[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




                 DEPARTMENTS OF LABOR, HEALTH AND HUMAN

               SERVICES, EDUCATION, AND RELATED AGENCIES

                        APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
  SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, 
                    EDUCATION, AND RELATED AGENCIES
                   DAVID R. OBEY, Wisconsin, Chairman
 NITA M. LOWEY, New York             TODD TIAHRT, Kansas
 ROSA L. DeLAURO, Connecticut        DENNIS R. REHBERG, Montana
 JESSE L. JACKSON, Jr., Illinois     RODNEY ALEXANDER, Louisiana
 PATRICK J. KENNEDY, Rhode Island    JO BONNER, Alabama
 LUCILLE ROYBAL-ALLARD, California   TOM COLE, Oklahoma
 BARBARA LEE, California             
 MICHAEL HONDA, California           
 BETTY McCOLLUM, Minnesota
 TIM RYAN, Ohio
 JAMES P. MORAN, Virginia           

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
                Cheryl Smith, Sue Quantius, Nicole Kunko,
                   Stephen Steigleder, and Albert Lee,
                           Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 Raising Wages and Living Standards for Families and Workers......    1
 National Institutes of Health: Budget Overview/Implementation of 
the ARRA/Status of National Children's Study......................   85
 Pathway to Health Reform: Implementing the National Strategy to 
Reduce Healthcare-Associated Infections...........................  199
 Secretary of Labor...............................................  313
 U.S. Department of Health and Human Services.....................  369
 U.S. Department of Education.....................................  461

                                ________
         Printed for the use of the Committee on Appropriations







                 DEPARTMENTS OF LABOR, HEALTH AND HUMAN

               SERVICES, EDUCATION, AND RELATED AGENCIES

                        APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
  SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, 
                    EDUCATION, AND RELATED AGENCIES
                   DAVID R. OBEY, Wisconsin, Chairman
 NITA M. LOWEY, New York             TODD TIAHRT, Kansas
 ROSA L. DeLAURO, Connecticut        DENNIS R. REHBERG, Montana
 JESSE L. JACKSON, Jr., Illinois     RODNEY ALEXANDER, Louisiana
 PATRICK J. KENNEDY, Rhode Island    JO BONNER, Alabama
 LUCILLE ROYBAL-ALLARD, California   TOM COLE, Oklahoma
 BARBARA LEE, California             
 MICHAEL HONDA, California           
 BETTY McCOLLUM, Minnesota
 TIM RYAN, Ohio
 JAMES P. MORAN, Virginia           

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
                Cheryl Smith, Sue Quantius, Nicole Kunko,
                   Stephen Steigleder, and Albert Lee,
                           Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 Raising Wages and Living Standards for Families and Workers......    1
 National Institutes of Health: Budget Overview/Implementation of 
the ARRA/Status of National Children's Study......................   85
 Pathway to Health Reform: Implementing the National Strategy to 
Reduce Healthcare-Associated Infections...........................  199
 Secretary of Labor...............................................  313
 U.S. Department of Health and Human Services.....................  369
 U.S. Department of Education.....................................  461

                                ________
         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 50-763                     WASHINGTON : 2009




                       COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania          JERRY LEWIS, California
 NORMAN D. DICKS, Washington           C. W. BILL YOUNG, Florida 
 ALAN B. MOLLOHAN, West Virginia       HAROLD ROGERS, Kentucky
 MARCY KAPTUR, Ohio                    FRANK R. WOLF, Virginia
 PETER J. VISCLOSKY, Indiana           JACK KINGSTON, Georgia
 NITA M. LOWEY, New York               RODNEY P. FRELINGHUYSEN, New   
 JOSE E. SERRANO, New York             Jersey
 ROSA L. DeLAURO, Connecticut          TODD TIAHRT, Kansas
 JAMES P. MORAN, Virginia              ZACH WAMP, Tennessee
 JOHN W. OLVER, Massachusetts          TOM LATHAM, Iowa
 ED PASTOR, Arizona                    ROBERT B. ADERHOLT, Alabama
 DAVID E. PRICE, North Carolina        JO ANN EMERSON, Missouri
 CHET EDWARDS, Texas                   KAY GRANGER, Texas
 PATRICK J. KENNEDY, Rhode Island      MICHAEL K. SIMPSON, Idaho
 MAURICE D. HINCHEY, New York          JOHN ABNEY CULBERSON, Texas
 LUCILLE ROYBAL-ALLARD, California     MARK STEVEN KIRK, Illinois
 SAM FARR, California                  ANDER CRENSHAW, Florida
 JESSE L. JACKSON, Jr., Illinois       DENNIS R. REHBERG, Montana
 CAROLYN C. KILPATRICK, Michigan       JOHN R. CARTER, Texas
 ALLEN BOYD, Florida                   RODNEY ALEXANDER, Louisiana
 CHAKA FATTAH, Pennsylvania            KEN CALVERT, California
 STEVEN R. ROTHMAN, New Jersey         JO BONNER, Alabama
 SANFORD D. BISHOP, Jr., Georgia       STEVEN C. LaTOURETTE, Ohio
 MARION BERRY, Arkansas                TOM COLE, Oklahoma
 BARBARA LEE, California
 ADAM SCHIFF, California
 MICHAEL HONDA, California
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, Maryland
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)

 
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED 
                    AGENCIES APPROPRIATIONS FOR 2010

                              ----------                              

                                         Wednesday, March 25, 2009.

      RAISING WAGES AND LIVING STANDARDS FOR FAMILIES AND WORKERS

    Mr. Obey. Well, good morning, everyone.
    Before we start, I was telling Professor Krugman I know he 
came in harried and worried he was going to be late. I recall, 
when I was in college, one of my best friends was a person by 
the name of Bill Steiger, who later came to Congress two years 
before I did. Unfortunately, he was on the wrong side of the 
political aisle but we remained very good friends. But we were 
both in a constitutional law class together and I remember the 
second day of class our professor was David Feldman, who was 
tough. He was like the old character you saw in The Paper 
Chase, the old TV series a long while ago.
    And Feldman had begun his lecture when Bill Steiger walked 
in, about two minutes late to the class, and Feldman pulled his 
glasses down on the end of his nose, looked over at Steiger and 
said, Mr. Steiger, he said, let me apologize. He said, 
ordinarily we would have an usher escort you to your seat. 
Unfortunately, our carnations have not yet arrived.
    So I got a kick out of it to think that it was the 
professor who was two minutes late, rather than the student. 
But I know how tough it is to get down here. I appreciate your 
coming and I appreciate all the panelists being with us here 
today.
    Let me simply make a few remarks, Mr. Tiahrt can make a 
couple remarks, and then turn to our first witness.
    This Subcommittee has a huge amount of work to do and it is 
really, I think, the workhorse of our domestic discretionary 
portion of the budget, certainly in terms of the work that we 
do in trying to deliver help and services to millions of 
American families all across the Country. And we have had an 
especially rocky time trying to deal with, first of all, the 
economic stimulus package and then the omnibus appropriations 
bill. And now, shortly, we will have a budget from the new 
President and we will have to act on that in short order.
    But I thought that it would be important to place 
everything we have been doing, as well as everything the 
President will be doing in his new budget, in the proper 
context, and here is what I mean.
    Both parties seem to have a narrative about what has 
happened in the economy. The Republican party seems, by and 
large, to say, well, this was all caused, or largely caused, by 
what happened in the housing market and it is the collapse of 
housing that has led to this problem. And I think the 
Democratic narrative seems to be, well, if those guys on Wall 
Street had just behaved like adults, we would not be in this 
mess.
    I frankly think that both narratives are oversimplified. I 
will agree that those two events were the triggering events 
that caused a lot of problems in the economy, but I think there 
is an underlying problem that I would like to see addressed 
today, and that problem is simply this: From World War II until 
about 1973, this economy grew in a fairly healthy fashion, and 
that increased prosperity was shared roughly across the board, 
regardless of income group.
    That started to change around the middle 1970s, and from 
1980 on we saw a much larger share of income growth go into the 
pockets of the most well-off 10 percent; and certainly, in this 
decade, we have seen an even larger share of income growth in 
the economy go into the pockets of the top 10 percent.
    And that has meant that the other 90 percent have really 
been struggling to stay even, they have been struggling for 
table scraps. And I think they tried to maintain their living 
standard or expand their living standard by borrowing, so they 
borrowed for lots of things--for education, to pay for health 
care, to pay for consumer goods, to pay for cars, you name it. 
And that house of cards sort of came crashing down when the 
housing and banking and credit crises hit.
    So now we have the question not only of how we get out of 
this recession, but also how we build the kind of economy in 
which all families can share in what we hope will be the 
renewed growth in prosperity down the line once this recession 
is over.
    So we are going to have two panels today to talk about that 
problem, and especially with our first panel this morning we 
will have a focus on the inequality that has developed in this 
society and what might be done to deal with that inequality as 
we try to dig ourselves out of this recession; and our first 
witness, Dr. Krugman, will address himself to that.
    But before he does, I would like to call on Mr. Tiahrt for 
whatever comments he would like to make.
    Mr. Tiahrt. Thank you, Mr. Chairman. I would like to also 
welcome the witnesses for both panels and welcome Dr. Krugman.
    Mr. Chairman, I want to thank you for putting today's 
hearing together. I think our discussion today will really get 
to the heart of the philosophical differences in America when 
it comes to the issues surrounding our economy. There is no 
question in my mind that everyone in this room wants to return 
to our Country's historic economic success. I think there is 
considerable disagreement on how we get there. But I think at 
least we can start with the statement that we all want to end 
up in the same place, a place where our children can start a 
business or find a high quality and high-paying job.
    Today's discussion--indeed, the focus of the entire 
Congress--should be on how we renew the dream, the American 
dream. I do not subscribe to Keynesian economics. Every thin 
dime Congress spends or, more appropriately, borrows is the 
functional equivalent of a thick quarter that our children in 
Kansas and across the rest of America will have to pay back 
later.
    And I have yet to see a Government job that pays for 
itself. I do not believe that massive deficit spending on 
things like comparative effectiveness research, which I believe 
will read to rationed health care, or propping up local and 
State governments, as done by the stimulus bill recently, is 
going to create the private sector jobs in the short term or 
revive our economy.
    All we seem to be creating is more bureaucracy. And, as I 
said, I have yet to see a government job that pays for itself.
    My view is that one of the worst things that we can do as 
Congress is to follow macro economic policies that result in 
raising taxes on American citizens and employers. We have 
enjoyed economic success in the past in large part because of 
our relatively low tax rates. To raise taxes will, in my view, 
not only hurt the American wallets immediately, but also stifle 
the prospect of economic prosperity in America in the near 
future. Sadly, this is where the Administration is headed.
    What is even more concerning to me is the discussion of a 
second stimulus bill. Frankly, I do not think the first one has 
been around long enough to determine it has had any impact. My 
view is that the first stimulus bill will not work, not because 
it is not big enough, but because it is misguided in its 
economics. To pass a second stimulus bill that makes the same 
mistakes as the first seems unwise to me.
    The President has made a great deal recently about 
Republicans being the party of no. Simply not true. We have 
great ideas that simply have been shut out of the process.
    And, by the way, Chairman, I want to thank you for not 
shutting us out of this process today.
    I am ready to say yes; to say yes to policies that will 
help rebuild a sound economy for today and the future. We need 
to pursue common sense microeconomic policies that work and 
reduce the uncontrollable costs that people are facing, those 
who keep and create jobs here in America. And I think it starts 
by reducing the size and scope of the government that has 
strangled growth.
    We need to move towards a competitive business tax whose 
rates will compete with the rest of the world. Ireland, though 
it has been caught up in a worldwide downturn, is well poised 
to recover as it welcome companies and fosters growth.
    We need desperately to pursue common sense approaches to 
regulation, with a cost-base justification of the rules our 
bureaucrats impose on those who keep and create jobs.
    We need to be energy independent. I think it is well passed 
the time that we adopt a loser-pays approach to litigation, as 
the United Kingdom follows.
    And, finally, I hope we discuss the rising cost of health 
care, in addition to ensuring health care access, which is one 
of the biggest burdens on our economy. I believe a consumer-
based approach to health care delivery can benefit patients and 
the economy.
    These ideas build the fundamental strength of our economy, 
and that is how we can renew the dream and renew the 
opportunity for ourselves and our children.
    I would just like to close by saying although we are 
struggling today, I am confident and optimistic that the 
American people will overcome this downturn, as they always 
have. My concern is that borrowing and spending will prolong 
the pain, instead of fixing the problem.
    I look forward to the discussion today and yield back.
    Mr. Obey. Thank you.
                              ----------                              

                                         Wednesday, March 25, 2009.

      RAISING WAGES AND LIVING STANDARDS FOR FAMILIES AND WORKERS


                                WITNESS

PAUL KRUGMAN, PH.D., NOBEL LAUREATE IN ECONOMICS
    Mr. Obey. Let me simply welcome our first witness, Dr. Paul 
Krugman. As I mentioned earlier, Mr. Krugman is a distinguished 
Nobel Prize winner and Professor of Economics at Princeton 
University. He is also a Centenary Professor at the London 
School of Economics and an op-ed columnist for The New York 
Times, and one of the 50 most influential economists in the 
world today. His professional reputation rests significantly on 
his work in international trade and finance. He is the author 
or editor of 20 books and more than 200 papers. He is also well 
known for his work on income distribution and public policy, 
which is the subject of his remarks, largely, this morning.
    I want to mention that we have agreed to let Dr. Krugman go 
at 11:30 so he can make a prior commitment at the Swedish 
Embassy.
    I appreciate your being here, Dr. Krugman. Please proceed 
with your statement.
    Mr. Krugman. Thank you, Mr. Chairman. And thank you, Mr. 
Tiahrt.
    Well, as everyone is aware, this hearing is taking place at 
a time of economic crisis. Unemployment is rising steeply and 
the outlook for working Americans is the grimmest it has been 
since The Great Depression. Two years ago, few, including 
myself, imagined that things could get this bad.
    We all hope that the President's policies can pull the 
economy out of its tailspin. But even if he does succeed in 
that goal, that will not be enough. The U.S. economy was 
failing to serve the needs of the American people even during 
the good years of the current business cycle.
    I find it instructive and depressing to consider the state 
of the economy for ordinary Americans in 2007, which was as 
good as it got in recent years. By almost any measure, the 
economy was worse for a majority of families in 2007 than it 
had been in 2000, and there was, if you believe the numbers, 
which I mostly do, surprisingly little progress even over a 
much longer period, reaching back three decades.
    So median family income, adjusted for inflation, was 
actually slightly lower in 2007 than it had been in 2000. And 
if we got back several decades, to 1979, we find that median 
income rose only 15 percent over a period of almost 30 years, 
less than half a percent annually. Virtually all of that rise, 
by the way--this is not a partisan point, but just an 
observation--took place during the Clinton years. That compares 
with sustained income growth at more than 2 percent a year 
during the great post-war boom, post-war generation.
    The poverty rate in 2007, which was an alleged boom year, 
was 12.5 percent, not only higher than the 11.3 percent rate in 
2000, but higher than the 11.7 percent rate in 1979. If one 
believes the numbers, none of America's economic growth over 
the past generation has trickled down to America's poor.
    And the health insurance situation worsened substantially. 
The percentage of the American population without insurance 
rose sharply in the late 1980s and the early 1990s, sparking an 
unfortunately failed attempt at health reform. The situation 
then improved somewhat for a while, thanks to cost control and 
a booming economy. But since 2000 health care costs have once 
again risen much faster than wages, leading to a growing 
problem of uninsured Americans even when the economy is 
growing. It is almost certain that the current crisis will soon 
present us with a major crisis of lost health care coverage.
    So why has a growing economy failed to deliver for ordinary 
Americans? One major reason is growing income inequality. Many 
of the gains in income went to a small minority of very well-
off people, with most workers seeing little rise in real wages. 
Even using Census data, which missed the growth in the highest 
incomes, average household income rose twice as fast as median 
household income; that is, income growth over the past 30 years 
would have been twice as fast if it had not been for growing 
inequality.
    There is also a secondary reason for the failure of 
economic growth to help many Americans, which is our 
dysfunctional health care system. We are unique among advanced 
countries in not having some form of universal coverage, yet we 
spend far more to cover 85 percent of our population than our 
counterparts spend to cover everyone, with no evidence that we 
receive correspondingly better care.
    For both these reasons, there has been a remarkable 
disconnect between the state of the economy, as measured by the 
growth of GDP, and the experience of most Americans. And if 
that disconnect continues, recovering from the current 
recession, urgent though it is, will still leave major economic 
problems unsolved.
    So what can we do to end the disconnect? Reducing income 
inequality is a difficult task. The truth is that while we have 
some ideas about what might work, there is little reason to be 
confident about the efficacy of whatever measures we try. The 
Great Compression of the New Deal, which created the middle 
class society of the post-war era, the society I grew up in, is 
an inspiring role model, but, in honesty, I cannot promise that 
we know how to repeat that experience.
    Health care reform, on the other hand, is something we know 
can work. Study after study has demonstrated that the U.S. 
health care system is not just harsh and unfair, it is highly 
inefficient. We have extremely high administrative costs, 
largely because insurers work so hard not to cover the people 
who need insurance most. We lag in the use of information 
technology. We have a combination of inadequate care for many 
Americans and vast spending on dubiously effective care for 
many other Americans.
    I might also note that our health care system under-invests 
in preventive measures that could save money, as well as lives.
    A reasonable estimate is that successful health reform 
could eventually save several percent of GDP while 
substantially improving the lives of most Americans. As anyone 
who has studied proposals to promote economic growth knows, 
that is huge. Even a drastic increase in private investment, 
achieved by whatever means, would be highly unlikely to yield 
that big a result.
    Can we afford health care reform in the face of projected 
large fiscal deficits? To borrow a phrase, yes, we can. In 
fact, we must. First of all, there is no reason to be concerned 
about the level of deficits, per se, the dollar figure per 
year, in the near term, by which I mean the period likely to 
extend for three or four years before the economy recovers.
    In normal times there is reason to worry that deficits will 
crowd out private investment and raise interest rates. In the 
current situation, however, the world economy is, in effect, 
suffering from an excess of desired saving. Even at a zero 
interest rate, businesses are not willing or able to invest all 
the savings the private sector wants to undertake. As a result, 
government deficits actually stimulate economic activity in the 
current situation by giving those savings a place to go. Those 
deficits do not crowd out private investment. In fact, they may 
well crowd it in.
    We do need to worry about Government debt. There are real 
concerns about the sustainability of very high levels of debt 
in the future. However, we need to realize, even though this 
sounds striking, maybe a little crazy, that a trillion dollars, 
more or less, of debt over the next decade is virtually 
irrelevant to America's long-term fiscal position. That 
position is, instead, dominated by the rising projected costs 
of our entitlement programs, mainly Medicare and Medicaid.
    And the only way to reign in Medicare and Medicaid costs is 
through a thorough reform of our health care system. To put off 
health care reform out of fear of deficits would be a monstrous 
case of being penny wise and pound foolish, sacrificing the 
Nation's long-run fiscal prospects for the sake of holding 
current numbers below some artificial threshold.
    In dealing with the deficit, and also in dealing with 
health care, we need to take the long view, and that long view 
says that we should proceed with massive reform now.
    Thank you.
    [The information follows:]


