[Senate Hearing 110-656]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-656
 
    REDUCING UNEMPLOYMENT AND INCREASING BUSINESS OPPORTUNITIES FOR 
                                VETERANS

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



                               ROUNDTABLE

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP



                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 14, 2008

                               __________

      Printed for the use of the Committee on Small Business and 
                            Entrepreneurship


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



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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                 JOHN F. KERRY, Massachusetts, Chairman
CARL LEVIN, Michigan                 OLYMPIA J. SNOWE, Maine,
TOM HARKIN, Iowa                     CHRISTOPHER S. BOND, Missouri
JOSEPH I. LIEBERMAN, Connecticut     NORMAN COLEMAN, Minnesota
MARY LANDRIEU, Louisiana             DAVID VITTER, Louisiana
MARIA CANTWELL, Washington           ELIZABETH DOLE, North Carolina
EVAN BAYH, Indiana                   JOHN THUNE, South Dakota
MARK PRYOR, Arkansas                 BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         MICHAEL B. ENZI, Wyoming
JON TESTER, Montana                  JOHNNY ISAKSON, Georgia

                 Naomi Baum, Democratic Staff Director
                Wallace Hsueh, Republican Staff Director


                            C O N T E N T S

                              ----------                              

                                                                   Page

                           Opening Statements

Kerry, Hon. John F., Chairman, Committee on Small Business and 
  Entrepreneurship, and a United States Senator from 
  Massachusetts..................................................     1

                        Roundtable Participants

Brown, Justin Legislative Associate, National Legislative 
  Service, Veterans of Foreign Wars, Washington, DC
Conley, Coreena, site director, Veterans Business Outreach 
  Center, Sacramento, CA
Dever, Col. Chip MA ARNG, small business owner, Systems Kinetics 
  Integration, Marstons Mills, MA
Elmore, William D., Associate Administrator, Office of Veteran 
  Business Development, U.S. Small Business Administration, 
  Washington, DC
Hardy, Capt. G. Mark, USN president, National Security 
  Corporation, Baltimore, MD
Heavey, Patrick, executive director, St. Louis Veterans Business 
  Resource Center, St. Louis, MO
Klerman, Jacob A., principal asociate and Abt fellow Abt 
  Associates, Cambridge, MA
Levine, William president, WL Concepts and Production, Inc., 
  Uniondale, NY
McWilliam, John, Deputy Assistant Secretary, Veterans' Employment 
  and Training Service, U.S. Department of Labor, Washington, DC
Rooney, Roderick, self-employed constable, Boston, MA
St. John, Bruce, Intergovernmental Affairs Officer, Center for 
  Veterans Enterprise, U.S. Department of Veterans Affairs, 
  Washington, DC
Sharpe, Joseph, deputy director, National Economic Commission, 
  The American Legion, Washington, DC
Weidman, Rick, executive director for policy and Government 
  affairs, Vietnam Veterans of America, Silver Spring, MD
Winkler, Dr. John D., Principal Deputy Assistant Secretary of 
  Defense for Reserve Affairs, U.S. Department of Defense, 
  Washington, DC

          Alphabetical Listing and Appendix Material Submitted

Brown, Justin
    Response to written questions from Senator Snowe.............    45
Dever, Col. Chip MA ARNG
    Prepared statement...........................................    50
Elmore, William D.
    Prepared statement...........................................    61
    Response to written questions from Senator Snowe.............    45
Hardy, Capt. G. Mark
    Prepared statement...........................................    64
Kerry, Hon. John F.
    Opening statement............................................     1
Klerman, Jacob A.
    Prepared statement...........................................
    Response to written questions from Senator Snowe.............    45
Levine, William
    Prepared statement...........................................    66
McWilliam, John
    Response to written questions from Senator Snowe.............    46
St. John, Bruce
    Response to written questions from Senator Snowe.............    47
Sharpe, Joseph
    Response to written questions from Senator Snowe.............    47
Snowe, Hon. Olympia J.
    Prepared statement...........................................    42
    Post-hearing questions posed to the following roundtable 
      participants and subsequent responses:
        Brown, Justin............................................    45
        Elmore, William D........................................    45
        Klerman, Jacob A.........................................    45
        McWilliam, John..........................................    46
        St. John, Bruce..........................................    47
        Sharpe, Joseph...........................................    47
        Winkler, Dr. John D......................................    48
Winkler, Dr. John D.
    Response to written questions from Senator Snowe.............    48

                        Comments for the Record

Federick, Curtis, vice president, Royal Linen Service, Flint, MI.    71
Frigy, Dustin, director, Procurement Technical Assistant Center, 
  Genesee Regional Chamber of Commerce, Flint, MI................    72
Ledwick, Michael W., CFLE, Clio, MI..............................    73
Lopucki, Carol, State director, Michigan Small Business & 
  Technology Development Centers, Grand Rapids, MI...............    74
McMurray, president, Commercial Weather Services, Inc., Grand 
  Blanc, MI......................................................    75
U.S. Department of Labor, Veterans Employment and Training 
  Service........................................................    76


                   REDUCING UNEMPLOYMENT AND INCREAS-



                ING BUSINESS OPPORTUNITIES FOR VETERANS

                              ----------                              


                        WEDNESDAY, MAY 14, 2008

                      United States Senate,
                    Committee on Small Business and
                                          Entrepreneurship,
                                                    Washington, DC.
    The Roundtable met, pursuant to notice, at 10:15 a.m., in 
room SR-428A, Russell Senate Office Building, the Honorable 
John F. Kerry (Chairman of the Committee) presiding.
    Present: Senator Kerry.
    Staff present: Karen Radermacher and Matt Walker.

  OPENING STATEMENT OF THE HONORABLE JOHN F. KERRY, CHAIRMAN, 
SENATE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP, AND A 
            UNITED STATES SENATOR FROM MASSACHUSETTS

