 
waiver.
    But I would also like to advise you that my organization 
actually runs a loan fund where we make interest-free loans to 
individuals so they could help pay for----
    Ms. Lofgren. That is really admirable. That is terrific.
    Mr. Vargas. And our default rate is less than 5 percent.
    Ms. Lofgren. That makes me very proud to be sitting here 
talking to you.
    My time has expired, and all the time has expired. I do 
thank you for your patience, for you willingness to be here to 
share your expertise. We will have 5 legislative days to ask 
additional questions in writing, and if we do that, we would 
ask that you answer as promptly as you are able to.
    And, again, we thank you very much for your participation.
    And this hearing is now adjourned.
    [Whereupon, at 12:13 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Letter to David Walker, Comptroller General of the General Accounting 
                 Office (GAO) dated September 12, 2007



Fee Increases Imposed by USCIS Fee Rulemaking for Selected Immigration 
 Applications, Effective July 30, 2007, Compiled by NALEO Educational 
                                  Fund



     Letter to Dr. Emilio Gonzalez, Director, U.S. Citizenship and 
Immigration Services dated February 20, 2007, from the American Friends 
                           Service Committee



         American Friends Service Committee Recommendations on 
          DHS Docket No. USCIS-2005-0056 of September 19, 2007



 Prepared Statement of Fred Tsao, Policy Director, Illinois Coalition 
                    for Immigrant and Refugee Rights