    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Obey. Thank you very much, Dr. Krugman. Let me ask a 
couple questions. As you know, we have passed a significant 
budget stimulus package, and there are those who feel that that 
is a significant mistake because it adds to the deficit. You 
have indicated in your testimony that what we ought to be 
focused on is not the near-term, year-by-year deficit, but the 
long term level of deficit; and that, in fact, in the short 
term, deficits may be essential in order to prevent worsening 
of the economic situation.
    We now have the Budget Committee about to mark up budget 
resolutions for the year. The Budget Committee process is 
fairly interesting; it is the only process I know where you can 
cut budgets without cutting programs, because they do not have 
to tie macroeconomic decisions to micro results. And there are 
those who will say that, now that we have passed an economic 
stimulus package, about a month ago, we need to scale back on 
the size of expenditures and scale back on deficits next year 
and the following year.
    Tell me why you think that that would not be a good idea at 
this time.
    Mr. Krugman. We first need to measure the stimulus package 
against the current needs of the economy. President Obama 
estimates that his package will, at its peak, add about 3.5 
million jobs to what we would otherwise have had, and that 
estimate is consistent with most economists' ballpark models. 
That is helpful, but the U.S. economy has already lost almost 
4.5 million jobs in this recession, and that is against the 
backdrop of a growing population. So we are almost 6 million 
jobs short of where we should be already, and losing jobs at 
the rate of 600,000 a month.
    So the package as it now stands is mitigating, it is not 
even enough to prevent us from having a very severe recession; 
it is just a mitigating factor.
    If we respond to concern about the size of the package by 
scaling back other government spending, we are undoing the 
effects of the stimulus package, making it even more 
inadequate. And it is really important to bear in mind, to have 
some sense of what the long-run magnitudes are here.
    The stimulus package is approximately $800,000,000,000. 
That is the headline number. Because it will stimulate the 
economy, some of that comes back in the form of higher tax 
revenues. A reasonable guess at the true cost is on the order 
of $500,000,000,000, which is 3 percent of GDP. That is 
significant, but it is certainly not make or break if we are 
thinking about the long-run budget prospects of the United 
States; and we certainly should not be sacrificing crucial 
priorities in the interest of offsetting the cost of this very 
necessary temporary measure.
    Mr. Obey. Another question, on the issue of inequality. Why 
should we be concerned with growing inequality in the economy? 
I mean, it may offend our sense of fairness and justice, but in 
terms of the long-term strength of the economy, why should we 
be concerned if we have growing inequality?
    Mr. Krugman. Okay, there are two levels of answer to that. 
The first is that rising inequality means that the majority of 
the population gets less than an equal share of economic 
growth. And I actually addressed that briefly in the opening 
remarks. If we had not had rising inequality these past three 
decades and had had the same rate of economic growth, the 
standard of living of the typical family, the median family, 
would have grown at least twice as fast as it did. The pie may 
be growing, but if an ever-growing share of that pie is going 
to a small group of people, most people end up not seeing their 
incomes rise as fast as the average.
    Beyond that, we have more speculative, but probably real, 
aspects in which a highly unequal society ends up being a 
dysfunctional society. There are somewhat abstract, but very 
real, issues of trust, sense of community, and there are much 
more real, I think, economic concerns. If we ask ourselves how 
did we get into this financial crisis, an important aspect of 
it was that players in the financial market were prepared to 
take huge risks with other people's money because, at least for 
a while, they could earn extraordinary incomes.
    People who defend high inequality says that it creates 
incentives, which it does, but I think what we have just 
learned is that those incentives are not necessarily incentives 
to do good things; they can sometimes be incentives to do 
extremely socially destructive things.
    If I just say look at the historical record, the most equal 
income distribution the United States has ever had was during 
the generation following World War II. That was when we truly 
were a middle class society, when we were certainly not an 
egalitarian society. We were not Cuba, but we were a relatively 
equal society. That was also the era of the greatest economic 
growth that we have ever achieved, before or since.
    So I do not want to push those things too far. I think the 
most important, the clearest argument is if you have rising 
inequality, then most people do not share fully in economic 
growth. But there are reasonably good reasons, looking at the 
historical record, to think that a highly unequal economy is a 
worse economy and a worse society.
    Mr. Obey. One last question before I pass the witness. 
There has been some considerable debate in this Country about 
the relevance of what Roosevelt did in 1932 to the existing 
situation. As I read history, what happened is that when 
Roosevelt came in to power, we had unemployment approaching 25 
percent, and that Roosevelt took actions to build confidence 
and provide some modest stimulus, which brought down the 
unemployment levels to a modest degree. But then, after 1936, 
he seemed to feel that the economy was recovering and on the 
road back, and he throttled back and tried to turn more toward 
a balanced budget and, as a result, the economy again dipped 
and it took until World War II to really achieve full 
employment.
    The lesson I would draw from that is that it would be a 
mistake for us to throttle back too soon on stimulating the 
economy. What is your reaction to that interpretation of those 
events?
    Mr. Krugman. Very much in agreement. What happened in 1937 
was a broad resurgence of the old orthodoxy, both about 
balanced budgets, even in a time of high unemployment, and 
monetary policy. So there was a shift towards a more 
contractionary monetary policy as well. And the economy slid 
back down in what was, at the time, often referred to as the 
Second Depression and did a great deal to undermine the 
economy, as well as the New Deal agenda.
    We can also look at the Japanese experience in the 1990s, 
which offers a quite similar story. If we look at the Japanese 
behavior circa 1996, same thing. It is often said that the 
Japanese policy of public works to support the economy did not 
work. Actually, it did when it was pursued; it did expand the 
economy. But they too had a sudden burst of premature 
orthodoxy, leading to the Japanese economy slipping back again.
    So there is a real concern. And one of the great concerns, 
I may say, about the stimulus bill as written is that it will 
deliver its peak support to the economy next year and then fade 
out quite quickly, and there is no solid reason to believe that 
stimulus will cease to be necessary in 2011. The CBO's 
projections show the economy recovering, but that is not a 
result, it is an assumption. They basically simply imposed the 
idea that we will return to normalcy five years from now, and 
it is very hard to see what the forces leading to that return 
are. So I am very concerned that it will, in fact, be deja vu 
all over again, that just as the Japanese repeated Roosevelt's 
experience, that we will then repeat the Japanese experience.
    Mr. Obey. Thank you very much.
    Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    First, I would like to talk about your statement on rising 
inequality. I think, in looking at those broad categories, we 
fail to see what has happened during that time with people who 
were previously in those categories. There has been a mobility 
of out-of-the-bottom, the lowest quintile, or people we would 
consider poor, into the middle class. About 54 percent moved 
out of the bottom quartile into either the next quartile or the 
middle quartile. I am sorry, quintile, five categories instead 
of four.
    So when you just look at the number--because we do have new 
people coming into the economy, people coming in to work now 
that did not work before; and that happened during the time 
period that you are referring. So if you look at the upward 
mobility, there has been a high rate of people moving out of 
that bottom quintile into other categories during the same 
period of time.
    And you mentioned the 1950s. It is an interesting study of 
economics from the Depression up until today, because I think 
we remained stagnant. There were some ups and downs, but our 
economy was relatively stagnant during the 1930s, where we 
borrowed a lot and spent a lot. I think it was the 
capitalization that occurred during World War II and the 
opportunity when these people came back from World War II, 
young men and women with a can-do attitude that took this 
capital investment that occurred during World War II and came 
up with new ideas and new innovation, and that is how we saw 
this expansion of the middle class.
    So my concern today, as we move forward, is that we focus 
on this macro level and we say--and I believe that 98 percent 
of the people in Congress today are macroeconomics Keynesians. 
I believe there are very few that look at the microeconomics 
that build the aggregates that you study in macroeconomics. In 
order to build that microeconomic concept, we have to go down 
and look at small businesses, the people who keep and create 
jobs. In Kansas today, four out of five jobs are small business 
jobs.
    So developing a structure where they can have opportunity 
is what I am concerned about. I think that is what builds a 
strong economy from the bottom up, and not from government 
down.
    And I look at policies. You mentioned that this massive 
spending may have some failure in the future. We will have a 
spur or a bump in 2010 that could go away in 2011, if I 
understood your testimony right. If I look at what we are doing 
today, this year the Federal Government is going to go out and 
borrow $3,000,000,000,000. And apparently we are not doing too 
well because last week the Fed printed $1,000,000,000,000 in 
new money. So we are putting more money into the economy by 
creating, by printing it. What impact does that have on 
inflation when you print money and have more money available in 
an economy?
    Mr. Krugman. Okay, that is a long list of questions. Let me 
do the best I can.
    Just, first, about income mobility. Yes, we are not a caste 
society. People do move up and down. However, the extent of 
those moves is often greatly exaggerated. Yes, there is a 
changing mix of people, but the last study I have seen says 
that, even after a decade, if we are looking at the top 1 
percent or so of the population, after a decade, most of the 
top 1 percent is the same people who were still in the top 1 
percent a decade earlier. We are not actually looking at a 
situation where it is a constantly changing cast of characters.
    And perhaps most important for comparisons across time, 
income mobility has, if anything, probably declined in the 
United States. So to the extent that we have always been a 
Country in which people move up and down, which somewhat 
reduces the sort of lifetime inequality of income, that is no 
more true and, if anything, less true now, than it was 40 years 
ago.
    Mr. Tiahrt. I think if you look at the lifestyle of people 
in these five quintiles, people have a better lifestyle today 
than they had in the 1950s.
    Mr. Krugman. I think that there is a substantial illusion 
in that. I mean, certainly people are better off than they were 
in the 1950s, and in some respects there are things that we----
    Mr. Tiahrt. Well, let me ask you this. And I have been to 
the poorest area in Kansas. People there live in single-family 
units; they have refrigerators, they have telephones, they have 
cable TV, they have microwaves, they have cell phones. How much 
of that existed in the middle class in the 1950s?
    Mr. Krugman. Obviously, not microwaves and cell phones, 
which had not been invented yet. But this is always--I think 
your relevant comparison would be how secure did people feel in 
a middle class lifestyle in, let us say, not 1950, let us say 
1970 versus now. I think people are much less secure in that 
style.
    And, yes, some things are much better. Other things are 
worse. People were more sure that their local public school 
would give their children a decent education in 1970 than they 
are today. People were more sure that their company retirement 
fund would continue to cover them, that they actually had a 
secure retirement. People were less terrified that they would 
lose health insurance and be bankrupted by medical costs.
    Mr. Tiahrt. I would agree with you, and I think it is 
macroeconomics and the Keynesian policies that got us in this 
position. And what will get us out, in my belief,--and I would 
like your view on this--is if we create jobs, private sector 
jobs--and how you do that is the question--if we create jobs 
that will generate revenue for the government and will create 
investment.
    I disagree with you on savings. I think savings is a good 
thing, not a bad thing. And if you look at the spending we have 
been doing here on the Federal level, spending is not the 
answer. But if we create opportunity so we can create jobs, by 
doing that I think you remove the uncontrollable costs that 
employers are facing today. Those costs are all driven by the 
government, but reduce or remove those costs. Having more jobs 
in America is one of the things we are looking for, is it not? 
And how do we get to that?
    Mr. Krugman. Two things. First, nothing in the experience 
of the last two decades supports at all the view that changing 
taxes in the range that is under discussion is going to be a 
bad thing for job creation. We have as close to a controlled 
experiment as you will ever get in economics. We had one 
President who came in, raised taxes, raised the top marginal 
rate, was followed by an extraordinary explosion of job 
creation, and then the next President cut the top marginal rate 
and even before the recession took place, job creation was 
quite anemic.
    You can say there were other factors, but there is 
certainly nothing in that record to support a hardline view 
that any increase in taxes is going to be destructive of jobs 
and that cutting taxes is always the way to create them. It 
just did not work that way in the past 20 years.
    And the view that as long as the microeconomics, the 
private sector is all good, then nothing bad can happen to the 
economy is completely belied by economic history. The U.S. 
economy of the 1920s was a marvel, it was more creative, 
arguably, than it has ever been. It was full of driving 
innovation, full of remarkable new businesses, new business 
ideas; and then something terrible happened. And I guess my 
basic view is, by all means, entrepreneurship, innovation, 
productivity are wonderful things, but one Great Depression can 
ruin your whole day.
    Mr. Tiahrt. Thank you for being very generous with your 
time, our Committee's time, Mr. Chairman.
    I just think if you look at, for example, the 1990s, a tax 
increase was followed by limiting the growth of government 
during the 1990s. We limited the growth of government and that, 
coupled with revenues, as you say, increased, was what allowed 
us to balance the budget for four consecutive years. And my 
concern is if we do not control the growth of government, no 
matter what we do there is going to be a problem.
    Thank you, Mr. Chairman.
    Mr. Obey. Mrs. Lowey.
    Mrs. Lowey. Thank you very much.
    As an admirer and reader of your column, many of us look at 
it as the truth. So we are very happy that you are out there.
    For many of us, discussing wages and standard of living 
without acknowledging the impact that the economic crisis is 
having on families across the Country certainly is not 
adequate, and one of the most troubling aspects that I see is 
that almost every check in place to present this kind of 
disaster failed.
    For example, if a lender approved a loan likely to fail, an 
underwriter responsible for verifying the income on the 
application should have flagged the loan. When that did not 
happen, an investment firm on Wall Street began buying bad 
mortgages and bundling them into securities. Executives there 
should have investigated the mortgages' level of risk, which 
they did not because they were all making so much money. And 
even if both the lenders and investment banks were not 
effective in weeding out bad loans, rating agencies charged 
with analyzing the risk of mortgage-backed securities should 
have been raising red flags.
    Yet, in case after case, each of these levels, from the 
lender to the underwriter to the investment firms to the rating 
agencies, there was monumental failure.
    Now, many of us recognize that there is not a silver bullet 
solution to solving the crisis, and it will take a combination 
of approaches, and I appreciate your mentioning health care. 
And, as we know, this is a prime focus of this Administration, 
this President.
    And I read your column the day after, or it was probably 
the day of Geithner's presentation of his plan and the market 
soared. Now, there are many out there who will say, well, the 
market is soaring, Geithner is right, Summers is right, Krugman 
is wrong. I wonder from you what can be done to change both the 
industry and the culture that led to the poor decisions and 
investments that harmed our economy, and how do we prevent this 
happening again.
    I will speak to many of my constituents--my district is 
very varied, but many will say, oh, it is just a cycle, you 
know, it goes up and it goes down, and do not worry about it. 
And then they see the market going up and there can be a great 
big move, and, okay, things are working again, forgetting the 
greed and the 40:1 leverage, etc., etc., etc.
    So how do we make these changes? Are you confident that we 
can do it, given the fact that health care will remain key on 
the agenda?
    Mr. Krugman. Okay, Mrs. Lowey. About the market reaction--
--
    Mrs. Lowey. They would read your column.
    Mr. Krugman. My old teacher, Paul Samuelson, famously said 
that the market had predicted 9 of the last 5 recessions. More 
contemporaneously, though still showing my age a bit, I would 
say that the market thought that pets.com was a great idea. So 
I do not want to place too much weight, certainly, on what 
happens on a day or even a year in the market.
    There is a fundamental, philosophical, you might say, 
debate, which you will probably read a bit more about in my 
next column, about whether the system of finance that we 
developed, not just these past couple of years, but over the 
past quarter century or more, was fundamentally a good idea or 
a deeply, deeply flawed system. And I believe that the 
Administration still thinks it was mostly a good thing. I think 
that is a point of difference between them and myself.
    We went from the old modeling, in which there were banks 
and banks made loans and they held on to those loans, to a 
model of highly securities finance, where a loan originator 
would make a loan and then sell off the loan, which would then 
be sliced and diced and turned into more complex financial 
instruments.
    And what we know for sure is that the incentives in our 
financial system were deeply, deeply flawed. Essentially, if 
you were a manager in that system, you made a great deal of 
money by creating the appearance of profit. And even if the 
whole thing blew up after five years, you would walk away with 
a large sum of money. And at some level, ultimately getting the 
compensation schemes right is critical.
    I think we can also ask ourselves--and I will just try to 
end this--do we have too much finance in this Country. I have 
been working on this a bit and noticing that during the 1960s 
the finance sector was about 4 percent of GDP. In recent years 
it has been 8 percent of GDP. Is that extra 4 percent of GDP 
creating value or is it, as I am now starting to think, 
actually destroying it?
    Mr. Obey. We are going to have to hold people to five 
minutes or some members will not get a chance to question Dr. 
Krugman before he leaves at 11:30. So I am sorry to say the 
gentlewoman's time has expired.
    Mrs. Lowey. I have to go back to my hearing. Hopefully, we 
will have another session at Rosa DeLauro's house, where we 
enjoyed you.
    Mr. Krugman. Yes.
    Mrs. Lowey. And Elizabeth Warren came the other night, and 
she agrees with you.
    Mr. Krugman. I am sure Betsy does, yes.
    Mrs. Lowey. Thank you.
    Mr. Obey. Mr. Alexander.
    Mr. Alexander. Thank you, Mr. Chairman.
    Doctor, on the second page of your testimony you said, 
talking about the dysfunctional health care system: ``We spend 
more to cover 85 percent of our population than our 
counterparts spend to cover everyone, with no evidence that we 
receive correspondingly better care.'' Could one assume, after 
reading that, that you are implying that if we cover everyone, 
we would both get it cheaper and better?
    Mr. Krugman. Yes. Just take the issue of administrative 
costs. Medicare, which, although we do not think of it this way 
often, is a single payer system covering Americans 65 and 
older, spends about 3 percent of its budget on administration. 
Private health insurance companies spend approximately 14, even 
though most of their practice is group coverage through 
corporations, which should be relatively cheap.
    The best available estimates suggest that the U.S. system 
spends about 30 percent of its total on administration; 
whereas, other countries' systems spend on the order of half 
that.
    Why are administrative costs so high? Essentially because 
of the cost of underwriting, insurance companies attempting to 
figure out who not to cover, and because of attempting to shift 
the cost onto someone else. It is very high costs imposed by 
the non-universality of coverage. And if you try and look at 
who the uninsured are and what it would cost, just on the 
administrative cost savings alone, it ought to be cheaper in 
total to cover everybody than to do what we now do.
    Mr. Alexander. Okay. I also find it puzzling you said that, 
comparing the amount of money, cash, that is in the system 
today, we are 8 percent versus 4 percent at some time in the 
past. If that is the case, then why do we have those excited 
about the idea that the Treasury might inject yet another 
$1,000,000,000,000 into the system, if you are implying that we 
already have too much cash might be the problem?
    Mr. Krugman. As you may have gathered, I was not fond of 
the plan announced by the Treasury this week, and there is a 
great difference between the measures that the Federal Reserve 
has been undertaking, which are an attempt to promote new 
lending, and the Treasury plan, which is simply an attempt to 
pour money into the existing banks without necessarily coming 
out and lending on the other side.
    We do have a problem that financial institutions, some of 
the key ones, are crippled by inadequate capital, and we need 
to find a means of recapitalizing them. But that is not the 
same thing as saying that we want the sector to expand. And, 
no, I think we do need to face up. We will eventually have to 
face up to the notion that there is not going to be as much of 
a finance sector as we had in 2006, and that it will be a good 
thing when it becomes a smaller part of our economy than it has 
been in recent years.
    Mr. Alexander. And if it appeared that I was implying you 
were excited about it, I apologize. I did not intend to.
    Thank you, Mr. Chairman.
    Mr. Krugman. May I say, if you were an owner of bank stock, 
the notion that the Treasury is about to throw 
$1,000,000,000,000 in your general direction would probably be 
regarded as a good thing, regardless of whether it works or 
not.
    Mr. Alexander. We have sensed there is some excitement out 
there.
    Mr. Krugman. Yes.
    Mr. Alexander. Thank you.
    Mr. Obey. Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Thank you, Dr. Krugman. It is a pleasure to have you here 
this morning. I am going to pass on the temptation to talk 
about the financial situation, but let me move, because I think 
this whole issue, one that has been a real concern to me over 
the years, is the whole issue of income disparity.
    You say in your testimony that when reducing income 
inequality ``there is little reason to be confident about the 
efficacy of whatever measures we try.'' Let me ask why such 
pessimism. If you were at the helm of a policy-making 
institution like this institution, what are some of the ideas 
that you would develop and implement to try to turn this 
around?
    You point to health care, and I understand that. That is 
something that we need to do and something that we can work at. 
What else? Where else would you prioritize in terms of this 
issue?
    Mr. Krugman. I am sorry you asked that question. Let me 
say, quickly, two things. The great leveling of the American 
income distribution, the Great Compression which took place 
under FDR, took place under extraordinary circumstances. First, 
there was a tripling of the size of the union movement thanks 
to the combination of the Depression and a change in the 
political environment; and, secondly, there was World War II, 
which was a great equalizing factor. And the important lesson 
from that was that those changes stuck for 30 years. It turned 
out that having altered, in effect, the bargaining position of 
American workers, we got a more equal distribution, which 
lasted a long time, without any adverse economic effects. So 
that is the great inspiring lesson.
    But since we are not planning to have a second Great 
Depression and a third World War, I hope, it is going to be 
difficult to carry out measures on anything like that scale.
    What we can do are, I think, on two fronts. Some of the 
increased inequality reflects increasing disparities based on 
educational level training skill. So it is almost certainly a 
good thing to invest in better education, especially not at the 
highest end, but for the population at large training. But my 
read says that that is probably going to have only a modest 
impact on inequality, even if we do a lot of it.
    The second thing we can do is try to enhance the bargaining 
power of workers. And I am very much a supporter of the 
Employee Free Choice Act, which is the cutting edge of that 
discussion right now. There is no fundamental reason in people 
who say that a stronger labor movement does not make sense in 
the 21st century I think are missing the realities. They are 
thinking that modern labor negotiations have to look exactly 
like the industrial labor negotiations of 40 years ago to be 
effective, and I do not think that is right.
    But the reason for my pessimism is that we are not sure. If 
you ask me to put a number on what the passage of EFCA would do 
to the Gini coefficient, I have no idea. If you ask me what 
would comprehensive health care reform do to the number of 
uninsured, I can be quite exact and highly optimistic about 
that.
    Ms. DeLauro. I am going to yield back my time, Mr. 
Chairman, because I am going to the Budget Committee, where we 
are going to do battle to see if every time we get to thinking 
about where the cuts ought to be made, it winds up in the 
nondefense discretionary portion of the budget, which is where 
you have health care and where you have education and some of 
the issues that might in fact make a difference in people's 
lives. So thank you, Mr. Chairman.
    Thank you, Dr. Krugman.
    Mr. Krugman. Thank you.
    Mr. Obey. Mr. Bonner.
    Mr. Bonner. Thank you, Mr. Chairman.
    Dr. Krugman, I am going to steer away from your testimony 
today, because I feel like some of my colleagues will take an 
opportunity to talk to you about that. I would like to focus on 
a couple of articles that you wrote recently, one February 1st, 
Protectionism in Stimulus; and on March 16th, A Continent 
Adrift.
    Let me give you a quick update on my thoughts and then, 
more importantly, I would like to hear from you on yours.
    Last week, many of our colleagues on both sides of the 
aisle took the opportunity to rush to the microphones and I 
know sincerely, but, nevertheless, express their outrage and 
dismay over the fact that there were bonuses that had been 
allowed for some of the small number of employees at AIG. The 
President was outraged over it and we were all outraged over 
it, although we never really answered the question who actually 
instructed Senator Dodd to take the language out of the 
conference committee that would have addressed this issue in 
the stimulus bill.
    One of the reasons I opposed the stimulus bill was an easy 
one for me, but a harder one to explain to some of my 
colleagues, and that was there was also a Buy American 
provision in it. Now, every member of this Committee is 
American; probably every person in this room is American; and 
we are all for buy America to create American jobs. Yet, the 
example I used with a steel caucus hearing was we have a 
company in Germany, ThyssenKrupp, that invested, two years ago, 
$4,500,000,000 of their money to come to the United States to 
create jobs in America, 20,000 construction jobs right. They 
actually were looking at Louisiana, but we ended up bringing 
them to Alabama, so we were grateful to have them come. These 
are good paying jobs with good paying health benefits. They 
will replace lower wage jobs in the textile industry and timber 
industry jobs, many of which have gone offshore.
    And, yet, one of the provisions--and I talked to Secretary 
Summers about this--was that, in an effort to wrap our arms 
around American jobs, we ended up saying, okay, you can come 
invest $4,500,000,000, create 20,000 construction jobs, 2700 
permanent jobs, but, by the way, you cannot sell any of the 
steel that you happen to manufacture to the U.S. Department of 
Transportation because that is not American, even though those 
jobs and the product would actually be finished here.
    So since you have opined in a couple columns about what is 
going on in Europe and specifically also about the Buy American 
provision in the stimulus, I would like for you to help me 
understand, from your perspective, do we run a risk when we 
rush to judgment about an issue and hold up something as 
popular as Buy American in setting off a trade war and building 
walls of isolationism, much like we did in the 1920s and 1930s, 
do we run a risk of actually doing more harm than good with 
policies like that?
    And I apologize for the confusion of the question.
    Mr. Krugman. No, it was not confused at all. This is 
exactly the issue on which I have to talk at my next engagement 
today.
    Let me say where we are. The problem with protectionism of 
any form--and the Buy American provision is not the grossest 
form of protection, but it is certainly a step in that 
direction. The problem with it is that it is very hard to undo. 
The relatively open world trading system that we have now has 
been a very good thing for the world. Less so, I would say, I 
think not so much about American workers, where there are some 
ambiguous effects, but for the poorest countries. When someone 
asks me why is relatively free trade important, my answer is 
think about Bangladesh. Think about the poorest countries, 
which cannot survive unless they can export their products.
    That relatively open system we have now took 70 years to 
create. After the highly protectionist responses that the world 
undertook during the Great Depression, it took generations of 
painstaking, slow negotiations to basically get back to where 
we started. And if you smash it apart right now, putting Humpty 
Dumpty back together again might take another three 
generations. So that is the reason to be extremely cautious 
about it.
    You do not want to say, I think it is incorrect to say that 
protectionism caused the Great Depression or even to say that 
protectionism would necessarily make our current crisis worse. 
Particularly given that the United States is being more 
aggressive in grappling with this crisis than the Europeans 
are, the temptation to say, well, let us keep the benefits of 
our stimulus at home is real and not foolish. But if you think 
about the costs, think about what could happen if we break up 
the system which has been so hard won, those are very serious 
to worry about.
    Mr. Obey. The gentleman's time has expired.
    Mr. Jackson.
    Mr. Jackson. Let me thank you, Mr. Chairman, and let me 
also apologize to my colleagues who may not know that I was 
here on time at the appropriate beginning of the hearing. But 
Congresswoman Lowey and I are trapped in a dueling hearing 
across the hall, and I wanted to make sure that they were 
understanding of why the queue is reflective of the way it is; 
and I thank the Chairman.
    Professor Krugman, I know that you have concerns about the 
public-private partnership presented by Secretary Geithner on 
Monday. A number of us do. And some of the concerns that you 
have articulated are clear to many of us, and there are certain 
hazards associated with the public-private partnership offered 
by the Secretary.
    But I wanted to present to you another concept of public-
private partnerships written about by your colleague, Bob 
Herbert, at The New York Times just a week or two ago.
    The Congress of the United States has been trying, and a 
number of States have been trying, to attract more private 
investment in public works projects. A little different than 
the bank rescue plan, but, nevertheless, there is an 
acknowledgment by this institution that there is sufficient 
private capital available to build and expand the domestic 
economy and the domestic job creation base by attracting 
private capital to public works projects if the private 
investors can find a way in a public works project to get their 
profit out of the project. Obviously, combining the best of 
public governance with the best of private experience, there is 
a potential match made in heaven.
    Bob Herbert specifically talked about a greenfield airport 
outside of my congressional district that could provide an 
opportunity to create, initially, 15,000 jobs, but, upon its 
final expansion, nearly 350,000 jobs to the local economy. No 
public works project does for an area what an airport does. An 
airport comes, for example, the accelerator and the multiplier 
effect: Hyatt, Hilton, UPS, Federal Express, DHL, etc.
    Could you distinguish for the Committee the difference 
between many State efforts, many local efforts, including 
Federal efforts to encourage private investment in public-
private partnerships from the kind of public-private 
partnership that Secretary Geithner articulated with respect to 
banks and share with us some of the hazards associated with the 
latter?
    Mr. Krugman. Thank you. There is no problem with bringing 
the private sector in on a project; it is a pragmatic issue. If 
the financing can be more easily arranged, if the expertise 
that private firms can bring to a project can be best brought 
in not simply by hiring them as a contractor, but by making 
them a stakeholder, that is fine. If you go through American 
economic history, you can find that we have done things in a 
variety of ways. The Erie Canal was a straight public works 
project, but the building of the Transcontinental Railroad was 
essentially what they did not call at the time, but was a 
public-private partnership, where land grants were used to 
encourage the railroads to do the job.
    The issue about the PPIP really has nothing to do with 
these things. My way of understanding what Secretary Geithner 
has presented is that it is, in essence, the same plan that 
former Secretary Paulson presented six months ago. It is really 
a proposal to have the taxpayer buy up a bunch of assets at 
more than anyone in the private sector is currently willing to 
pay. It is disguised a little bit, or at least it is made 
obscure by the complexity of the financing scheme and by the 
fact that the headline number of public investment is not going 
to be quite as large.
    But what it really does is it gives the private equity 
investors, in effect--I am being a little inflammatory here, 
but it basically bribes public investors to go out and buy the 
toxic assets. It offers them what is in effect a large put 
option because the FDIC is guaranteeing debt which is 85 
percent of the total and, if things go bad, the investors can 
simply walk away. So if the investments turn out to be bad, 
there is a strong element of heads, they win, tails, the 
taxpayer loses.
    Now, that is being defended by Treasury on the grounds that 
these assets are in fact being greatly undervalued, and that 
what we really need is a large subsidy to make people buy it. 
But it has nothing to do with it. Buying up toxic paper from 
troubled banks is not at all like building an airport.
    Mr. Obey. The gentleman's time has expired.
    Mr. Rehberg.
    Mr. Rehberg. No questions.
    Mr. Obey. Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman.
    It is a pleasure to listen to the testimony, and your 
prepared statement, for a person who did not study economics, 
is easier to read for me.
    The question I have is there is a lot of debate on 
measuring economic growth and measuring inequities in our 
system within our population. The measure that we use, from 
what I hear, is GDP. Are there other measures that would be 
more precise that would create a greater contrast in what you 
are trying to talk about using GDP? Is there another way of 
doing that so that it is more precise and perhaps even more on 
point?
    Mr. Krugman. Congressman, I am tempted to act professorial 
and say that is a good question, which is a way of playing for 
time because you do not actually know the answer yourself. What 
I would say is, first off, no serious economist believes that 
GDP is a sufficient measure of economic success. We all know, 
every principles of economics textbook, including my own, has a 
couple of pages on what GDP does not do; and simply having a 
higher GDP does not necessarily tell you the actual improvement 
in the quality of life.
    It helps to use some measure which comes closer to the 
experience of the typical family, which is why people like 
myself often focus on things like median family income. But 
even that misses quite a lot. Whether there is a single measure 
that can capture all of what we want to talk about is highly 
dubious. People have tried to do that; they always end up being 
somewhat arbitrary constructions.
    To take the example if we are comparing the United States 
and France, we have substantially higher GDP per capita. We 
have approximately the same labor productivity. The difference 
is partially that they have higher unemployment, but largely 
that they just take longer vacations that we do. How much of 
that is a loss and how much of that is simply a different 
choice?
    For what it is worse, gross changes in GDP almost always 
reflect comparable changes in any measure of the quality of 
life. There is no question that if you have country A, which 
has twice the GDP per capita of country B, country A is going 
to be a happier country.
    But I think you are asking too much to have a single 
number. We use GDP, we use a few other measures, but then we 
are not so much presenting a number as telling a story: what is 
it like in this Country; what is it like in our society.
    Mr. Honda. I was not looking for a single metric, I thought 
maybe there might be a series of metrics out there that can be 
used to contrast one to another.
    Mr. Krugman. Certainly, we have life expectancy, infant 
mortality; we have survey results about life satisfaction, 
which tell you something about how people perceive their lives; 
we have measures of household security or lack thereof. All of 
these things come together. There is not a whole lot of 
difference between rankings of countries by simple GDP per 
capita and rankings by these others, but there are some 
important difference. Particularly, more equal, less insecure 
societies look better, rank better on most of these measures 
than looking at GDP would have told you.
    Mr. Honda. Thank you.
    Mr. Obey. Ms. Lee.
    Ms. Lee. Let me first just thank you for being here, but 
also thank you for your testimony, Dr. Krugman, and also how 
you kind of break down economic analysis as it relates to 
public policy. I always read your columns and your articles, 
and looking at your testimony today, it is very consistent with 
ordinary folks being able to read and understand what is taking 
place in the economy and what we need to consider as we move 
forward.
    I wanted to just mention one of your comments in your 
testimony. You talked about the poverty rates. A boom year was 
about 12.5 percent. I would have added, in addition, for people 
of color, for instance, for African-Americans, it was 24.5 
percent to 27.9 percent; for Latinos, 21.5 percent to 27.1 
percent.
    I wanted to ask you how--and we understand the environment 
we are currently in in terms of the consideration of race. Race 
and class have always been a big issue in this Country, and I 
want to find out, as it relates to the poverty rates now, how 
you see race. Is it still a factor? What would you say would 
account for these huge gaps? I mean, 12.5 percent is bad 
enough, but when you go to 24 to 27, 21 to 27, that is twice as 
bad. So by leaving out communities of color, people of color, 
does that send a different type of message that race is not a 
factor anymore in our economic strategies, or how do you see 
this at this point with, quite natural, President Obama as 
President?
    Mr. Krugman. I think there is only so much I can say here. 
One is that, clearly, there are large racial differences in 
poverty rates in income. While we like to emphasize that a 
majority of the poor in the United States, contrary to popular 
impression, are not in fact African-American, certainly, the 
poverty rates are much higher among African-Americans. And it 
would be clearly foolish to suppose that, simply because we 
have finally had an African-American President, that race has 
ceased to be an issue in America, it is very much still an 
issue, very much still a large part of our social scene, of our 
economic scene.
    The causes of the racial differences are probably complex. 
I, for one, do not believe that discrimination has ceased to be 
a factor. I do not believe that we wiped away all of our 
centuries of history; I believe it is a real issue. There are 
also social issues. There are simple persistent issues.
    Referring to some of the remarks we had earlier, we are not 
a society of perfect social mobility. There is actually a great 
deal of hereditability of economic status. And the fact that we 
had undeniably vast discrimination in this Country not that 
long ago continues to color our income distribution, our 
poverty rates today.
    Now, many of the things we can do to mitigate suffering, to 
mitigate poverty can be color-blind even though we are aware of 
the issues of race. Universal health care is going to be good 
for people. Probably the biggest beneficiary, certainly rates 
of insurance are highest among African-Americans. But that does 
not mean that you have to think about that in devising the 
program; you simply have universal coverage and it serves those 
most vulnerable especially well. Other things, certainly we 
need to take them into account.
    I would agree with the President, race is our original sin 
in this Country. We have made far more progress in coming to 
terms with that over the past 50 years than many would have 
imagined, but we have certainly not come pass it.
    Ms. Lee. Thank you very much. The second question I have is 
with regard to income inequality and this recent unethical and 
immoral and probably, possibly criminal behavior by many of the 
Wall Street firms as it relates to the bonuses, I have a bill, 
it is the Income Equity Act, and what I am trying to do is 
close some of these loopholes that would allow these unlimited 
kinds of bonuses. But what this bill would do would be to only 
allow the deduction of $500,000 or more, 25 times the pay of 
the lowest wage worker to receive a Federal tax deduction.
    Mr. Obey. Could I ask you to be very brief in the answer? 
The gentlewoman's time has expired.
    Mr. Krugman. Yes. I cannot respond without knowing much 
more than I do about the bill. I am all in favor of seeking 
ways to limit this and certainly some of the deeply unjust tax 
privileges that some people in the financial industry have 
received, but beyond that I cannot go.
    Ms. Lee. Thank you very much.
    Mr. Obey. Ms. Roybal-Allard.
    Ms. Roybal-Allard. Thank you, Mr. Chairman.
    Mr. Krugman, in your book, Confronting Inequality, you 
state that the principle of equality of opportunity, not 
equality of results, is a largely fictitious distinction. Could 
you elaborate on what you mean by that?
    Mr. Krugman. Yes. It is often stated that, well, what we 
want is equality of opportunity, and that does not mean 
everybody has to end up in the same place. But if you have a 
highly unequal society, as we do, the children of those who do 
well are given a great advantage. The children of those who do 
poorly are put at a great disadvantage.
    And in the book, The Conscience of a Liberal, I cited the 
studies on educational attainment versus socioeconomic status, 
where it turns out that high-scoring students as of eighth 
grade, from the bottom quartile, measured by socioeconomic 
status, are less likely to graduate college than low-scoring 
students from the top quartile on socioeconomic status.
    Loosely speaking, that rich dumb kids are more likely to 
make it through college than poor smart kids. And that is 
telling you that we are a society in which, whatever we may 
like to imagine, we are not a society that has anything like 
equality of opportunity; that there is strong passing down 
through the generations of social and economic status.
    Ms. Roybal-Allard. You go on also to say that this high 
inequality imposes serious costs on our society that goes 
beyond the purchasing power, and one of the things that you 
give an example is how it corrupts politics. Could you 
elaborate on that and maybe given some other examples?
    Mr. Krugman. Yes. We certainly see that our political 
system is utterly democratic on paper and much less so in 
reality; that we can see--and I think everyone on this panel 
knows better than I do--the role of money, of influence, and 
simply of voice; that in a society where many people are poorly 
educated, scraping by, their voices are not heard in our 
political system. It undermines. People who have extreme views 
would say that we are a democracy in name only, and are really 
an oligarchy. I think we are better than that, but there is 
certainly a grain of truth to that.
    My colleague, Larry Bartell, in the Politics Department in 
Princeton, has shown that really the bottom third of the U.S. 
population is entirely ignored by the political process, that 
the views of the poorer constituents, even lower income working 
people are essentially ignored by the process. And that is not 
the Country we should be.
    Ms. Roybal-Allard. Is my time up, Mr. Chairman?
    Mr. Obey. No. You have one minute left.
    Ms. Roybal-Allard. Okay.
    So basically what you are saying is that although we, as 
Americans, like to think that, in this Country, we have equal 
opportunities, that basically that is a fantasy and that not 
only that we do not have equal opportunities, but that it is 
reflected in equal results that negatively impacts the ability 
of people to move upward in our society?
    Mr. Krugman. That is right. We still see ourselves as a 
society of Horatio Alger stories. And they do happen, but they 
happen much more rarely than people imagine. And, for what it 
is worth, we are less a society of Horatio Alger stories at 
this point than some other advanced countries. The chance of 
somebody born in the bottom quintile of making it into wealth 
or even substantial affluence is less in the United States than 
in Canada or Finland, largely because of things like the 
inadequacy of our health care system.
    So there are opportunities. We are not a caste society, but 
we are not the kind of wide open society that we hold up to 
ourselves as an ideal and sometimes imagine that we actually 
fulfill and practice.
    Ms. Roybal-Allard. And, as a result, we are all impacted by 
this inequality, regardless of where we are on the income 
standard.
    Mr. Krugman. That is right. We are at the level of value 
judgments at some level, but we are more--let me just say one 
thing. We are certainly wasting a great deal of human 
potential. Those smart kids from the bottom quartile who do not 
manage to make it through college essentially because they are 
so disadvantaged, that is talent that we could use, that we 
need.
    Ms. Roybal-Allard. Okay. Thank you.
    Mr. Obey. Thank you.
    Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman.
    I appreciate it. I enjoy reading your column during the 
week and I have enjoyed your books. I think you have provided a 
lot of guidance for those of us who are trying to deal with a 
lot of these issues.
    I represent a district that is in Northeast Ohio, 
Youngstown, Akron, who have been hit in a major way not just 
recently, but I think over the course of the last 25 or 30 
years, and you can see where our local economy is based on what 
has happened just in the past few months. We see a General 
Motors plant who gets rid of a third shift, gets rid of a 
second shift, and three or four days later the seat 
manufacturer lays off a couple hundred of people, and a few 
days later the logistics company lays off a few more people, 
and Delphi, right down the line.
    So my question is in two parts. One is an issue that I 
think the Secretary of the Treasury kind of tipped his hat at a 
little bit early on, the issue of China, currency manipulation 
in China, what your thoughts are on that and maybe how we can 
address that as a Congress and from the Administration 
perspective.
    And then, also, as I stated earlier, how the ripple effect 
of manufacturing and how manufacturing leads to more job 
creation than the financial sector. I know you mentioned 
earlier about going from 4 percent of our GDP to 8 percent of 
our GDP is finance, and that would be healthy if that gets 
reduced back to 4 percent. So something has got to fill that 
void. Is it manufacturing? How can we put together a good 
comprehensive manufacturing policy in the United States?
    So China currency and a manufacturing policy. And you have 
four minutes to solve that.
    Mr. Krugman. Right. China currency policy. I think I was 
struck by Secretary Geithner's excessive clarity. It seemed to 
me that that was a case where a little bit of Greenspan clouds 
of words was appropriate. It is a very difficult issue. Of 
course China is manipulating its currency. They got those 
$2,000,000,000,000 of reserves somehow.
    The question is what you want to do about it, and that is a 
very tricky issue, especially given that while, on the one 
hand, we do not like those Chinese exports competing with U.S. 
goods, although that is not as great an issue as people 
imagine, on the other hand, we do not want them abruptly 
dumping all their dollars. So it is a trick issue for which I 
have no good answers. It is just one of those things that one 
hopes just fades away.
    Mr. Ryan. Is now a bad time to try to address that?
    Mr. Krugman. Probably now is a bad time. Let me just say 
right now the woes of manufacturing--and I think this is the 
crucial thing right now--this is not that U.S. jobs are being 
stolen by other people. Manufacturing is in a catastrophic 
state around the world. It is collapsing everywhere because of 
the severity of the economic slump. Just this morning we had 
the news that Japan's exports have fallen 50 percent over the 
past year, just catastrophic collapse in their exports of 
manufactured goods. Same thing is happening to China. Same 
thing is happening to Germany.
    So the urgent thing that we need right now is not how can 
we get some slightly bigger share of this global manufacturing 
pie, but how do we stop this--I am going to have trouble with 
my metaphor here, but how do we stop this pie from shrinking to 
insignificance for all of us. There are longer term 
manufacturing issues, but right now what we need is economic 
recovery. We need to do whatever we can do to get it. And 
manufacturing is on the leading edge, is paying the biggest 
costs from the slump and would then be the biggest beneficiary 
if we can get a recovery.
    Mr. Ryan. Some people kind of pooh-pooh the idea that a 
green revolution can lead to resuscitating manufacturing in the 
United States. We have a lot of little machine shops that are 
making the bolts that go in the windmills. I mean, from a 
policy perspective, is that a realistic expectation that all of 
this investment in green technology will lead to reviving 
manufacturing?
    Mr. Krugman. It would help. I think it is unrealistic to 
expect manufacturing ever to be the same share of GDP that it 
was 30 years ago, just as it is unrealistic to expect us ever 
to go back to a Country where a large proportion of the 
population is farmers. There is a transition; we have moved, 
everyone has moved towards becoming increasingly a service 
economy. But manufacturing is especially depressed right now. 
It could come back significantly.
    The whole green investment, green spending is real. I have 
not been able to form any judgment of my own about how big it 
will be ultimately. It certainly will be a factor, but how big 
I do not know.
    Mr. Ryan. Thank you.
    Thank you, Mr. Chairman.
    Mr. Obey. I promised Dr. Krugman [remarks made off 
microphone]. So I would simply give Mr. Tiahrt one minute for 
whatever summary thoughts he might have.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    And thank you, Dr. Krugman, for being with us. It has been 
very enlightening. I enjoyed your conversation and your 
positions. I would disagree with your colleague about the 
poorer class or the lower class being ignored by the political 
process. I know that Ms. Lee and Chairman Obey and others here 
pay a great deal of attention to it, and I would argue with him 
that they do have access to Medicaid, EITC, public schools, 
unemployment, and they do vote; and we all realize that, so we 
pay a lot more attention to them than your colleague may 
realize.
    I just want to conclude by saying that my concern in the 
direction that the Country is going ignores the fact that a 
rising tide raises all boats, and when we have a strong 
economy, even those who do not have access to college have 
access to opportunity. And if we can provide access to 
opportunity, those that do not complete college--Bill Gates 
would probably be the most large example--but others do take 
that opportunity and bring these ideas to the marketplace, and 
it is those private sector jobs that help us keep the lights on 
in the Federal Government and at the State and local 
governments.
    So my concern is how do we raise the tide. And your input, 
I think, has helped give me a different perspective on some of 
the things that we are looking at. Thank you very much.
    Mr. Krugman. Thank you.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Mr. Obey. And I guess all I would say is that I would like 
to think that in all cases a rising tide lifts all boats. The 
problem is that, as has been said by others in the past, at 
some times in our recent history it appears that a rising tide 
has raised only all yachts.
    Let me say that I appreciate your comments today. I think 
it is important to hear what you said with respect to the 
stimulus package, when you indicated that there is no great 
certainty that the need for stimulating the economy will 
evaporate within a year and a half. I certainly do not think it 
is going to. I wish I did.
    With respect to your acknowledgment of the difficulties 
that we have in trying to reduce inequality, I guess all I 
would say is that I do believe that, whether directly or 
indirectly, we can at least impact that around the edges by 
what we do to enhance educational opportunity, and by what we 
do to strengthen the bargaining position of workers at the 
bargaining table. We certainly can impact their welfare by the 
shape and nature of the tax code and we can certainly 
strengthen the safety net for those who do not do well in the 
economy through actions such as universal health care and 
pension protection and the like.
    If you would like to comment for a minute before you leave, 
the floor is yours.
    Mr. Krugman. Yes, Mr. Chairman, I would very much agree. 
The fact that you do not know just how much effect you are 
going to get from a policy is not a reason not to do it if you 
think it will move things in the right direction. And I believe 
that education enhanced opportunities for labor to organize 
would help reduce inequality.
    I think I am thinking a little bit as an author when I 
wrote my last book but one. I put health care first because 
that was the one where I thought I could promise some very 
specific results, and I put reducing inequality as a more of 
here are some things we ought to try, and they would probably 
all help, but I do not know how much, and that is not to say we 
should not do them.
    We can do a lot better than this. I think the main point is 
that we have a tremendously vital private sector. We have 
entrepreneurship; we have innovation. What we do not have is an 
adequate way of making sure that all Americans are benefitting 
from what that private sector creates, and we can do much 
better at that than we have been doing. Thank you.
    Mr. Obey. Amen to that. Thank you very much. Good luck at 
your next engagement.
    Mr. Krugman. Thank you.
                              ----------                              