    Chairman Kerry. Well, good morning, everybody. We will 
officially come to order, though you are an unbelievably 
orderly group already. Thank you for that.
    Thank you very much for being here, everyone, and I 
apologize that we are starting a little late. But I got 
overscheduled this morning, and I think this is my fourth 
event. We were starting early today.
    But this is a very important one. First of all, I just want 
to thank you all for coming to talk about veterans issues 
within the business context, and small business particularly.
    This is an official roundtable of the Senate Committee on 
Small Business and Entrepreneurship, and we have found these to 
be particularly helpful in helping the Committee to develop 
legislation and develop a record for that legislation. It tends 
to be a little less formal than the standard hearing but, 
frankly, I think far more productive in a lot of ways because 
we can have some give and take, back and forth. Just remember 
that it is all on the record, and therefore, if you can help 
our reporter by identifying yourself as you begin to speak, it 
goes a long way toward helping the record to be clear about who 
is saying what when.
    The record is made a formal part of the records of the 
Committee, and it helps to inform both the staff and other 
colleagues who cannot necessarily be here to know how to 
approach these issues and what to do.
    There are currently 23\1/2\ million veterans living in the 
country today, including more than 4.4 million now who have 
left the military since 1990. As servicemembers transition from 
serving the Nation to reentering civilian life, the economic 
benefits and opportunities that are provided by the Federal 
Government become very important, even more important in the 
field of entrepreneurship and business ownership. As the 
Chairman of this Committee, I have been serious since day one 
about trying to address the problems that confront a lot of our 
reservists and National Guard members who wish to start a small 
business, or many of who already are a small business owner. 
And we find that the repeated deployments to Iraq and 
Afghanistan have taken a real toll on some of those small 
business folks, some of whom literally have had to shutter 
their doors because they were a sole proprietor or others, in 
many cases, were small enough that their absence made a 
profound impact on the ability of that business to survive.
    There is a lot happening here in Congress; I am pleased to 
report. Last week, the Veterans' Affairs Committee held a 
hearing on Senate bill 22, which, many of you know, is the 
Post-9/11 Veterans Educational Assistance Act of 2007, better 
known by its common moniker, the new GI bill, which I am co-
sponsor of and many of us are supportive of in trying to pass.
    I am also working on legislation to help prevent veterans, 
servicemembers, active duty and otherwise, from having their 
homes foreclosed. This has been a particular problem for some. 
So we are trying to temporarily extend the period that a lender 
has to wait before the foreclosure proceedings can go forward. 
It is currently 3 months. We want to extend it to 9 months 
after a serviceperson returns from service. And we want to 
suspend the increases in mortgage rates so that there is a 
freeze on those mortgage rates at 6 percent for 1 year after 
the serviceperson ends their service. These provisions, I am 
pleased to say, we did succeed in getting into the Foreclosure 
Prevention Act, but as you know, we have run into problems in 
getting the Foreclosure Act itself passed.
    I am also working to push legislation that Senator Smith 
and I introduced last year, and that is the Active Duty 
Military Tax Relief Act, which includes a provision that would 
provide a tax credit to small businesses who pay their 
employees who are called up for active duty--i.e., pay the 
salary differential. Many small business folks get paid less, 
obviously, when they are called up to active duty, and if they 
have a fixed mortgage and all the other expenses of a family, 
that can become particularly onerous. So we want to encourage 
people to be able to pay that difference, and it is a great act 
of patriotism and of conscience for people who do that. But we 
want to encourage it and make it easier.
    Senators Grassley and Baucus introduced the Defenders of 
Freedom Act, which included a provision similar to the 
provision that I had originally put in, and I am pleased that 
they did that. Different versions of this bill have passed the 
House and the Senate. Hopefully we are going to get final 
action on this in the near future, and all of you here can be 
helpful in helping us to get that.
    When I became Chairman of the Committee last year, the 
first thing I did was call a hearing on veteran small business 
issues, focusing on the shortcomings of the Federal Government 
in addressing the needs of veterans, as well as offering some 
possible solutions.
    At that hearing, I made a promise to you that we would put 
together legislation to address the concerns that we heard. And 
I am proud to say that, working with Ranking Member Senator 
Snowe, we were able to pass that legislation through Congress, 
and the Military Reservist and Veteran Small Business 
Reauthorization and Opportunity Act of 2008 was signed into law 
on February 14 of this year.
    That could not have happened without the hard work and 
support of many of you who are here, so I thank you for that 
and recognize that, unfortunately, there still are many 
challenges that face our veterans and reservists.
    So the roundtable today will begin by looking at the issues 
that veterans and reservists face when trying to find civilian 
employment, including starting a small business. Jason Klerman 
from Abt is going to tell us about a survey commissioned by the 
Veterans Administration, released last September, which showed 
that 18 percent of veterans were unemployed 1 to 3 years after 
leaving the military. In addition, of veterans finding 
employment, 25 percent were earning less than $22,000 a year. 
And another survey of veterans released by military.com in 
November found that 81 percent of returning military veterans 
didn't feel fully prepared to enter the workforce, and 61 
percent of employers say they do not understand how the 
qualifications gained in military service translate to the 
civilian world.
    I must say to you, I am saddened by that figure and 
disturbed by that figure because the leadership skills and 
discipline and patience, as well as the hierarchical knowledge 
that people learn in working in military organizations, all of 
these kinds of things are enormously advantageous to the 
private sector and to the normal workforce. And so those 
statistics really bother me, and I look forward to learning 
more about what is behind them and what can be done to combat 
them.
    The second part of today's discussion is going to focus on 
the solutions to the kinds of problems we identified. We are 
going to try to find a way to solve them.
    We have with us today Federal agencies, veteran service 
organizations, and veteran and reservist small business owners. 
I am confident that there are going to be a lot of ideas at 
this table about how to proceed.
    Last, the roundtable is going to focus on veteran small 
business centers and how effectively they are currently serving 
veterans. Coreena Conley will speak about the work of her 
center in California, and Pat Heavey will tell us about his 
work in St. Louis. We also have three clients from the centers 
who can talk about the impact of the centers on their lives. 
Our Committee has heard from many veterans about the importance 
of these small business centers. There are some who argue that 
similar services are provided by the Small Business Development 
Centers and other organizations. So we need to work through 
that tension and understand what the distinctions are, what the 
add-ons, plus-ups are, if you will, of the veteran-dedicated 
centers. And I look forward to a productive and helpful 
discussion here about the role of those centers.
    I know there is no clear consensus in the veteran community 
about what a veteran small business program ought to look like. 
It is always hard to get consensus in the veteran community, 
anyway, period; I have learned through the years. But we ought 
to try to see if we cannot narrow that down here today and 
let's figure out what really is the best deal. It is very hard 
folks, if we cannot get a consensus in the veterans community 
for what best serves the veterans. Believe me, it is tough to 
get it among my colleagues. So help us here today in order to 
do that.
    The general way we work here is to just take your name 
placard like this and put it up so that the Chair can see it, 
and that way you get called on appropriately as we proceed 
along. And the other thing I forewarn you, this is my schedule 
today, if you just want to get a sense of what I am working 
with. It is a four-pager today. And so I am not able to be here 
the whole time. We have a Foreign Relations Committee hearing. 
I also have a Commerce Subcommittee and a Finance Committee 
meeting all at the same time, and I have got to bounce between 
them, which is why we put this record together.
    But we have able staff who run this very effectively, and 
as I said before, this has proven to be a terrific way to get 
our staffs all on the same page and working effectively. So do 
not let the fact that the Senator is not here, or a Senator is 
not here at a particular moment deter you from creating this 
record, because this will produce legislative effort, I promise 
you. And it is the best records that we get out of the 
Committee. I think it is the best format that we work with.
    So if you keep answers concise and everybody drives toward 
the same goal here, this will be a productive morning. And 
again, I thank you on behalf of the entire Committee for taking 
the time to come.
    Do you guys want to make any comment as you start?
    Ms. Radermacher. I do not.
    Mr. Walker. If I could just briefly----
    Chairman Kerry. On behalf of Senator Snowe, do you want 
to----
    Mr. Walker. Sure. Thank you very much. I appreciate that.
    Chairman Kerry. Please.
    Mr. Walker. Thank you very much, and I appreciate that.
    Chairman Kerry. Are the mics on? Somehow I do not hear the 
normal sound here. They are? OK. Good.
    Mr. Walker. Thank you very much, and I appreciate that. I 
would just like to say thank you on behalf of Senator Snowe to 
the participants for what you do today, but not only what you 
do today, but for what you do each and every day on behalf of 
veterans. You do it all without regard to yourself, and she is 
very appreciative of that.
    In addition, we would like to thank Senator Kerry for the 
work that Senator Snowe and he have done on a bipartisan basis. 
This is truly an issue that both the Republicans and the 
Democrats have worked together on, bipartisan as well as 
bicameral in our efforts with the House of Representatives, to 
get passed the military reservist/veteran entrepreneurship 
legislation that we worked on. This included provisions that 
Senator Snowe had in both the 109th Congress and the 110th in 
four different bills, and Senator Kerry as well, and so we 
thank them for working on a bipartisan basis on these issues 
that are truly of importance to veterans.
    As we are here today, we specifically want to look at the 
issues, as the Senator discussed, on veterans employment. 
Senator Snowe has some very serious and significant concerns 
about veterans employment, and that is something that I hope 
that we can flesh out through our discussions.
    Again, thank you for your time. I am going to stop there to 
defer back to the Chair, but we thank you.
    Chairman Kerry. Matt, thank you very much. I did not 
introduce Matt Walker, who is the senior staffer for the 
Republicans, the minority on this side, and Karen Radermacher 
for those of us on our side. But it is completely without that 
sense, I hope you will understand. Everything we do on this 
Committee, I must say we have done in a totally bipartisan way. 
And it is fun to do it. It makes it worthwhile.
    Mr. Klerman, why don't you lead off? Lay out sort of what 
the picture is here and let's rock and roll.
    Mr. Klerman. Good morning, Senator Kerry. My name is Jacob 
Klerman. I am a senior principal associate at Abt Associates in 
Cambridge, Massachusetts. I want to emphasize, looking around 
the room, since several of the people that have funded my 
research are here, that I am going to speak today in a private 
capacity, not for anybody who funded my research or for Abt 
Associates.
    With that introduction, I want to say four things to sort 
of set some research evidence for the discussion this morning.
    The first thing I want to say has to do with today's 
veterans and the experience of active-duty veterans as they 
leave service. The place we want to start is to remember that 
today the military is enlisting the very cream of the non-
college-bound youth of America today. They come in with high 
aptitude. Almost all of them are high school graduates. While 
they are in the military, they get a set of skills that are 
exactly the skills that employers claim that they are looking 
for. They get the ability to follow instructions. They get the 
ability--experience following instructions, to work in teams, 
to have small leadership skills, and they often get skills that 
have direct transference to the private sector.
    And then when they leave, they enter the job market, and as 
the Senator said, there is work that we have done, work that 
other researchers have done that suggests that when they first 
enter the job market, many veterans have some difficulties. 
When we think about that, I think the place to start is to 
remember that entering the labor market, whenever one does 
that, is a challenge. It is a challenge for high school 
graduates when they leave high school. It is going to be a 
challenge to those who have essentially no high school--no 
private job market experience, and they are going to go out and 
try and work, enter the job market. And while our veterans, 
when they spend time in the service, have considerable job 
market experience, they do not have connections with employers. 
And so we would expect when veterans first enter the job 
market, like new high school graduates, they will have some 
churning in the job market if they go forward.
    As the Senator quoted, earlier work that we did at Abt 
Associates suggests that in the first year or two after they 
leave active duty, about 18 percent of veterans are not 
employed at that time. It is important to remember, however, 
that that statistic includes a number of people who are in 
school or doing other things. That is exactly what we would 
expect them to do. We gave them GI bill benefits and the like 
when they were in the service, and so that would not be 
considered to be a significant problem.
    Nevertheless, it is true our work and the work, for 
example, of several people in the Department of Labor suggests 
that veterans have unemployment rates that are considerably 
higher than the general population. But they are not 
considerably higher than their young counterparts, and we know 
that over time, as those veterans grow older, that any gaps 
that there are between the experiences of veterans and non-
veterans, where originally veterans had higher unemployment 
rates, close quickly.
    So I think that for our first order, we want to think for 
the individual veteran about these problems as being 
transitory. That is not to say it is not worthwhile for all of 
us to think about ways to help young veterans to make that 
transition go more quickly, but at least as of right now, there 
is no evidence there is a real problem in the intermediate 
term. That is the situation for active-duty veterans.
    The situation for reservists is slightly different. The 
Senator mentioned issues about reservists. So the issue for 
reservists is that most reservists had jobs before they were 
called to active duty, and they are guaranteed by law the right 
to go back to those jobs after they return from active duty. 
That is USERRA, Uniformed Services Employment and Reemployment 
Rights Act. So inasmuch as that legislation is working well, we 
would expect veterans/reservists to have similar earnings who 
had jobs, who were employed, as opposed to self-employed, 
before and after they come back. And the available evidence 
suggests that for the most part, most reservists come back, and 
their earnings are relatively similar after they come back 
compared to before they left. And in fact, the work that we did 
for Dr. Winkler, who is here for Reserve Affairs, suggests that 
while they are on active duty, most reservists actually have an 
increase in their income properly computed. It is not true 
about all of them. There are a significant number that show 
losses. But most reservists actually have more. Now, we would 
expect that because they get special pays. They have 
significant hardships being overseas, being literally in harm's 
way. But in a literal financial sense, most reservists should 
not be having trouble paying their mortgages because they have 
higher earnings.
    There are some reservists who have lower earnings than they 
had before, especially the ones that had better-paying jobs, 
and it is worth noting in terms of the perspective of this 
Committee that the prevalence of those things is actually 
slightly higher among self-employed reservists than it is among 
reservists who had jobs. And we are in the process of looking 
at the question of what happens when self-employed reservists 
come back, because they are not protected by USERRA because in 
the end they are the employers, and those big employer 
protections do not apply. We do not have results on that right 
now. We hope to have results on that for you soon in the 
intermediate future. That is my second point. That was active 
duty and reserve.
    The third point I want to make is that presumably we are 
here partially because the Nation and reserve--veterans are in 
a different place than they were, say, 10 years ago. We are now 
engaged in a major war. We have people fighting on the front 
lines. We have more attention to the situation of the service. 
And we are all concerned that the situation will be worse in 
terms of their labor market experiences.
    So I want to tell you that as of now, I do not think there 
is any strong evidence that labor market experiences for 
veterans have gotten worse when they are coming back, either 
active duty or reservists. But I want to say that we need to be 
careful about that. There have been a series of recent studies 
that have noted that a significant number of people who are 
serving overseas are suffering some form of difficulties--post-
traumatic stress disorder or traumatic brain injury--and there 
is some evidence that those problems are associated with poor 
labor market outcomes when people come back. And it is worth 
studying whether or not in the future those are an issue.
    The preliminary work that I have seen so far suggests that 
that is not a problem, but that work is still very early, and 
we need to keep an eye on that, because obviously the situation 
for veterans today is very different than 10 years ago, because 
today we actually have a large number of veterans that are 
serving in combat situations and are having the stresses that 
come from that position, and we want to be careful that that 
does not mean they are having significantly worse outcomes. 
There is no evidence of that so far.
    And then the fourth point I want to make is a warning for 
this Committee--``warning'' is too strong, but a cautionary 
tale. Senator Kerry pointed out that we did a set of focus 
groups for employers, and we talked to the employers. We got a 
whole bunch of relatively negative perceptions about veterans. 
In particular, we heard concerns that veterans are mentally 
unstable. And as we talk today about the problems that veterans 
are having, we all want to be careful not to make that a self-
fulfilling prophesy. To some extent, all the employers in the 
Nation are listening to the types of things we are saying, and 
while it is true that some veterans are having difficulty, it 
is not true of most of them, and we do not want to overstate 
that situation so that employers have a negative perception and 
are, therefore, more reluctant to hire our veterans.
    Thank you, Senator Kerry.
    Chairman Kerry. Let me follow up on that for a minute. I 
was just listening. As we sit here, you talked a fair amount 
about sort of a preliminary set of findings, preliminary here, 
preliminary there. What do we know--I am trying to crystallize 
out of what you have just told us. Give us the short and sweet 
of how you would summarize where the focus ought to be. You are 
not sure of what happens to a certain reservist level here or 
the differentials. It is hard to wrap your hands around that a 