     Prepared Statement of Michael A. Knowles, President, National 
           Citizenship and Immigration Council (AFGE/AFL-CIO)
    Madam Chair and Members of the Subcommittee:
    On behalf of the National Citizenship and Immigration Services 
Council (AFGE/AFL-CIO), we are submitting this testimony for the record 
of the hearing on September 20, 2007 concerning H. Res. 47, Rep. Zoe 
Lofgren's legislation to prevent the immigration fee increase from 
going into effect. The NCISC is the American Federation of Government 
Employee's Council representing some 7500 employees working at U.S. 
Citizenship and Immigration Services (USCIS). Our members at USCIS 
include: Immigration Information Officers, Contact Representatives, 
Immigration Officers, Adjudications Officers, Asylum Officers, Refugee 
Officers, Status Verifiers, Information Technology Specialists, 
Language Specialists, Community Liaison Officers, Training Officers, 
Program and Management Analysts, Clerks, and Supply Technicians.
    Madame Chairman, along with the Consular Officers of the State 
Department these dedicated civil servants are America's gatekeepers--
deciding who can enter our country and who can remain here. To say that 
these workers are critical to our nation's homeland security efforts 
would be a gross understatement. Our members work tirelessly to review 
every application for any immigration benefit to ensure its legitimacy 
and determine the eligibility of the applicant. But when these 
obligations come up against long-standing, severe financial problems, 
outdated technology, inadequate infrastructure and other resource 
limitations at our Agency, something has to give.
    Despite Agency assurances to the Congress that all is well, it is 
not. In recent years, we the employees have faced multiple unrealistic 
challenges due to unrealistic assumptions about what USCIS can do and 
how much it costs to do it. So let's collectively stop fooling the 
American people into believing that our gates are opening and closing 
as they should.
    USCIS, and its predecessor, the Immigration and Naturalization 
Service (INS), have been chronically underfunded and therefore ill-
equipped to provide its employees with the tools and resources they 
need to perform the complex mission of the Service. We have a legacy of 
antiquated computer technology, dilapidated, crowded and in some cases 
unsafe facilities; poor and inadequate training; little funding for 
professional development and continuing education; insufficient staff 
and an over-reliance on temporary or ``term'' employees and private 
contractors. This has resulted in backlogs, shoddy work product, 
enforcement vulnerabilities and an unrelenting push for numbers of 
applications processed over quality. The result is an increase in 
undetected fraud, the increased possibility of terrorists entering the 
country and poor customer service for people seeking legal and 
legitimate immigration benefits. It also results in a demoralized and 
stressed-out work force subject to unacceptably high turnover rates and 
an inability of our Agency to recruit, promote and retain the best 
qualified and most highly motivated workforce.
    We should not discount the contribution this situation has towards 
the growing problem of illegal immigration. Many who might have 
preferred to come to the United States of America through an orderly 
process in a legal status have become frustrated by the inevitable log-
jams and turned to unlawful means to realize their dreams.
    The deep and abiding frustration felt by USCIS employees can be 
seen in the attached letter to Director Gonzales and petition that has 
so far been signed by over 300 Adjudications Officers from District 
Offices around the country. These men and women are so concerned about 
the current situation, they have taken the unusual step of signing 
their names to a petition which states:
    ``Sir, with due respect, there is a quiet consensus amongst many 
(District) Adjudications Officers that we are not performing our duties 
in a way that truly serves our country, the American people and you. 
There is a clear, and we respectfully believe unreasonable, ``push'' 
for reaching quotas for case/interview completions, for ``numbers'', 
and for quantity over quality.''
    Virtually every employee we have spoken with--regardless of their 
job series--complains of the same problem: too much work to do in too 
little time, by too few workers. Many feel pressured by productivity 
requirements to complete their work without compensation, during lunch 
and break periods and during off-duty hours. Many feel pressured to 
``cut corners'' in the adjudications process in order to make 
productivity and timeliness requirements. Many complain that they are 
often unsure of whether a benefit has been properly granted or denied, 
because of these constraints.
    The frustration felt by many USCIS employees is illustrated by the 
situation at the Dallas District Office, where some of our members 
describe a program called the Dallas Office Rapid Adjustment (DORA). 
The program was designed to ensure that the process of seeking to 
adjust immigration status as husband and wife was accomplished in as 
little as 15 minutes. According to one employee in that office, 
attorneys for immigrants were thanking adjudications officers profusely 
for the program and readily admitted there was no way to effectively 
detect marriage fraud under the program.
    And the frustration is felt in virtually every District office and 
Service Center when workers trying desperately to resolve long standing 
backlogs of applications are suddenly forced to deal with a new 
phenomena known as ``front logs''--a sudden surge in benefits 
applications (numbering now in the hundreds of thousands) having been 
submitted to USCIS just prior to the new fee increase going into 
effect. The surge could have and should have been anticipated, but it 
was not and now employees are being asked to speed up the assembly 
line.
    To make up for inadequate staffing in the locations that are 
handling the ``front log,'' the Agency has had to detail employees from 
other locations and make use of more overtime. The Agency has 
rightfully commended these employees for their hard work, but we remain 
concerned that our workforce is operating at a level beyond its current 
capacity to produce the work that the American public expects us to 
perform. As a result, quality and accuracy are sacrificed, and our 
ability to detect fraud and potential terrorist threats is diminished.
                     why we need the fee increase:
    First, it needs to be said that our support for the USCIS fee 
increase is based on our understanding of where this money is to be 
allocated: more employees, improved infrastructure, better training and 
technology and a generally enhanced ability to perform our jobs 
effectively. The Agency has assured us that it intends to re-classify 
position descriptions and consider upgrades for many of our employees. 
We are pleased to hear that, but have yet to see that plan implemented. 
At the same time, we have witnessed the increase in numbers of Senior 
Executive Service positions and an increase in management and 
supervisory positions at the GS-13, 14 and 15 levels. Absent upgrades 
for our main work force--the men and women who do the ``heavy lifting'' 
of providing the Agency's services--the Union questions whether some of 
the spending made possible by fee increases is entirely justified. 
Adjudications Officers and other related occupations have received no 
grade increase in many years, and recognition of their contribution to 
the Agency must be equally considered before senior management again 
rewards themselves for work we have performed.
    But the new fee-rule, for all of the problems raised by critics, 
represents the only viable plan that is presently available to provide 
the Agency with the revenue it needs to adequately equip and staff its 
work force to carry out the mission. We wish to recognize and commend 
USCIS Director Emilio Gonzales for the leadership and vision he has 
shown by devising this important plan for resourcing our chronically-
underfunded organization. He has demonstrated a genuine concern for the 
morale and effectiveness of our workforce by implementing a number of 
important new initiatives (all made possible by the fee increase) to 
upgrade our facilities and build new ones, expand training and career 
development opportunities, upgrade and integrate our information 
technology infrastructure and move our business process from a paper to 
an electronic environment. But the tasks and expectations we have been 
handed--the lawful and efficient adjudication of millions of benefits, 
visas and naturalization applications--remain daunting; we are still 
not sufficiently staffed and equipped to do the job. We believe 
important progress is being made in that direction, but the Agency's 
efforts to achieve these improvements--and the Herculean efforts by its 
employees to do the job--will be seriously jeopardized if HR 47 
prevents the fee rule from being fully implemented.
    That said, the Union believes that the Agency cannot, in the long 
run, be adequately and sustainably funded and resourced by fees alone--
no matter what the scale of fees. There needs to be a balance between 
fee-generated resources for operational costs and appropriations to pay 
for our homeland security responsibilities and special programs, 
investment in infrastructure, capital costs and work force training, 
pay and benefits.
    Because UCSIS is a fee-funded agency, there is presently no other 
legal means for the agency to raise the funds it needs to operate. We 
believe this funding formula must be revisited by Congress as soon as 
possible. USCIS is a critical federal agency that plays an integral 
role in the Department of Homeland Security's critical mission of 
preventing potential terrorists from entering and operating in the 
United States. Because our role is vitally important to all Americans, 
all Americans should contribute to the effective performance of that 
mission. USCIS is not an insular, essentially invisible agency 
exclusively serving the needs of immigrants. In a post 9/11 world, 
USCIS must hold up its end of the homeland security safety net. To do 
so will require more money, perhaps a great deal more money--should a 
comprehensive immigration reform bill pass--in the future. Fees for 
immigration benefits cannot and will not pay for it all.
                      longer term funding of cis:
    The NCIS Council strongly supports the inclusion of appropriated 
funds for specific activities of this agency. While we do not oppose 
the funding of immigration benefits from fees, we believe that many 
other activities should come from appropriated funds. While we are not 
prepared to recommend specific funding methods for each USCIS-provided 
service, we would welcome the opportunity to work with you on such a 
project.
    Finally, we are deeply concerned about the apparent inability of 
the Agency to provide you with the information Congress clearly needs 
to assess the reasonableness of the fee increase. As a union, we have 
no direct access to this information and can only promise to work in 
concert with the Committee to pressure the Agency to be more 
responsive.
    We, the employees of UCIS, are fully committed to the 
accomplishment of our assigned mission: to provide for the security of 
our Homeland by ensuring that those who immigrate meet all eligibility 
requirements to be accepted as members of our society. We provide a 
critical service to the people of the United States of America. Like 
any good or service, there is a cost involved. It is in the public 
interest to ensure that our immigration policy establishes a system 
that is reasonable, safe, and lawful that provides for the security of 
our homeland and the welfare of the people of the United States of 
America. Whether this cost is to borne solely by those who are seeking 
the benefits of our immigration laws, or by the taxpayers, or a 
combination of the two, is a decision to be made by Congress. But 
without adequate resources, we, the civil servants who administer and 
enforce our immigration laws, cannot be expected to accomplish our very 
important mission.
    However, in the end, until such time Congress decides to change the 
way USCIS is funded, we do believe this fee increase is necessary and 
should be allowed to go into effect. We ask that you support the 
Agency's efforts--and in particular the efforts of the working men and 
women who help keep our country safe--by ensuring that USCIS has the 
resources it needs to do the job. Thank you.
     ``EXHIBIT A (text of petition by USCIS District Adjudications 
              Officers)'' by the National CIS Council 119


  Letter to Linda Swacina, U.S. Citizenship and Immigration Services 
     District Director dated April 11, 2007, from Citizenship and 
              Immigration Services Adjudications Officers



 Responses to Post-Hearing Questions from Jonathan R. Scharfen, Deputy 
          Director, U.S. Citizenship and Immigration Services