                                         Wednesday, March 25, 2009.

      RAISING WAGES AND LIVING STANDARDS FOR FAMILIES AND WORKERS


                               WITNESSES

KEITH HALL, PH.D., COMMISSIONER, BUREAU OF LABOR STATISTICS, DEPARTMENT 
    OF LABOR
JOAN FITZGERALD, PH.D., DIRECTOR, LAW, POLICY AND SOCIETY PROGRAM, 
    NORTHEASTERN UNIVERSITY
PHAEDRA ELLIS-LAMKINS, CHIEF EXECUTIVE OFFICER, GREEN FOR ALL
    Mr. Obey. Let me next call our second panel. First, Dr. 
Keith Hall, who is currently Commissioner of the Bureau of 
Labor Statistics. Dr. Hall has led the Bureau since January 
2008, having been appointed Commissioner by President Bush. He 
has also served as Chief Economist for the White House Council 
on Economic Advisors and the Department of Commerce and 
International Trade Commission.
    Dr. Joan Fitzgerald, Director of the Law, Policy and 
Society Program at Northeastern University in Boston, is the 
author of Moving Up in the New Economy: Career Ladders for U.S. 
Workers, and has written extensively about models for training 
and career advancement in the health care sector.
    I understand that Mr. Honda would like to briefly introduce 
Ms. Phaedra Ellis-Lamkins.
    Mr. Honda. Thank you, Mr. Chairman.
    Members of the Committee, I would like to introduce a 
personal friend, Ms. Phaedra Ellis-Lamkins. Phaedra hails from 
San Jose, California, and is the CEO of Green For All, an 
organization dedicated to building an inclusive green economy, 
fighting pollution and poverty together. Prior to her position 
at Green For All, she was the head of the South Bay Labor 
Council and Working Partnerships in Santa Clara County.
    She is nationally recognized for creative and innovative 
approaches to improving the lives of working families and her 
brilliant, charismatic leadership style.
    And I do not think I am embarrassing her yet, but I will 
get there.
    She has co-founded the Partnership for Working Families, a 
national coalition to bring the principles of good jobs and 
community benefits to local economic development. She fought to 
create one of the first community benefits agreements in the 
Country, providing community standards for large-scale 
development projects in San Jose.
    She has been featured in The Wall Street Journal online, 
San Francisco Chronicle, San Jose Mercury News, America At 
Work, NBC News, and ABC News.
    Finally, she serves on the board of the Leadership Council 
of California.
    She has many other accomplishments that I could name, but, 
in the interest of time, Mr. Chairman, let me just extend a 
warm welcome to her today.
    Mr. Obey. Thank you.
    Ms. Lee, I understand you wanted to make a comment?
    Ms. Lee. Well, just welcome and congratulations to you. 
Now, of course, we share, as the new CEO for Green For All, now 
with Van Jones, advising our President and our Country on the 
greening of our economy and ensuring that no one will be left 
behind. I really thank you very much for your leadership and 
for making this transition now. We look forward to working with 
you, of course, in Oakland, California also. Thank you.
    Mr. Honda. We share good.
    Mr. Obey. I am going to forego my opening statement for 
this panel because I am informed that we are about to have 
three votes beginning sometime after 11:45. This place would 
function very well if we did not have to interrupt our work to 
go vote, but that is part of the job.
    So what I would hope we could do is get each of you to get 
your statements in before we have to leave. When we do leave, 
we will be gone for about half an hour, I am afraid. So I would 
like to squeeze as much in as we can before we leave.
    Dr. Hall, why do you not proceed first? Take about five 
minutes to summarize your statement.
    Mr. Hall. Thank you, Mr. Chairman and members of the 
Committee. I appreciate the opportunity to discuss the Bureau 
of Labor Statistics' occupational outlook information with you. 
I would like to provide a very brief overview of the current 
economy and then discuss long-term employment trends through 
2016. In light of the Committee's interest in health care, I 
will address this field specifically. Finally, concerning a 
topic of current intense interest, green jobs, I want to 
briefly discuss the challenge of measuring the number and 
characteristics of these jobs.
    As you know, the Nation is in the midst of a sharp and 
widespread contraction of the labor market. Since the start of 
the recession, 4.4 million payroll jobs have been lost and the 
unemployment rate has increased from 4.9 percent to 8.1 
percent, the highest level in over 25 years.
    Job losses have occurred in nearly all major industry 
sectors, and employment has grown only in health care, private 
education, and government. Unemployment is up among all major 
demographic groups, and the number of people working part-time 
and voluntarily has jumped to 4 million. Job losses have 
occurred throughout the economy, as four States now have an 
unemployment rate above 10 percent.
    The BLS prepares long-term national projections every two 
years, including the labor force, industry output, and industry 
and occupational employment. The most recent projections were 
published for the 2006-2016 period. We rely on data from a 
number of BLS programs, including the Current Employment 
Statistics, Occupational Employment Statistics, the Current 
Population Survey, and the Producer Price Index. We also use 
data from other Federal statistical agencies, primarily the 
Census Bureau and the Bureau of Economic Analysis.
    I want to first note that the 2006-2016 projections were 
completed before the current recession. The impact of the 
recession and financial market turmoil on the long-run 
structure of the economy may not be known for some time, and 
may well impact the long-term trends that are the focus of our 
projection analysis. For example, we do not yet know if recent 
large declines in retirement wealth may impact future labor 
force participation rates of older workers.
    To put the occupational projections into context, let me 
briefly review the broad trends. We expect growth in the labor 
force and total employment to slow, and the decline in 
manufacturing employment and shift toward services employment 
to continue. We expect that employment in manufacturing, 
mining, and the Federal Government and utilities will all 
decline. All other major industry groups are projected to gain 
jobs, with the most rapid job growth expected in health care 
and social assistance, professional and business services, and 
educational services.
    Total employment is expected to growth 10 percent over the 
decade, resulting in 16.5 million new jobs. The two groups with 
the largest employment in 2006, professional and related 
occupations, and service occupations are also expected to grow 
faster than other groups, each increasing by 17 percent. Both 
include occupations within the large and fast-growing health 
care and social assistance, and professional and business 
services industries, such as registered nurses, home health 
aides, and computer software engineers.
    These two groups also represent the opposite ends of 
education and earnings ranges. Many occupations in the 
professional and related group pay wages above median for all 
occupations and require higher levels of education or training, 
while many service occupations pay lower wages and require less 
education and training.
    So far I have mentioned only job growth; however, job 
openings arise not only when new jobs are added to the economy, 
but also when existing jobs become permanently vacant, such as 
when workers retire. These replacement needs are expected to 
generate more than twice as many job openings as job growth 
alone. The retirement of the baby boom generation will create 
many replacement openings, where replacement needs will be 
significant in any large occupation, even some that were not 
expected to grow. Also, many rapid growing occupations have 
relatively low employment and will, therefore, add relatively 
few job openings.
    When the two sources for job openings, growth and 
replacement, are added together, a different picture emerges. 
Service occupations where replacement needs are high are 
expected to generate the most job openings. And although 
professional and related occupations will likely add more new 
jobs through growth than service occupations, it has lower 
replacement needs and will therefore generate slightly fewer 
job openings.
    Increasing demand for health care services will generate 
significant employment growth throughout the health care 
sector. The primary driver of this growth is an aging 
population. Advances in medical technology will continue to 
improve the survival rate of severely ill and injured patients 
who will then need extensive therapy and care. At the same 
time, cost containment policies will generate faster than 
average growth and demand for health care workers who assist 
health care practitioners and have lower training requirements.
    BLS produces comprehensive employment wage data for 670 
industries and over 800 occupations. While we can identify some 
of the industries and occupations that are likely to have green 
jobs, most green activities either cut across industries and 
occupations or account for a subset of activity within an 
individual industry and occupation category. For example, 
retrofitting buildings to increase energy efficiency currently 
falls in the construction industry, but likely support only a 
small fraction of the current 6.6 million construction jobs in 
the U.S.
    In closing, I just want to express my appreciation to the 
Committee for inviting me to be part of the distinguished panel 
today, and I want to thank you for your support of the Bureau 
and its programs, and I am looking forward to working with you.
    Mr. Obey. Thank you.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Obey. Dr. Fitzgerald.
    Ms. Fitzgerald. Yes. Thank you, members of the Committee, 
for having me here today.
    I would like to talk about the health care sector and its 
potential for creating middle class jobs for people who are 
already in the sector.
    There are three interconnected issues here. The first one 
is improving the quality of care; the second one is improving 
skills of the workers who are in the profession; and the third 
is improving wages.
    In 2006, I published a book called Moving Up in the New 
Economy, where I examined career ladder programs in health care 
and several other sectors throughout the Country. They were led 
by community colleges, community organizations, unions, 
employers, and combinations of those groups. I identified two 
types of career ladder strategies: one that creates ladders 
within an occupation that already exists, and others that help 
people in lower levels advance to higher levels.
    But before I talk about those, I would like to also mention 
simply the importance of raising wages, irrespective of 
training. And let us just take the case of the lowest paid 
workers in these occupations, that is, home health care workers 
and those who work in long-term care, either as something 
called home health aides or certified nursing assistants. 
Basically, these are jobs that take anywhere from 6 to 12 weeks 
of training.
    They are very poorly paid. People in these occupations get 
very little respect on the job and, as a result, the turnover 
rate is very, very high. That high turnover rate affects the 
quality of care. The person who is coming in to take care of 
your parent, whether in a nursing home or in their home, when 
they leave and that job turns, you are also losing the person 
who knew something about the person they are caring for and 
their special needs.
    So what we find is, by increasing wages, we decrease 
turnover, and that, in and of itself, helps to improve the 
quality of care.
    But let us look a little bit at some of the strategies. One 
is to create tiers within occupations. If we look at certified 
nursing assistant, the next tier up is to become what is called 
a licensed practical nurse, in some States a licensed 
vocational nurse.
    For someone who is working full-time, raising a family, and 
going to school, it is an 18-month path; and what happens is, 
if a person--and this is often the case--trying to make that 
advance does not make it, she has nothing to show for it, she 
is still a CNA. So the idea is to create tiers within the 
occupation so that you recognize increases in skills.
    There are many in my book that I talk about, programs like 
this throughout the Country. There is one problem with them, 
though: they are usually developed by an employer, and if you 
become a CNA-2 or a CNA-3 at one place of employment, that is 
not a portable credential that you can take along with you.
    And the other problem is because they are working in 
occupations that are, for the most part, subsidized by 
government funding, there is not enough money in the system to 
really raise their wages out of the poverty track. There is 
potential here, though, but we have not achieved it yet.
    Let us move on quickly to career ladders. In theory, what 
we have is a career ladder that starts at the certified nursing 
assistant, moves up to the licensed practical nurse, then moves 
up a step to the Associate degree registered nurse, the 
Bachelor's degree registered nurse. You could take it up to 
Masters and Ph.D. in nursing, for example. In practice, the 
most likely--and this is a very difficult career ladder jump--
is from the CNA to LPN.
    I have looked, as I said before, all around the Country. 
Everything you need to know about how to do this you can learn 
from AFSME's District 1199-C Training and Upgrading Fund in 
Philadelphia. There is simply nothing else comparable in the 
Country. It serves over 10,000 workers a year; it is operated 
mostly on Taft-Hartley money that the employer kicks in 1.5 
percent of payroll; and it is the Nation's only union-run LPN 
school.
    But because the union also receives grants from the 
Department of Labor and other government funding sources, they 
can serve people in the community as well.
    I could go on for some time about the features of the 
program that make it great. I think one of the things that is 
unique among this program is the three people who started it--
Henry Nicholas, Cheryl Feldman, and the late Jim Ryan--have 
been with the program for all of its 35 years and have really 
been able to adapt it. But here is a case where a certified 
nursing assistant can almost double her wages by moving on to 
an LPN.
    But one of the problems facing these kinds of programs and 
any kind of advancement program for people in the nursing 
occupations is the shortage of nursing faculty. And there have 
been programs throughout the Country by different States trying 
to address this shortage, but here again the problem is a wage 
gap. A Bachelor's degree or even an Associate degree nurse 
makes about $72,000 a year, and it is about $62,000. It is less 
than that for a Master's degree or Ph.D. trained nurse working 
in a university. So you are a nurse; what decision are you 
going to make in terms of where you are going?
    So that has to be part of the whole picture of how we 
improve career ladder opportunities in nursing. And we have 
tried to deal with that once at the Federal level with the 
Nurse Education, Expansion and Development Act, but the 
legislation never passed. It has been reintroduced by Durbin.
    I could go on and tell you about several other types of 
programs not only in nursing, but in behavioral health, 
surgical technician, orthopedic technicians, but you can read 
about those later. What I want to point out is how 
contradictory the Federal policy is on this.
    On the one hand, we have cost containment guidelines for 
Medicare and Medicaid, and we know there is a lot of corruption 
in the system that needs to be fixed. But those cost 
containment restrictions are also responsible for maintaining 
this low wage industry.
    Then, on the other hand, we have the U.S. Department of 
Labor creating these special pools of funds to improve worker 
training, and these demonstration projects cannot compensate 
for the low wages that exist in the sector.
    Then, if we had a third hand, we could say the other thing 
we do is use H1-B funding to bring in nurses trained from other 
countries, so essentially we are outsourcing the education and 
training of nursing and other health technicians in this 
Country.
    So, to close, I would argue that we have to set as a 
national goal not just the expansion of these various small 
programs here and there and training, but an ideal that all 
positions in the health care field pay at least a good 
paraprofessional salary and provide benefits to workers; and it 
is only by linking those two goals that we will really create 
middle class jobs in the health sector.
    Thank you.
    Mr. Obey. Thank you.
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    Mr. Obey. Ms. Ellis-Lamkins.
    Ms. Ellis-Lamkins. I am going to try to be thoughtful of 
your time also, so, Chairman Obey and members of the Committee, 
thank you for inviting me here. I would also like to say a huge 
thank you for the introduction from both Mr. Honda and Ms. Lee. 
Certainly having advocates like them makes it just an exciting 
trip to be here, but really because of their strength and 
leadership, we are very proud of them and proud to be their 
constituents; and to get to be both of theirs is a true honor.
    I am here on behalf of Green For All, a national 
organization dedicated to moving people out of poverty through 
the green economy. Basically, we think this is a moment in 
history that we are going to look back and judge ourselves by 
how we behaved, and the reason is because the economy is going 
through a transformation. And in the same way that technology 
transformed the economy, the greening of the economy, the need 
to conserve energy, the need to save money is going to 
transform this economy.
    The real question for Green For All is will we use that 
opportunity to move people of color and low income people into 
this economy, and our belief is that if we are purposeful, we 
can be sure to make sure that we use this economy and this 
changing of the economy to make sure people who are often left 
out are allowed to become part of the economy. So what we are 
focusing on is specifically green collar jobs. And green collar 
jobs are well paid, career track jobs that contribute directly 
to preserving or enhancing environmental quality.
    So some people ask us, well, does that mean a green job is 
where someone uses a broom and is a janitor in a clean green 
building, is that a green collar job? We say, no, that is a 
poor job that pays someone; it does not pay someone well. What 
we are really looking at is what are quality jobs that also 
make the environment better.
    So the question really is green jobs, why now? Well, two 
reasons. First is the fiscal and the financial crisis. The 
second is the crisis of global climate change. And I think it 
is said best by President Reagan's U.S. Federal Reserve 
Chairman, who said that you can be sure that if nothing is 
done, the economy will go down the drain in the next 30 years.
    Now, for us it is not polar bears that will be the biggest 
victims of global warming. People will be the biggest victims 
of global warming; ourselves, our children, and our 
grandchildren. At Green For All, we think there is a solution 
to these two problems: to build a green economy strong and 
inclusive enough to lift people out of poverty; to in effect 
fight poverty, pollution, and global warming at the same time. 
We have to be able to create good jobs in basic green 
industries: renewable energies like wind and solar, advanced 
biofuels, green building, transportation, waste management, 
water conservation, and environmental remediation. And we have 
to be able to recognize that the pathways that these present 
really will allow the end of a pollution-based economy.
    I want to focus on four simple truths about green jobs. 
First, the job creation potential is enormous. I have to be 
honest. When we looked at this, we said, well, where are the 
green jobs? Are there really green jobs that exist anywhere? 
And what we found is in fact there are, that a broad range of 
studies have demonstrated that the renewable energy sector 
generates more jobs per megawatt of power installed, per unit 
of energy produced, and per dollar of investment than the 
fossil fuel-based energy sector.
    What we look at is things like waste management. Every time 
we throw away recyclable consumer waste or building materials, 
we are throwing away jobs that could have been created. What we 
have been doing is looking across the Country, because we said 
we know it is not just California, and what we are finding from 
the way that we get rid of waste to the way the BeltLine is 
being built in Atlanta is that there are some clear examples of 
quality green jobs being created.
    Second is that green jobs are not just out in the science 
fiction movie somewhere, that in fact they are real jobs that 
we can point very specifically to. When we look at those types 
of jobs, what we are really looking at is will it actually 
transform current industries. We sat today with folks who are 
looking at training programs. What they have said is, look, 
part of what is happening is just the changing of construction. 
Part of these jobs will not be new jobs, which is absolutely 
true. But there actually will be also industries that create 
whole new jobs, from the way paper is done to looking at window 
retrofitting. So we are very interested in that.
    Three, green jobs are often middle skilled jobs requiring 
some post-secondary education, but less than a four-year 
college degree. It will not be a handful of scientists and 
engineers who build the green economy. Nor will it only be 
people who live in certain counties in California and drink too 
much Chablis. It will be pipefitters and machinists and 
technicians who build the green economy. These can be good 
middle-class jobs and, most important, accessible to low 
income, low skilled workers.
    Fourth, and perhaps most importantly, is these jobs are 
difficult to offshore. When we look at the economy's growth, 
what we are really trying to figure out are what are the jobs 
that will help produce manufacturing, produce job investment 
here; and the real potential in green jobs is that it has to be 
done. You do not get to retrofit a building in China and send 
it back; it has to be retrofitted here. It makes sense for the 
materials to be produced here, and it is difficult to 
transport.
    So, obviously, those are four clear truths about the green 
economy. What scares us is the relying on mistaken assumptions: 
that fossil fuel energy is abundant and cheap; that pollution 
is free; and fast and cheap is the same as quality and 
productivity. And we would make five simple suggestions about 
what we need to do. And recognizing your time constraints, I 
want to just go through them very quickly.
    First, smart energy and climate policy have to be the 
foundation of an inclusive green economy. We need a bill that 
limits greenhouse gas emission and advances aggressive climate 
solutions. To ensure that the next economic crisis faced by our 
Nation is not compounded by the type of climate crisis and 
devastation we experienced during Katrina, where the 
insufficient resources of low income families trapped an entire 
community, both economically and environmentally, we need a 
bill that invests generated revenue to maximize the gain and 
minimize the pain for low income people and the transition to a 
green economy.
    Second, maximizing impact will require policies at a scale 
commensurate with the challenge we face. At Green For All, we 
have been developing a proposal with partners for a Clean 
Energy Corps. I want to also thank those who voted and helped 
pass the GIVE Act last week.
    Third, job quality in the green economy will not happen 
without smart public policies that ensure it. From project 
labor agreements to community benefits agreements, high value 
contracting standards, it will be clear.
    Four, the green economy will not be built without a skilled 
workforce. I want to thank you, Mr. Obey, your fantastic staff, 
Ms. Lee, Mr. Honda, and the entire Committee for including 
$500,000,000 for green job training in the American Recovery 
and Reinvestment Act. We will be working to ensure, and we also 
would respectfully ask the Committee to look beyond the next 
two years of funding provided by the Recovery Act and consider 
reserving funds in the next year's appropriations bill for the 
Green Jobs Act authorized in the 2007 energy bill and authored 
by the Secretary of Labor Solis.
    I really want to thank you for giving me the opportunity to 
be here, but mostly I want to tell you that I promise this is a 
moment in history, and what we all have to decide is how we 
want to be viewed in this moment in history. My hope is this is 
a moment we will look back and say that this Committee invested 
in, believed in the worker in America and believed that 
manufacturing and green jobs and preserving the planet was 
something that we could all do.
    Thank you.
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    Mr. Obey. What I am going to try to do, I am going to try 
to see how many people I can squeeze in for questions in the 
next five or six minutes, before we have to go and vote, 
because when we leave I know we will be gone for at least half 
an hour, and that will shoot any ability to get questions out. 
So if I could ask each member to take about three minutes, 
beginning with Mr. Tiahrt.
    Mr. Tiahrt. Well, Mr. Chairman, that is trying to cover a 
lot of ground in three minutes. Maybe we can get them to return 
some of this information as a question.
    For example, Dr. Fitzgerald, you have come up with some 
projections that are based on a set of ground rules and 
assumptions that were not laid out in your presentation. If you 
could provide those to me, I think it would help me understand 
your projections a little better.
    I know that, for example, borrowing $3,000,000,000,000, as 
we are going to do this year at the Federal Government level, 
is going to have an impact on interest rates unless we print 
the money, like we did last week, when the Federal Reserve 
printed $1,000,000,000,000. That, in turn, puts more money into 
our money supply, which I believe drives inflation. And when 
you combine those two you get unemployment. So I am very 
concerned about how did you, in your projections, try to adjust 
a political climate in the future? Because I think there are 
some things that are hard to see. So if you could provide that 
to me, I think that would be good.
    Dr. Fitzgerald, you mentioned health care having these 
different opportunities to create a higher wage scale by 
education and by classification within the jobs. But then you 
said there is not enough money in the system to raise the 
wages. So where do we get this self-eating watermelon? How do 
you create this? And I think my concern is if you look at 
health care today, 65 percent is privately funded and 45 
percent is funded by the Federal Government, either in 
Medicare, Medicaid, or VA system. And in every case, every 
doctor, clinic, and hospital that I speak to, cost shifts. They 
take money they receive from the private sector to cover the 
shortfalls of government health care.
    So as we expand government health care, there is less money 
available to cost shift. And the only option that we see is 
what the current doctors in Kansas are doing. Four out of five 
of them no longer take Medicaid or Medicare patients, any new 
patients. They are trying to let the current ones go through 
their life cycle. So if we have less money available to cover 
the inadequacy of cost, then we have rationed health care.
    So my concern is how do you cover this when we are moving 
towards a rationed health care system? How do you increase the 
wages for people in health care when there is less money 
available?
    Ms. Fitzgerald. Well, I would certainly support Dr. Krugman 
in his ideas about what we need to do to reform the health care 
and reduce administrative costs and put those costs actually 
into the delivery of the health care system.
    Mr. Tiahrt. Well, one of the things he did not cover is 
that a lot of the 14 percent of administration costs are driven 
by government regulations. So we have set up this disaster by 
imposing these government regulations.
    You can go to Wesley Hospital in Wichita, Kansas, who used 
to have a whole floor of beds where people could be treated for 
problems. Today, that floor has been cleared of the beds and it 
is a sea of desks, and it is just to handle the paperwork.
    The last thing--and hopefully we can come back and finish 
this--Ms. Ellis-Lamkins, I think you are right about your 
opportunity in the green jobs, but I think you are wrong in the 
premise that it is global warming that is driving it. I want to 
submit for the record testimony of 700 scientists. It used to 
be 650 scientists. At the last intergovernmental panel on 
climate change, 650 scientists signed a report that said that 
the earth is actually cooling. It peaked in 1989 and for the 
last decade it has been getting cooler.
    I know if you talk to Jim Oberstar, he will tell you that 
in his district, which is Northern Minnesota, the month of 
January it never got above zero degrees Fahrenheit.
    So this is actually testimony of 700 scientists that 
debunked the claims of global warming. They believe that the 
earth is actually getting cooler.
    [Clerks note.--The information referred to was supplied and 
is retained in the Committee files.]
    Mr. Obey. That is only in States populated by Norwegians. 
[Laughter.]
    Mr. Tiahrt. But that being said, I agree that it is a great 
opportunity. You are on to something that I would like to help 
with, because I do think there is a wonderful opportunity. For 
example, we could build a clean technology coal-fired 
electrical generating plant, and with that, in the carbon 
sequestration plan, develop a whole new industry related around 
algae growth. Algae consumes carbon dioxide, emits oxygen, and 
it is very versatile. We can use it to make more electricity, 
we can use it for plastics. It has an oil base. You can even 
make makeup from it. So it is very versatile, and I think you 
are on to something that we need to expand on and create this 
opportunity.
    Ms. Ellis-Lamkins. Well, I appreciate that, and I would 
like to not focus on our disagreements. So whether you think it 
is because of global warming or because of business 
opportunity, I would like to focus on what we agree on. So what 
would be helpful is to have champions of the Green Jobs Act and 
to think about how we create some of those opportunities. So I 
look forward to a discussion that allows people to move out of 
poverty and we will certainly follow up with your staff so that 
we can figure out how to make you a champion of those policies.
    Mr. Tiahrt. Thank you.
    Mr. Obey. We are going to have to go to vote, and we will 
return as fast as we can. I would ask members to please come 
back as soon as the last vote.
    [Recess.]