little bit. What do we know well enough to say this is priority 
number one that we have got to address?
    Mr. Klerman. We know that young veterans have higher 
unemployment rates than their non-veteran counterparts. There 
is no doubt about that. We know that that gap closes over time 
so we have reason to believe that that will be a relatively 
short-term phenomenon. But all the services and the Department 
of Labor and the Department of Veterans Affairs have a variety 
of programs to try and ease that----
    Chairman Kerry. But do we know why? Is there a lack of a 
sort of connecting flow as they are separated from the service 
and then go out in the sector? Are they just decompressing and 
are they going through PTSD issues? I mean, is there a--can we 
hang our hat on something?
    Mr. Klerman. I do not think there is any reason to think it 
is anything other than the fact that it takes a while to settle 
into the civilian labor market, that all new labor market 
entrants spend a lot of time finding the right job for them, 
and that implies some amount of time out of the labor force and 
some amount of time finding a job that pays enough that it pays 
you for your skills. And that process always takes a long time, 
and at least so far, I have not seen any evidence that it is 
much worse for veterans than it is for any other new job market 
entrant--a high school graduate or a woman who is coming back 
to the labor force after she was away raising her children. 
There may be significant problems, but I have not seen the 
evidence.
    Chairman Kerry. That is for folks who are kind of going 
through a normal separation after a period of active duty, et 
cetera. Does that include reservists?
    Mr. Klerman. Yes. The same thing is true for reservists. In 
fact, the evidence suggests that reservists come back in 
faster. If they had jobs before, they are guaranteed the right 
to go back to that job later, and there are procedures in place 
that say if your employer does not offer you your job back, 
call this number because we want to know about it. There are 
procedures the Department of Labor runs for guaranteeing those 
rights. The number of complaints is relatively small, but there 
are complaints, and they do get acted on, as I understand it. I 
think there is someone here from Labor who can speak to that.
    Chairman Kerry. Well, we will come back to that probably in 
a moment.
    Mr. McWilliam.
    Mr. McWilliam. Sir, I am John McWilliam from the Department 
of Labor. I just wanted to expand a little bit on Mr. Klerman's 
discussion of the young veterans returning to the employment 
sector.
    Chairman Kerry. Before you do, there is one other question 
I forgot and that I wanted to ask. You talked about the quality 
levels and the graduate of high school, et cetera. But it is a 
fact that to meet recruiting quotas in the last months or year 
or so, there has been an increasing waiver of many of those 
requirements. Has that impact been felt?
    Mr. Klerman. Well, the longer version of my statement said 
something about that, and I did not get a chance. There is no 
doubt that there have been declines in the, quote-unquote, 
quality of the people that are coming to the military as the 
Department of Defense has tried to expand the number of people 
who were being recruited, and the fraction of people who are 
coming in with lower test scores, were not high school 
graduates, who have some form of waiver for often a previous--
often low-level or moderate-level criminal conviction has gone 
up.
    There are two things to say about that. The rates still 
are--the quality remains quite high over historical standards, 
and even if that was a significant issue, it would not be the 
veterans that we are seeing now, because those issues for the 
most part have only been observed in the last year or two. 
Those people would not be cycling off until 2 or 3 years from 
now. So even if that is an issue, it does not explain the data 
we are looking at today. We may have a problem with that in a 
year or two.
    Chairman Kerry. All right.
    Mr. McWilliam, thank you.
    Mr. McWilliam. Thank you, Mr. Chairman. I just wanted to 
expand a little bit about the young veterans returning to the 
civilian workforce from the military. The research that we have 
done has showed that they have a very high unemployment rate 
immediately following separation, 32 percent. However, it 
steadily decreases as they go long away from being in the 
military. By 39 weeks, it approaches that of the general 
population. It is, therefore, our belief that--and our emphasis 
has been on the Transition Assistance Program and assisting 
people----
    Chairman Kerry. General population by a national statistic 
or general population by a local or State statistic?
    Mr. McWilliam. By the general one, sir, on the current 
population survey that the Bureau of Labor Statistics puts out 
on a monthly basis. And so it approaches it at the 39th week. 
Mr. Klerman mentioned that it does take a long time, and 
anecdotally, people tell us it takes a while to adjust 
themselves. There, of course, is the financial safety net that 
they have for UCX, Unemployment Compensation for Ex-
servicemembers, which generally lasts 26 weeks and provides 
that ability for people to move into the civilian workforce 
area. And as I said, the emphasis, we believe, should be on the 
Transition Assistance Program. The Department of Defense has 
signed up to achieve a goal of 85 percent of transitioning 
servicemembers attending the 2\1/2\-day workshop that we 
present at all military installations from a current 60 
percent.
    Chairman Kerry. Mr. Weidman. Rick. You had your card up, 
and then you put it down. You yielded. It is a very effective 
maneuver here.
    [Laughter.]
    Chairman Kerry. Go ahead.
    Mr. Weidman. Good morning, Senator, and thank you very 
much, Mr. Chairman, for the opportunity to be here today. I am 
interested in Mr. Klerman's study and Mr. McWilliam's 
profession of how well the system is working, and that is not 
our perception, particularly having to do with the DVOP/LVER 
Program.
    Chairman Kerry. DVOP and LVER being?
    Mr. Weidman. Disabled Veteran Outreach Program and the 
Local Veterans Employment Representative Program. Essentially, 
they are the veteran staff in the local one-stops. Most of the 
money that goes to United States Department of Labor Veterans 
Employment and Training Service is channeled to the States, to 
the workforce development agencies in the 53 jurisdictions that 
actually do the workforce preparation, or reputedly do so.
    There is no accountability in this system. The Jobs for 
Veterans Act, which was enacted in 2002, was essentially a 
tradeoff. DVA never went along with that bill, particularly 
with part-time DVOPs. Having run at the time the second largest 
DVOP/LVER Program in the country, with the full backing of 
Governor Cuomo and the State legislature on a bipartisan basis 
and all the VSOs, I can tell you how difficult it is to keep 
managers from misusing the veteran staff in those local job 
service offices when they are overrun with people because they 
do not have enough general staff. And that is still the case 
today.
    The Jobs for Veterans Act shifted to something that perhaps 
made some great deal of sense, and I was part of the thinking 
at the time, although we objected to many of the particulars in 
the Jobs for Veterans Act, that we would switch from 
proscriptive behaviors to measuring results. And so the 
tradeoff was supposedly giving the workforce development 
agencies more latitude in return for much more rigorous 
accountability. Does anybody get a job here? And is it at a 
higher level? And for veterans. And particularly for disabled 
veterans and special disabled veterans, those with 30 percent 
or more.
    And, in fact, the latitude was given to the workforce 
development agencies almost immediately, and I believe it is 
still pending and still has not been published, all of the 
regulations that have to do with the accountability portion of 
it, 6 years later. And that is being done now, I understand, 
only because the legislation was passed last year that required 
them to publish the regulations to implement the 2002 law. This 
does not impress us.
    One of the biggest problems in Government throughout, 
whether it be all of the fine legislation that you have had a 
significant and leading role in for veteran entrepreneurs, when 
it comes to Federal procurement, the problem is in the 
accountability about what actually happens out there and does 
anything bad happen if people do not do the right thing and do 
not obey the law, and does anything good happen if they do a 
heck of a job. And it is that lack of accountability that we 
feel that it is struggling. It had led DVA to the point where 
we believe that when it comes to the DVOP/LVER Program, there 
are only two responsible options without betraying the young 
people coming home. One is to Federalize all the DVOPs and 
LVERs and put them under the direct control of the VETS and the 
State directors and assistant directors and not keep them just 
processing people into one-stops, but them wherever the vets 
are and where the employers are. The job listings for disabled 
vets over the last 20 years of my talking to DVOPs all around 
this country comes right back to the same thing. The DVOPs will 
say that for disabled vets, they develop--almost every one of 
them----
    Chairman Kerry. Is the reporter getting all these acronyms? 
Are you OK with that?
    Mr. Weidman. I am sorry. For the veteran staffer, for a 
special disabled vet, meaning 30 percent or more, that they 
develop the job around the individual, and then they go work 
with an employer to create that job. It is very labor 
intensive, no pun intended, and it is not a high-gross game. 
And so we need to get away from that and understand what can we 
do for the high-risk veterans and especially for those who are 
service-connected disabled who are coming home today so that 
they do not wind up like a lot of our guys 25 years down the 
line with a resume that looks like Swiss cheese. And a job is 
the key to the readjustment process. It is really the nexus of 
the readjustment process. And everything else ought to be aimed 
toward that flash point of obtaining and sustaining meaningful 
employment, and currently the aspects of the system, some run 
by the VA, some run by Labor, do not work very well.
    In regard to USERRA, I will just offer a very brief comment 
that I offered last week at the Veterans' Affairs Committee 
hearing that Senator Akaka and Senator Burr held in regard to 
USERRA. And there was a law, we said, well, we do not object to 
this, and it is--possibly toughening up the law will do some 
effect, but maybe after all the things we have done over the 
last 25 years, what the young people still tell me--and I spend 
a lot of time with young people, from Walter Reed and from 
other hospitals--is that they do not even bother--I am talking 
about the Guard and reservists--because they hear it takes up 
to 2 years and most of them do not get satisfaction, and that 
it is justice delayed is justice denied. If it does not happen 
quick, it does not matter. He or she----
    Chairman Kerry. So how do you pull them in? How would you 
pull them in? What is your way to make sure----
    Mr. Weidman. Well, I think maybe we ought to rethink our 
approach. A very small percentage of the employers in this 
country are paying the economic cost of this war, in other 
words, because they have Guard and reservists working for them. 
Let's give them a tax break, one. And, two, let's take some of 
that WIA money and make it available to employers, particularly 
small employers, not only to train their replacement for the 
individual who gets activated into the Guard and Reserves, but 
also for the individual who comes home after the deployment who 
oftentimes, after 15 months away, has to be retrained. So let's 
focus on that because right now some few large corporations are 
making a mint on this war. Maybe it is time for another Harry 
Truman style hearing. But the small guys are paying.
    Chairman Kerry. Right, but are those reservists and 
guardsmen the people who are--are they the ones who are really 
being dropped through the cracks, in your judgment? Or is it a 
more chronic problem for the person who winds up with that 
Swiss cheese resume that you have talked about who is really 
somebody who may not have the training, did not have a solid 
job necessarily, or does not know where they are going? You 
know, I am not thinking about the employed person, but the 
person who was not necessarily already employed in the civilian 
sector who is coming out for the first time to look for the job 
and so forth?
    Mr. Weidman. Well, the experience of those employers--
employers who have hired Guard and reservists and veterans once 
are more likely to do it again. But if that returnee is a young 
person that went out of high school directly into the Reserves 
and National Guard, which often happens, and then comes home, 
they are in that category, just as the separating active duty 
folks. They have a high school diploma and have never been in 
the job market.
    The same veteran-friendly employer is reluctant at this 
point to hire more, and we have talked about this, and you 
heard testimony a year ago January----
    Chairman Kerry. Because of the cost to the company.
    Mr. Weidman. Because they are going to take care of the 
people they have.
    Chairman Kerry. Right.
    Mr. Weidman. But they are not going to extend more, and Mr. 
Klerman talked about the attitude of many employers. It is a 
great danger, and it was a great danger with Vietnam veterans, 
that you had to fight so hard to get the neuropsychiatric and 
readjustment counseling services that it made it difficult for 
people to get a job. But at the same time, in order to get and 
keep that job, you need those supportive services for many 
combat vets.
    So I am not sure what the solution is, but one thing that 
would be a good watch word, if I may suggest, is--our good 
friend Max Cleland, a former Member of this Committee, had a 
great phrase for it: ``strong at the broken places.'' People 
who--combat vets are strong at the broken places if they get 
the care they need to help make them as whole again as humanly 
possible, both neuropsychiatrically as well as physiologically. 
And I will stack that combat vet up against the kid who hung 
around and never served their country in the military any 
doggone day as being the person I would bet on to be the best 
employee.
    Chairman Kerry. Yes, well, I do not disagree with that at 
all. The question is how to get these connections, how to make 
it attractive for that employer to actually do that, which is 
what we are talking about here, which is good.
    Mr. Elmore, do you want to pick up? And then we will go to 
Mr. Rooney from there.
    Mr. Elmore. Yes, sir.
    Chairman Kerry. I am going to have to dog out of here in a 
minute, but----
    Mr. Elmore. And thank you for having this today. I think a 
couple of points really for Mr. Klerman. I found his report 
very interesting, and I am still digesting much of what is in 
there. But there are a couple of points that I wanted to make 
in the context of the question about the quality of the 
recruits. I think DOD recognizes this, and perhaps Dr. Winkler 
might want to address this later.
    We have been working with the Department of the Army for 
about 4 years now on the development of what is called the Army 
Advantage Fund, and that fund, in fact, is going to support the 
creation of future homeownership and future entrepreneurs of 
Army recruits. And they have to be in the 50th percentile or 
higher to be eligible for that program. So DOD is also taking 
these steps to try to recruit high-quality recruits, and I 
applaud them for that.
    A couple of points, though, that I wanted to make about the 
report. One of his primary recommendations was this lack of 
network amongst servicemembers coming home, and I think that is 
critically important, and I think that is important in the 
small business side as well, because entrepreneurship is a 
lonely profession, and if you do not have an ability to link up 
with others who are entrepreneurs and you do not have family 
support, the prospect for success can suffer. So I would like 
to have a little more exploration of how we get around and get 
to this development of the kind of support networks that are 
more typically available for those who do not serve.
    Second is there is other evidence in some other reports 
that talks about rural self-employment, and there has really 
been a pretty dramatic increase in self-employment in rural 
communities. It is about 240 percent over the last 40 years. 
But at the same time, self-employment income is only about half 
of those who have regular jobs in the regular civilian 
marketplace. And given that many of our Reserve and Guard 
members are from rural areas, I think that is an area that 
certainly I am trying to push my program focus increasingly 
toward. How do we get out and affect opportunity in the rural 
areas, especially as we continue utilizing Reserve and Guard?
    Thank you.
    Chairman Kerry. Well, that is interesting. Does the SBA 
have a--I mean, is it targeting that in some specific way?
    Mr. Elmore. Given the experience that we have had with the 
Patriot Express Loan and I think the initial really pretty good 
success on that, we do have a new Rural Express Loan Program 
that is targeted out to the rural areas. And I know in the work 
that I have done with our Small Business Development Centers, 
for example, with my district office outreach initiative as 
well, we continue to push out to engage Reserve and Guard, 
whether they are rural or urban, and through that trying to 
bring them in touch with the services and resources we do have 
available in the hopes that that will be----
    Chairman Kerry. When do you begin that? When do you 
initiate that? Is there some awareness at separation that this 
is available to people?
    Mr. Elmore. Yes, I think--one of the other points in his 
study is that a significant number of Reserve and Guard and 
active servicemembers begin to think about that transition 
before they get to TAP. I think it was 30 percent, if my memory 
is correct, pretty close to that, begin their job search prior 
to separation. So I think it is not just TAP. In that sense, it 
is really almost pre-TAP. You know, how--we certainly do not 
want to encourage people to get out. But at the same time, we 
want to make sure those who have made that decision that they 
are not going to continue to serve, whether it is because their 
enlistment is up or retirement, that they know about and have 
access to the services and information available from all of us 
here at the table and others. So that is the direction that we 
are trying to move.
    Chairman Kerry. Mr. Rooney.
    Mr. Rooney. Thank you, Senator. My name is Roderick Rooney. 
I am a citizen, and I am speaking in that capacity. I am a 
special veteran, disabled vet, an entrepreneur. I suffered 
dealing with some of the programs in the Northeast Veterans 
Center. They closed. I have a master's degree. I am a WIA, the 
one-stop centers, but there is nothing that was out there--I 
was out of work for 2 years. There is nothing out there for a 
person who has, a veteran who has some skill sets, some 
training, some tangible--have a resume that does not have gaps. 
There is plenty of programs for individuals with PTSD or who 
are homeless or some of these issues, but most of--from my 
journey--and I audited, Rick, you know, one-stops. From my 
journey it is only--there is a lot of information, you know, 
from Veteran Express or Career to Success, all the buzz words 
and new-fangled attempts to disseminate information. But it is 
just that--information.
    What I found from the individual service centers that were 
specializing in veterans, they had that--they understood 
simplified. They understood esprit de corps. So when you walked 
in, you felt--you got--what I needed most was someone to give 
me some hope, because you get rejection and rejection and 
rejection. And to have some skill sets and still getting all 
these rejections, like even if you do a Federal job--and I am 
on the special list--the manager gets to choose from that, 
which list he picks from. And if you are not on that list that 
he chooses from, you still do not get that special preference. 
That is a flaw.
    Chairman Kerry. Interesting dilemma. Go ahead.
    Mr. Rooney. But, in general, it is--I was reading some 
report, and it had a lot of repetitiveness in the communities 
that specialize in veterans services. I think that is not so 
because for a person who is in the local area, when you go to 
the one-stops, something like that, that is the big mountain on 
the hill. The one that is in your community, you kind of know 
and are familiar with, and the individuals that work there are 
familiar with you. And the service centers reps--there is only 
one. He may have like 25, 30 veterans. You get to see him maybe 
once every 2 weeks, and he is just giving you information that 
is on the Internet. You know, I live on the Internet. I am 
originally a New Yorker, so I just--you know, I am on the 
phone, Internet, everything. But it is no information that I 
could not find myself. And I found that the services that are 
out there from Department of Labor and all those agencies is 
general information. No one shakes hands anymore. At my former 
job was a fellow who also could not find a job. So maybe I was 
not that good at it, right? But no one goes and shakes hands 
and looks someone in the eye and builds that relationship of 
trust, giving the veteran a chance or saying, ``I have this 
perfect person for you. Let's give him a shot,'' and coach them 
in the job and follow up with them. Instead of having a 
referral, have a linkage. My hand is still on this individual. 
It is not like that when you go to, I guess, the larger 
agencies. And this is like--the ones at the smaller agencies, 
when I went in, they gave me a free seat for grant writing. You 
know, I could barely pay for gas to even go from Boston to 
Lawrence, you know, but I did. And I was out of work for--I got 
a 6-month contract job with the State of Massachusetts as a 
contract monitor. But that is the most I can squeeze out in 2 
years from unemployment. And if you go to the SBA or SCORE, you 
have to be pretty much polished when you get there.
    You know, if you are a young veteran, a returning vet, you 
do not have that polish like that. You are still plowing and 
you are still readjusting, and you have to have a polished 
business plan that is, you know, good to go through the--I 
mean, they have got representatives there and experts there to 
help you muddle through to get it to the level of if the banks 
will give you a loan. But to go through that process is a big 
turn-off, and it is not even really--you know, if you knew, 
especially if you are young and coming home, you know, that is 
like going to college. I have got to put math down. I have got 
to put my thoughts on paper. It is a fighting task, and so it 
is just missing the mark, just from my----
    Chairman Kerry. Well, that is a very important--that is a 
very eloquent and important statement. I think it is helpful, 
and it needs to be fleshed out a little bit here as we go 
forward, sort of what is the reality versus the policy or the 
concept. And I think if we can flesh that--I have got to go 
down to this other hearing for a minute, but I know, Dr. 
Winkler, you have had your card up for a moment, so I am going 
to leave it in the hands of Karen and Matt, if I can. But this 
is good. Keep fleshing this out a little bit, and I think there 
is a lot more yet to be added to it. We have a lot of experts 
at the table. Have we made you a Red Sox fan yet?
    Mr. Rooney. No way. No way.
    Chairman Kerry. You just lost my sympathy.
    [Laughter.]
    Mr. Winkler. Good morning. I am John Winkler, Principal 
Deputy Assistant Secretary of Defense for Reserve Affairs, and 
I am very grateful to have this chance to come and talk about 
this issue.
    The issue of veterans' employment and unemployment is 
important to the Department of Defense, and Reserve Affairs, in 
particular, as far as guardsmen and reservists are concerned. 
We have a role to play in many ways in assisting guardsmen and 
reservists and understanding the source causes of problems that 
people may face with their employers. We also are responsible 
for the National Commission for Employer Support of the Guard 
and Reserve, which is the front line for the Department and the 
employer community dealing with issues.
    And so we have been really thinking hard and looking hard 
at this issue from our perspective for a couple of years, and I 
think the general point I want to make in response to points 
that have come up so far along the way is while there is no 
doubt there are problems out there with respect to individuals 
and veterans getting jobs, keeping jobs, finding jobs, and so 
on--we certainly admit that and understand that. However, from 
a perspective of public policy, what we have really put our 
effort into is in really nailing down the facts, trying to 
understand empirically what is going on so we can target our 
efforts or respond to your initiatives in terms of targeting 
them toward the populations or the problems that take 
precedence over others. As Senator Kerry says, first find the 
drivers and then prioritize among them.
    But one thing I want to offer today then is just a few 
facts as context for the discussion. Again, yielding that you 
will no doubt be able to find somebody whose personal 
experience may contradict what I am about to say, these still 
are the facts as we understand them from surveys, through 
research, and so on and so forth.
    The first point I want to put out for us is at least 
speaking to the Guard and Reserve community, you know, what is 
their employment status and to what degree are they facing 
difficulties when they come back from deployment and getting 
jobs and so forth? So the first fact coming from the June 2006 
Status of Forces surveys that the Department conducts shows 
that looking at that point in time, 76 percent of Guard and 
Reserve members were employed when they were activated at that 
point. And of that 76 percent, 79 percent returned to the same 
employer and 19 percent returned and found a different 
employer. Do the math: 98 percent of those guardsmen and 
reservists who were employed prior to activation came back and 
were able to successfully find a job.
    So the problem now turns to the 2 percent. What is going on 
with the 2 percent who had a job, came back, did not return to 
work? What the surveys, again, tell us is that there are 
reasons for that. Some people decided they did not really like 
their previous job and they wanted to leave it. Some of them 
are taking advantage, properly, of educational benefits they 
have earned and have decided they wanted to upscale and they go 
to school. Some of them say simply they want to take a break.
    Now, that then brings us to the Unemployment Compensation 
for Servicemembers Program which Mr. McWilliam mentioned 
earlier. Recall that guardsmen and reservists who serve 90 days 
or more on active duty are entitled to up to 6 months of 
unemployment compensation. There is some evidence that the word 
is getting out, and that, in fact, the guardsmen and reservists 
who are eligible for unemployment compensation for ex-
servicemembers are appropriately utilizing their entitlement. 
That is supported by the notion that they are taking a break, 
changing course.
    So the first conclusion I draw from that is that at least 
some of what you may observe overall in terms of unemployment 
among veterans is driven by that segment of the veterans, the 
guardsmen and reservists, who are utilizing unemployment 
compensation for servicemembers and are doing so, in effect, to 
provide them with a transition as they sort out where they are, 
where they were, and where they want to go. So I think that is 
part of it. The implication of that for me from a public policy 
perspective may then be that if people are taking time to 
readjust and to chart their futures, are we supporting them in 
the best way to help them make their decisions and make good 
contacts, and that might be one dimension of this that would be 
important, too.
    The other thing is the issue of those reservists coming 
back and who are facing issues with USERRA and so forth. And, 
again, no doubt there are people who have had problems, but, 
again, what the basic situation appears to be--let's look at 
June 2005 to March 2007: 246,200 guardsmen and reservists de-
activated. Cases that ultimately rose to the level of a USERRA 
violation, less than 2,000, \1/10\ of 1 percent of the de-
activated population. One-tenth of 1 percent.
    Now, again, will some people say, ``I didn't want to 
bother, I didn't think I could get any recourse to that''? Yes. 
But how much bigger would one-tenth of 1 percent grow based on 
that?
    One indication of that would be, again, going back to our 
National Commission for Employer Support of the Guard and 
Reserve ombudsman activities, we have hotlines. We are actively 
working in the fields to talk with employers, talk with 
guardsmen and reservists who may have difficulty. We are 
fielding over 13,000 calls a month lately and resolving most of 
them. So there is certainly at least some people who are at 
least making the effort and are getting relief and don't rise 
to the level of a USERRA violation.
    Again, then, kind of a conclusion I would draw from that, 
if you are trying to prioritize the problem list here, the 
veteran community who were previously employed and returning to 
work would not necessarily be the first population in most 
need. It might well be others, such as disabled vets, such as 
people entering the workforce for the first time. And, in turn, 
I would say going forward, one useful thing to continue to do 
is to segment this population and really understand which 
individuals are most in need.
    Thank you.
    Mr. Walker. I am here to mostly listen versus to talk 
myself and to speak, but I did have a quick follow-up question 
for you. The report made one note which was that one of the 
suggestions was rebranding the military to potential employers.
    Now, I am sad to say, as a member of the Guard and reserve 
myself, that many members that I have talked to have actually 
told me--and this is very, very disconcerting--that they have 
actually questioned whether or not when they apply to 
employers, whether they should include their military service 
on their resume because of fears of how that could react. And I 
am wondering, have you been doing anything to sort of rebrand 
these members to potential employers to talk about their skill 
sets, what benefits they have, what value they can bring to the 
civilian world?
    Mr. Winkler. Yes, and, again, John Winkler, Reserve 
Affairs. We hear this, we appreciate it, we understand this. We 
talk with employers, we talk with the guardsmen and reservists 
to understand the degree to which this is potentially an issue.
    But I have to say, again, there are anecdotes and there are 
experiences, and then there is other evidence and experiences. 
And I can only really address this in a very preliminary way 
right now because the study we are supporting is still 
finishing its final stages. But we have been conducting an 
employer economic impact survey looking at impacts on employers 
and costs that are imposed on them when their employees are 
called up for military service. And the findings initially 
provide a very strong counterpoint, which is, when asked 
about--these employers asked about their experience with 
reservists, they are very, very positive. In fact, they rate 
them as equal or better than non-military members across 
various dimensions related to their job effectiveness.
    So there are employers out there who appreciate this. 
Perhaps it is true. We can continue to communicate the value of 
military service. But, again, anecdotally, we understand that 
employers appreciate the fact that they are getting workforce 
members that are drug free, that are on time, that are focused, 
that can work in teams, and these kinds of attributes I think 
are ones we can continue to emphasize.
    Ms. Radermacher. Mr. Dever, you have had your placard up 
for a while. Would you like to comment?
    Mr. Dever. Sure. I am very pleased to be here, and thanks 
to Joan and yourself for making things so that I could be here 
today. I didn't think when I came here this morning that 
immediately USERRA would jump to the front of what it was that 
I wanted to say to people here.
    First, let me say I am a member of the community. I am a 
service-disabled veteran. I am a small business owner. I am a 
small business owner because, after coming back from Iraq, I 
went through a period of unemployment. And the way I became 
employed was through the assistance of the Veteran Business 
Outreach Centers. I went through the legislation. I think it is 
a wonderful thing and want to encourage that more be done along 
those lines, because my experience was a positive one. I know 
that the Business Center that I work with, Louis Celli, Louis 
is always busy, which tells me that there are a lot of people 
utilizing his services, a lot of people who need his services. 
And as I said, at a very difficult time for me, Louis was the 
contact point that made me getting myself stood back up and 
back to work possible.
    I will try to go very quickly and hit a couple things.
    USERRA is there, and I will tell you an anecdote that I 
find very, very disturbing, and I can tell you--you know, and 
go with Mr. McWilliam through the specifics of the case. 
However, due to the nature of the injuries, the illness, and 
the problems that returning reservists and National Guard 
soldiers are having, there are some things in there that then 
preclude them from being able to use the things that are 
immediately available to them.
    I have TBI. I didn't know I had TBI until I had been back 
for nearly 18 months. At that point, my recourse under USERRA 
had expired. I had no recourse. That needs to be changed, 
because I will tell you, yes, it may be 2 percent today and it 
may be 2 percent at 60 or 90 days. It is not 2 percent at 18 
months, I don't believe. And I think if somebody looks at that 
particular data set, they will find that there are other 
issues. And, again, it is because of the nature of the conflict 
and the nature of the injuries that people are sustaining.
    A couple of people mentioned taxes and mentioned the tax 
incentives that are given to employers when Guard and Reserve 
soldiers leave to go onto active duty. I will tell you that as 
an employer, and in a previous capacity working as chief 
financial officer/general manager, you know, and basically at 
the nexus of the hiring process, that from the standpoint of a 
company, yes, recognizing the sacrifice that the company makes 
by providing that soldier, airmen, whatever it might be, to the 
Reserve component to go and serve the country is absolutely 
important, and taking care of that incremental wage difference. 
But what I would also say is that maybe more important in my 
mind, I think more important is that on the 2nd of June I am 
going to hire a gentleman to work for me. He is a service-
disabled veteran. He is transitioning from one career to 
another, a career police officer, and now needs to go into 
something different because his disability precludes him from 
continuing on as a law enforcement officer. It sure would be 
great if I could get some kind of tax break, because I am 
putting him, you know, back to work and putting him into a new 
career path, not just a job but a career path that will, you 
know, sustain him for many years to come. And I think that kind 
of a tax incentive might get some of the people who are maybe 
on the fence or who have gone over to the other side.
    The anecdotal evidence about people saying that they have 
concerns about putting their military record service on their 
resume, I will tell you, again, anecdotally, I applied for 148 
jobs in 8 months. How do you know that? Because I have every 
single one of them, and I did not know it was 148 until I 
looked at it last night in anticipation of coming to talk about 
it today. Every single one of those, you know, loud and clear 
declares that not only have I served, but that I continue to 
serve because I am still an active member of the Army National 
Guard, meaning that, you know, could I deploy again or could I 
be called again? Most certainly. And I would say that I am 
happy that I am self-employed and that I do not have to float 
resumes any longer. But I can certainly understand in the 
larger community how a lot of reservists have come to the point 
where they don't know whether it is an advantage or a 
disadvantage.
    I certainly believe---personally, if someone were to ask 
me, I would say that it was absolutely a disadvantage for me to 
be listing those things, and particularly to say that I was 
still an active member because I choose and want to continue to 
serve.
    I have made some other notes, and I will cut myself off 
here, and let some other folks talk, and give those back to you 
afterwards. Thank you.
    Ms. Radermacher. Thank you.
    Mr. Walker. I just had a very quick comment for Mr. 
McWilliam, and that was Senator Snowe's home State actually has 
the second highest per capita existence of veterans of any 
State in the Nation. One in every 10 people in the State of 
Maine is a veteran, so it is an issue that is very, very deep 
to her heart.
    The person who runs the DVOP and LVER Program in the State 
of Maine is Paul Luce, a phenomenal individual who recently 
returned from Afghanistan, does a phenomenal job with veterans. 
Even when he was over there, he was hitting up soldiers before 
even returning about how he can help them find jobs. So, to 
that extent, I want to mention that I feel that the program was 
very successful, at least in her home State.
    But I wanted to briefly mention that a very big concern to 
my boss is the fact there has been an 11-percent drop in 
funding in real dollars to the program from 2001 through 2008. 
And when you figure in for inflation, that is a 25-percent cut. 
Some of the problems that we are talking about within the 
program I think can be directly attributed to the fact that 
when we are talking about a 25-percent cut in funding to those 
programs at a time when certainly our soldiers need this the 
most, as we are hearing here today, I am curious to hear your 
thoughts on that. Are you asking for additional funds? Will you 
ask for additional funds? Why has there been the cut? Not to 
put you on the spot, but I am just trying to figure out where 
things are at, and if you have any thoughts on if there is more 
money that is needed for the program or what else could be 
done.
    Mr. McWilliam. Well, it is a very good point, and I 
appreciate your comments about the program in the State. I met 
the Sergeant Major. He is a very dynamic person. He just took 
over the program I believe about when he deployed or while he 
was there, and we have seen real major changes in his 
leadership of the DVOPs and the LVERs in the State since I was 
up there in November and talked to him and everything.
    The problem between the States, comparing 2001 to 2008, is 
that the new law, the Jobs for Veterans Act, changed the 
funding formula and the way the funds are allocated to the 
States. And it made some major changes in States, and there 
were a lot of States who saw a decrease in funds available 
because of the funding formula.
    The funding formula is based on the number of veterans 
looking for employment in your State divided by the number of 
veterans in the United States looking for employment. And so it 
shifts every year. There is a change every year to it. I will 
have to look and talk to you specifically about how much in 
Maine was caused by the change in the funding formula.
    The appropriation itself has increased slightly each year. 
Our 2009 recommendation shows an increase of about $7 million 
for the program. But I will have to get back to you on the 
specifics.
    Mr. Walker. Thank you. I appreciate that.
    Ms. Radermacher. We do have a couple of other people who 
wish to talk: Mr. Levine, Pat Heavey, Rick Weidman, Justin 
Brown. We do want to move along. We have been talking about 
this a little bit as we have been going along, some of the 
solutions and also following up on our hearing from last time. 
We are going to focus on that here, and then after a few 
minutes, actually probably about 10 or 15 minutes, we do want 
to take a short break and then start talking about vet centers, 
ideally leaving enough time to have a full conversation about 
that as well.
    But I do want to go to--Mr. Levine, you have had your card 
up, and I would like to give you a chance to comment as well.
    Mr. Levine. I would like to indulge the Committee and our 
guests for a brief statement. Ms. Radermacher, Mr. Walker, 
members of the Committee, my name is Bill Levine of W.L. 
Concepts and Production, New York.
    Ms. Radermacher. Mr. Levine, just to check, is this about--
if it is in regard to the Veterans Business Outreach Centers--
--
    Mr. Levine. Yes.
    Ms. Radermacher. We are going to talk about that more in 
depth right after the break.
    Mr. Levine. Do you want me to hold then?
    Ms. Radermacher. It is probably best, if you do not mind. 
If you would like to comment on some----
    Mr. Levine. It is down. Not a problem.
    Ms. Radermacher [continuing]. Of the more recent comments, 
absolutely. But we will focus after the break----
    Mr. Levine. I will wait. Thank you.
    Ms. Radermacher. Who else? Did you want to comment on what 
we have been discussing?
    Mr. Brown. First off, I would like to thank both of your 