                           Afternoon Session

    Mr. Obey. I was trying to squeeze several people in, so I 
squeezed Mr. Tiahrt down to three minutes. Let me simply go 
back to Mr. Tiahrt for another two or three minutes to see what 
other questions you might have.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Dr. Hall, you mentioned utilities declining, if I 
understood you correctly, in the number of jobs. I guess if you 
combine that with Ms. Ellis-Lamkins' move to increase green 
jobs, many of those would be in the area of utilities. And I 
have often thought we could do simple things like they do in 
Germany, where they have net metering, and that would encourage 
people to go out and produce electricity either through solar 
panels or wind generators. In Kansas we are very interested in 
wind generators because we have a continuous south wind.
    Kasaw [phonetically], in the Oglala Sioux Indian language, 
means people of the south wind, and, believe me, we are the 
people of the south wind.
    So I think there is actually, in the utility sector, unless 
you categorize some of those as manufacturing jobs, how would 
you explain the projection in utility jobs going down?
    Mr. Hall. You mean what is behind the----
    Mr. Tiahrt. Yes, what is behind the projection? Is it 
because we have higher productivity in generating power or 
electricity or other forms of energy?
    Mr. Hall. To be honest, I do not know great detail on that 
one specifically. A lot of what we do, obviously, is we look at 
trends in employment within the industry. I am not sure----
    Mr. Tiahrt. It makes the assumption that utilities are in a 
more productivity trend, higher productivity trend than we 
would see, and we expect that to continue.
    Mr. Hall. I believe that is so. That is certainly the case 
with manufacturing. That is part of why we talk about 
manufacturing jobs declining over time.
    Ms. Fitzgerald. I can speak to the utility question a 
little bit.
    Mr. Tiahrt. Please.
    Ms. Fitzgerald. I am working on a book on green jobs and 
career advancement right now.
    Part of it is, when you talk about wind or solar, the 
utilities are purchasers of that power, so that the jobs 
associated with wind or solar will not be credited under 
utilities, since they are simply purchasing it.
    Mr. Tiahrt. I see. I got something from my power company 
here in Northern Virginia, Dominion. It is customer connection. 
It is sign up for green power. In red--and perhaps there is 
some analogy of this--it says purchase power equal to 100 
percent of your monthly electrical usage. The cost is an 
additional $0.105 per kilowatt hour. For example, if you use 
1,000 kilowatts, that is $15 more. You could also purchase 
blocks at 133 kilowatts at $2, which calculates basically the 
same cost, $0.105 more kilowatt hour.
    Apparently, it is more expensive to generate green 
electricity. I am a little positive because electrons are not 
colored. What little I know about electrons, they are not 
colored. But it does cost more to generate green power at this 
point.
    Ms. Fitzgerald. Let me just give you an example. One is 
Austin Energy. Austin Energy is a utility in the Austin, Texas 
area where there is a mandate from the city, a portfolio 
standard to produce a certain percentage of their electricity 
from renewable sources. They just signed on to produce a 300 
megawatt solar farm that is going to be built. They will 
purchase that power. They got a fabulous deal, it is about 
$0.17 a kilowatt. Natural gas is about $0.08 or $0.09. So what 
they are doing----
    Mr. Tiahrt. Retail or wholesale?
    Ms. Fitzgerald. That is their purchase cost. And what they 
are doing is investing in renewable energy in the belief that 
the cost will go down over time, and there is every reason to 
believe that; it already has become par in wind. But as much 
solar as they move to thermal solar and thin film solar, much 
more likely to move in that direction. So it is more expensive.
    So a plan like you mentioned, that Austin has, it is either 
because you have a very green community and they sign on. But 
what you are finding is a lot of manufacturers are actually 
signing on to those green power purchase plans because they are 
long-term plans. So they will go to X wind farm and say we are 
going to purchase all your energy over the next 30 years. Then 
they will lock people in to that price. So that is very 
appealing as a business to know what that utility cost is going 
to be over the long term.
    So you either get green people who are willing to pay the 
premium for the renewable energy or you get your big customers, 
your manufacturing and other institutional customers who like 
the security of the long-term prices. And sometimes with wind 
it is actually cheaper over the long run.
    Mr. Tiahrt. What I have seen in Kansas, Fort Hays State 
University, for example, their power rates are determined by 
the high usage months, which are August and September because 
of air conditioning. That is when the students come. So they 
have bought diesel-powered generators and are what they call 
cost shaving. When they get to a certain usage, these 
generators kick on and that holds their rates down for the rest 
of the year.
    Ms. Fitzgerald. But that is one way they can deal with 
this. Another way they could deal with that would be some of 
the efficiency programs and encourage the universities and 
others to go to much more efficient systems of air conditioning 
to shave that peak; and that is what Austin Energy does as 
well.
    Mr. Tiahrt. I guess we will have time later on for another 
round?
    Mr. Obey. Well, until 1:00.
    Mr. Tiahrt. Until 1:00? Okay, well, I think I will yield 
back.
    Mr. Obey. Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman.
    To Dr. Fitzgerald, just a quick question. It is a training 
question. Are there small changes that we can make this year to 
Title 8 training programs to expand opportunities to the CNAs 
and LPNs without creating new programs? If you would like to 
look at that and get back to us, we would appreciate it.
    Ms. Fitzgerald. Okay.
    Mr. Honda. A general question. We are all looking at the 
green collar workforce and we are all involved in certain kinds 
of activities, but on an international level, when we are 
looking at global activities, and with the current distrust 
between our Country and China for historical reasons, but also 
the relationship that we have because of trade and things like 
that, are there opportunities for the areas that we have 
influence over to create what might be called a sister city 
kind of relationship of activities here and linked with another 
group in China so that we can start looking at ways to find 
commonality so that we can start, one, develop confidence with 
each other, a track record?
    And I do not think it needs to be formalized through State 
Department or anything else like that, but kind of a people-to-
people like activities to like activities to start moving this 
ball towards some international cooperation so that at a 
certain point in the future, as a Country, we will be ready and 
have a little bit more work done with people when we are ready 
to look at a relationship between our Country and China and 
ways to move forward on this struggle to attack this global 
warming thing, the greenhouse gases kind of challenge that we 
have in the future?
    Ms. Fitzgerald. Is that for me?
    Mr. Honda. Anyone.
    Ms. Ellis-Lamkins. It can be for anyone.
    Ms. Fitzgerald. You want to go first?
    Ms. Ellis-Lamkins. Go ahead.
    Ms. Fitzgerald. There are a lot of sister city programs, 
and I do not know that they are very meaningful.
    Mr. Honda. Well, what I was thinking of, the model would be 
something like that, where you find likes in the other country 
so you can start developing this relationship and build trust 
and things like that.
    Ms. Fitzgerald. Well, in terms on the green issues--and you 
may want to speak to this--there is an international 
organization called ICLEA. I never remember what it stands for, 
but it is an organization working on climate change and 
sustainability issues in cities that offers technical 
assistance, primarily working in Europe, South America, and the 
United States. And it would be very interesting, particularly 
because they are building brand new ecocities in China to try 
to bring Chinese cities into that organization. So I think 
around the global warming or sustainability issue in cities 
where there is an organization that probably would be very good 
in facilitating that.
    Mr. Honda. Are we involved in ecocities also?
    Ms. Fitzgerald. Are we involved in ICLEA? It is city-by-
city. There are about 850 cities throughout the world that are 
involved in that, and many area. Is Oakland?
    Ms. Ellis-Lamkins. I do not know that Oakland is, but San 
Jose is.
    Mr. Honda. Okay.
    Ms. Fitzgerald. I think the real issue with these--I am 
actually doing some research on these various organizations. 
Seven hundred some U.S. cities have signed on to the U.S. 
Council of Mayors Climate Change Agreement, and so what? It 
does not require them to anything, so what we really need to 
focus on are organizations on the ground that are working in 
cities so that these umbrella organizations are meaningful in 
terms of motivating change.
    Mr. Honda. Well, the question was taking on that activity 
and finding a like, for lack of a better word, a kindred spirit 
in China that you can link up to and create this partnership so 
that people start it before government starts.
    Ms. Ellis-Lamkins. Mr. Honda, I think it is an excellent 
question because I think the real challenge is how do you 
create a spirit of cooperation among people who want change. 
And I think there are a lot of groups in China who are also 
doing like was talked about before, who are trying to do work 
both around global climate change and also trying to create 
models. I think there has also been a lot of government 
investment, certainly, and infrastructure and technology. So I 
think we both can learn from where investments were made, how 
to make it easier to be essentially entrepreneurial in spirit.
    And in addition is to figure out what are the groups that 
we can partner with. And we would certainly be happy to send 
your office a list of groups that we think might be prospective 
partners in China and also to think about groups on the ground 
that are doing work here in the United States that are in some 
of those international relationships.
    Mr. Honda. Great. Thank you.
    Mr. Obey. Dr. Hall, you said that four States right now are 
at 10 percent or above in terms of unemployment. Which ones are 
they?
    Mr. Hall. They are Michigan, 11.6 percent; South Carolina, 
10.4 percent; Rhode Island, 10.3 percent, and California, 10.1 
percent.
    Mr. Obey. South Carolina, you say, is among them?
    Mr. Hall. Yes.
    Mr. Obey. Okay. And which are the next tier? Which States 
do you expect that we will see above 10 percent within the next 
three months or so?
    Mr. Hall. It is difficult for me to project data, since we 
produce the data. It always sort of puts me into a bind because 
we do collect the data. I can tell you that the trends for all 
the States up to now have had rising unemployment rates and 
there has not been pretty significantly rising unemployment 
rates; all 50 States have risen since the recession started, 
and there is no real indication yet that that is going to stop.
    Mr. Obey. What would you say are the characteristics of the 
four or five States that, at this point, have the lowest 
unemployment levels?
    Mr. Hall. It is hard to say because the States seem to have 
almost characteristic unemployment rates. Some States run 
generally above average, some run generally below average. I am 
sure a lot of it has to do with their industry mix, what sort 
of industries they have got. There has been such a long-run 
trend, for example, in manufacturing, declining employment in 
manufacturing. States who heavily invest in manufacturing have 
generally higher unemployment rates, for example. All the 
States have gone up because the unemployment has gone up in all 
industries, just about. So it has been very, very widespread. 
It is just that some States started from higher levels.
    Mr. Obey. The Brookings Institution recently released a 
report on middle-skilled jobs which they say constitute nearly 
half of the U.S. employment, and the report defines these jobs 
as those that require significant amount of education and 
training, such as an Associate degree or certificate, but not 
necessarily a four year Bachelor's degree; jobs like plumbers, 
machinists, etc. The report seems to support the notion that 
there are good paying jobs that do not require a significant 
post-secondary education, or at least not four years.
    What is your reaction to the notion of middle-skilled jobs, 
whether there is a skill that needs to be addressed today and 
whether the coming retirement boom will widen the skills gap?
    Mr. Hall. That is a good question. Obviously, our 
projections show job growth at all skill levels, but there are 
sort of two spots where it really jumps out. I have got a nice 
chart I can look at here. One is at the very lowest level, a 
lot of replacement jobs at sort of minimal training level jobs. 
And then there is a lot of job growth at college education, 
Bachelor's degree or above. So that does leave a fairly 
substantial gap in between where the job growth is not likely 
to be quite as high.
    Mr. Obey. One other question for you. How much does the 
decline of manufacturing in this Country, in your judgment, add 
to the gap between incomes in this Country? Do you have any way 
of assessing that?
    Mr. Hall. Not really directly. That is a good question, 
though, because I think you are right. I think the 
manufacturing jobs probably do have their share of those in 
between education levels that you are talking about, those in 
between jobs, something below a Bachelor's degree and something 
above minimal training. So I have not studied it, but my guess 
is that that does contribute.
    Mr. Fitzgerald. May I respond to that one? Because I think 
there is plenty of evidence to show that the decline of 
manufacturing has contributed to the widening income gap in the 
United States, and that is why a lot of the green jobs work is 
so important, because so many of these jobs are in 
manufacturing. And the representative from Ohio earlier spoke 
about the businesses in Ohio that could produce parts for the 
wind turbines. There is a whole organization in Ohio that is 
trying to make that happen, make the supply chains in 
manufacturing for wind, for other forms of renewable energy; 
and time after time, what the manufacturers are saying is we 
cannot get people that are willing to go into these jobs, these 
training programs, certificate level or whatever.
    So supporting policy in the green area that would support 
manufacturing has a potential for creating a lot of those 
middle wage jobs and also the health care. I did not get a 
chance to talk about it, but those allied health technician 
positions, most of them are either 9-month to 1-year community 
college programs, and they pay living wages.
    Mr. Obey. Let me ask either one of you. Let me take the 
devil's advocate position. There are some people around here 
and some people around the Country who will pooh-pooh the whole 
idea of green jobs and they will say that is just the latest 
fad, that is just the latest label; people are going to shop 
around this Country and this budget, looking for anything that 
is labeled green. They will try to associate themselves with it 
and pull off a piece of the change.
    What is your response to that? What would you say to 
demonstrate that when you are talking about developing green 
jobs in the economy, that you are taking a hard-headed look at 
economic realities and not just behaving like you are permanent 
president of an optimist club or something?
    Ms. Ellis-Lamkins. Thank you for the question. First, let 
me apologize for being late; I misunderstood.
    Mr. Obey. No, we got back earlier than we thought.
    Ms. Ellis-Lamkins. Okay.
    I think that is a really important question and I think it 
is a pretty consistent question when change happens. When new 
and exciting change happens, people freak out. It is a pretty 
normal response. You know, we sat with a group of CEOs----
    Mr. Obey. Never in Congress.
    Ms. Ellis-Lamkins. Never in Congress, thank gosh. But we 
sat with a group of CEOs in Silicon Valley, and listening to 
their stories from Google to Hewlett Packard, to thinking about 
when they made the case that there was something different 
happening and that technology might transform the way we 
worked. People disagreed, thought they were crazy, and thought 
it was something that would only happen in California.
    So what I would say to people who say it is not real, is I 
would say they should look at the examples from solar, where we 
are beginning to see not only the installation of solar in 
places like Richmond and Atlanta, but they should look at not 
only what is being created, but they should think about whether 
we want to be on the front of innovation.
    If you had said, five years ago, you thought U.S. car 
manufacturing could make a resurgence, but when you look at 
places like Tesla, one of the only companies that is going to 
be increasing the numbers of manufacturing jobs in auto making, 
when you look at companies that are thinking about that, when 
we have sat with these companies that are ready to grow, we 
look at Chicago Republic Windows, the workers that stayed in 
the plant, that was bought by someone who was actually going to 
use it to do retrofitting as part of the stimulus package.
    So what I would say to them is when we look at examples of 
manufacturing that used to exist, and what we see is not only 
the commitment to grow, but to be able to increase it, those 
jobs are going to increase; not just stay where they are, but 
increase. So the question is will we be ready as a Country for 
it.
    Ms. Fitzgerald. Just to add to that, if we just look at 
renewable energy, solar and wind, the United States is the 
innovator of solar energy, and right now, if we looked at both 
in solar and wind, who are the top 10 producers, we would have 
maybe one or two companies that are in the United States. We 
have just let the manufacturing go. And in wind and solar, 70 
to 75 percent of the jobs are in manufacturing. And what are we 
talking about? We are talking about projects in the ground. 
That is important. But if we are not building them here, we are 
not going to take advantage of those jobs, and we really have 
to build that in.
    Another example is public transportation. We are talking 
about expanding subway systems, light rail systems, all of 
these creating jobs in construction; zero on producing them 
here. Because there are domestic content, we do a little bit of 
the assembly. So like we get maybe 10 percent of the value 
added on this.
    So when we are thinking about the stimulus package, let us 
make sure that we look at how some of these manufacturing jobs 
are going to be U.S. jobs; otherwise, we are just going to be 
paying for manufacturing jobs elsewhere.
    Mr. Obey. Well, to me, one example about which I am the 
most zealous is the example of new battery technology for the 
auto industry for cars that we would like to see running on 
electricity rather than gasoline. I, for the life of me, do not 
see how our auto industry recovers international leadership 
unless we are in the forefront of developing new technology 
that includes new kinds of batteries that will power those new 
kinds of vehicles, which is why we put over $2,000,000,000 into 
the stimulus package for that purpose.
    What policies should we consider to maximize the earnings 
potential of the green jobs we are creating, as well as the 
policies that keep green jobs at home? Any other specific 
suggestions you have on how to build the focus to do that?
    Ms. Ellis-Lamkins. I have a couple. You know, I think that 
there are a couple things that really are important. The one 
thing that I want to just raise that we hear time and time 
again in local communities where they are doing excellent work 
is their concern about Federal preemption when they have good 
local law. So one thing is what do you think when there are 
good local standards that are stronger than the Federal 
regulation? So I would first just raise the issue of figuring 
out how to recognize good standards at a local level.
    The second is there are a lot of good models for this, from 
community benefits agreements to project labor agreements. The 
way we have often thought about it is that there is a three-
pronged approach: pre-qualification of contractors, standards 
when there are contracts in place, and enforcement and 
resources for enforcement. So part of it is also making sure, 
when there is an investment, there is a way to ensure that the 
regulations are actually maintained.
    In addition, we have got a proposal for the Clean Energy 
Corps to think about how do you create those jobs, encourage 
workforce development with that, and to be able to make sure 
that is funded.
    In addition, funding the Green Jobs Act I think will be 
critically important in the future. Thinking about 
manufacturing, many cities and jurisdictions across the Country 
are putting aside millions of square feet to be able to attract 
manufacturing industrial land and to think about what that 
strategy will be so that there is a package to be able to make 
sure that manufacturing happens and that it happens with 
standards.
    I think you made a great point, Chairman Obey, about even 
the idea of middle class jobs. We have 48,000 apprentices in 
this Country just alone in the plumbers and pipefitters, and 
for us to think about how do we make it easier for folks to be 
able to join those types of programs and how do we ensure that, 
when there is investment spent through the recovery money, that 
those jobs are jobs that will continue, not short-term jobs. So 
thinking about pre-apprenticeship opportunities so that people 
move into those jobs.
    Mr. Obey. Dr. Fitzgerald, with respect to health care, you 
were talking earlier about the need to try to increase wages 
for people working in the field, and you mentioned nurses, for 
instance. You know, the general concern in this Country is how 
we reduce health care costs, so when you talk about increasing 
wages in the health care field, that would seem to be 
counterintuitive. But you mentioned that, in fact, it could 
help save money or increase quality because of lessening of 
turnover.
    Beyond the turnover issue, how else would you defend the 
idea that we can afford to provide universal health care with 
rising wages at the same time that the President is talking 
about reducing health care costs by health care reform?
    Ms. Fitzgerald. Well, first, of course, there is the 
turnover issue, but there is also the broader level of 
commitment to employment. So Kaiser Permanente, for example, in 
the programs they have developed throughout the Country with 
their 27 unions, one of the things they have really done is 
return on investment analysis that definitely shows that by 
investing in your workers and creating opportunities for them 
to advance lowers costs dramatically in that, for example, to 
replace a nurse costs about $150,000 in the whole time spent 
when that position is vacant than when it is filled with 
someone that needs to learn a whole new system.
    So that is one aspect of it.
    I think another aspect of it is quality of care. If you 
have invested in a better trained aide, they are more likely to 
help reduce, for example, falls, which is a major problem; bed 
sores, urinary tract infections because people are not taken to 
the bathroom enough. So that better trained aides and licensed 
practical nurses deliver better care and actually reduce the 
health care costs of those facilities that invest in them.
    So that is another key area.
    And the other is a morale issue so that if people feel 
invested in and part of the organization, they are part of the 
process and can help an organization look for ways to cut 
costs, and nursing homes, it is in the book, can demonstrate 
that that is the case.
    So I would say those are the three key areas.
    Mr. Obey. One last question. Can you elaborate on how much 
of the nursing shortage and limited nursing career ladder 
opportunities are due to nursing school faculty shortages? I 
keep hearing that even if we provide funding for nurses 
training, we have a bottleneck because often people who are out 
in the field are making more than people who are on the faculty 
trying to teach people to be nurses.
    How do you see us dealing with that problem?
    Ms. Fitzgerald. I would look to Oregon in the longer part 
of my testimony that talks about different models for making it 
easier to do the training, whether it is SIM-Man training to 
replace some clinicals, coordinating and so forth. But, I think 
the most obvious thing is you raise the wages at the university 
level. But it is difficult to do, even for community colleges, 
because they are very expensive programs to run in terms of the 
faculty-student ratio is much smaller than it is when you can 
put 500 students in a history class. And throughout the 
curriculum you have that kind of student-teacher ratio. Plus, 
there are the clinicals. There is a real shortage of clinical 
sites. So what you find is a hospital is much more likely to 
accept clinicals from a Bachelor's degree program than it is 
from the community college, so you create that bottleneck.
    So it has to be dealt with in terms of technological 
creativity and how we educate nurses. But it just makes perfect 
sense; no rational nurse is going to make the decision I am 
going to teach for $20,000 less a year and put in more hours 
than I would. So I think that kind of legislation that helps 
the universities subsidize those salaries would be one way to 
address that bottleneck.
    Mr. Obey. Well, another would simply be if we had State 
legislators who were willing to meet their responsibilities to 
their own universities. I know that in my State, when I left 
the legislature, about 42 percent of the operating cost of the 
University of Wisconsin was paid for out of the State General 
Fund financed by the State legislatures. Today, that is down to 
about 19 percent. They have walked away from their 
responsibilities to fund the universities at an adequate level. 
Then they wonder why tuition goes up and it becomes less 
affordable for kids to go.
    Ms. Fitzgerald. Right. That is exactly right.
    Mr. Obey. Mr. Tiahrt.
    Mr. Tiahrt. Mr. Chairman, I just want to thank you for a 
good hearing. I thought it was very interesting, stimulating, 
and I think we learned a lot. So thank you very much.
    And thank you to the witnesses. Appreciate your being here.
    Mr. Obey. Thank you.
    Thank you all. Appreciate it. Thanks for coming.
                                          Thursday, March 26, 2009.