bosses for supporting S. 22, as well as some other legislation, 
your bosses' legislation on home foreclosures and caps, and 
that is all very good and we thank you.
    However, I would like to address Mr. Klerman, and I guess I 
am surprised how you suggested that our recruitment standards 
are maintaining a quality level. All of the information I have 
seen and research that I have seen done suggests that we are at 
our lowest recruitment standards in a period of about 15 to 20 
years. The worst recruitment standards we have had was 
following the introduction of the all-volunteer force from 
about 1973 to about 1985, when we introduced the original GI 
bill.
    We know that this era of veteran, from 1973 to about 1980, 
were four times more likely to be homeless than their non-
veteran counterparts. So I am cautious in saying that, you 
know, we are maintaining the same recruitment standards, and I 
believe that we need to be very careful about the recruitment 
standards and the veterans we are allowing in the military. We 
do not want the military to once again become an employer of 
last resort.
    In consideration of that as well--I think today we have 
broadly been talking about veterans in two capacities, one 
being veterans in general and employment issues and reservists. 
I think that there is not a one-size-fits-all, if you will, to 
look at these solutions. And a person that is separated from 
the military as an enlisted veteran is going to need different 
transitional tools than somebody that departed as an officer, 
and similar with reservists as well.
    It is the belief of the VFW that the best transitional tool 
we have for the majority of these people separating, which is 
the enlisted veteran, in our current state, I mean, they are 
typically only doing one tour, is a robust educational GI bill. 
We believe that this is going to allow them to further their 
education and thereby more easily transfer into the workforce.
    No offense to Mr. McWilliam, my personal experience with 
DOL's programs and the majority of my counterparts and fellow 
Iraq and Afghanistan veterans are not using the DVOP/LVER 
Program, and that has been my experience as well with the 
Officer Corps that have done one or two--well, I don't know how 
you phrase it, but if they are mid-grade level officers and 
they have gotten out, they are typically also not using the 
DVOP/LVER Program.
    So, with that, I just kind of wanted to put that forth, and 
I appreciate everything you guys are doing. Thank you.
    Ms. Radermacher. Thank you very much for those comments.
    I do a little bit want to change the focus of the 
conversation to kind of thinking about things that we can 
actually do to address some of the things that have been 
raised. I am going to throw out one question. I see we have 
more people who would like to comment, and I will give everyone 
a chance to do so.
    One of the things that I kind of want to raise, just based 
on what I have heard here today, and that is what I have heard 
repeatedly about disabled veterans and the issues of PTSD and 
TBI and some of the other injuries. You know, we have heard 
about segmenting the population to figure out exactly what 
individuals need, and I think that is an important point. And I 
was wondering if anyone had any comments there, what is needed 
or necessary.
    Mr. Hardy. I will pass.
    Ms. Radermacher. You will pass that round.
    Who else? Do you guys still want to--well, I was just 
mentioning that one of the issues that seems to have come up is 
what about individuals who are leaving the military who have a 
disability, whether it is PTSD or TBI or some form of injury, 
and how does that affect their employment and what can we do 
about it as well. So a couple different people, and I did not 
see who put up--but, actually, I think either--did you have 
your--actually, if you would like to go ahead, I think you had 
your placard up first.
    Mr. Hardy. OK. I did not want to directly address the TBI, 
but something that might be germane. My name is G. Mark Hardy. 
I am an entrepreneur and also captain in the Navy Reserve. And 
so I don't want to talk about my situation so much as it is 
possibly representative of many other guardsmen and reservists.
    Since 9/11, I served over 1,000 days on active duty. None 
of those have been in the capacity of mobilization for the 
Global War on Terror, and as a result, what we find out is that 
none of the protections that would come under things such as 
USERRA or some of the benefits that are often offered to 
individuals who are mobilized under these capabilities would 
apply to me.
    As a small businessman and as an entrepreneur, if I were an 
employee, I could come back and USERRA would protect my job. 
But because I am an entrepreneur, my clients are not bound by 
USERRA. Often, many entrepreneurs come back to nothing.
    And so without the right type of orders, it is a difficult 
situation. As a Navy officer, we are not put in combat roles as 
often as our Army brethren, and as a result, many Army vets 
experience things differently than Navy or Air Force, who are 
put in backfill positions or support positions, so that they 
are not necessarily in the line of fire, which is perhaps a 
good thing, but also what it means is that in the flexibility 
administratively to create the orders, we often bypass the 
mobilization process entirely to get administrative expediency, 
but the net result is that a whole class of reservists and 
guardsmen are denied a lot of the benefits the way that the law 
is written. And here is potentially the reason why.
    If you look at the Commission for the National Guard and 
Reserve, their report that came out earlier this year, Item 22, 
Recommendation 22, identifies 29 types of duty statuses that a 
reservist or guardsman could hold; 28 of those 29 are not 
qualified for some of the benefits that are specified in the 
legislation, such as the Military Reservist and Veteran Small 
Business Reauthorization Act. So I would encourage taking a 
close look at how we define eligible veterans, because you may 
find that they are individuals who have served honorably, 
continue to serve honorably, share a disproportionate burden 
economically as a result of their voluntary participation, and 
yet are afforded none of those legal provisions because we are 
focusing on those who have been mobilized through this 
particular process. And, of course, for the disabled veterans 
that come back, they need, you know, special consideration. I 
absolutely have no concern or no grudge against that. I think 
it is wonderful. But I think we are leaving a whole class of 
folks out.
    That would be my input on that.
    Ms. Radermacher. I do think that is a really interesting 
point and one that I have not heard actually made that often, 
so I think it is an important thing to add to the discussion.
    Just for our sake, you mentioned that you are a reservist/
small business owner. Is there any thoughts that you would like 
to add about other things that would be helpful for you as you 
have served the Nation repeatedly over the last few years and 
continue to run a small business? Are there any things that 
would be helpful to you or----
    Mr. Hardy. I would think so, and thanks for asking the 
question, because right now, again, looking through the 
legislation, it provides--it makes it easier for me to get 
access to loans. But I don't need access to cheap money. I have 
already built a business. I can access funds. What I need is 
access to opportunity, and we have structures that are already 
well in place. For example, the Small Business Administration 
has an 8(a) Program which will support culturally disadvantages 
and socioeconomically disadvantaged businesses.
    Well, I can think of no greater disadvantage than to be 
gone all the time serving your Nation, and yet because of my 
genetics, which I have no choice of, I don't fit in any of 
those categories that would describe me as potentially 
disadvantaged.
    So one thought may be to take a look at programs such as 
8(a) and to extent the eligibility under title 13 to include 
returning veterans to allow for--and, again, it is a part-time 
program. It does not exist indefinitely. It has certain 
eligibility criteria. But it would require no new bureaucracy 
or it would require no new structures, simply a change in a 
line of the law which then would permit SBA to provide that 
type of meaningful assistance, and not only have access to 
opportunity, which currently all I have access to is 
potentially loans.
    Ms. Radermacher. OK. That makes sense. It makes a lot of 
sense.
    I was just informed actually that, Bill Elmore, you are 
going to be leaving, you have to leave early today. And we do 
have a couple questions that we wanted to ask beforehand. And 
so actually if you guys can remember, we would like to hear 
from all of you. Before he leaves, we do want to follow up on 
some of what is happening with the bill. Did you have a 
specific question that you wanted to start----
    Mr. Walker. Well, actually, Bill, if you wouldn't mind, 
just more so for the benefit--we have heard a little bit about 
what is being done in terms of the status and implementation, 
but for the benefit of the people that are sitting around the 
table, if you could just quickly give an idea of where things 
are at in terms of implementing the legislation, we would 
appreciate that.
    Mr. Elmore. Yes, sir. Thank you.
    There is a number of the parts of that legislation that we 
are actively implementing, but probably the easiest and the 
most straightforward was the permanency of the old Advisory 
Committee on Veterans Business Affairs. That has now been 
rechartered. We have scheduled the first meeting. It is going 
to be in June, and we are actually actively recruiting new 
members as well because some of the members are reaching their 
expiration dates in June. So we are doing that now.
    The SBDC Program is going to be announcing very soon grant 
opportunities for SBDCs under that part of the law. So I think 
you are aware of that, but that is coming, and I would expect 
within the next 30 to 60 days you will see that grant 
announcement out on the street and for SBDCs to compete.
    The DOL-TAP part, we had already provided a number of 
materials to DOL. We have pulled those materials back, and we 
are now updating some of those materials for part of the TAP 
manual. And we are also in discussion with DOL about--and with 
DOD, but we are starting with DOL because they basically run 
the TAP Program itself--to try to update the materials there 
and make sure that those materials are available at every TAP 
seminar in the country, and that is about 4,000 seminars. So 
you know I have five centers. It is kind of hard for five 
centers to get to all 4,000 of those seminars. So we are 
working with DOL, and will with DOD, to get that done.
    We have changed the Vet Business Outreach Center Program 
announcement, and, Coreena, this will be the first time you 
have probably heard this. One of our five centers expires this 
year. They are in their fifth year. So that program is going to 
be recompeted for one center, and that announcement will likely 
be out in the next 30 days, and have now included the authority 
in there for them to be able to do the grants or the contracts 
or subcontracts out for other organizations to participate in 
TAP. So we have taken that step.
    I know there is a number of things that I am missing here.
    We have already put up a mock--or basically a startup 
website on how to promote MREIDL more efficiently and more 
effectively to reservists. We have not gone to DOD with that 
yet, but we have put it up internally, and we are still 
working--actually, I was working on that this morning on some 
of the banners and things that will go into that.
    We are working on the regulations for the changes to the 
MREIDL Program itself. We will be extending not only--there 
will be this pre-activation program. We also will do the 
reprioritization so that those loans will be the ones that are 
processed first. And we are also in discussion--other regs have 
not come out yet, so please do not hold me to this in final 
form, but at this point, we believe that the extension on the 
timeframe to apply will be equal to the time that someone has 
been activated. So we are working on those regs now, but as you 
know, the regulatory process, I cannot just pronounce that as 
done. There is still a ways to go with those kinds of things.
    There is a number of other steps in here that I am sure if 
I took the time to read my list--you know, we have met with GAO 
on one of the reports. We are working internally to identify 
what we think the cost will be so that in future budget 
requests we can come back to you and say here is the amount of 
funds we would need to implement the new loan program, here is 
the amount of funds we would need to do the study, here is the 
new funds that we would need to expand the Veterans Business 
Outreach Center Program, those kinds of things. So we are 
working actively on all of those.
    Mr. Walker. I just want a quick follow-up on this one.
    Mr. Elmore. Yes, sir.
    Mr. Walker. One of the things that was extremely important 
for my boss--and it was from the hearing that was held back in 
January--is that she heard that there is a lot that is being 
done by everyone to help veterans, but that there seemed to be 
people going in different directions. And she called for the 
creation of the Interagency Task Force, and it is something 
that is really near and dear to her heart because she thinks 
this is needed to coordinate and leverage what is being done. 
And I specifically wanted to bring this up before you left, but 
as well as others in the room are still here--SBA, DOD is here, 
VA is here, VSOs are here. She wants this to be implemented 
soon, but she also wants it to be truly effective. This is not 
some interagency task force that is just out there for the sake 
of saying that there was one. So all the people in this room, I 
really encourage you to work together, because this is a 
tremendous opportunity to really speak to your agencies and 
tell them that from her perspective she is going to hold people 
accountable to do this, to stand straight and make sure that 
they are working together so that we are coordinating and 
leveraging what can be done.
    Mr. Elmore. I can tell you that we are actively working on 
that as well at the highest levels of not only SBA but inside 
the administration to identify how to put this thing together 
properly and to make sure that we have a level of participation 
that the law I think envisions. So we are working on that as 
well. It is not a piece that I manage in that sense because we 
have to do some coordination across other agencies.
    Ms. Radermacher. I just want to follow up a little bit 
about the Military Reservist and Economic Injury Disaster Loan 
Program. First of all, is there a sense of when we might see 
the regulations for the changes?
    Mr. Elmore. You know, I cannot give you an explicit 
timeframe, also because we have to go through this whole 
regulatory process. I can tell you that we are, in fact, 
drafting the regs and we are drafting the changes to the SOPs 
and those kinds of things internally to implement that. We 
don't think there is any real significant cost association, so 
it is really a paper process. You know, in fact, some of the 
things that--you know, the prioritization of the loan 
applications, we were already doing informally. We simply had 
not put it in the regs. So some of that stuff is already in 
play. Certainly we have had a lot of work going forward with 
Dr. Winkler's office, with ESGR, and many others in the 
promotion of MREIDL and trying to put that information out in 
front of Reserve and Guard members and their employers.
    So, you know, we can get back to you, I think, with a 
timeframe, but I will have to go back to our disaster office 
and ask them specifically where they are at in the process.
    Ms. Radermacher. OK. The other question I wanted to ask 
about is I am glad to hear that you are increasing efforts to 
get the word out about the MREIDLs. But the question--I have 
been reading a lot of news stories about the Patriot Express 
Loan and the number of loans that have been approved since--I 
think it was June 13th when it was rolled out.
    Mr. Elmore. Yes.
    Ms. Radermacher. And it is something like over 1,000 for 
something like over $100 million. And then when I compare that 
to what has happened with the MREIDLs--and I think it is about 
290 loans for about $26,000 or so, and I recognize that they do 
apply to different people. However, I just had another 
conversation with someone before the roundtable, a reservist/
small business owner who actually again said to me, he was, 
like, you know, ``I really wish we had something like a loan 
that would apply to reservist/small business owners who are 
affected by deployment.'' And I was, like, ``Well, there is.'' 
I mean, it is out there.
    And so I guess I am not understanding why SBA is managing 
to get the word out about Patriot Express, yet it seems that 
far fewer people know about this other program that is far 
older.
    Mr. Elmore. You know, they are all good questions, and 
those are the same questions we wrestle with internally. We 
know we approve about 60 percent of the applications that we 
receive, which is higher than our regular disaster portfolio. 
So we are pleased that we are able to help make this thing fit.
    I think what you run into--and the law helps change this--
part of it was the timeframe. You could not make application 
until you got activated. After you got activated, you are not 
going to make application if your activation notice was a very 
short timeframe. So you are not going to make application 
likely until you get home. If there has been significant damage 
to the business, the idea of entering into additional debt to 
support that business, you know, that is a real challenge. And 
you know this as well, we are also constrained in that we 
cannot approve loans unless the customer, the potential 
customer, can show an ability to pay it back.
    So I think there have been a number of things that have 
tended to push against additional debt for those that really 
suffer the significant damage.
    The other problem is--and it is a real problem, and John 
and I have worked on this now for a long time--there is no one 
simple way to identify those that are affected. So how do we 
identify amongst that million two or million eight reservists 
out there those that are self-employed, those that are 
activated, those that may suffer damage, or those that have 
been damaged? We all recognize there is damage, but it is a 
significant minority of those self-employed reservists, and 
there has been no one way to identify them. And that continues 
to be a real challenge for us.
    Ms. Radermacher. OK.
    Mr. Walker. Sorry, and I want to apologize to everyone for 
doing this because I want to just quickly go into something 
that we actually have earmarked for later to discuss. But on 
the Veterans Business Centers, both VBOCs and VBRCs, I do want 
to ask you, because you do have a flight and it is important 
that before you leave we get the SBA's position, particularly 
from you.
    Mr. Elmore. Yes, sir.
    Mr. Walker. As someone that specializes in this issue 
within the SBA, and that is why I apologize for deviating, but 
I want to catch you on record here.
    There have been discussions about the benefit of Veterans 
Business Centers, and both of our bosses are clear in our 
strong support for that and why they support it. And one of the 
issues that people brought up is the question of is there 
duplication, and the question is: Are they duplicative of Women 
Business Centers, SBDCs, other entities that are out there? And 
we clearly think that it is not. We know that it is not. We 
realize that there is specialization, that they have a 
different network, that they have special skill sets. We 
understand that, but I want to hear from your perspective your 
thoughts on that, particularly as someone from the SBA that 
works with people both in SBDCs, WBCs, VBOCs.
    Mr. Elmore. I do not believe they are duplicative. I think 
if you look at the reach that SBA has, given our size 
especially, you know, we assist in some sense or another around 
1 million, 1\1/2\million, up to 2 million entrepreneurs a year. 
There are 25 to 26 million entrepreneurs in America, so clearly 
we do not reach, even with all of our programs, all the 
entrepreneurs. And you layer that with veterans and reservists 
and those that have been activated and those that have gone 
away and come back, I do not think there is any way that they 
are duplicative. I do not think there is a single system in 
America that can reach every Reserve/Guard veteran.
    I can tell you as well that if you will look at--and it is 
anecdotal, and we have not done research to demonstrate this. 
But I will pick Florida for an example because they are not 
here. That is one my five centers, one of the original centers. 
Twenty percent of the SBDC customers in Florida are veterans, 
but yet only about 10.5 percent of the adults in Florida are 
veterans. So if you look at the percent of veteran 
participation in all of our programs across the agency, it 
comes nowhere near that 20-percent level.
    Now, I do not know why, but we have now invested $150,000 a 
year into the Florida SBDC as an adjunct. It is not the SBDC. 
It is a program that is associated with SBDC. Make that clear. 
But I think that relationship of having a veteran focus, 
whether it is inside that system or outside the system, like 
California, and working with the SBDC--or St. Louis or Boston 
or any of the others--shows that there is value in knowing the 
common language, the common history, the common background, the 
common experience, and the common issues and the common 
resources available to anybody that has worn the uniform. Those 
that have not simply do not know those things.
    So you accelerate the engagement, and I think you said it, 
sir. Having somebody look you in the eye--a veteran is not 
afraid to look another veteran in the eye. Sometimes there are 
others in the world of human services--and I have been doing 
this for 35 years. I have only been a Fed for 8. In the world 
of human services, there is a number of people I dealt with 
would never look me in the eye, and almost to a person, they 
never wore the uniform. So there is always great value.
    You know, if you don't mind me rambling on here a second, 
because I think this is really important. We have the Vet 
Center Program at the VA, which is, I think, one of the most 
important and incredibly effective programs VA has. Before the 
Vet Centers were created, there were mental health services all 
across America. But yet we created the Vet Center Program 
because there was great value in bringing that commonality of 
experience to the table to make sure that those men and women 
could get the services they needed and get on with their life 
and succeed.
    Everywhere you look across the Federal sector, we have 
veteran-specific program activity like the GI bill, like the 
Home Loan Program, because it makes sense. It works. So how--
back to, I think, the final point. I believe that a veteran-
specific approach through our centers and in concert with SBDC 
and SCORE and others is not only more cost-effective, but I 
believe it is more service-effective, because the first time a 
vet walks in the door, they are going to get an answer. It may 
not be the answer they want to hear, and I expect my friends 
would say the same. But they are going to get an answer. That 
is not always the case in the broader human service delivery 
system in America that does not know about what it means to 
wear the uniform.
    Thank you.
    Ms. Radermacher. Thank you very much for that.
    I would like to start talking about Vet Centers. I did 
promise that I would also break. Due to time, if we do not need 
it, I would like to skip it. But if anyone would like a very 
short break to run out, we can do that at this time.
    OK. Let's take a quick break. If you can be back maybe in 5 
minutes.
    [Recess.]
    Ms. Radermacher. All right. Let's go ahead and get started. 
Matt will be back in 1 second.
    I would like to start this next portion, and this will be 
talking about Veterans Small Business Centers. Ideally, I would 
like to start by actually giving Mr. Heavey and Mrs. Conley an 
opportunity to talk about what it is that they do. If you would 
like to start?
    Ms. Conley. Absolutely. My name is Coreena Conley, and I am 
the Director for the Veterans Business Outreach Center, which 
is a statewide business and economic development initiative. I 
serve the State of California and also the State of Nevada. We 
have a sub-center in Nevada.
    The core mission of our program is to be able to advance 
the growth and commercial competitiveness of veteran-owned 
small business enterprises through education and services 
focusing on business development, technology deployment, and e-
commerce. And how we effectuate those services are in three 
forms of--three capacities. We provide free one-to-one business 
consulting services for veterans, reservists, and Guard 
members, and there are initiatives to either start a business 
infrastructure and/or expand an existing endeavor.
    We also offer a plethora of educational workshops series, 
and we host 1- to 3-day conferences which has an emphasis on 
Government contracting, both on a Federal level, a State level, 
with prime contracting capabilities. We also have a component 
of financing which has an emphasis with the Patriot Express 
Loan Program and franchise capabilities as well.
    Our center is located and co-housed through the Vietnam 
Veterans of California. We are actually a division of them. And 
the other component of the services that we offer is 
transitional housing. We also have clinical psychologists and 
counselors that provide services with post-traumatic stress 
disorder. And that is based out of our California facility. We 
have about four housing facilities throughout northern 
California.
    Our center has collaborated with numerous agencies 
throughout the State of California and Nevada, both on a 
Federal level, a State level, and a local municipality level, 
allowing us to be able to provide these consulting services to 
the veterans small business sector, and not allowing us to 
duplicate our efforts with agencies such as the Small Business 
Development Center's Service Corps of Retired Executives.
    So what our organization has done is we have entered into 
cooperative agreements with the Small Business Development 
Centers throughout the State of California and Nevada and the 
Service Corps of Retired Executives and Women Business 
Enterprises. So we are the point of contact, our California 
center is, for any veteran that is looking to receive any form 
of business consulting services. They will refer that client to 
our office so we can help do a needs analysis to either help 
them start that business infrastructure and/or expand that 
endeavor, or if it is an exit strategy due to today's current 
state of economy.
    Just to give you an example of the amount of clients that 
we serve--and what you have to realize is that we operate this 
Statewide initiative on a nominal budget. Our budget is 
$150,000 each year. For contract period last year, from 10/01 
of 2006 to 9/30 of 2007, between our training and our 
conference activities, we served over 24,940 clients. We did 
over 101 training activities. On our one-to-one consulting 
hours, we provided over 1,040 consulting hours and served over 
425 veterans, reservists, and Guard members. And what you need 
to take into consideration is some of these individuals were 
actually serving overseas at this time. So they had a business 
infrastructure in place, and they were very concerned about the 
operational infrastructure and the survival mode when they came 
back home. The spouse was usually left behind to manage it, and 
they had no expertise in that industry sector. So what we did 
is we stepped in, did a needs analysis, and either put together 
an exit strategy or bootstrapped them until they returned.
    The prior year, in 10/1 of 2005 to 9/30 of 2006, our 
program was beginning to expand and grow. And if you take a 
look at these numbers, you can truly see how the increase in 
demand with the reservist and Guard members is truly at the 
forefront of our military people returning home.
    In 2005 and 2006 contract period, in our training and 
conference attendees, we served over 14,000 veterans, 
reservists, and Guard members. At that point in time, we 
facilitated only 36 training activities. We provided 886.8 
consulting hours and served 313 clients.
    In this new contract period from 10/1 of 2007 to 3/31 of 
2008, we have actually provided for training and conference 
attendees 18,702 veterans throughout California and Nevada. We 
provided 39 training and conferences. We provided 565.5 
consulting hours and served over 261 clients. So you can 
actually see how the demand and the increase is fluctuating due 
to our current economic state.
    In California, too, we have an economic downturn in the 
construction industry, and from that downfall, we have had a 
lot of construction companies come in to be able to put 
together a feasibility study in order to have the business 
survive.
    So that is when we partner with the California State 
Department of General Services for the DVBE initiative due to 
Public Law 106-50, where they do a 3-percent set-aside 
contracting capabilities for all service-disabled veterans with 
a preference. So a prime contracting agency will get the main 
aware, and they will subcontract out to the DVBE to be able to 
fulfill those contracting capabilities, and those forms of 
services to the disabled veteran business community is what is 
strapping them through on a contracting level.
    And to give you an example of some of the agencies that we 
work with, because the earlier question that you talked about 
was duplicating services, we work, obviously, with local 
universities and community college districts. We work with the 
Small Business Administration, with all six district offices 
throughout the State of California, and the main district 
office and area office in Nevada. And we work with GSA, DGS, 
the Federal Technology Centers, PTACs, SBDC, SCORE, BA, U.S. 
Corps of Engineers. We work with all prime contracting agencies 
for the 3-percent set-aside contracting capabilities for the 
Disabled Veteran Business Enterprises. We work with the 
California DVB Alliance. We worked with each one of the 
California DVB Alliance networks, the Elite SDVOB network, 
California Department of Veteran Affairs, the Women's Business 
Centers, all the VFWs, the Chambers of Commerce, the military 
bases throughout California and Nevada. We also partner with 
EDD, so if a veteran comes in or a reservist comes in and at 
this point and venue they are not sure if they want to be self-
employed or if they want to receive an employment capability, 
we have EDD that comes into our facility twice a week, which 
they will sit down with them, and they will teach them how to 
either put together a viable resume and to help them search for 
employment capabilities as well. We also work with one-stop 
centers and the Center for International Trade for businesses 
that are in the manufacturing assistance programs as well.
    So that is in a nutshell what we do.
    Ms. Radermacher. Great. Actually, thank you very much.
    Ms. Conley. You are welcome.
    Ms. Radermacher. Pat, if you would also like to----
    Mr. Heavey. Thank you. Good afternoon. My name is Pat 
Heavey, and I am the founder and executive director of the St. 
Louis Veterans Business Resource Center, which is operated by 
the Veterans Advocacy Foundation. We opened our doors in June 
of 2004. We were the first of these to open, and we were a 
pilot.
    My own background, which goes back to about 1971 with this 
stuff--I helped to put together the first Vietnam veterans 
self-help center in the country, and I sure know your boss real 
well because he did the first--was that these agencies are--
these operations would best thrive if they were integrated with 
the community. So we are on a community-based organization 
model. That is what we do.
    We serve St. Louis and about a 150-mile radius therefrom. 
We also serve about 400 clients a year via the Internet and 
they are everywhere. They are all over the place.
    We have two other centers. One is in Boston, and one is in 
Flint, Michigan. The three centers together in fiscal year 2006 
counseled and trained about 6,000 veterans--6,088. I have some 
numbers here for you that I can just leave with you. But we 
also took on the task of raising private funds, and in my case, 
I took it on with a passion, and I put together a board of 
directors of 30 veterans, successful veteran business people, 
who serve yet another function with us. They are a board, and 
they help us raise funds. But, more importantly, they are all 
successful business people. Hence, they are all mentors in our 
mentoring program.
    And there is a third thing that comes into play here that 
folks who are familiar with the private business world 
certainly know, and that is that contacts are invaluable. We 
have some contacts. Our board has many, many, many more. And we 
fully utilize our board members for that sort of thing.
    Case in point, Ray Hill. Ray Hill's American Pilsner Beer. 
Ray came in to see us about a year ago. He had a business plan, 
and it was in pretty good shape, and he had worked on his beer 
for 6 or 7 years, testing it on his friends, including me. And 
he had a very fine formula down. He came in to see us as a 
client. Ray was in the Air Force; then he worked for the 
Department of Agriculture for a while. And we were able to 
introduce him through that network to the owner of the largest 
supermarket chain in Missouri, Scott Schnuck being the owner. 
And he, of course, was interested to some degree, particularly 
after he met Ray, and he began to put his beer on their 
shelves.
    Two months later, Anheuser-Busch walked in the door because 
if you live in St. Louis, you know that Anheuser-Busch monitors 
everything about the drink industry all the time. And they saw 
this out on the shelves. Ray walked out with a deal, 51 percent 
for him, 49 percent for Anheuser- Busch. And that had largely 
to do with this private network of individuals helping him out.
    I was very impressed by Mr. Dever's story because I have 
heard it a few times, and Mr. Rooney's tale. We deal with our 
clients in the same way as I used to deal with individual 
clients in an MBA consulting practice. I am an MBA type. We 
first assess where they are, and approximately two-thirds of 
the people who come through our doors go right back out our 
doors with instructions that maybe they should get a job. We 
are interested in not culling out, but including in those 
businesses and those situations with a high possibility of 
success. We aim toward that.
    My center has now been open 4 years. In that period of 
time, we have raised private funds approximately equal to the 
Government funds that we have been allocated. And as a matter 
of fact, in this year of short funding for us, that is why our 
doors are open still, is because we raised those funds for that 
purpose.
    And we have also put together some unique programs. One is 
called the Bootstrap Loan Program. A Bootstrap Loan works like 
this: You take a series of classes from us, and right now we 
are using Kaufmann, which is the industry standard, pretty 
much. When you complete that, you may submit a business plan. 
If your business plan is chosen by a committee selected from my 
board, we will give you a $5,000 grant, bootstrap, to get you 
going, and you are eligible for a micro loan of up to $5,000. 
Now, that is not a lot of money, but $10,000 helps a lot of 
smaller businesses to get going.
    It is important to note that those funds do not come from 
the Federal Government. They come from the community. We raise 
those bootstrap funds from people like Emerson Electric, 
Anheuser-Busch, those kinds of companies. The micro loan funds, 
even more astonishingly, came from my board members' pockets. 
They formed an LLC to do this, and everybody kicked in five 
grand, and that was our micro loan fund.
    We are concerned at all times about the total veteran. I 
have worked, as I say, with vets since the early 1970s, and 
that is a long time, and that makes me pretty old. But it gives 
our clients the advantage of when they come in our door, we may 
not be able to help them, but we know who to refer them to, and 
we know what individual at that place to refer them to. And we 
often see them back after they have had help from other 
agencies.
    When we were talking about the Guard and Reserve, we attend 
all of the TAP training that happens in our area. We have an 
hour-and-a-half session in there where we talk about self-
employment, so that is the Air Force base and--Fort Leonard 
Wood and Whiteman Air Force Base. And from that pool, we pull 
quite a few clients. The important thing--and I am sure you 
would agree with this. The important thing to realize is that 
because the guy walks in the door today does not mean that 6 
months from now he will walk out with a business. He may have a 
3-year process to get to there. He may have a 6-day process to 
get to there if he comes in with a shiny, well-thought-out 
business plan.
    What we do know for sure is that in fiscal years 2006 and 
2007, we created 161 new businesses, and those new businesses 
employ an average of three people apiece. And since many of 
them are sole proprietorships, some of them are somewhat 
larger. The largest one is probably 45 or 50 employees right 
now at that point.
    We put a lot of the impetus and the emphasis upon the local 
community to support their veterans, and we call upon our 
community's veterans to support our clients. There is a 
camaraderie that exists there that is very hard to duplicate, 
and we figured this out back in the 1970s when we did the 
Veterans Service Centers of Southwest Illinois. We had five 
locations, and we were open for 7 years. This was back in the 
golden days of the Comprehensive Employment and Training Act, 
CETA. And there was plenty of money around with CETA.
    We learned a lot of things there, but one of the things 
that we learned is that veterans deal particularly well with 
other veterans in these settings, and it is because we have a 
common culture and we have a common background. All of us at 
some point in our lives got on a bus in the middle of the 
night, drove out to some God forsaken place, had the bus 
unloaded by bald-headed maniacs in funny hats, and found out 
that we were suddenly in a whole new universe. That is a 
binding experience. That is the kind of thing that you do 
remember 30 years later, for sure.
    In conclusion--and I am not going to hold you up a big long 
time here--we have worked out a method of integrating Federal 
dollars--which were not big enough to do anything with. I stand 
in awe at the amount of work that you do for $150,000. I stand 
in awe, because it costs me almost twice that much to do that, 
nearly. We have found a way to integrate local resources, local 
experts, local folks into our process, so the fact that we have 
only three people on our staff, including me, is greatly 
magnified by the fact that we have ranks of volunteers who are 
willing to come in and counsel with folks.
    For instance, we have lots of people who wanted to join 
janitorial services, wanted to do janitorial services. There 
are all kinds of franchises out there to do janitorial 
services. Most of them are kind of questionable in terms of 
their economic terms. So we take those folks, and we get them 
together into like a little coffee group, and then we ask Tom 
Bolt to come down and talk to them about the janitorial 
business. Tom Bolt employs 750 people in his service. He is 
willing to share everything he knows because these folks are 
not really going to be competitors to him. They are probably 
going to be feeders to him at some point in time as these jobs 
get larger than they can handle.
    We have had 3 years of consistent funding. That has now 
pretty much come to an end, and I do not want to talk about 
that side of it because we are working hard with a lot of 
people to solve that. But our goal is and has always been to 
deliver veteran-to-veteran services in a consistent manner that 
gives people a path of progress to follow. And I deal 
personally with about half of our clients myself and would not 
give up that opportunity for all the money in the world.
    That is it.
    Ms. Radermacher. Thanks so much, Pat.
    Mr. Heavey. Pretty extemporaneous. I am sorry. You were so 
prepared.
    Ms. Radermacher. We are going a bit over. I know that I 
told people 12. I would, if people are willing, like to 
continue the discussion for a little bit, possibly be done by 
12:30. That being said, I recognize that there are some people 
who do need to leave. I was told that Dr. Winkler needed to 
leave. I did want to ask you one more question before you left, 
and then I also wanted to give those clients who had worked 
with the centers a chance to speak as well, as well as giving 
everyone a chance to comment before we close.
    This was actually in follow-up to the hearing from last 
time, and I recognize that you were not there. One of the 
things that was mentioned is that the DOD was working on a data 
base that would list all the employers of Reserve and Guard. Is 
that now completed?
    Mr. Winkler. Well, yes, you are referring to our civilian 
employer information data base, which is now mandatory that 
each guardsman and reservist enter information on their 
employer. We reached our effective objectives around a year ago 