 NATIONAL INSTITUTES OF HEALTH: BUDGET OVERVIEW/IMPLEMENTATION OF THE 
                ARRA/STATUS OF NATIONAL CHILDREN'S STUDY

                               WITNESSES

RAYNARD KINGTON, M.D., PH.D., ACTING DIRECTOR OF THE NATIONAL 
    INSTITUTES OF HEALTH
JOHN NIEDERHUBER, M.D., DIRECTOR, NATIONAL CANCER INSTITUTE
STORY LANDIS, PH.D., NATIONAL INSTITUTE OF NEUROLOGICAL DISORDERS AND 
    STROKE
ANTHONY FAUCI, M.D., DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND 
    INFECTIOUS DISEASES
DUANE ALEXANDER, M.D., DIRECTOR, EUNICE KENNEDY SHRIVER NATIONAL 
    INSTITUTE OF CHILD HEALTH AND HUMAN DEVELOPMENT
GRIFFIN P. RODGERS, M.D., DIRECTOR, NATIONAL INSTITUTE OF DIABETES AND 
    DIGESTIVE AND KIDNEY DISEASES
PATRICIA GRADY, PH.D., R.N., F.A.A.N., DIRECTOR, NATIONAL INSTITUTE OF 
    NURSING RESEARCH
JOSEPHINE BRIGGS, M.D., DIRECTOR, NATIONAL CENTER FOR COMPLEMENTARY AND 
    ALTERNATIVE MEDICINE
JOHN RUFFIN, PH.D., DIRECTOR, NATIONAL CENTER ON MINORITY HEALTH AND 
    HEALTH DISPARITIES
LAWRENCE TABAK, D.D.S, PH.D., ACTING NIH PRINCIPAL DEPUTY DIRECTOR AND 
    DIRECTOR, NATIONAL INSTITUTE OF DENTAL AND CRANIOFACIAL RESEARCH
    Mr. Jackson. I would like to welcome Dr. Kington and the 
institute and center directors who are seated behind him.
    At today's hearing, we would like to discuss NIH's 
implementation of the Recovery Act funding NIH received, the 
President's fiscal year 2010 budget for NIH to the extent that 
it has been made public and the status of the longitudinal 
National Children's Study which many of our Subcommittee 
members are interested in but which has never received much 
discussion because President Bush tried his hardest to 
eliminate it.
    Between the omnibus spending bill and the Recovery Act, we 
were able to provide an $11.3 billion increase for NIH, the 
largest ever 1-year funding increase to NIH.
    I am sure, Dr. Kington, that were Dr. Zerhouni here today 
he would love to be in your seat these days.
    With that kind of increase, the Committee will be watching 
carefully to be sure that NIH spends it in a way that both 
stimulate good science to propel our economy and to create 
high-paying jobs throughout the Country.
    We appreciate having some of the NIH institute directors in 
the front row today. Dr. Kington, you should feel free to have 
them respond to specific questions if you would like. There is 
an empty seat to your right, to my left, with a mic for that 
purpose.
    Mr. Tiahrt, are there any comments that you would like to 
make?
    Mr. Tiahrt. Thank you, Mr. Chairman.
    I would like to welcome Dr. Kington as well and the 
National Institutes of Health center directors who are here. 
Thank you all for coming.
    Mr. Chairman, I am particularly glad you scheduled this 
hearing, given that NIH currently has 33 percent more resources 
than it did last year. I am interested to know how it is going 
to be spent.
    While I would like to discuss the upcoming budget, it 
appears that our friends in the Executive Branch may, 
themselves, not yet know what it contains. That is unfortunate 
because I know that the Chairman and I both would like to get 
started in earnest, so we can avoid the end of year crunch that 
leads to an omnibus bill.
    I am always pleased that we are going to be discussing the 
National Children's Study and some of the problems it has 
encountered over the last couple of years--problems that, in my 
view, should never have happened and have jeopardized the 
entire study.
    At any rate, I look forward to the testimony, and I yield 
back.

                      Dr. Kington's Oral Statement

    Mr. Jackson. Thank you, Mr. Tiahrt.
    Dr. Kington, we have your written statement. Please feel 
free to summarize with oral remarks so that you will have 
adequate time to answer any questions.
    We welcome you to the Committee and congratulate you for 
your ascendancy in this acting role.
    Dr. Kington. Thank you, Congressman Jackson, and good 
morning to you and other distinguished members of the 
Subcommittee. It is an honor and a privilege to appear before 
you today to discuss the National Institutes of Health's 
implementation of the American Recovery and Reinvestment Act.
    Before I begin, I would like to introduce my NIH colleagues 
who have joined me: Dr. Anthony Fauci, Director of the 
Institute of Allergy and Infectious Diseases; Dr. Duane 
Alexander, Director of the Eunice Kennedy Shriver National 
Institute of Child Health and Human Development; Dr. Josephine 
Briggs, who is the Director of the National Center for 
Complementary and Alternative Medicine; Dr. Patricia Grady, 
Director of the National Institute of Nursing Research; Dr. 
Story Landis, Director of the National Institute of 
Neurological Diseases and Stroke; Dr. John Niederhuber, 
Director of the National Cancer Institute; Dr. Griffin Rodgers, 
Director of the National Institute of Diabetes and Digestive 
and Kidney Diseases; Dr. John Ruffin, Director of the National 
Center on Minority Health and Health Disparities; and Dr. 
Lawrence Tabak, Acting NIH Principal Deputy Director and 
Director of the National Institute of Dental and Craniofacial 
Research.
    First, I want to express my sincere gratitude on behalf of 
the Agency for your support of NIH in the fiscal year 2009 
budget and for the continued trust you place in NIH to make the 
discoveries that will lead to better health for everyone as 
reflected in the recent appropriation of the $10.4 billion in 
ARRA and the 3.2 percent increase in the Fiscal Year 2009 
Appropriations Act.
    I thank you on behalf of the many scientists we are able to 
support at more than 3,000 research institutions throughout the 
50 States and U.S. territories and on behalf of the public who 
count on our research to help detect, treat and prevent 
hundreds of diseases and conditions.
    As you noted, I submitted my testimony for the record, and 
I will try to just highlight key points for you this morning.
    As we are all painfully aware, every sector of America is 
facing challenging times from the drastic downturn in the 
economy. The biomedical research community has not been spared 
from this turn of events. It is an unfortunate irony, however, 
that it comes at the same time that we are seeing extraordinary 
scientific opportunities for improving health.
    This is worrisome not only because it means fewer jobs but 
also because innovation and a constant influx of new talent are 
crucial to the Nation's economic success and to a robust 
biomedical research enterprise. So it is timely that the 
President and Congress provided ARRA funds to NIH to stimulate 
the economy and to advance biomedical and behavioral research.
    To bring the impact of ARRA down to the individual level, I 
would like to share with you the following. One of our program 
directors received an email several days ago in response to 
news that an applicant's grant application is being considered 
for funding with ARRA money. Here is an excerpt from the email:
    ``We gave a termination letter last Friday to my longtime 
post-doc. His job has been saved. He is going to be thrilled to 
hear about his change of fortune. I would also like to hire a 
technician with the new funds since I presently don't have 
one.''
    I am certain that similar scenarios will occur throughout 
the Country over the next two years as we implement the Act.
    Your decision sends a strong signal to scientists in the 
field and to bright young people who may be one day choosing 
science as a career, that the United States is willing to 
support outstanding research and outstanding scientists.
    Here is only a sampling of the important work that we will 
support with ARRA funds. For example, we will expand rapidly 
our understanding of a wide range of diseases and conditions 
including diabetes, forms of cancer, addiction, glaucoma, heart 
and lung disease, arthritis, kidney disease and mental 
disorders. In addition, we will expand our efforts in 
community-based research with a special focus on minority and 
under-served populations and make further investments in the 
potential applications of nanotechnology.
    Just to briefly review, the ARRA provided NIH funding in 
the following ways:
    It appropriated $8.2 billion to NIH for scientific 
research.
    It allocated $1.3 billion for construction and equipment at 
our grantee institutions, $1,000,000,000 of that focused on 
extramural construction and renovation and $300,000,000 to 
shared instrumentation and large capital research equipment.
    The remaining $500 million will be used to fund high 
priority repairs, improvements and construction on the NIH 
campus to enable the highest quality of research to be 
conducted.
    In addition, $400 million was transferred to NIH from the 
Agency for Healthcare Research and Quality to support research 
in comparative effectiveness.
    Let me review how NIH will be using the dollars in direct 
support of science.
    NIH is using a nimble approach to investing the money 
quickly, with the greatest impact. For example, we are in the 
process of determining which of the highly meritorious 
applications that we were not able to fund last year would make 
sense scientifically to fund for the next two years with ARRA 
dollars.
    NIH has already issued a number of new funding 
announcements. In particular, we have made targeted grants 
announcements to stimulate research in high priority areas. An 
excellent example is our announcement this week of four 
research grant announcements related to autism, a disease that 
affects so many families in America.
    NIH has committed $60 million of research funding to 
address the differences across the autism spectrum of 
disorders. Researchers will help develop and test diagnostic 
screening tools, assess risk from exposures and test early 
interventions and adapt existing pediatric interventions for 
this population.
    NIH has created a number of new programs that will spur new 
areas of research and trigger an almost immediate influx of 
research dollars into communities across the Country. For 
example, we have introduced the Challenge Grants Program, the 
Grand Opportunity Program or GO Grants, Signature Initiatives 
and a program to encourage the recruitment of new faculty to 
conduct research and, finally, a summer program to hire 
students and science teachers in research laboratories, and I 
will speak a little bit about a number of these programs next.
    For the Challenge Grants, we issued the largest RFA in the 
history of NIH. This is a shortened version of it, a 220-page 
document that lists 237 scientific topics in 15 broad 
scientific areas. We expect to devote at least $200 million to 
this effort.
    The research funded under the Challenge Grants program will 
fund a number of important topics including advances in 
biosensors, new approaches to HIV therapy, new research in 
bioethics, research on health disparities and clinical 
research, pain management and the new area of so-called 
theranostics, a combination of the words, therapy and 
diagnostics, which refers to materials that can both diagnose a 
condition and treat a condition--so a material that might be 
painted on a tooth that could both detect a fracture and repair 
it.
    Another new program is the Grand Opportunity Program or the 
GO Grants. This program will highlight large-scale research 
projects that accelerate critical breakthroughs, early and 
applied research on cutting-edge technologies and new 
approaches to improve interactions among multidisciplinary and 
interdisciplinary research teams.
    NIH is supporting a number of important Signature 
Initiatives that will support exceptionally creative and 
innovative projects and programs to address major challenges in 
biomedical research. The initiatives will cover new scientific 
opportunities in nanotechnology, for example, genome-wide 
association studies, Alzheimer's disease, oral fluids as 
biomarkers and community-based research just to name a few of 
the potential topics.
    We have also announced an important new program to support 
newly trained faculty to conduct research. This will help 
address the need to support early career scientists who are one 
of NIH's top priorities. Funding will be provided to hire and 
provide appropriate start-up packages and to develop pilot 
research projects for newly independent investigators.
    We are also particularly delighted to tell you about our 
expanded summer program for teachers and students across 
America. Funds will support short-term summer jobs for high 
school and undergraduate students as well as elementary, 
middle, high school and community college science educators in 
laboratories across the Country and will provide several 
thousand young people with an opportunity to experience the 
world of research, and we hope this experience will spark their 
desire to become scientists.
    We are mindful that a top priority for the use of ARRA 
funds by NIH is to create and preserve jobs as well as 
increasing purchasing power in all corners of the Country. We 
firmly believe that we can do this while carrying out the core 
NIH mission and without compromising our commitment to fund the 
best scientific research ideas.
    We will fulfill ARRA's comprehensive reporting requirements 
including jobs created and preserved, tracking of all projects 
and activities and trend analyses. To track all of NIH ARRA-
related activities, I invite you to go to our web site, 
www.nih.gov, which we will update regularly.
    In summary, groundbreaking discoveries are most often built 
on the foundation of many incremental advances that bring us 
closer to diagnosis, treatments and other public health 
improvements expected by Congress and the American people.
    Because of ARRA funds, there will be more discoveries 
across the Country next year and many years to come. These 
findings will yield better understanding of the major diseases 
and disorders including those that I touched upon here today 
and hundred more as well as providing keys to allow all of us 
to live healthier lives.
    As I said in my opening comments, we are grateful for your 
commitment to biomedical research and all the promise that it 
brings to people here in the United States and around the 
world.
    We have employed a number of innovative strategies to 
quickly and wisely invest ARRA funds. We will stimulate the 
economy, we will create jobs, and we will advance science. Most 
importantly, ARRA will help us contribute to our principal 
mission which is to make scientific discoveries that will 
improve the public's health.
    I would be pleased to answer any questions, and I will take 
advantage of the opportunity to call upon my colleagues for a 
special response to particular topics in their areas of domain.
    Thank you again.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           NIH RESEARCH FACILITIES CONSTRUCTION MODERNIZATION

    Mr. Jackson. Dr. Kington, thank you very much for your 
testimony.
    We are going to try today to adhere as closely as possible 
to the five-minute rule. I am going to certainly apply it to 
myself.
    I want to thank my colleagues for coming to today's 
hearing. Chairman Obey, who would normally be chairing the 
Committee, has found himself in another conflicting scheduling 
event and expresses his deep regrets for not being here to all 
of the institute directors, center directors and to you.
    The Recovery Bill provided about $1.5 billion for 
extramural research facilities and NIH campus research 
facilities. Whether the money is awarded for new construction 
or renovation, it is sure to generate needed jobs across the 
Country. What is your estimate of jobs created through this 
funding?
    How critical is it to modernize biomedical research 
facilities in order to achieve the scientific advances of NIH 
that have been outlined in the road map?
    And, what is the estimated backlog of creating adequate 
research space?
    That is my first series of questions.
    Dr. Kington. First of all, we anticipate that extramural 
construction support, which is the $1 billion that will go out 
across the Country, will allow us to deal with extraordinary 
backlog on academic campuses throughout the Country in basic 
renovation and improvements. I believe the estimate was around 
$9 billion of backlog across campuses across the Country, and 
this $1 billion is a significant down payment on that large 
amount of resources that are needed to bring these buildings up 
to speed. We think that it will have a direct impact on the 
quality of the research that we support.
    And the relatively small amount, the $500 million that will 
go to support construction on campus, will also allow us to 
substantially improve the quality of our research buildings and 
to catch up with the deferred maintenance backlog that we have 
accumulated.
    We have not estimated exact numbers of jobs that will come 
from the construction dollars, but we can get back to you with 
estimates. We don't have exact numbers right now.
    We have better estimates for the jobs that will come from 
the research dollars.

                 JOB ESTIMATES FROM CONSTRUCTION FUNDS

    Mr. Jackson. Can you give us some sense of that?
    Dr. Kington. We estimate that each of our grants, on 
average, supports between six and seven jobs either in part or 
in full. We are in the process of actually doing an even more 
detailed study to look at the exact numbers that will come from 
the various mechanisms. That comes from a number of studies 
that we have conducted by pulling a sample of our grants and 
looking at their funding patterns.
    One of the opportunities with the reporting that will come 
from this, associated with ARRA, is we will probably have 
better information than we ever have had about the economic 
impact of the dollars that we support.
    [The information follows:]

              Construction Jobs Created With $1.5 Billion

    Dr. Kington: The estimate number of jobs created or maintained by 
the $1.0 billion for extramural construction and $500 million to 
support construction on NIH owned buildings and facilities is an 
approximation. The exact number will depend on the mix of projects, 
location, and cost of materials.
    The job projection for both the extramural and NIH campus 
construction projects is based on an industrial labor conversion factor 
of about 5.5 work years per $1.0 million spent. It is estimated about 
8,000 work years can be supported with a total of $1.5 billion of 
construction funds. If you extrapolate that each work year is equal to 
one position then it can be inferred the $1.5 billion will support 
8,000 positions.

    Mr. Jackson. Dr. Kington, I want to congratulate NIH for a 
well thought-out plan and for obligating the unprecedented 
funding increase for fiscal funding for NIH. It provides an 
unprecedented funding increase for this year and next year, 
temporarily hiking the number of new grants and success rates, 
but the prosperity is short-lived. After two years of funding, 
NIH is back to where it started--low success rates and 
potentially scant money for new grants.
    That is unless the Administration and Congress acknowledge 
the hole we have dug for NIH and own up to our responsibility 
to continue stable funding.
    I know you would have to be a loyal Administration witness, 
but can you give us a straightforward assessment of what will 
happen to NIH scientists in 2011 after the Recovery Act money 
dries up? How many additional scientists will receive research 
support under the Recovery Act and how will those scientists be 
supported once the funding dries up?
    Dr. Kington. First of all, we have some experience with 
planning for large influxes in support to our budget, having 
lived through the doubling and then the not so soft landing 
that came after the doubling, and we have learned from that 
experience.
    We are much better at estimating the churn of dollars, and 
with these dollars we have made an effort to limit the impact 
by limiting our commitments to only the two years of the 
dollars that come with the Recovery Act. We, however, 
anticipate that if these dollars actually generate the research 
advances that we hope they will generate, we will probably have 
an increase in applications beginning in 2011.
    We have done some estimations, and we believe that it may 
drop the success at least several points below what it has been 
if we don't have a substantial increase in our budget.
    We tried to use these funds wisely, so we can minimize the 
out-year impacts. But it is inevitable that if the dollars are 
used successfully, we will generate advances which will, in 
turn, generate new applications. We are trying to limit that 
impact, but in some ways it is an indication of the success of 
the funding to generate new scientific advances.
    Mr. Jackson. Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Welcome, Dr. Kington. I don't think there is any question 
you guys do wonderful research that has dramatically improved 
the lives of Americans, and I want to congratulate you on your 
persistence.
    There is some concern on my part about this pig going 
through the python, if you will, this $10,000,000,000 that is 
going to be a 33 percent increase to your budget, but it is 
only for a limited time. Our Chairman and Chairman Jackson 
here, I think, is right to be concerned about how that is going 
to be spent.
    And I think probably what justifies that concern is the 
National Children's Study where we started in 2000 to do some 
good things by tracking 100,000 kids from conception, when life 
begins, until the natural progress through life. I think it is 
going to reveal some very interesting things.
    But it originally started out to be approximately 
$3,500,000,000 over a 25-year period, and most of us found that 
a good plan. Now I am hearing that that cost may actually 
double. Is that about right?
    Dr. Kington. Well, we have every plan to bring the cost 
down, and I can answer in more detail, but we anticipate that 
the total cost will not be double.