in terms of populating that data base, and now our challenge is 
to keep it current. But it is live and running.
    Ms. Radermacher. Great. And just to ask, is that 
something--because the other part--and I again recognize you 
were not at that conversation--was that SBA wanted to reach out 
to reservists ahead of time, especially reservist small 
business owners, to let them know what was available. Is that 
something that is an option, or is there----
    Mr. Winkler. We actually intended the data base to be used 
for outreach purposes, and it is the source of the statistics 
that we frequently cite now, for example, the 9 percent of 
guardsmen and reservists who are self-employed, 18 percent work 
for small businesses with 100 or less employees.
    Bill is not here. Bill has been talking more directly with 
our people about how to do that, but in principle, that is 
doable.
    We do have, obviously, some privacy concerns. If we are 
reaching out to the employer, it needs to be sort of 
independent of the employee.
    Ms. Radermacher. OK. Well, thank you very much for being 
here.
    I did want to continue to talk about vet centers, and also 
we do have some individuals here who actually did get help from 
some of the Veterans Small Business Centers, and I wanted to 
give them a chance to comment, if they would like to.
    Mr. Rooney. My name is Roderick Rooney. I am from AAA 
Constable Services, a small business in Boston, Mass. But as I 
explained earlier, I was unemployed for 2 years. I couldn't get 
help from the service centers. Voc. rehab. paid for my 
master's, and they couldn't get me a job. I had more contacts 
than they did, because they had data bases that they would lean 
on. And that is just another information, and so you get 
bombarded with information. But the pressing of the flesh and 
going and developing a relationship with employers is never 
done. I ran a workforce development agency and training 
development classes, and we came up with a curriculum with the 
input of employers, asking what they wanted from employees, and 
we implemented it through the curriculum, so we have that 
relationship.
    I haven't found in my journey for 2 years, I haven't found 
any relationship like that. The service reps are into the one-
stops or the SBA levels, unless you had a polished, you know, 
business plan. Sometimes Maslow's theory is you have got to eat 
first, and you might not want to work on that business plan, as 
much as you should, you know, to get it polished enough to get 
considered for even a micro loan.
    But with that said, those agencies have had just 
information which I pretty much found on my own, through 
USAJobs or whatever. You know, I had access. But what helped me 
was the service--the Northeast Veterans Service Center, which I 
was--I live in Boston, and I had to go all the way up in 
Lawrence to even find that type of service because there was 
nothing--there was nothing for me to--there was no place that 
would give me the individual one-on- one--not holding my hand, 
but that one-on-one. I walked in the door. Louis Celli, he 
just--he gave me a free seat through a grant I guess they had 
from--they worked out, to take a grant-writing course that 
everyone else had to pay. Employers paid the employees, too. 
And I was sitting with persons from MIT and all that, and 
meanwhile I am still woozy from all these--he said he's got 188 
resumes out. I must have sent at least 500. You know, I have 
been on 30 to 50, you know, interviews. I am a professional 
interviewer now, you know?
    But I found out when I did get help, it was--when I was 
with the DVOPs and all that, I got my own jobs, and I still 
would call them and told them I did and let them at least get 
the credit, you know. But what I didn't get from them was I 
needed that vitamin of my spirit, and that is what I got from 
the Veterans Service Center. I needed it, and it was 
unconditional esprit de corps. He understood me. He understood 
me, man enough, he understood me and worried about--I am a 
single, I have sole--my son, I have full custody, 16-year-old, 
and so he understood that stress of, you know, still trying to 
make it through and getting the gas money to come to there. I 
was on unemployment, but unemployment, you are still like at 
the poverty level, you know, and it doesn't address your true 
needs. You know, and I did the hard work to try to educate 
myself and be a productive citizen and serve my country. But 
when Mr. Ritchie opened the door for me and allowed me have 
that seat for that 5- or 10-day course, it was--then he offered 
me other avenues for me to do tangible things instead of just 
floating resumes and waiting for the letter, another rejection, 
another rejection. You know, or go to this interview and 
hoping, hoping. I had tangible paths to follow, and he provided 
that unconditionally. He even took me out for--he didn't know 
me. He took me out and bought me a sandwich. He didn't have to 
do that. And not trying to make light of the work that, you 
know, the larger agencies are doing, the Government agencies 
are doing, but that serves a particular individual. And if you 
don't have that--you know, if you are not homeless or substance 
abuse or PTSD, or severe handicaps, we get, like the gentleman 
was saying about the Navy, the ones who don't get that full 
service, we get lost if you have a degree, because you employ 
them. But I didn't go to school to get a master's or working at 
Mickey D's, even though you could be a manager, I guess, in 
there. But I would like to own a Mickey D's. How do I do that? 
You know, and so I started a constable business and certified 
and bonded. But when it was time for me to try to get 
information for the next level, how to get Federal--how to get 
more money, that is when the service center closed where I was 
at with Mr. Celli. I didn't know where to go, and Maslow's 
theory still is always in effect. You have got to eat, shelter, 
you know, safety. I still have got to be an example to my son 
and other people's sons.
    So it just gave me the path to follow, something tangible 
that I could grasp and some measurement that I could be 
measured by because we need to be measured and felt that we are 
making a difference. And we don't have that now.
    Ms. Radermacher. Well, thanks, Mr. Rooney.
    Mr. Levine, I see that yours is up as well. And did you 
want to speak or did your placard just fall over?
    Mr. Dever. I keep putting it up, and it keeps falling over.
    Ms. Radermacher. Oh, OK. So we will go to Mr. Levine, and 
then we will go to you next. And, actually, just because we are 
starting to run short on time, if people can try to hit the 
highlights of what they would like to say, I would like to give 
both of you a chance to speak, and then anyone else who would 
like to chime in, I would like to give them a chance as well.
    Mr. Levine. Ms. Radermacher, Mr. Walker, and Committee 
Members and guests, before I begin, I am going to take a little 
bit of a different approach.
    First of all, I want to thank the likes of Ms. Conley and 
also Mr. Elmore, because if it wasn't for people like him, I 
wouldn't be the success I am. And, you know, we all could say 
that we want different things out of committees, but I could 
tell you my experience has been one that has just been 
outstanding. And to all those who--Mr. Heavey types, I guess 
want to say from the bottom of my heart thank you, because I 
would not be where I am today if it wasn't for organizations 
that are out there for veterans.
    I prepared a few-second issue and just some statement on 
the SBDC and VBOP Program from New York, and I would like to 
just read it. It is brief. I will not bore you, I promise you. 
And I will make my time quick.
    The Veteran's Business Outreach Program, the VBOP--one of 
four original pilot programs in the U.S.--was funded through 
the SBA's Office of Veterans' Business Development Center and 
launched in September 1999. This highly successful program will 
complete its 9th year in September 2008. The VBOP Program 
provides targeted business counseling and training directed 
toward veterans with a priority for service-related 
disabilities. The program consists of a Statewide Coordinator 
on Long Island and a VBOP dedicated Business Adviser at 
Centers--VBOC--collocated with the Farmingdale Small Business 
Development Center, the Albany Small Business Development 
Center, and the Buffalo Small Business Development Center.
    This program includes business counseling, research, and 
training to assist veteran startups and existing veteran-owned 
businesses to obtain long-time and long-term success. I truly 
know only one of the four VBOP Programs, the one in New York, 
but my SBDC adviser, retired naval Captain John Narciso, 
networks with all of the programs, and he speaks highly of them 
and I respect his judgment.
    I just want to stop while I am reading and tell you that I 
could look into Captain John Narciso's eyes, and he could look 
into my eyes, and there is nothing like that except if you are 
dealing with a parent. And I want you guys, everybody here, to 
know how important it is to maintain these programs. I am a 
success, and I am sure that there are going to be other people. 
We just have to keep nourishing that ground and bringing up the 
people that serve this country.
    In New York, before I speak about my experience with the 
SBDC, it assists over 100 vets each month, plus 10 disabled 
vets, with one-on-one business advisement. Over the last 4 
years, 40 of those vets a month were impacted by jobs saved or 
created. That is batting almost 400 percent, guaranteed to be 
in the Cooperstown Hall of Fame.
    These vets accessed capital, usually with an SBA guarantee, 
at a rate of almost $1.5 million each month or an investment of 
$35,000 per job. That is nothing, gentlemen and ladies. I think 
this is important because giving owners and workers appropriate 
levels of capital increases their productivity and ensures that 
we can compete in the domestic and global economies,
    That is my statement. You can all have a copy of it.
    On a personal note, I just want to give you a brief story 
on my business and how John helped me. This program, 
fortunately, came into existence 2 years before I ever needed 
services from the Veterans Outreach Program. I am a Vietnam 
vet, was successful working for a firm for many, many years. 
Unfortunately, with the business downturn, my business went--
the one I worked for, actually, went out of business. This was 
the first time in my life that I was ever in need of some sort 
of support with unemployment. I went to New York State, and 
they had a program called the SEAP Program, which is a self-
employment program. I am not sure if any other States have it, 
but basically instead of giving you unemployment benefits, they 
gave you the same benefits, but in that time you had to start 
your own business.
    With that, I did not realize I was getting a business 
partner--the Veterans Outreach Program. I was whisked away into 
a special room with John, and John says, ``I am now your new 
boss.''
    John worked with me in one room of my home at 9 o'clock at 
night, at 8 o'clock in the morning, because I was going to be 
something that he was going to be proud of, Long Island was 
going to be proud of. My business now is 8 years old. We have 
won numerous awards in New York State, and I could say it--and 
I do not mean to bore everybody, but if it was not for the help 
from the Veterans Outreach Programs, you would not be seeing a 
success story like the one I had.
    Again, I want to thank this Committee for inviting me. I 
want to thank all of you who do whatever you can for veterans, 
because without your help, Lord knows where we would be. And 
this country must respect our veterans and put them up on a 
level that they should deserve.
    Thank you for your time, and any questions or anything, I 
would be delighted to answer.
    Ms. Radermacher. Thanks so much, and thanks so much for 
sharing what your experience has been. Very helpful.
    Mr. Dever.
    Mr. Dever. Just one of the things that you spoke to, Mr. 
Heavey, that, you know, particularly struck home with me. 
Before I spent time in Iraq, I never spent a lot of time 
thinking about electricity and distribution grids and, you 
know, a number of other things that we take for granted here. 
And I kind of wanted to make an analogy of what some of the 
discussion talked about, and in particular, you know, an 
overlapping of services and that, you know, there are many 
organizations that are in not the same business but the same 
kind of business and that type of thing.
    What I will tell you is that, sure, you could look at it 
that way. The way that I would look at it is that the SBA, the 
VA, Department of Labor, you know, they are on the main power 
grid. They are generating a tremendous amount of, let's call 
it, electricity from the standpoint of they are the big 
transmission lines in the system.
    Now, what I discovered while I was in Iraq is that although 
the transmission system is of great and tremendous importance 
and, in particular, I have had a lot of involvement in doing an 
awful lot of things that facilitated making sure that, you 
know, high amounts of hundreds and thousands of kilowatts of 
electricity were available on those grid systems, if you did 
not have the transformers to step down the electricity off of 
the transmission line into the local neighborhood, the local 
neighborhood had no electricity.
    So the fact that, you know, we took Iraq to electrical 
levels that it had not seen before the war during the time that 
I was there and, as I said, had the privilege of being able to 
influence some of these things, local communities did not have 
service. The Veterans Business Outreach Centers are those types 
of things where you take, you know, the things that--you know, 
making an approach to the VA or making an approach to the SBA 
or the Department of Labor or whatever, you know, there is not 
the access there.
    Yes, there is the capacity there, and that is where the 
electricity is. But in order to be able to tap into it, you 
need to be able to have those step-downs, you know, that bring 
it into the local community. And without that, there are an 
awful lot of things generated, but the access is not there for 
individuals like myself and, you know, Mr. Rooney, as he said. 
And it is very important.
    Those things cost a lot less than, you know, the efforts 
that we did. I saw lots and lots of money spent on those 
things, and when we figured out part of the problems, again, it 
was on the order of tens of thousands and small hundreds of 
thousands of dollars making big differences, because we put 
transformers in place and we were able to get electricity into 
small communities where it was needed.
    And I would tell you that I will take from this, you know, 
an aspiration of I hope that in the next 2 to 3 years, I pay 
enough Federal income taxes that you are completely paid for, 
because for the return on $150,000, a small investment like 
that, based on--you know, as Mr. Heavey said, you know, putting 
people to work and putting people back to work so that they 
can, you know, pay taxes and keep the cycle going, I think 
these veterans centers, if you did an analysis and I would say 
if the centers do not ask for it now, if you would ask for 
people to voluntarily give back the information, you know, 
about what it is that they are making, what it is that they are 
paying back in, you know, State, Federal, and local taxes, 
Federal taxes, and things like that, I am happy to give that 
information to Louis if it helps, you know, people say, hey, 
these things are making an impact at the local level.
    Thank you.
    Ms. Radermacher. That is great. Actually, any information 
that people would like to submit for the record, like the data 
that you mentioned, we would love it. The record is open for 
another 2 weeks, and any information is helpful to the work of 
the Committee.
    Before I ask anyone else, could you in maybe 30 seconds say 
kind of what the role of the Veterans Small Business Center 
played in helping you start your business?
    Mr. Dever. I was not planning at the point in time where I 
went back into business for myself. I had been in business back 
in 2000-2001. The army afforded me the opportunity to go to the 
Army War College, so I stopped working for myself. I went 
there, I came back, and then I deployed and went to Iraq.
    I just could not find a job, so when the last job thing 
that I had fell through, I picked up the phone, I called Louis, 
and I said, you know, I need to do this and I need to do this 
now because I have an opportunity to put my first contract in 
place, you know, as a self-employed small business owner. And, 
you know, we put the things in place. I got my tax ID number, 
and, you know, the other parts of it. But it was really, you 
know, again, a very critical timing issue.
    I looked back, I actually had Louis' name and contact 
information from January of 2006, and it was actually, I think, 
June of 2007 when Louis and I first started corresponding 
directly, and then in December, because it was just about the 
first of December when, you know, the last job opportunity that 
I had fell through that I said, you know, enough is enough, as 
Mr. Rooney said, you know, bills to pay and things to do. And 
it facilitated that process because I was in a very short time 
window to exploit what was available to me, and with Louis' 
help and the center's help, I was able to do that and not miss 
that opportunity.
    Ms. Radermacher. Great. Thank you so much.
    Mr. Dever. Took more than 30 seconds. Sorry.
    Ms. Radermacher. Well, thank you. It was helpful.
    Would anyone else like to make a comment. Oh, I apologize. 
I didn't see your placard. If we could keep it short since we 
are trying to wrap up, but go ahead.
    Mr. St. John. My name is Bruce St. John. I am with the VA 
Center for Veterans Enterprise. A couple of times in the 
hearing, the word ``duplication'' has come up, and I would say 
that an alternate word might be ``overlap.''
    There are a number of organizations that the Federal 
Government has created--Small Business Development Centers, 
Veterans Business Resource Centers, Procurement Technical 
Assistance Centers, the Center for Veterans Enterprise, the 
Veterans Business Resource Centers, and I have forgotten 
probably some others. So what exists today is a veteran has the 
ability to get pretty much all the advice, information, and 
access to the Federal marketplace at a relatively low cost. If 
these did not exist, the cost of paying lawyers, accountants, 
you know, conference planners, things like that, would be much 
higher and would be a big barrier to many people.
    So I think in our experience and in our opinion, these 
organizations are a very cost-effective and valuable resource 
for the veteran community and for the small business 
entrepreneur to get the advice, the assistance, the support 
that they need, and so that they can decide and figure out the 
pathway to whatever success is for them.
    And so I would just, you know, propose that an alternate 
word to ``duplication'' is ``overlap.''
    Mr. Walker. But just to be clear, because I want to make 
sure that we are clear on this, particularly in regards to who 
you represent, you do see that there is a very profound need 
for these organizations and what they do that goes above and 
beyond what is being done by the other organizations, correct?
    Mr. St. John. I think each of the organizations is 
valuable, and you have 2 million veterans; you have 2,000-some-
odd SBDCs; you have 5 VBOCs. Different veterans will go to the 
same place and decide it works or does not work. We get--people 
call us, and they have been one place, and they did not like 
it. Other entrepreneurs went there and loved it, you know.
    So what has happened is we, the Federal Government, have 
provided a number of avenues whereby each person can find the 
pathway that leads to success for them. And for some, they find 
a job. We know that. Some, they find a job. Some, they become 
entrepreneurs.
    So, yes, I agree, you know, they are all valuable, and some 
of the numbers--I was over here dividing. I mean, this is cents 
on the dollars of what you would have to pay lawyers, 
accountants, and training organizations to get, you know, the 
approximate equivalent. So, yes.
    Mr. Walker. Thank you.
    Ms. Radermacher. We actually are going to wrap up. We so 
appreciate all of you for coming. I feel like there has been a 
lot of really valuable information and testimony that has been 
presented.
    Personally, I wish we could continue the conversation since 
I still have a lot of questions and things that I would like to 
know. But we are going to wrap up, so thank you all very, very 
much for coming. Please send any additional information. The 
record is open for 2 weeks, and we would be happy to include 
that.
    [Whereupon, at 12:33 p.m., the roundtable was concluded.]

                      APPENDIX MATERIAL SUBMITTED

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  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                              Justin Brown

    Question. Would you support a national network of veterans 
business centers whether they are Veterans Business Outreach 
Centers (VBOCs), Veterans Business Resource Centers (VBRCs) or 
some combination of both types of centers?
    Answer. On behalf of the 2.3 million members of the 
Veterans of Foreign Wars of the United States and our 
Auxiliaries, I would like to thank you and your Committee for 
this question and the opportunity to participate in your 
roundtable discussion. Small business and entrepreneurship are 
issues of great importance to our members, and the entire 
veteran population.
    The Veterans of Foreign Wars (VFW) is highly supportive of 
expanding veterans' small business and entrepreneurial 
resources. The VFW is aware of the great work veteran business 
centers have been conducting and would like to see these 
programs replicated and expanded to cover a greater geographic 
area and a larger population of veterans.
    The VFW believes that proactive veterans' programs such as 
career training, education and the veteran small business 
centers are the best way of ensuring our veterans enjoy a high 
quality of life after having served their country. If we give 
veterans the tools and the opportunity to succeed they will do 
so.
    In consideration of recent developments, the VFW believes 
SBA would be the best Department to have oversight of an 
expansion of veterans' business resources. As this Committee is 
well aware, the Veterans Corporation (TVC) was supposed to fund 
Veterans Business Resource Centers under its umbrella and 
failed to do so at sufficient levels. We believe that TVC has 
lacked legitimate oversight and would like to see its funds 
redirected toward expanding veterans small business programs 
via the SBA, similar to that of the women's' business centers.
                              ----------                              


  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                           William D. Elmore

    Question. Would you support a national network of veterans 
business centers whether they are Veterans Business Outreach 
Centers (VBOCs), Veterans Business Resource Centers (VBRCs) or 
some combination of both types of centers?
    Answer. Currently, the Small Business Administration (SBA) 
supports veterans and other critically important audiences 
through its national network of business and technical 
assistance programs. This includes business counseling services 
provided for current and prospective business owners through 
1,000 Small Business Development Centers (SBDCs), 114 Women's 
Business Centers and over 10,000 SCORE volunteers located 
across the country.
    Employment training and career development assistance for 
veterans is also provided by both the Department of Veterans 
Affairs and Department of Labor.
    In addition, veterans may also utilize SBA's procurement 
specialists and large portfolio of loan programs, including two 
specifically for Veterans, the Patriot Express Loan Program and 
the Military Reservist Economic Injury Disaster Loan program 
(MREIDL).
    Given this wide variety of programs and services, we do not 
believe that a separate national network of veterans' business 
centers would be the most efficient way of delivering services. 
Rather, we believe that full and aggressive utilization of the 
existing extensive network of SBA, VA, and Labor programs would 
be more effective.
                              ----------                              


  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                            Jacob A. Klerman

    Question. How can we find ways to re-brand recently 
separated service-members and make them more attractive to 
potential employers?
    Answer. Abt Associates' study for the Department of 
Veterans Affairs did not include a detailed analysis of 
rebranding strategies. Our interviews suggested positive and 
negative perceptions of veterans as employees. On the positive 
side, veterans were perceived as reliable, disciplined, mature, 
team players, having integrity, with a strong work ethic, and 
leadership and project management skills. On the negative side, 
veterans were perceived as rigid and inflexible, only good at 
taking orders, but lacking creativity, higher education, 
business and financial skills, and specific business knowledge. 
Potential employers also expressed concern about the effects of 
combat and Post Traumatic Stress Disorder (PTSD).
    As rebranding strategy would want to emphasize the positive 
factors and correct mis-perceived negative factors. The 
standard approaches to rebranding would involve public service 
announcement (on TV, the radio, and in newspapers; emphasizing 
the good qualities of veterans and their recent public 
service), targeted outreach to appropriate employers (e.g., DVA 
booths at meetings and conferences with representation from 
major potential employers), partnerships with selected 
temporary help agencies that now serve as an important entry 
path into the labor market, and targeted outreach to potential 
franchisers (for those seeking to start small businesses using 
a franchise).
                              ----------                              


  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                             John McWilliam

    Question 1. I am informed that in my home state of Maine, 
funding for the Disabled Veterans Outreach Program (DVOP) and 
for the Local Veterans Employment Representatives (LVER) 
Program has dropped from $940,000 in fiscal year 2001 to 
$837,000 in fiscal year 2008. This represents an 11 percent 
drop in real dollars and when you adjust for inflation it's a 
25 percent cut. At a time when our returning veterans need the 
best assistance we can offer, it is unconscionable that we 
would slash funding to give them the training and help they 
need to get a job. Why have the cuts been made to these vital 
programs?
    Answer. In fiscal year 2003, Maine was funded $1,040,832 
for the Jobs for Veterans State Grant (JVSG). This grant 
comprises the Disabled Veterans Outreach Program (DVOP) and for 
the Local Veterans Employment Representatives (LVER) Program. 
In fiscal year 2009, it is estimated that the funding will be 
$858,000.
    The decrease in the funding for the state of Maine is 
attributable to the change in the statutory funding formula. 
Please see the response to Question 2.

    Question 2. During the Roundtable, you mentioned that DVOP 
and LVER funds are allocated through a specific funding 
formula. Can you explain that funding formula in detail, and 
why this funding formula has led to decreased funds for my home 
state of Maine?
    Answer. Under the law in effect prior to fiscal year 2003, 
the DVOP and LVER programs were allocated to the states using a 
staffing formula. Generally, the DVOP program was based upon 
the number of veterans living in the state, and the LVER 
allocation was based upon the number of LVER positions in the 
state as of January 1, 1987.
    In November 2002, the passage of the Jobs for Veterans Act 
(PL 107-288) (JVA) changed the manner in which funds were 
allocated. The JVA stipulated that the amount of funding 
available to each State would reflect the ratio of the total 
number of veterans residing in the State who are seeking 
employment to the total number of veterans seeking employment 
in all States.
    The Department of Labor implemented this requirement by 
publishing regulations in 2005. These regulations are at 20 CFR 
Part 1001 and specify that the funding formula will be based 
upon the 3 year average of the Current Population Survey (CPS) 
and the 3 year average of the Local Area Unemployment 
Statistics (LAUS).
    The relative allocation of funding to States is developed 
based on a combination of the ratio of the general unemployment 
level in each State compared with the unemployment level in all 
States using LAUS data, and the ratio of the number of veterans 
in the civilian labor force in the State as compared to the 
number of veterans in the civilian labor force in all states 
using the CPS data.
    The formula was phased-in over a 2-year period beginning in 
fiscal year 2004. The result was that states with low numbers 
of veterans residing in the State who are seeking employment 
would receive less funding under the new formula. The chart 
below indicates the funding amounts and the statistics used to 
determine the funding provided to Maine since the passage of 
the Jobs for Veterans Act.

                                                        Jobs for Veterans State Grants for Maine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Total     Change from     3-year     Percentage     3-year     Percentage     3-year
                                                                funding      previous     average    of national    average    of national     average
                                                               allocation      year         LAUS        total         CPS         total     distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2009**...................................................     $858,000           3%       33,190        0.46%       84,333        0.66%         0.56%
FY 2008.....................................................     $831,000           2%       32,784        0.43%       87,000        0.66%         0.55%
FY 2007.....................................................     $813,000           4%       33,823        0.41%       89,000        0.66%         0.54%
FY2006......................................................     $784,000           1%       32,341        0.38%       88,000        0.64%         0.51%
FY 2005*....................................................     $777,000          -7%       30,562        0.38%       88,000        0.64%         0.51%
FY 2004*....................................................     $838,000         -20%       26,966        0.39%       87,667        0.61%         0.50%
FY2003......................................................   $1,040,832  ...........  ...........  ...........  ...........  ...........  ............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Phase in period for new funding formula.
** Estimate.

    Question 3. Do you believe the DVOP and LVER programs 
receive sufficient funding? Please explain why or why not.
    Answer. The funding level for the Veterans' Employment 
Training Service (VETS) allows the agency to carryout its 
statutorily mandated functions, while emphasizing the highest 
priority programs. We recognize that, as a result of the new 
funding formula, many smaller states and those with fewer 
veterans have received less funding. However, we believe that 
the increased emphasis on priority of service for veterans in 
the One-Stop Career Centers, in conjunction with the existing 
DVOP and LVER programs, allows the states sufficient resources 
and the flexibility to provide the full range of employment 
services to those veterans. In addition, since the beginning of 
the Global War on Terror, VETS has placed additional emphasis 
on the Transition Assistance Program (TAP) in order to better 
prepare service members to make a smooth, seamless transition 
to from the military to civilian employment, and on the 
provision of intensive employment services for the severely 
injured and wounded. In sum, we believe the funding level 
requested in the President's fiscal year 2009 budget is 
appropriate and meets our mission requirements.
                              ----------                              


  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                             Bruce St. John

    Question 1. Does the US Department of Veterans Affairs 
agree that there is a specific need for Veteran Business 
Outreach Centers (VBOCs) and Veteran Business Resource Centers 
(VBRCs) because of the targeted services that they provide, or 
does the Department believe that veterans are adequately served 
through general business assistance and counseling programs, 
such as Small Business Development Centers (SBDCs)? Please 
provide a detailed explanation for your answer.
    Answer. The small business development centers (SBDC) 
identified in Public Law 108-183 as the service provider for 
small business courses are eligible for funding support through 
the G.I. Bill. The Association of Small Business Development 
Centers (ASBDC) is a well-established national network 
comprised of academic and business professionals who specialize 
in small business matters. The ASBDC requires continuing 
education for its center counselors and provides regular 
communications to keep field personnel apprised of changing 
legislation and regulations. The veterans corporation partnered 
with the SBDCs to provide FastTRAC training on its behalf. 
Given its statutory footprint, its national presence, its 
unsurpassed professionalism and historical relationship with 
the Small Business Administration, veterans are well-served by 
interactions with SBDC.

    Question 2. Would you support a national network of 
veterans business centers whether they are Veterans Business 
Outreach Centers (VBOCs), Veterans Business Resource Centers 
(VBRCs) or some combination of both types of centers?
    Answer. The Department of Veterans Affairs encourages 
consideration of expanding funding to the SDBCs and increasing 
the number of SBDCs that are also procurement technical 
assistance centers (PTAC), funded by the Defense Logistics 
Agency. The SBDCs are identified in Public Law 110-186 as 
eligible for grant funding from the Small Business 
Administration to deliver counseling to veterans. We further 
encourage expanding funds for the Association of Procurement 
Technical Assistance Centers. Our experience with the PTACs is 
that they provide exceptional value to business owners seeking 
Federal prime and subcontract opportunities. Owners are well-
served by both the SBDCs and the PTACs.
                              ----------                              


  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                             Joseph Sharpe

    Question. Would you support a national network of veterans 
business centers whether they are Veterans Business Outreach 
Centers (VBOCs), Veterans Business Resource Centers (VBRCs) or 
some combination of both types of centers?
    Answer. The American Legion strongly supports increased 
funding of the Small Business Administration's Office of 
Veterans' Business Development to provide enhanced outreach and 
community based assistance to veterans and self employed 
members of the Reserves and National Guard.
    Additionally, The American Legion supports allowing the 
Office of Veteran Business Development to enter into contracts, 
grants, and cooperative agreements to further its outreach 
goals. The Office of Veterans' Business Development must be 
authorized to develop a nationwide community-based service 
delivery system specifically for veterans and members of 
Reserve components of the United States military.
                              ----------                              


  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                          Dr. John D. Winkler

    Question 1. How can we find ways to re-brand recently 
separated service-members and make them more attractive to 
potential employers?
    Answer. One of the most undervalued assets of American life 
is the repeated ability of the American military to recruit the 
nation's young people and over the course of a career, prepare 
a valuable pool of leaders who become the key contributors to 
America's civil society. Mayors, city managers, police 
officers, teachers, health care professionals, school board 
members, and the full range of non-governmental practitioners 
started their careers as military Service members.
    In our work with employers, we've found that there is an 
extreme demand for highly trained and skilled men and women. 
The qualifications of Veterans that made them valuable and 
dependable assets while protecting our country are the same 
qualifications that are in demand by prospective employers: 
they are educated and highly trained individuals who are 
flexible, diverse leaders and team members and who are proven 
to perform well under pressure.
    There have been some barriers to creating a pipeline to 
connect those with military experience to the needs of the 
civilian community. The Department of Labor's (DOL) Advisory 
Committee on Veterans' Employment, Training and Employer 
Outreach (ACVETEO) which is made up of major employers, veteran 
service organizations, the Department of Defense, DOL, the 
Department of Veterans Affairs and the Small Business 
Administration, among others, is making suggestions to 
assisting veterans and employers. The ACVETEO is devoted to 
improving the means of connecting our separating Service 
members with the employers who need them, while recognizing 
that technology available today can assist in this effort.
    The Department thinks the new 24/7 tools, one of which is 
TurboTAP, will be a means that Service members can use to 
identify employer needs and employers can use to reach out to 
Service members.

    Question 2. The Department of Defense has recently altered 
some of its recruiting guidelines to allow recruits who would 
not have been considered qualified to join the armed forces. 
The vast majority of these recruits will eventually leave the 
armed forces to seek employment, most within the next few 
years. Does the Department recognize that these recruits may 
have greater difficulty in finding employment than previously 
separated servicemembers? If so, has the Department made any 
plans to prepare for these servicemembers for re-entry into 
civilian service?
    Answer. The Department's enlistment standards have not been 
altered. They have remained the same since 1990, when those 
standards were first established. The Department's recruit 
quality benchmarks require 60% of the fiscal year non-prior 
service accessions to score at or above average and no more 
than 4% score below the 31st percentile on the enlistment 
aptitude test, and 90% of those accessions to be high school 
diploma graduates.
    As stated in the response to the question on ``re-
branding'' recently separated Service members, the Department 
of Labor's (DOL) Advisory Committee on Veterans' Employment, 
Training and Employer Outreach (ACVETEO), which is made up of 
major employers, veteran service organizations, DoD, DOL, the 
Department of Veterans Affairs and the Small Business 
Administration, among others, is devoted to improving the means 
of connecting our separating Service members with the employers 
who need them. They continue to explore ways to assist veterans 
in transitioning to civilian employment and connect with 
employers. The ACVETEO also recognizes that technology 
available today provides tools--such as TurboTAP--that 
veterans' can use at their convenience (24/7) to help them 
tailor a plan specific to their skills and interests.
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                        COMMENTS FOR THE RECORD
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