                     THE NATIONAL CHILDREN'S STUDY

    Mr. Tiahrt. The reason there is a concern is if you take 
this $10,000,000,000 pig going through the python and find out 
it is really $20,000,000,000 later on, we could shortchange 
ourselves and our future by having to shut down research or 
limit it when it could reveal some very profitable things for 
the life and well being of Americans.
    So I would like to know a little bit better about how that 
$3.5 billion was developed and how it expanded. Did we decide 
we need to include more children in the study or did we have to 
hire more people to conduct it?
    Did we, after ignoring Kansas, pick up some additional 
States? Nothing subtle there.
    Dr. Kington. I am just grateful that we are the python and 
not the pig. [Laughter.]
    The National Children's study is a study of unprecedented 
size and complexity that is designed to answer extraordinarily 
important questions about the role of the environment and 
particularly in the development of children.
    This study began out of a working group that identified the 
scientific need, and then planning was initiated. Over the last 
five or six years, we have had a number of opportunities to 
estimate the cost of the study, but we were estimating a moving 
target because it became clear early on that once we generated 
a comprehensive sort of wish list of scientific sub-projects 
that we wanted in the study, it became clear that we would not 
be able to fund all of those research components, which is not 
unusual for a large research project.
    Mr. Tiahrt. Are you still going through that analysis and 
so you may be able to limit the increase in cost?
    Dr. Kington. Absolutely. In fact, we received advice from 
the National Research Council at the National Academy of 
Sciences where we were told, advised to have a pause after a 
period of an extensive pilot when we could analyze the results 
of the pilot, see what worked, what didn't work, see what the 
costs were and then to make adjustments.
    Mr. Tiahrt. Is that pilot done at the end of this fiscal 
year or when will your pilot project be complete?
    Dr. Kington. The pilot project consists of seven vanguard 
centers. Two are operational now. Five more will come online 
next month. They will have about a year of operation, and we 
really need that period of time because the study really is 
unprecedented.
    It is a population-based study. So we are knocking on 
doors, trying to find women who are of childbearing age, who 
are likely to become pregnant, follow them through the 
pregnancy to the birth of the child and then follow the child 
through to age 21.
    Mr. Tiahrt. If you are arranging relationships, I have a 
couple of gals in my office that would like your help. 
[Laughter.]
    I am being facetious. I am sorry.
    Dr. Kington. I will resist the opportunity to comment on 
that one.
    What we did know was about maybe three or four years ago we 
had an estimate of about $3.1 billion. Internal to the study, 
it became clear at some point that that was an underestimate of 
the entire package that was being piloted. Now we knew we were 
going to scale it down some, but it was an underestimate.
    A decision was made not to correct the estimates because 
the feeling was we would have to go back and correct again once 
we had good information from the pilot study. This was an error 
in judgment in my opinion.
    We have now corrected that error in judgment. We are re-
estimating costs. We are having a number of steps in the review 
of the activity including much greatly increased review from 
the Office of the Director.
    Mr. Tiahrt. Excuse me. I almost out of time, so I apologize 
for interrupting you.
    I think you are on the right track by reassessing the 
study. In any government program, allowing it to grow beyond 
its original intent is a great temptation. So I would encourage 
you to keep it within the original scope because you had a 
great idea.
    Let's complete that idea rather than risk jeopardizing it 
by expanding it too big and getting it killed because of the 
size.
    Thank you, Mr. Chairman.
    Mr. Jackson. Thank you, Mr. Tiahrt.
    I have been informed that we are expecting a fairly lengthy 
series of votes sometime between 12:30 and 1:00. These will be 
the first and last votes of the day but, again, potentially 
lengthy. And so, I am grateful to members who are honoring the 
time.
    I thank you once again, Mr. Tiahrt.
    Mr. Honda.

                HEALTH DISPARITIES AND EQUAL ACCESS BILL

    Mr. Honda. Thank you, Mr. Chair.
    Welcome, Doctor. Your written testimony is very good, and I 
really appreciate its detail and being succinct.
    The area I am concerned about is the area that you took a 
lot of pain to discuss, and that is the communities of color 
and the disparities. Hopefully, in your discussion and your 
research and your thinking, Asian American populations are 
included in there because I think that is a myth out there, 
that the communities don't have any problems.
    When we disaggregate the community, you know that there 
will be different communities with very serious problems. So, 
in part of your work hopefully, that will be some of the 
direction.
    We had a bill in the last session. I believe it was H.R. 
3014. It is the Disparities and Equal Access Bill. Essentially, 
what we wanted to do was look at all the gaps in our health 
system from research to delivery systems, services at the 
clinical level, community level--many of the areas which you 
have discussed in your paper here.
    I was wondering whether, number one, in the last fiscal 
year out of the $30 billion that was allocated for NIH, I 
believe it was $2 billion or $3 billion was set aside. Two 
billion dollars was set aside to study the disparities, and I 
was wondering what kind of work was done as a result of that.
    Two, where in your studies was there some matching in the 
desire that we provide services based upon our bill, figuring 
out whether if you are already doing it, what parts of it, what 
parts of the bill are being addressed.
    And then, three, in the future, how will you be looking at 
that in anticipation of a bill being passed or not being 
passed? In the direction, whichever you want to go to, there is 
a parallel there, an equal desire.
    So I was wondering whether you could comment on those 
questions.
    Dr. Kington. Thank you for the question. This is an 
extraordinarily important area for the Agency and for the 
American people.
    First, I point out the trends for our expenditures in 
health disparities. We, as you noted, estimated that about $2.6 
billion of our budget in 2008 was devoted to health disparities 
research.
    We have defined disparities populations, and we certainly 
acknowledge that many Asian sub-populations have extraordinary 
health care problems. There is great heterogeneity across 
subgroups, and that is a theme that cuts across many projects 
of research supported by multiple institutes and centers 
including the Minority Center.
    Mr. Honda. May I just interrupt for a second?
    Dr. Kington. Sure.
    Mr. Honda. For purposes of the future, if that would be 
articulated, that would be greatly appreciated because I think 
once articulated and written down then we know that exists and 
we pay attention to it. Thank you.
    Dr. Kington. We will articulate it in our strategic plan, 
and I can go on to that topic. We are in the process of 
starting a second wave of our strategic planning process. It is 
led by Dr. Ruffin, and Dr. Ruffin may want to comment.
    We try to integrate health disparities research across the 
entire Agency. Although the Minority and Health Disparities 
Center clearly has the lead, we feel that it is important that 
every single institute and center understand that they own part 
of this problem.
    I see, and I can personally tell you that every single 
institute and center director sees it as a priority. It was a 
priority under Dr. Zerhouni, and it is also a priority under 
our ARRA dollars. You may note that in this large compendium of 
topics one of the 15 priority areas was health disparities 
research.
    We anticipate receiving many important applications and 
funding them under ARRA. I think that you will see in our 
portfolio we have everything from very basic research all the 
way through research on systems and how minority groups and 
health disparities populations fare within our health care 
systems, and I think that you will continue to see that broad 
continuum of research at the Agency.
    And, Dr. Ruffin may want to comment as well.
    Mr. Honda. Thank you.
    Mr. Ruffin. I think that the last iteration of the 
strategic plan, as Dr. Kington stated, while it had been slowed 
getting through the process because there was a lot of 
different stages that it had to go through, I can say that 100 
percent of the institutes and centers at NIH did not let that 
process of clearance slow them down. Many of those issues and 
initiatives that are listed there in that plan have already 
been initiated.
    I think those of you who may have participated and were 
present in December at our summit meeting where there was 
somewhere in the neighborhood of about 4,400 people. The 
purpose of that summit was to give the ICs--the institutes and 
centers--an opportunity to report on where we are with the 
various projects that we have going on within the ICs at the 
NIH, the institutes and centers.
    I think that what was revealed at that summit is the 
magnitude of research in all of those areas that you just 
mentioned that are now underway.
    Mr. Honda. Thank you.
    Mr. Jackson. Thank you, Mr. Honda.
    By the way, I like the idea that when Dr. Kington invokes 
your name if you would just step up to the mic. It saves us a 
considerable amount of time, and there may or may not be a 
second round. But the distinguished institute heads and 
directors have traveled a great distance to participate, and to 
the extent to which they can participate, we would be grateful.
    Mr. Rehberg.
    Mr. Rehberg. Thank you, Mr. Chairman.
    Could you expand a little bit more on the 14,000 grant 
applications?
    One of the problems that I have, and I have maybe been 
critical of my own party from time to time, we always say we 
want to balance the budget except keep your hands off Homeland 
Security and Defense, and that is where you end up with the 
$500 toilet seats and $200 hammers. When you are not paying 
attention, somebody is going to be padding a budget.
    When you have an influx of money like $10,000,000,000 and 
all of a sudden you go: Oh, goody, goody, goody. Now we can 
just expand what we were doing. These may have been 
meritorious. However, they didn't make the cut before. All of a 
sudden, they are back on the table again.
    Give us some confidence that, one it is going to stimulate 
the economy as intended, two, that you are not just going to be 
throwing money at new projects that hadn't made the list before 
and, three, why not just use the money for an expansion or a 
continuation of those that you found to be meritorious in the 
first round rather than trying to spend it on let's say two-
year projects and then coming back before the Committee and 
saying, well, now you have to have a maintenance of effort 
because we have begun these very important projects when, 
however, they didn't make the cut before.
    Dr. Kington. Very good questions.
    First of all, it is important to recognize that those 
14,000 applications were reviewed and found to be 
scientifically meritorious. We received many more applications 
that were not funded. This was the top, right below our funding 
level.
    But it is also important to recognize that that is in the 
context of flat budgets. Over the last six years, the NIH 
budget has essentially been flat, and we have lost about 17 
percent purchasing power. So there was a great deal of pent-up 
demand.
    We believe that many of those projects can be funded for 
two years, and all of them have been found to be scientifically 
of high quality and have been reviewed by our councils. But 
that is not the only way that we are using these dollars.
    Many institutes and centers are also committing equal 
amounts, if not more, to supplement existing grants and 
contracts as you suggested. These are projects that are already 
ongoing in which we are either accelerating or we are expanding 
to address new areas for existing contracts. We released two 
solicitations for requests for those supplements, and that will 
be a major part of this portfolio
    We have three big buckets. One is the funding of grants 
that were on the table but were very high quality, and if we 
had had funds we would have been perfectly comfortable funding 
them because they were of high scientific quality. The second 
is supplementing existing grants and contracts through either 
an administrative process or a competitive process in which we 
solicit requests. And the third is the new grant programs such 
as the Challenge Grants and GO awards which are only for two 
years.
    Mr. Rehberg. And your deadline on that is what?
    Dr. Kington. The deadline?
    Mr. Rehberg. Of this various process of the spending.
    Dr. Kington. We have started. We have released the 
supplement requests, announcements for administrative 
supplements and competitive supplements. We have released the 
Challenge Grants. We hope soon to release the GO Grant 
application RFAs.
    So we are substantially down the track a bit on this, and I 
actually think we have elaborate time tables actually to make 
sure that we can get the applications, review them and fund 
them beginning in 2009.
    We are absolutely confident that we have the infrastructure 
and the reserve to, one, fund really good science and, two, 
fund it quickly.

                     JOB ESTIMATES FROM ARRA FUNDS

    Mr. Rehberg. What is your number on new jobs created with 
your $10 billion?
    Dr. Kington. It depends upon the distribution across those 
pots. We can give you an estimate. As I said, each grant we 
believe supports between six to seven jobs in part or full.
    We can get back to you with the exact dollar estimates.
    Mr. Rehberg. I want not just exact dollar but exact job.
    Dr. Kington. Excuse me. The exact number, yes.
    Mr. Rehberg. Because the stimulus was billed as a jobs 
creation. It got morphed into a job maintenance somewhere along 
the line once they realized that it was going to be very 
difficult to create as many jobs as were promised. So I want an 
exact number that you anticipate, jobs that will be created 
with your $10 billion.
    Dr. Kington. We will give that to you, and it is required 
under the reporting requirements of the Act.
    [The information follows:]

                    Jobs Created With $10.0 Billion

    Dr. Kington: The estimate number of jobs created or maintained by 
the $10.0 billion provided to NIH in the Recovery Act is an 
approximation; the exact number will depend on the mix of grants or 
contracts awarded. The Act provided $8.5 billion for scientific 
research and equipment, $1.0 billion for extramural construction and 
$500 million to support construction on NIH owned buildings and 
facilities.
    The traditional NIH scientific grant type is called an R01, for 
which a study indicates each award supports 6 to 7 part or full 
positions. NIH estimates the $8.5 billion funds will support around 
7,000 research project grants and contracts of which, about 4,000 
should be R01 type grants. We project these R01's should support 24,000 
to 28,000 positions in part or in full across the Nation. NIH does not 
have the data available to estimate the job creating impact of the 
remaining 3,000 grants and contracts that are not R01's. The job 
projection for both the extramural and NIH campus construction projects 
is based on an industrial labor conversion factor of about 5.5 work 
years per $1.0 million spent. It is estimated about 8,000 work years 
can be supported with a total of $1.5 billion of construction funds. If 
you extrapolate that each work year is equal to one position then it 
can be inferred the $1.5 billion will support 8,000 positions. Although 
NIH does not have the data to generate comprehensive estimated job 
projections, we will continue to work to develop and provide them.

    Mr. Rehberg. I understand that. Thank you.
    Mr. Jackson. Thank you, Mr. Rehberg.
    Ms. Roybal-Allard.
    Ms. Roybal-Allard. The National Children's Study is a study 
that is extremely important for communities such as the ones I 
represent that are overrun with freeways and every kind of 
unwanted project that you can imagine. So, if I may, I would 
like to direct my questions to Dr. Alexander who I believe 
oversees the studies.
    Is Dr. Alexander here?
    Dr. Alexander. Yes.
    Ms. Roybal-Allard. Okay. Dr. Alexander, first, I would like 
a little bit of a clarification of the response to Mr. Tiahrt's 
question because I have heard that some concern has been raised 
about the many variables that you are piloting in the National 
Children's Study. The concern is that it may double the budget 
is what I have heard.
    Can you explain what the reasons are for so many variables 
and do you share that concern in terms of doubling of the 
budget?
    Dr. Alexander. When we made the decisions to go ahead with 
the pilot study that was very broadly encompassing of many of 
the ideas, not all, that had been proposed for inclusion in the 
study, we did it for several reasons.
    First, we felt that the best way to decide what the content 
of the final protocol for the main study would be, would be 
based on experience in testing in the field of the various 
ideas, possibilities of different approaches for recruiting 
subjects, different approaches for collecting data, et cetera. 
The best way to get that information was to actually test it in 
the field.
    There was never any anticipation that we would double the 
size of the study or even massively increase it. However, the 
study itself was conceived as a public-private partnership. So, 
in addition to the Federal funds available from the 
appropriation, we also anticipated that things that could not 
be incorporated into the protocol funded by the appropriation 
might be picked up by other interested parties, other 
components of the government, other government agencies, the 
private sector, industry, foundations, advocacy groups, 
whatever.
    We wanted to have an identification of things that were 
useful to do but did not make the cut, if you will, of 
inclusion within the protocol within the financial constraints 
that there would be, and we would hope many of these other 
things might be picked up by these other sources.
    Therefore, it was advantageous, in addition to trying to 
pick the best things for the final protocol, to include more 
things so that we might be able to offer these up to expand the 
reach of the study and really fulfill its purpose much more 
extensively than just the appropriated dollars would be able to 
do alone.
    Ms. Roybal-Allard. Also, many parents have concerns about 
enrolling their children in clinical studies, and this is 
particularly true of ethnic and minority groups who could 
benefit greatly from this study.
    Could you please tell the Committee what is being done to 
recruit and to retain racially ethnic and culturally diverse 
children and what your contingency plan is to support study 
sites that do not achieve the targeted minority enrollment 
rates that you are anticipating?
    Dr. Alexander. Yes, those are very important issues that 
the study has tried to address from the beginning. First of 
all, the study itself is one that looks like America. We have 
rejected the approach, based on the best scientific advice we 
could get, of a convenience-based sample in favor of a 
nationally representative sample so that the children included 
will come from an appropriate proportional representation of 
their representation in the population.
    There will be representation from all racial and ethnic 
groups, socioeconomic status groups, geographic distribution, 
et cetera.
    Ms. Roybal-Allard. Doctor, I am sorry to interrupt, but my 
question really is what kind of outreach are you going to have 
in order to assure that you get the diversity that you are 
seeking?
    Dr. Alexander. Okay. Very good. Let me get to that.
    That then has been also an effort we have made from the 
beginning. The outreach includes presentations to organizations 
that represent minorities across the spectrum--Hispanic 
organizations, African American organizations, whatever. We 
have presented several times to the National Medical 
Association and have their endorsement and so forth.
    We have also charged each of the sites with a broad effort 
in community outreach. Each of them has a person on their staff 
directed toward community outreach and reaching people in the 
community, both directly as well as through the media, through 
their community leaders and organizations and so forth. So that 
is being done.
    In addition, we have publicity that has preceded our entry 
into the field in the sites where the study is being done.
    We also have efforts underway to be sure that if we have 
difficulties in the field we are able to deal with them. We 
have sensitivity training being done for all the people who are 
doing the interviewing.
    And, our oversight center will be looking at our minority 
recruitment efforts to be sure that we are making our goals. If 
we are not, then we are prepared to step in and increase the 
efforts in the sites or to increase efforts at supplementing by 
over-sampling in other areas.
    Ms. Roybal-Allard. Doctor, I am just hoping that there will 
also be forms and applications and presentations in appropriate 
languages and that the research teams themselves will be 
culturally and linguistically competent.
    Dr. Alexander. They are. In fact, virtually all of the 
documents for the public are in English and Spanish, and we 
have seven different languages for the consent process.
    Ms. Roybal-Allard. Thank you.
    Mr. Jackson. Let me just indicate also that I have just 
received an update that the votes are likely to come now, the 
final votes of the day, between 11:30 and noon. So the extent 
to which we have questions of Dr. Kington and the extent to 
which we have questions for institute heads or directors, 
please feel free to incorporate them now as the first round 
might be in fact our only round.
    Mr. Ryan.
    Mr. Ryan. You are running a very tight ship, Mr. Chairman.
    Mr. Jackson. It is all we have.
    Mr. Ryan. It is all we have. That is right. [Laughter.]
    Thank you very much.
    I have had the opportunity over the past couple of months 
to get involved in some different programs that are going on 
around the Country.
    I went out to the University of Wisconsin at Madison and 
met with Dr. Richard Davidson out there who is doing a 
significant amount of brain research. One of the issues that he 
is trying to deal with and I think a lot of people around the 
Country are trying to deal with, whether it is in the field of 
health care or in the field of education, is how our society at 
this point in time is dealing with stress and the ripple effect 
that stress has throughout our communities, throughout our 
health care system, throughout our education system.
    So I have a couple of questions basically along the line of 
basic behavioral research, science research that you are doing 
but also some more specifics as far as how we can start within 
our health care system, within the research that you are doing, 
as we learn more and more about the functions of the brain, 
what we can do to prevent and teach people how to control their 
levels of stress so that we are not dealing with these chronic 
symptoms that are weighing down our health care system.
    There is also major science now backing in schools that 
these kids that come to school, they have problems at home. 
They have problems with their family. They are dealing with a 
significant amount of stress before they get into the 
classroom, and the brain research is showing that in these kids 
the part of their brain that they need for working memory, for 
good decision-making is all being affected by the levels of 
stress they are having to deal with.
    So I have two or three questions. One, initially, probably 
would be for Dr. Briggs, I think. So, come on up.
    What research have you supported and are currently 
supporting on the application of low-cost behavioral 
interventions such as mindfulness-based stress reduction on 
health care utilization?
    Dr. Briggs. Congressman, I am delighted at your interest in 
this question. This is indeed a very exciting part of our 
scientific portfolio. We have a very robust set of superb 
applications dealing with mindfulness, stress reduction and 
their impact on disease.
    Dr. Davidson's program is supported by us as a center, and 
he is doing very interesting fundamental neural work on the 
impact of meditation on the brain.
    In addition, we are looking at some very practical 
applications of these methods such as effect of mindfulness on 
post-traumatic stress disorder, effect on eating and metabolic 
disorders and effect on the management of pain.
    As I think this Committee is well aware, management of 
chronic pain, and as all of us as doctors know very well, 
management of chronic pain is very difficult, and these 
interventions show substantial promise in that arena. It is a 
very active area in our portfolio.
    Mr. Ryan. My next visit is on Monday. I will be out at the 
University of Massachusetts Center for Mindfulness, and I 
invited Representative Kennedy to come on over and help meet 
with some of the folks over there. Jon Kabat-Zinn started that 
about 30 years ago, and that is dealing with managing chronic 
pain.
    I think this is another area that we really need to get 
into.
    What research are you supporting on behavioral 
interventions that can start early in life, so, preschool, 
first grade, to promote emotional and social skills to help 
deal with these levels of stress in a lot of these kids--
basically, the emotional and social intelligence that our kids 
are really required, not only required to have but need to be 
competitive in a global marketplace?
    Dr. Briggs. This is an area of great promise. NCCAM has a 
relatively small portfolio in mindfulness in children, but I 
agree with you, it is an area of great promise.
    We are a small part of the NIH. We are only 0.4 percent of 
the NIH budget. But we are very careful to partner with areas 
like OBSSR in the development and support of the behavioral 
research. It is a very promising area.

             PHYSIOLOGICAL FACTORS AFFECTING ORGAN SYSTEMS

    Mr. Ryan. Okay. Well, you can answer this in writing but 
about the research you are supporting, focusing on identifying 
how psychosocial factors can get under the skin and affect 
organ systems, both for health and illness, if you can get back 
to me because I know the hammer is coming down from the 
Chairman here real soon. I am starting to sweat.
    Dr. Briggs. We would be glad to give you that information.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Ryan. Yes, my stress level is going up right now.
    But just to say thank you and that over the course of this 
budget and next year's budget this is something that I am going 
to be extremely focused on and hopefully get you some more 
money because I think this can end up in the long run saving 
our health care system, our education system, tons and tons--
and our criminal justice system, tons and tons of money.
    Dr. Briggs. This is an area that we also hope to be able to 
look at in the comparative effectiveness arena.
    Mr. Ryan. Great. Thank you.
    Mr. Jackson. Mr. Kennedy.
    Mr. Kennedy. Thank you, and I appreciate those questions 
very much.
    I do have a number of questions about neuroscience and the 
brain and look forward to getting to those, but I fear that we 
don't have enough time today but look forward to future 
hearings.
    I do want to ask Dr. Kington if he could present the 
President of the United States with the top half-dozen most 
promising opportunities to fund research that would transform 
the outcomes of various diseases in terms of the research and 
its production of viable cures.
    I have had numbers of scientists in my office to talk about 
the deficit in these research grants that you have heard the 
concern about all over today in this Committee and how that 
whether it is muscular dystrophy or if it is brain science or 
if it is another illness and that if we had more peer review 
science.
    We are leaving so much of it on the table because we don't 
have enough funding, that if we had more of it out in clinical 
trials, that we would be moving it forward so much that we 
could really make a marked difference in people's lives.
    What I think we could make such a difference in this 
Country in terms of funding this Committee properly is if the 
President of the United States went to the American people and 
he said: This is the deal. If we had these dollars, we could 
literally expand the lifetime of people with this illness, with 
this illness, with this illness.
    We could literally find a cure for Alzheimer's. It would 
shorten the time that we could find a cure for Alzheimer's in 
this period of time.
    We could literally shorten the period of time that we could 
come up with a cure and find a cure for autism.
    We could literally make the progress we need to make on 
Parkinson's disease and shorten the time that we need to have a 
cure for some of these other illnesses.
    I think that is the way we capture the public's 
imagination. It is not over jobs. It is not about jobs. This is 
about changing the quality of people's lives.
    I have had it put to me so poignantly on so many occasions 
in my office, that it just gets me wild when I think to myself 
that we can't get it across the American people that their 
dollars, just a minuscule amount of dollars in comparison to 
the total budget, could be transforming their health care--
transforming it--and, furthermore, cutting the amount of 
dollars that we are going to have to expend in overall future 
health care dollars.
    You heard the other day in terms of the Alzheimer's folks 
who were in town the other day. We spend so many dollars 
treating Alzheimer's patients when if we just found a cure, and 
the research dollars we are spending on Alzheimer's is 
minuscule. It is pennies compared to the dollars we are 
spending on actual treatment.
    So, if you could comment just basically on that premise 
that we are spending dollars on treatment of Alzheimer's and on 
treatment of autism. Autism is now 1 in every 142 boys that are 
born have autism. Yet, research is like pennies in Alzheimer's 
and autism compared to the treatment of these diseases and why 
it is that we should be spending money on the research because 
the research is prevention. It is like real dividends paid if 
we invest in the research.
    Could you talk about that?
    Dr. Kington. Well, we certainly share your passion for NIH 
as a good investment for the American people primarily because 
of its impact on health. All of us live healthier lives and 
longer lives because of the advances certainly over the last 
several decades.
    I think that each of us could generate a list of diseases, 
whether it is Alzheimer's or many other neurologic disease, 
cancer, musculoskeletal diseases, infectious diseases and HIV, 
the obesity epidemic. We could run down the list of areas of 
important scientific opportunity and enormous public health 
challenge.
    We believe that over the course of this Agency we have been 
a good investment. So I will be discreet and say that we share 
your enthusiasm for this Agency.
    Mr. Kennedy. What I am asking for is I need, we need to get 
concrete here. We can't be all over the board. We need the 
President of the United States to offer up your top, most 
promising research in the pipeline and send out because the 
American public can only handle a couple of really specific 
examples that we can digest in the public medium.
    I am asking you, can you get it to the President, so he can 
put it in a speech and capture the American public's attention 
on this?
    Dr. Kington. Well, your point is well taken. We will think 
about whether or not we can get an opportunity to do that.
    Mr. Kennedy. Okay. Well, I would encourage you to do that 
because it is good for your budget.
    Dr. Kington. That, I can't respond to. [Laughter.]
    Mr. Jackson. Ms. McCollum.

                         MESOTHELIOMA RESEARCH

    Ms. McCollum. Thank you, Mr. Chair.
    I am going to set a little bit of a background here. 
Mesothelioma kills as many as 10,000 people each year in the 
United States. When I am using that term, I am also going to 
include other asbestos-related diseases.
    Millions of Americans are exposed to asbestos, including 
military personnel and approximately 1.3 million employees on 
the job in construction and general industry according to OSHA.
    Now many people are going to be surprised that the use of 
asbestos, a known human carcinogen, has no established safety 
threshold level for exposure, and it is not banned for 
reimportation into the United States. So it currently comes 
back in products.
    Worldwide, the World Health Organization estimates that 
90,000 people die each year from asbestos-related lung cancer.
    So, last year, to try to see where the scientific community 
was on pulling all the information together, I put in some 
report language and it was as follows: The Committee is 
concerned about the progress and the research and the efforts 
to address mesothelioma and other asbestos-related diseases 
and, therefore, requests a complete report of all NIH-related 
intramural and extramural projects and grants related to 
mesothelioma and asbestos-related diseases.
    Are you prepared at the time or can you get back to me 
shortly on the progress on research efforts to address 
mesothelioma and other asbestos-related diseases through NIH? 
Who could take the leadership in coordinating what is going on 
out there on this disease?
    Dr. Kington. We would be happy to get back with you with a 
much more detailed presentation about the status of our current 
portfolio and where we think are the important scientific 
opportunities. As you point out, this is a relationship that 
has been known for some time now, and it is something that we 
can do something about.
    It is an important problem, and we will get back to you.
    [The information follows:]

                         Mesothelioma Research

    Dr. Kington: Mesothelioma is a disease in which malignant cells are 
found in the sac lining of the chest, the lining of the abdominal 
cavity, or the lining around the heart. Most commonly linked to 
exposure to asbestos, this disease usually remains asymptomatic for 
many years until detected at a later stage. This limits treatment 
options and results in poor rates of success. Few active therapeutic 
options are currently available, and patient outcome is invariably 
dismal in the short term. NCI is committed to finding new treatment 
options and funds a broad research portfolio in which several areas 
show promise.
    Mesothelin, a protein present in limited amounts in normal tissues 
but highly expressed in many cancers, makes an attractive candidate for 
cancer therapy. Three mesothelin targeted agents are in various stages 
of clinical evaluation in patients.
    NCI scientists are conducting a clinical trial of SS1P, an immuno-
toxin targeting mesothelin, in combination with pemetrexed and 
cisplatin for the treatment of newly diagnosed pleural mesothelioma. 
The trial is based on previous laboratory studies showing synergy 
between SS1P, taxol, and other chemotherapeutic agents.
    Researchers at NCI have completed a phase I clinical trial of 
MORAb-009, an anti-mesothelin monoclonal antibody and vaccine, in 
patients with mesothelin expressing cancers. A multi-institutional 
phase II clinical trial of MORAb-009 with chemotherapy in mesothelioma 
is set to begin with NCI as the lead institution. MORAb-009 was 
developed as a collaborative effort between NCI and Morphotek Inc.
    NCI is also participating in a clinical trial of a mesothelin tumor 
vaccine (ANZ-207) for the treatment of patients with mesothelioma who 
have failed standard therapy.
    The Cancer Therapy Evaluation Program of the Division of Cancer 
Treatment and Diagnosis (DCTD) supports four active phase II clinical 
trials under a contract with several cancer research institutions 
within the U.S. Two additional phase II trials have been approved and 
will be active in 2009. These studies are testing novel targeted agents 
for mesothelioma, including molecules that inhibit the formation of 
blood vessels in the tumors. Almost 100 mesothelioma patients have been 
treated so far in these trials.
    NCI has awarded a grant to the University of Pennsylvania to study 
immuno-gene therapies for malignant pleural mesothelioma. Included in 
this program is a phase II clinical trial combining immunotherapy, 
chemotherapy, and surgery. This program is expected to produce findings 
that will be incorporated as novel mesothelioma therapies.
    The Radiation Research Program of DCTD has awarded a grant to the 
University of California, San Francisco, to develop radio-
immunotherapies for mesothelioma tumors using nanotechnology for 
specific targeting of mesothelioma tumor cells. This has the potential 
to create far-reaching applications in radio-immunotherapy, 
particularly in high-potent treatments for malignant mesothelioma.
    The Cancer Diagnosis Program of DCTD has awarded a grant to the 
University of Washington to gain a better understanding of the immune 
response to ovarian cancer using an assay to detect mesothelin. 
Although not specifically directed to mesothelioma, it is expected to 
impact mesothelioma therapies since it is studying a target shared by 
both diseases.
    NCI has awarded to grants through the Small Business and Innovation 
Research and Small Business Technology Transfer Programs to study 
mesothelioma treatments. One grant is seeking to improve the delivery 
of small interfering RNA (siRNA)-based therapeutics targeted for the 
treatment of malignant mesothelioma. The other grant is seeking to 
develop functional gene therapy vectors as a treatment mode for 
mesothelioma.

    Ms. McCollum. I would appreciate that.
    Mr. Chair, there are many opportunities out there, I know, 
for researchers who are looking at moving forward on this, 
including at some of our universities which are facing great 
struggles in that right now.
    Angels dare to tread with picking out what is the most 
important disease to study. The reason why I said to kind of 
find out what is going on and who is collaborating and 
coordinating on this is quite often because military personnel 
are involved in this here too. So I am going to lay out a 
little more challenge perhaps.
    I see the NIH as being the lead organization in the United 
States with what the Department of Veterans Affairs is doing, 
what our universities are doing, what other research groups are 
out there doing. Somebody has to pull this all together.
    We have limited dollars, and people are coming up here. Mr. 
Kennedy just pointed out some great, great opportunities to 
improve the quality of lives for people, individuals and their 
families with Alzheimer's, with autism. We have to get really 
smart with the dollars that we have in health care.
    I think people look to you, and I want to look to you as 
being the leaders in telling us, the Congress, how we can go 
forward and working in cooperation with you in setting up good 
examples of how not only basic research but peer review 
studies, as has been pointed out, and funding grants and 
applications can have long-term benefits.
    With that, I yield back, Mr. Chair.
    Mr. Jackson. Thank you, Ms. McCollum.
    Just before I recognize Mrs. Lowey, I received an update. 
Votes are expected between 11:20 and 11:40. These will be the 
first and last votes of the day, potentially a very lengthy 
vote series.
    I have a number of questions, Dr. Kington, that have been 
presented by Chairman Obey and the Committee that we would like 
to submit for the record and would like a detailed response to 
those questions.
    Dr. Kington. We would be happy to answer.
    Mr. Jackson. Mrs. Lowey.

          IMPACT OF TOXIC CHEMICALS ON HEALTH AND DEVELOPMENT

    Mrs. Lowey. Thank you, Mr. Chairman.
    The fact that I had to be at a hearing next door has 
certainly not defined my passionate interest in what you are 
doing at the NIH, and I am delighted to have the opportunity to 
have an exchange with you, and I look forward to continuing the 
dialogue. Thank you.
    For years, I have been concerned about the impact of toxic 
chemicals on health and development particularly in the womb 
and throughout childhood. Some scientists believe these 
endocrine disrupters can alter cell development and organ 
function, negatively affecting one's health throughout a 
lifetime.
    More than 12 years ago Congress passed legislation that I 
authored, requiring EPA to screen and test chemicals and 
pesticides for possible endocrine-disrupting effects. 
Unfortunately, EPA has moved slowly, which is the 
understatement of the year, in developing techniques to 
identify disrupters.
    While I understand that NIH has a program to study the 
impact of endocrine disrupters on humans, there are still many 
gaps in our knowledge on this issue.
    I know that Dr. Linda Birnbaum, the new Director of the 
NIEHS, National Institute of Environmental Health Sciences, 
isn't here today. But I would like you to comment on activities 
within NIH when it comes to studying endocrine disrupters.
    What is being done?
    How can we enhance this research?
    Would NIH be willing to convene a panel of stakeholders to 
develop a plan for research moving forward? How much funding 
would be required for this?
    How will the National Children's Study specifically study 
endocrine disrupters' impact on children's health and 
development?
    If you can respond and share any additional information, 
that would be helpful.
    Dr. Kington. Thank you. As you noted, Dr. Linda Birnbaum is 
our new Director. She is a world-renowned toxicologist and 
actually comes from the EPA.
    I know they have a substantial investment of over $30 
million in endocrine disrupters, both at NIEHS and the National 
Toxicology Program which is run jointly with NIEHS.
    They have also been a leader in the area of EPA analysis, 
and their monograph on that topic is also available now. And 
they are working closely with the FDA on a number of these 
issues, and the EPA.
    I know that Dr. Birnbaum is considering having a workshop 
as a planning exercise to do exactly what you suggested--to 
bring together scientists and constituencies to come up with a 
reasonable sort of next step plan, both in identifying research 
gaps and, we hope, to inform our decisions about allocation of 
resources.
    I know this is a priority topic for her. We can give back 
much more detail about what we are doing in terms of specific 
activities, and there is a substantial portfolio precisely 
because this is such an important public health challenge.
    Mrs. Lowey. Well, let me thank you very much. As I 
mentioned, I began working on this when scientists came to talk 
to me about it.
    And I have been so concerned about the impact of wrapping 
food in plastics. Recently, many mothers of newborns have been 
concerned about the impact of the bisphenol A, I believe it is, 
plastic bottles. So I do hope that there is an urgency at the 
NIH to finally address these very serious issues.
    Dr. Kington. It is certainly a priority.
    Just as another example of ways that we are trying to help 
develop informed policy about this, we have started an 
initiative with the FDA in which we will take existing NIH 
studies that have biologic samples that can be analyzed to look 
at the relationship between BPA, bisphenol A, and various 
health outcomes. We are hoping that by using existing data sets 
and existing studies, we can develop quickly more information 
that will help inform some of FDA's decision-making.
    Mrs. Lowey. Well, thank you.
    It has also been widely acknowledged in the medical and 
scientific communities that this generation of children may 
face a lower life expectancy than their parents due to 
increased obesity and decreased physical activity.
    I would be very interested in whether the National 
Children's Study will look at what factors, both genetic and 
environmental, might contribute to increased incidence of 
obesity, and I would be interested to know because there is 
another issue that many of us have been talking about for a 
very long time and not that there hasn't been attention given 
to it.
    I see the red light is on. Maybe you can just respond very 
quickly. What research is NIH doing on this topic?
    Dr. Kington. It is certainly a priority. It is among the 
most important problems facing our population with the 
potential of having substantial detriments in health as a 
result of this aging cohort that is becoming adults, carrying 
with them the weight of overweight and obesity and all of the 
health implications that come with that.
    I know that it is one of the topics that is to be studied 
in the National Children's Study, and we also have a range of 
community-based interventions that are being developed as well, 
particularly targeted toward activity in children as 
adolescents when they begin to develop their health habits for 
their lives.
    So it is an important topic. We can give you a lot more 
detail about the full portfolio of investment in that area.
    Mrs. Lowey. Thank you.
    I just want to say, Mr. Chairman, that we have been having 
these hearings for a long time, and Dr. Fauci just gets in 
better shape and better shape. He looks younger every time.
    Dr. Kington. It is because of NIH research that he looks so 
good. [Laughter.]
    Mrs. Lowey. Thank you.
    Mr. Jackson. Let me thank you, Chairwoman Lowey.
    We have time for a brief second round requested by the 
Minority, but let me first acknowledge and recognize for five 
minutes under the first round, Ms. Lee.
    Ms. Lee. Thank you very much, Mr. Chairman.
    I apologize for being late. So, if the question is 
redundant, please forgive me.
    I am looking at your testimony, and I will definitely read 
it. It is very good to see you.
    Dr. Kington. Great to see you.

            OUTREACH FOR MINORITIES IN RESEARCH PROFESSIONS

    Ms. Lee. Thank you for being here. And all of the NIH 
directors and staff, thank you for the work that you are doing 
to advance research and quality medical care which your 
research, of course, is allowing us to do.
    Also, I appreciate the urgency and the diligence that NIH 
is putting into using the funds that we provided in the 
economic recovery package.
    I am particularly concerned--I am sure you know that--that 
as we dole out these funds that we are especially mindful and 
assured of the fact that they will benefit all segments of our 
diverse population. We are all aware and we know that it has 
been very difficult for minorities to break into the research 
professions and compete for NIH grants.
    So I just want to just ask you with regard to the specific 
funds with regard to diversity, how you plan to ensure 
diversity among the new investigators that will benefit from 
the funding in the economic recovery package and also if you 
have specific, I guess, outreach efforts for African American, 
Latino, Asian Pacific American and Native American and other 
racial minority groups represented among these investigators.
    Are you coordinating these efforts among the institutes?
    And, finally, extramural research facilities, I want to 
make sure that minority-serving institutions such as Meharry 
Medical School know about funding opportunities and are able to 
compete for these funds because we are at the beginning and at 
the dawn of a new day now. So I would like to see some of the 
past history, for whatever reason, of lack of diversity, lack 
of inclusion be rectified and corrected as we move forward in 
this new era of change.
    Thank you very much.
    Dr. Kington. Well, it is certainly true that we believe 
that it is essential that we have a diverse workforce in order 
to achieve our goals of the next generation for science. If we 
don't do it, we won't make the progress that we need to make. I 
think we try to focus on integrating approaches throughout the 
various programs.
    One area that I think has great opportunity is our summer 
program for summer jobs. This is an opportunity for thousands 
of students to work in labs in the Summer of 2009 and the 
Summer of 2010. We are just developing an outreach program, and 
the highest priority is to reach out to students who are from 
under-represented minorities and other diverse backgrounds as 
well as from geographically diverse areas as well.
    This is a great opportunity. We are just planning it now 
and working collaboratively across the institutes and centers. 
In terms of the construction, all of the institutions will have 
opportunity to prepare proposals.
    We have $1 billion that is being devoted. Obviously, we 
will make a significant effort to ensure that there is a 
reasonable spread of those funds across types of institutions 
and across the Nation. So I think we are aware of a lot of 
these issues.
    And some of the institutes are specifically targeting their 
training programs and their diversity programs for additional 
resources. For example, the National Center for Research 
Resources which funds the RCMI program, which is a target 
program to support research centers at minority institutions 
and which has a base of about $300 million will get about $70 
million more dollars through supplements.
    So we are trying to use all the mechanisms that we can use 
to make sure that we are diverse, both scientifically and 
geographically and along other dimensions as well.
    We, of course, have a continued problem with the pipeline, 
and that is a real issue in terms of assuring that we have 
diversity at every stage of the career development process. It 
is very clear that the diversity that we are seeing at the high 
school level is not translating to the diversity that we see at 
the level of principal investigators of grants.
    We are, in particular, interested in funding a program that 
will encourage diverse and creative approaches, new approaches 
to addressing some of these problems. We know that there are 
models that work, but it has been a real challenge for the 
scientific community as you are well aware.
    There isn't a magic bullet, but we are committed to trying 
new approaches.
    Ms. Lee. Thank you.
    Mr. Jackson. Ms. Lee, thank you.
    I understand that we have time, and it has been requested 
for an abbreviated second round. I am going to limit members' 
comments, if they don't mind, to three minutes.
    I believe we do have time before the series of votes 
begins, and I am going to show some leadership by example on 
that three minutes.
    Let me first begin by saying I want to change my focus to 
the National Center for Research Resources. In the American 
Recovery and Reinvestment Act of 2009, the Congress made an 
investment in the research infrastructure of our Nation's 
universities and colleges by placing $1,000,000,000 in an 
extramural facilities account at NCRR which had not been 
previously funded since fiscal year 2005.
    I want to further make you aware that the Public Health 
Service Act says the following: ``Up to $50 million, the 
director of the Center shall make available 25 percent of such 
amount to'' emerging centers of excellence.
    Since this program has not been funded in so long, I want 
to remind you that these institutions such as Meharry Medical 
College, Morehouse School of Medicine and Charles Drew 
University, which focus on eliminating health disparities, 
which is a priority for the NIH.
    Can you assure me that NIH will follow the letter of this 
law in the way it distributes the funds of this competitive 
grant program?
    Dr. Kington. We will follow the letter of the law. I am not 
familiar with that specific part of our law, but we will go 
back and review it, and we will follow it to the letter.
    Mr. Jackson. The reason I am putting this question in the 
record is because I wanted to familiarize you with it and put 
it on your mind that because we have expectations in this 
Committee that the law be followed.
    Also, I want to congratulate the NIH for organizing an 
impressive summit on health disparities in December. In 
particular, I want to commend Dr. Ruffin and the Center on 
Minority Health and Health Disparities--would you please take 
your seat--for their vision and leadership in planning such an 
important conference.
    The summit was a major accomplishment for the National 
Center for fulfilling the spirit of the law by bringing 
together all the institutes and centers at NIH and other 
Federal agencies around health disparities, but this is the 
type of leadership and coordination that the National Center is 
charged with and must continue to demonstrate with your support 
and the cooperation of the institutes, Dr. Kington, and the 
centers.
    At the summit, you announced the creation of the Health 
Disparities Intramural Research Program at the National Center. 
It is good to know that the research into health disparities is 
becoming more prominent at NIH's campus under the leadership of 
the National Center.
    I am always concerned about the support and resources of 
the National Center to effectively carry out its leadership 
responsibilities for minority health and health disparities at 
NIH. What additional resources have you given or planned to 
give to the National Center to start its intramural program or 
enhance its coordination?
    I would like you to answer it very quickly and then, Dr. 
Ruffin, if you would comment, and then Mr. Tiahrt is 
recognized.
    Dr. Kington. First of all, I had the pleasure of actually 
announcing that program at the summit. We think that is a great 
need, and it is an interesting model, a new model that I think 
some of the other institutes may follow as well in seating 
scientists across institutes and centers and having, if you 
will, sort of a virtual network across the institutes and 
centers rather than starting a new stovepipe.
    I think that is a great model. It has been fully supported 
by Dr. Zerhouni and Dr. Michael Gottesman, the Intramural 
Program Director, and we worked collaboratively with Dr. Ruffin 
to develop it. We will continue to support it.
    Mr. Jackson. Dr. Ruffin.
    Mr. Ruffin. As you know, most of our effort, not being a 
disease-based center but a trans-NIH center, that much of our 
success depends upon our ability to work collaboratively with 
all of the institutes and centers at NIH. And so, with the 
intramural program, we will continue that effort and work 
across NIH to make sure that this comes across the way we 
intend it to be.
    Mr. Jackson. Thank you.
    Mr. Tiahrt for three minutes.

       COMPARATIVE COST AND COMPARATIVE EFFECTIVENESS IN RESEARCH

    Mr. Tiahrt. Thank you, Mr. Chairman.
    I noticed in your written testimony, Dr. Kington, that you 
have been tasked with doing comparative effectiveness research 
and received $400 million to do it. Will this include 
comparative cost effectiveness in research?
    Dr. Kington. The definition for comparative effectiveness 
research was defined in the legislation, although there is a 
range of definitions.
    We identified that as one of the priority areas within the 
Challenge Grants Program. If we receive high quality 
applications that meet the definition for comparative 
effectiveness research that include cost, we will fund them. We 
may not fund them with the $400 million set aside. That will 
depend upon the ultimate decisions about the definition that 
will apply to that pool of funds.
    Mr. Tiahrt. So you are not certain at this point whether 
cost comparative research will be part of it? It could be?
    Dr. Kington. It could be.
    Mr. Tiahrt. My concern is this, and I hope that you don't 
fund it.
    I just spoke recently with a young lady named Jenny Jobe. 
She has an immune deficiency. When she turned 65, Medicare 
denied her current medication and put her on something that was 
more cost-effective.
    It gives her headaches. It gives her backaches. She has an 
upset stomach, and it doesn't work. Because of it, her immune 
system can't fight off a lot of the common things that we are 
able to disperse.
    My point is that cost comparative research will lead to 
rationed health care. Medicare is rationed health care today. 
She is a good example. There are many other examples.
    Medicaid does the very same thing.
    As we approach what people will call universal health care 
or single payer health care or national health care, it will 
become rationed health care very easily. I think it will 
anyway.
    But if you go to cost comparative or cost-effectiveness 
research, it will lead directly to that path, and people who 
have very serious diseases will be denied the best treatment.
    With the oncoming of the genome mapping, the DNA now that 
each of us possess, which is unique to all of us, allows us 
individual treatment. But cost-effectiveness research will lead 
away from that individual treatment and group us in aggregates. 
My concern is that these aggregates will not be able to meet 
the needs or the science that we have today.
    Dr. Kington. Well, certainly as a physician who practice 
internal medicine I certainly understand the concern that any 
policy effort might severely restrict choices in whatever way, 
but comparative effectiveness research doesn't necessarily lead 
to that.
    Mr. Tiahrt. Right.
    Dr. Kington. Comparative effectiveness research can provide 
useful information to commissions, to patients and providers to 
make better decisions about what works, under what 
circumstances, for which patients and might actually complement 
the movement that you noted toward personalized medicine. So 
they are not necessarily opposing.
    We believe that comparative effectiveness research will 
increasingly integrate information at a much more detailed 
level, at the individual level and can be used to help make 
better decisions for everyone. But I certainly recognize the 
concern.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    And thank you, Doctor.
    Mr. Jackson. Mr. Honda for three minutes.
    Mr. Honda. Thank you, Mr. Chairman.
    A real quick question on climate change and the kind of 
work that we are doing. Is there any thought being done on 
using some of the funds--even though if it is a two-year 
project, I know it will have continuous impact--in looking at 
climate change, its impact on immigration patterns and then 
ultimately spreads of diseases and things like that, working 
with NASA, NOAA and some of the others, CDC? Is there any 
thought or are there any grants that would be addressing that 
arena?
    Dr. Kington. First of all, the public health community is 
becoming increasingly aware of the potential impact of climate 
change on health, and it is potentially extraordinary--
everything from increasing heat waves and individuals who are 
vulnerable to high temperatures such as the elderly at risk of 
heat strokes to changes in ecologic systems that might, for 
example, increase the transmission season for vector-borne 
diseases such as diseases carried by mosquitoes all the way 
through to drought and malnutrition.
    We have begun a process of assessing what our own portfolio 
is in the Agency. The Fogarty International Center is actually 
chairing a working group of individuals from across the Agency 
to look at what our current investments are and to think about 
new investments.
    Certainly, this is an important scientific area, and it 
could be eligible for funds either through existing grants or 
newly submitted grants as a result of ARRA dollars. So it can 
be funded under ARRA dollars. Thus far, it has not been an 
explicitly articulated area of focus, but researchers can 
submit under many of the initiatives and can submit their own 
ideas for ARRA dollars.
    This is an important scientific area. Again, though, I 
think we are at the early stages in terms of the research 
community in understanding what the big needs are. Many of the 
institutes already have large portfolios. NIAID, Dr. Fauci's 
institute, deals with many of the infectious diseases, and I am 
certain would be able to fund research related to this.
    I don't know if you would like to comment.
    Mr. Honda. Yes, I would hope that we would be anticipatory 
rather than reactionary. I think that knowing the information 
that we have at hand and using computer-assisted predictions, 
that your NIH has a role in trying to figure out what it is 
that we can anticipate.
    Dr. Kington. We agree.
    Mr. Jackson. Mr. Ryan for three minutes.

             BASIC BEHAVIORAL AND SOCIAL SCIENCE BLUEPRINT

    Mr. Ryan. Thank you, Mr. Chairman.
    I understand from some press accounts that you asked two of 
your institute directors, Jeremy Berg and Richard Hodes to come 
up with a basic behavioral and social science blueprint. Could 
you provide the Subcommittee with some more details on this 
initiative and when you expect the effort to be completed?
    Dr. Kington. Of course. As you know, there has been a 
running discussion at the Agency about how best to support 
basic behavioral and social science research. There is no 
question that this is important for many of our major areas of 
focus at the Agency. Certainly, lots of prevention hinges on 
changes in behavior, and basic behavioral and social science 
research informs how we understand these behaviors occur and 
how we develop interventions to prevent bad outcomes.
    I think there was a decision made that I fully support, 
that rather than putting all of this area into one unit at the 
Agency, it is so important for so much of the Agency's mission 
that it should be spread across the entire Agency. This is a 
challenge we have had for many areas like this--obesity, the 
neurosciences--where we know there are important scientific 
opportunities that cut across the structure of the Agency.
    So we are following a model that we developed. We use it in 
obesity. We also use it for the neurosciences blueprint, where 
we form a high level of leadership. In this case, as you 
pointed out, co-directed, co-chaired by Dr. Berg and Dr. Hodes 
of the Aging Institute but also populated by institute and 
center directors, in which we look for strategic opportunities 
to build areas of research where there are gaps and that have 
the potential to affect the missions of multiple institutes and 
centers.
    The expectation is we will have both a core funding at the 
institutes and centers, and there will be a pooled funding as 
well. This is just getting started now and will be playing out 
over the next year, but then the blueprint will set the stage 
for research over several years.
    I think this is the right approach. Dr. Berg and Dr. Hodes 
are committed to making this work. We have seen it work before. 
Stay tuned. You will see major changes.
    Mr. Ryan. Also, in the report language that we had in 2009, 
we asked for a progress report by March 1st of this year, I 
think, asking you to use the Division of Program Coordination, 
Planning and Strategic Initiatives as the central headquarters 
to do this. So, if you could give us some insight as to what 
the report will entail.
    I just say I think a lot of people in the field, whether it 
is stress reduction or mindfulness or social and emotional 
learning or behavioral science, in many instances are doing 
this already. I think it is our responsibility as policy makers 
to try to break down these walls and get it into the prevention 
side of our health care plan, with the insurance industry and 
what we are doing here.
    So I appreciate what you are doing. Any assistance we can 
be, we want to be helpful.
    Dr. Kington. Can I just note that one of the areas in the 
Challenge Grants is behavior change and prevention? So that is 
one of the fifteen areas that is targeted.
    Also, in our Transformative RO1 Program that is designed to 
fund really creative and innovative research, we also 
specifically ask for applications on the science of behavior 
change. So I assure you it is at the top level of consciousness 
of the Agency.
    Mr. Ryan. That is not locked into one institute?
    Dr. Kington. No.
    Mr. Ryan. That is across the board.
    Dr. Kington. The common fund and across the Agency.
    Mr. Ryan. Okay. Great. Thank you.
    Mr. Jackson. Votes are coming now. We do have time to 
finish this round of questioning, provided no other members 
enter the room.
    Mr. Kennedy, then Mrs. Lowey, then Ms. Lee for three 
minutes.

                     COORDINATION FOR TBI AND PTSD

    Mr. Kennedy. If Dr. Landis could come up.
    I would like to thank Dr. Kington.
    I really want to thank my colleague, Mr. Ryan, for his 
focus on behavioral health.
    I want to focus on the Institute of Neurological Disorders 
and ask Dr. Landis, in light of the soldiers coming back from 
Iraq and the traumatic brain injury--360,000 of our soldiers 
suffering from traumatic brain injury--can you talk about the 
coordination that is going on between NIH, DOD, the VA and to 
what extent that we can get all the brain science together, 
neuroscience research and brain research and how that research 
can, interrelated, work to benefit psychiatric disorders?
    Mr. Landis. There is a significant effort in NINDS to look 
at Traumatic Brain Injury (TBI) at the cellular, molecular 
level all the way to understanding changes that may occur in 
brain structure and brain connectivity.
    NINDS, as the lead institute for that, has worked very 
closely with the Veterans Administration and with the DOD to 
make sure that there is not duplication but that there is 
actually good gap analysis, and programs have been targeted to 
specific topics. Towards that end, we have been working in 
workshops with diagnosis of TBI, definition of what actually 
brain changes occur, coming up with common data elements that 
would allow us to do clinical trials.
    Of particular interest is a very new effort coordinating 
with USUHS, Uniformed Health Services Institute, the Naval 
Hospital--and, as you know, Walter Reed will be moving out to 
the Naval Hospital--with the NIH to come up with a very 
innovative program to look at TBI and Post Traumatic Stress 
Disorder (PTSD) and better ways to treat it. So I think there 
is a lot going on.
    [The information follows:]

                     Coordination for TBI and PTSD

    Dr. Landis: The new Center for Neuroscience and Regenerative 
Medicine (CNRM) is explicitly designed as a coordinated program of NIH 
and the Uniformed Services University of Health Services (USUHS). A 
Memorandum of Understanding spells out in detail how the center will 
operate as a cooperative venture. In keeping with that agreement, Dr. 
Kington appointed a steering committee that includes the directors of 
NIMH, NINDS, the NIH Clinical Center and General Sutton of the Defense 
Center of Excellence for TBI. The research will help the soldiers at 
Walter Reed and National Navy Medical Center using the extraordinary 
neuroimaging resources at the NIH Clinical Center and the collective 
efforts of 162 investigators from USUHS and from several NIH 
Institutes. Plans are moving forward for research on diagnostics, 
biomarkers, neuroprotection, regeneration, and rehabilitation, as well 
as patient recruitment, informatics, and other critical areas.
    More generally, there is extensive coordination of research on TBI 
and PTSD within NIH and among NIH and the Department of Defense, the 
VA, the CDC, and other federal agencies. At NIH, NINDS, NIMH, and the 
National Center for Medical Rehabilitation Research, which is within 
NICHD, each have major TBI or PTSD programs, and other Institutes 
participate as appropriate. A Federal Interagency TBI Research group 
informs federal agencies of one another's efforts and facilitates 
coordination. A September 2008 meeting of the group discussed goals, 
priorities and funding for TBI research across many agencies including 
the NIH, four components of the DoD, the VA, CDC, SSA and others. Other 
trans. agency workshops have focused on TBI Classification in October 
2007, Combination Therapies for TBI in February 2008, on Neurological 
Consequences of Blast Injury in April 2008, Trauma Spectrum Disorders: 
Effects of Gender, Race, and Socioeconomic Factors in August 2008, and 
Advancing Integrated Research on Psychological Health and TBI: Common 
Data Elements in March 2009. The NIH is working closely with CDC on the 
activities specified in the TBI Act of 2008, including studies on how 
to improve tracking of TBI in former military personnel and on the 
effectiveness of interventions. There are many other interactions among 
the staff of the various agencies, including, for example, sharing of 
expertise and knowledge on review panels and on advisory boards for 
clinical consortia. For many years, the NINDS intramural research 
program has conducted very important work with the VA and DoD on long 
term neuropsychological outcomes of TBI in Vietnam veterans, and now 
the memorandum will further enable that research to extend to veterans 
who served in Iraq and Afghanistan.
    Finally, at the broadest level, the NIH Blueprint for Neuroscience 
Research coordinates the efforts amoung the 16 NIH Institutes, Centers 
and Offices that support neuroscience research. Just as the NIH Roadmap 
for Medical Research addresses roadblocks that hamper progress across 
all of medical science, the Blueprint takes on challenges in 
neuroscience that are best met collectively.
    The Blueprint has developed working groups on specific cross 
cutting issues, brought the scientific community together in scientific 
workshops, funded grants and contracts through specific initiatives, 
developed tools and resources to help all neuroscientists, and 
generally fosters communication and a culture of cooperation within the 
NIB and the neuroscience community.

    Mr. Kennedy. Is it being run out of NIMH because NSF told 
me there is a blue kind of an unofficial organization of brain 
science kind of being done through NIMH, or coordinated.
    Mr. Landis. There is a coordinated effort. So, NINDS has 
responsibility for TBI, NIMH for PTSD, and we recognize that 
the same changes in brain structure may underlie both, and we 
are working very closely together to maximize our understanding 
of brain plasticity to make a difference for soldiers who are 
coming back with both of those disorders.
    Mr. Kennedy. I would just like if you could get me what is 
going on in terms of coordination.
    Mr. Landis. Absolutely. I will give you a detailed answer 
for the record.
    [The information follows:]

                      Asthma and Allergy Diseases

    Dr. Insel: The National Institute of Allergy and Infectious 
Diseases (NIAID) continue to build on its longstanding and successful 
research efforts into the causes, pathogenesis, diagnosis, treatment, 
and prevention of asthma and allergic diseases. NIAID vigorously 
pursues research on asthma and allergic diseases by supporting 
investigator-initiated projects, intramural research, cooperative 
clinical studies, networks of research centers, and demonstration and 
education research projects. The ultimate goal of NIAID's asthma and 
allergic diseases research programs is to develop more effective 
therapies and prevention strategies.
    An important example of the many NIAID initiatives in asthma and 
allergic disease research is the NIAID-supported Inner-City Asthma 
Consortium (ICAC), which evaluates the safety and efficacy of promising 
immune-based therapies to reduce asthma severity and prevent disease 
onset in inner-city children. The ICAC is conducting several large 
clinical studies of asthmatic children and adolescents. These studies 
are testing the safety and efficacy of experimental treatments for 
asthma with an emphasis on factors that contribute to asthma severity 
in inner-city environments. Another ICAC study of more than 500 
children enrolled since birth examines the environmental conditions and 
immunological responses that contribute to the development of asthma 
and allergies in the first years of life. Since the 1970s, NIAID has 
supported the Asthma and Allergic Diseases Cooperative Research 
Centers, a network of 15 academic research centers located across the 
country. These Centers currently are conducting studies of the roles of 
infections, pollution and allergens in the development and severity of 
asthma. The Centers also are conducting three clinical studies in 
asthma, allergic rhinitis (hay fever) and sinus disease. Two additional 
studies are exploring the links between genetics and asthma. Recently, 
NIAID and several other NIH Institutes have established a public-
private partnership with the Merck Childhood Asthma Foundation to 
define and prioritize asthma outcomes, information will be used in 
future clinical studies. These outcomes will provide the 
standardization needed to conduct meta-analyses and draw more 
meaningful conclusions from the results of independent studies.
    Another important component of the NIAID research program is in the 
area of food allergy. the Consortium of Food Allergy Research is 
conducting a study with more than 500 infants to identify factors 
associated with allergies to peanuts, milk, and eggs. Five clinical 
trials currently are underway in the consortium to evaluate the safety 
and efficacy of experimental approaches to treat food allergy. The 
NIAID-sponsored Immune Tolerance Network currently is conducting a 
clinical trial with more than 600 infants at high risk for developing 
peanut allergy to determine if eating peanut-containing foods starting 
in infancy will prevent this disease. Another NIAID-supported network, 
the Atopic Dermatitis and Vaccinia Network, is identifying the 
immunologic changes that contribute to atopic dermatitis (an allergic 
disorder commonly known as eczema) and to the heightened susceptibility 
to infection in individuals with this disorder.
    Recently, NIAID and U.S. Food and Drug Administration co-organized 
a meeting of experts to identify safe approaches for developing new 
treatments for food allergy. A report and the recommendations of this 
meeting will be published this year in the Journal of Allergy and 
Clinical Immunology. Lastly, NIAID is leading an effort to develop 
clinical practice guidelines for the diagnosis and management of food 
allergies, involving an independent evidence-based review of the 
literature, guidelines writing by an expert panel, and review and 
oversight by a coordinating committee of more than 30 federal agencies, 
professional societies and patient advocacy groups.

                  SELECTED DISEASE RESEARCH AND EPSCOR

    Mr. Kennedy. In terms of, Dr. Kington, if you could just 
get me what is going on in terms of research on the asthma, 
ADHD, allergies and autism and whether states with EPSCoR 
receive any additional consideration for applying for stimulus 
funds, that would be terrific.
    Dr. Kington. We will prepare the response.
    [The information follows:]

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    Mr. Jackson. Mrs. Lowey for three minutes.

                         CROSS CUTTING RESEARCH

    Mrs. Lowey. Dr. Kington, you and I agree that peer reviewed 
medical research is at the core of NIH's mission. Peer review 
grants to doctors and scientists throughout the Country are 
absolutely critical to make progress in finding a cure for 
treatments for thousands of diseases and disorders.
    But I understand that about $800 million of NIH's stimulus 
funds will go to the Office of the Director for various 
research grants on various diseases. Can you share with the 
Committee what your priority areas are for these funds?
    How many new grants do you expect to be funded?
    And, will you be able to use any of the stimulus funds to 
place a few big bets on promising but risky research that you 
would not have been able to pursue otherwise?
    Dr. Kington. We are in the early stages of planning for the 
entire allocation of $800 million, but we are focusing 
precisely on those areas--areas that cut across the mission of 
institutes and centers, areas where an infusion of large 
dollars can move a whole field ahead and riskier investments.
    So we have committed $200 million toward the Challenge 
Grants Program, again targeted to those specific areas.
    We have committed $100 million to the Grand Opportunities 
Program which we anticipate and under which we will receive 
many creative, large grant applications.
    We won't make the final decisions of allocation until we 
see what institutes and centers have done because then we can 
decide, look at the entire portfolio and see what gaps there 
are.
    We are also funding the summer program for students from 
the Office of the Director. That is $21 million, right now, and 
it may go higher if we get more applications.
    So we have made those commitments for about half. The other 
half are waiting until we have a better idea of what the 
commitments are of the institutes and centers, and then we can 
make decisions about which initiatives we will fund.
    We generally won't fund at an individual grant level, but 
we will fund specific institutes' and centers' initiatives that 
have broad application and cut across the mission of institutes 
and centers. We are making those decisions, and we will try to 
complement the decisions of institutes and centers.
    Mrs. Lowey. Thank you very much.
    Mr. Jackson. Ms. Lee for three minutes.

                          SICKLE CELL TESTING

    Ms. Lee. Thank you very much.
    Could I ask Dr. Rodgers to come forward just a minute, 
please? Let me just thank you, first of all, and the National 
Institute of Diabetes and Digestive and Kidney Diseases for 
responding with regard to the whole issue of sickle cell anemia 
and the validity of the A1c test.
    I just wanted to know. First of all, I think the public 
awareness campaign to educate the public about that was 
effective, and it was very good, and I just needed an update 
from you on the status of laboratories and physicians and 
others who need to know this information. Do they all know now 
or do we need to do more? What is going on?
    Dr. Rodgers. Well, thank you for the question.
    The question relates to using hemoglobin A1c. I think that 
you posed to me two years ago that some were using that to 
actually diagnose diabetes and it was particularly confounding 
in patients that had hemoglobin variance such as sickle cell 
trait.
    While A1c determination is certainly not the standard at 
the moment for diagnosing diabetes, it certainly is very 
important for monitoring the course of disease because it gives 
the average value of glucose control in the preceding two to 
three months.
    At the time that you asked me the question, there were 
about 20 various assays for measuring hemoglobin A1c, and 
unfortunately 6 of that 20 were unreliable, gave unreliable 
results in individuals that had sickle hemoglobin or other 
variants.
    The NIH did, with your prompting, develop this education 
campaign which got out the message to individuals, to 
physicians as well as the general public, and it has been quite 
effective in diminishing the utilization of those unreliable 
methods in those areas.
    We have ongoing funding to a national glyco-hemoglobin 
standardization program out of the University of Missouri that 
continues both looking at the final remaining assays as well as 
getting the message out not only in this Country but worldwide 
because of course there are many more people in other areas of 
the world that have hemoglobin variants than in the United 
States.
    So your prompting that question, I think, has had a major 
impact.
    Ms. Lee. Thank you very much and thank you so much for your 
responding so quickly to that because many, many people were 
being, I think, mistreated as a result of that.
    Dr. Rodgers. Thank you for your interest.
    Mr. Jackson. Let me remind members that they may submit 
questions for the record which will be provided to Dr. Kington 
for an appropriate response to the Committee in writing.
    I want to thank the members' indulgence as well as Dr. 
Kington for allowing me to chair my first Labor, Health and 
Human Services Subcommittee.
    [Applause.]
    Mr. Jackson. And, to all of the distinguished scientists, 
chairmanships around this place are very hard to come by. It 
has taken me 10 years to sit in this seat.
    I am reminded by Chairman Obey that I long one day to have 
my picture hanging in this austere body, and Chairman Obey 
reminds me that members of Congress usually get hung before 
their pictures do. [Laughter.]
    The Committee is adjourned.

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                                          Wednesday, April 1, 2009.

PATHWAY TO HEALTH REFORM: IMPLEMENTING THE NATIONAL STRATEGY TO REDUCE 
                    HEALTHCARE-ASSOCIATED INFECTIONS

                               WITNESSES

PANEL 1: DEPARTMENT OF HEALTH AND HUMAN SERVICES
DR. DON WRIGHT, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR HEALTH, U.S. 
    DEPARTMENT OF HEALTH AND HUMAN SERVICES
DR. RICHARD BESSER, ACTING DIRECTOR, CENTERS FOR DISEASE CONTROL AND 
    PREVENTION
DR. CAROLYN CLANCY, DIRECTOR, AGENCY FOR HEALTHCARE RESEARCH AND 
    QUALITY
    Mr. Obey. Good morning, everybody.
    Let me welcome our panelists for the hearing today.
    We have a problem in this Country. When people go to the 
hospital, we hope that they are going to be made well. Instead, 
to put it bluntly, there are a hell of a lot of people who wind 
up being made sick and some of them dying.
    CDC estimates that there are 1.7 million healthcare 
associated infections in American hospitals each year, with 
99,000 associated deaths affecting 5 to 10 percent of 
hospitalized patients.
    To me, that is absolutely shocking, when you read the 
literature and you see what simple steps could be taken in many 
cases to reduce this threat. We are spending billions of 
dollars and focusing an incredible amount of energy to prevent 
this Country from being hit by al Qaeda again. The average 
American has one hell of a lot better chance to be killed by a 
hospital infection than being impacted by al Qaeda.
    When I look at the simple steps that could be undertaken in 
order to reduce this calamity, I am reminded of the old movie 
about Dr. Pasteur, who was simply trying to teach the medical 
profession to wash their hands. I know it is not that simple, 
but I do not believe that there has been a sufficient sense of 
urgency on this issue, either on the part of Congress or on the 
part of administrators throughout the government, and certainly 
on the part of health providers.
    I remember Paul O'Neill, the first Secretary of the 
Treasury under President Bush, started to get interested in 
this issue in Pittsburgh and expressed frustration at how hard 
it was to move the needle.
    So we are here today to talk about this problem. I have got 
a much longer, windier open statement than I care to deliver 
today, so let me simply say we are here to try to hear from 
these two panels about what we can do to solve a huge medical 
problem in this Country.
    Before I call on the first panel, let me simply ask Mr. 
Tiahrt for whatever comments he might have.
    Mr. Tiahrt. Thank you, Mr. Chairman. I want to welcome all 
the witnesses today. I would also like to point out that our 
Chairman has now served in the United States House of 
Representatives for 40 years, and I find that an incredibly 
great record, something to admire and----
    Mr. Obey. Some people might think it is horrifying. 
[Laughter.]
    Mr. Tiahrt. Well, it is comforting to me to know that the 
national parks, which you love so dearly, have trees who have 
not been here as long as you have.
    Mr. Obey. Thanks a lot. [Laughter.]
    Mr. Tiahrt. Mr. Chairman, this is a particularly 
interesting topic to me. There is a thought, when we go to the 
hospital, that we are going there to get well. Unfortunately, 
for 1.7 million people, they acquire an infection while they 
are in the hospital attempting to get better.
    I know that the hospitals are very concerned about that and 
work to try to turn that around. Our job in this Committee, I 
think, is to determine how the Federal Government can assist, 
and not hinder, implementing safety protocols. Sometimes we 
make it more difficult, more complicated, more inefficient, and 
less responsive, and I think we do not have to do that. I think 
we can be assisting in this process, and hopefully that is what 
we will do.
    I know that there is need for guidance and incentives from 
the experts at AHRQ, and the public needs the information from 
the CDC. But we need to find a balance that allows the 
providers to be innovative and flexible in their response, 
while keeping patients healthy.
    I look forward to the testimony. I think this is a very 
important hearing.
    I yield back.
    Mr. Obey. Thank you.
    The first panel is made up of Department of Health and 
Human Services officials who are taking the lead in 
administering programs at the Federal level focused on 
understanding the problem: Dr. Don Wright, Principal Deputy 
Assistant Secretary for Health, U.S. Department of Health and 
Human Services; Dr. Richard Besser, Acting Director, Centers 
for Disease Control and Prevention; and Dr. Carolyn Clancy, 
Director, Agency for Healthcare Research and Quality.
    Additionally, Dr. Thomas Valuck, Medical Officer and Senior 
Advisor to the Center for Medicare Management; and Mr. Thomas 
Hamilton, Director of the Surveys and Certification Group from 
the Centers for Medicare and Medicaid Services are available, I 
am told, in the first row immediately behind the witnesses, to 
answer questions if any of our panelists decides they want to 
duck a question or simply turn it over to somebody who can 
buttress their answer.
    With that, why do we not proceed with Mr. Wright first?

                     Dr. Wright's Opening Statement

    Dr. Wright. Good morning, Chairman Obey, Ranking Member 
Tiahrt, and other distinguished members of the Committee. I am 
Dr. Don Wright, the Principal Deputy Assistant Secretary for 
Health in the Office of Public Health and Science at the U.S. 
Department of Health and Human Services. Let me say I am 
pleased to be here today to describe HHS's efforts to reduce 
the rates of healthcare-associated infections and also the 
development of the HHS Action Plan to Prevent Healthcare-
Associated Infections which was released in January 2009.
    There are several agencies in HHS that have played a 
significant role in addressing this important public health 
challenge, including the Centers for Disease Control and 
Prevention, the Agency for Healthcare Research and Quality, and 
the Centers for Medicare and Medicaid Services.
    Healthcare-associated infections are infections that 
patients acquire while receiving treatment for medical or 
surgical conditions. They occur in all settings, including 
hospitals and ambulatory surgical centers.
    These infections are associated with a wide variety of 
causes, including the use of medical devices such as catheters 
and ventilators, from complications following surgical 
procedures, and from transmission between patients and 
healthcare workers. They exact a significant toll on human life 
and are among the top 10 leading causes of death in the United 
States.
    In addition to the substantial human suffering caused by 
healthcare-associated infections, the financial burden 
attributable to these infections is staggering. Healthcare-
associated infections result in an estimated $28,000,000,000 to 
$33,000,000,000 in excess healthcare dollars each year.
    Despite these sobering facts, healthcare-associated 
infections are largely preventable. Broad implementation of 
prevention guidelines can result in reductions in healthcare-
associated infections, which not only save lives and reduce 
suffering, but can result in healthcare cost savings as well.

                   DEVELOPMENT OF THE HHS ACTION PLAN

    Successful infection prevention and elimination efforts 
have been underway for years at the various agencies of HHS. 
However, in 2008, HHS began a Department-wide effort to 
approach this issue. HHS established a senior-level Steering 
Committee for the Prevention of Healthcare-Associated 
Infections last year in order to improve and expand HAI 
prevention efforts. The Steering Committee is chaired by me as 
the Principal Deputy Assistant Secretary for Health within the 
Office of Public Health and Science in the Office of the 
Secretary.
    Last year, we were charged with developing the HHS Action 
Plan to Prevent Healthcare-Associated Infections in hospitals. 
The Plan establishes national goals and outlines key actions 
for enhancing and coordinating HHS-supported efforts, and also 
outlines opportunities for collaboration with external 
partners.
    A critical step in the Action Plan development process was 
the identification of priority measures and five-year national 
prevention targets for assessing progress in HAI prevention. 
The targets serve to enable us to evaluate progress and focus 
prevention efforts in order to achieve the goals outlined in 
the Action Plan.
    While there has been considerable activity across HHS 
related to the prevention of healthcare-associated infections, 
clearly, more work needs to be done. The Steering Committee 
will next focus its second tier efforts on the ambulatory 
surgical setting. Ambulatory surgical centers have been the 
fastest growing provider type participating in Medicare.

         FY 2009 FUNDED ACTIVITIES OUTLINED IN THE ACTION PLAN

    With the $5,000,000 in funding provided to the HHS Office 
of the Secretary in the fiscal year 2009 Omnibus Bill, OPHS 
plans to continue the valuable work of the HHS Steering 
Committee for the Prevention of Healthcare-Associated 
Infections. The Steering Committee will have the continued 
responsibility for coordinating implementation of the current 
Action Plan, monitoring progress in achieving the national 
goals of this plan, as well as leading tier two efforts. In 
addition, the Steering Committee is coordinating the use of 
HAI-related American Recovery and Reinvestment Act 2009 funds.
    OPHS also plans to use the Omnibus funds to develop and 
implement a nationwide campaign to raise awareness of the 
importance of addressing healthcare-associated infections. The 
campaign will focus on empowering consumers to be active 
participants in preventing healthcare-associated infections and 
encouraging them to be more involved in their own healthcare. 
We acknowledge that some of the information on preventing HAIs 
may be too technical or not accessible for healthcare 
consumers, and we have identified health literacy as an 
important component of health communication to the consumer.
    Remaining OPHS funds will be provided to a variety of 
interagency projects, all directly linked to the Action Plan. 
One such example is an information systems project designed to 
support a standards-based solution for integrating data 
collection across specific HHS data systems. The intent of this 
project is to use interoperability standards to reduce siloed 
departmental data systems and reduce data collection and 
reporting burdens for healthcare facilities.
    Fifty million for HAI prevention was included in the ARRA 
funds. In a moment you will hear from Dr. Besser, my colleague, 
who will discuss how $40,000,000 of these ARRA funds will be 
spent to fund activities that support the Action Plan and 
benefit the States.
    The remaining $10,000,000 will be used by CMS to improve 
the process and frequency of inspections of ambulatory surgical 
centers. The ARRA funds allocated by CMS will allow States to 
hire additional surveyors, which will increase the States' 
capacity to maintain expected levels of ambulatory surgical 
center inspections, while building a greater capacity to use an 
improved survey tool nationwide.

 HEALTHCARE-ASSOCIATED INFECTION PREVENTION IN A REFORMED HEALTH SYSTEM

    The investment of ARRA funds in the fiscal year 2009 
appropriations represents critical investments that we believe 
show the value of how small investments can yield a large 
health impact. The President has articulated that in order to 
reform healthcare, prevention, healthcare quality, and patient 
safety must also be priorities. Monitoring and preventing 
healthcare-associated infections is fundamental to protecting 
patients and improving healthcare quality. We at HHS are 
committed to strong partnerships between Federal, State, and 
local governments and communities to help prevent these 
infections.
    Thank you for the opportunity to testify today and, at the 
appropriate time, I would be happy to answer any questions.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                     Dr. Besser's Opening Statement

    Mr. Obey. Dr. Besser.
    Dr. Besser. Thank you. Good morning, Chairman Obey, Ranking 
Member Tiahrt, and other distinguished members of the 
Subcommittee. I am Richard Besser, Acting Director of the 
Centers for Disease Control and Prevention, and it is my 
pleasure to be here today to share with you CDC's plans for 
utilizing the funds provided by Congress through the American 
Recovery and Reinvestment Act of 2009 and the fiscal year 2009 
Omnibus Appropriations regarding the prevention of healthcare-
associated infections.
    I respectfully ask to have my written statement included 
for the record.
    Healthcare-associated infections are a serious and 
pervasive public health concern. Mr. Chairman, as you noted, 
these infections occur in all types of healthcare settings, 
including hospitals, long-term care facilities, and ambulatory 
surgical care facilities.
    There are approximately 1.7 million healthcare-associated 
infections, or HAIs, per year in U.S. hospitals alone, and they 
are associated with 99,000 deaths. They have a tremendous 
financial toll, resulting in an estimated $28 billion to $33 
billion of excess healthcare costs per year.
    Almost everyone knows someone who has been affected by 
healthcare-associated infections. We have all heard stories of 
a coworker, a friend, or a loved one who has entered the 
healthcare system with one problem, only to acquire a life-
threatening, potentially preventable infection. Such stories 
speak to the heart of the HAI problem.
    The good news is that most of these infections are 
preventable, and CDC has made significant progress in 
developing effective prevention guidelines, tools, and 
strategies. CDC is fully committed to achieving the national 
goals and targets of the Department of Health and Human 
Services Healthcare-Associated Infections Action Plan and will 
continue to work collaboratively with our sister agencies to 
assure our collective success. The funds provided in the 
Recovery Act will supply much-needed investments to move toward 
the elimination of these infections.
    CDC plans to distribute approximately $40 million of these 
funds dedicated to healthcare-associated infections, which will 
be available to States, the District of Columbia, and Puerto 
Rico. These investments will complement investments made by HHS 
and the Agency for Healthcare Research and Quality, and will 
ramp up State and local efforts to support prevention efforts 
by doing three things:
    First, creating or expanding State-based healthcare-
associated infection prevention collaboratives; they will 
implement HHS recommendations and use CDC's National Healthcare 
Safety Network system or standards to measure outcomes and 
prevent these infections. These collaboratives will include 
State hospital associations, Medicare quality improvement 
organizations, and other partners, and will link to 
complementary activities supported by AHRQ and CMS.
    Second, enhancing State abilities to assess where these 
infections are occurring and evaluate the impact of hospital-
based interventions in other healthcare settings.
    And, third, building a public health workforce and health 
departments with the knowledge base and expertise who can lead 
Statewide initiatives to ensure progress towards the national 
prevention targets outlined in the HHS Action Plan.
    CDC will also use the Recovery Act funds to expand the use 
of CDC's National Healthcare Safety Network and to enhance data 
validation in States. The Safety Network is a secure Internet-
based surveillance system that provides a way to track, 
analyze, and interpret data on healthcare-associated 
infections. The Safety Network provides standard definitions 
and protocols for tracking and reporting these infections. It 
allows tracking of prevention practices and infections rates, 
and it provides tools for data analysis.
    Partially due to State legislation, participation in the 
Safety Network has increased dramatically in the past few 
years, from less than 500 in 2007 to presently over 2,200 U.S. 
healthcare facilities in all 50 States. Demonstrating the 
Network's success as a prevention tool, from 1997 to 2007, 
participating hospitals have decreased bloodstream infections 
by up to 50 percent.
    CDC will use the Recovery Act funds to support new 
activities in the State-based emerging infections program to 
support targeted efforts to monitor and investigate the 
changing epidemiology of these infections in populations as a 
result of prevention collaboratives. As these collaboratives 
move forward, the epidemiology of these infections will change.
    Reporting through the Safety Network will provide a picture 
of these infections in hospitals, and increasingly in long-term 
care facilities and ambulatory surgical centers. Emerging 
infections program findings will provide us with additional 
insight into the impact of Recovery Act-funded prevention 
activities, especially outside of the hospital setting.
    In summary, the Recovery Act funds will be invested in 
State efforts that support surveillance, improve healthcare 
quality, encourage collaboration, train the workforce in HAI 
prevention, and measure outcomes. Many of these funds will be 
used to support activities outlined in the HHS Action Plan 
which was released in January of 2009.
    Based on the success that CDC and AHRQ have seen in local, 
regional, and national initiatives, we anticipate a 10 percent 
to 20 percent reduction in healthcare-associated infections 
within two years of the successful implementation of the State-
based collaboratives.
    CDC's 2009 Omnibus funds will complement Recovery Act 
funding by expanding and enhancing the capabilities of the 
Safety Network, as well as rapidly expanding efforts in States 
to validate these data. This will enable CDC to improve the 
Safety Network electronic reporting and thus reduce the burden 
of data collection while increasing interoperability across 
agency data systems.
    In the future, electronic reporting will be a key component 
of ensuring data validity and assessing the impact of HAI 
prevention efforts in both hospital and outpatient settings. 
CDC will also provide technical support for the National 
Healthcare Safety Network implementation to all States.
    In addition, CDC's injection safety funding will be used to 
ensure that infection control measures are adhered to through 
collaborations with the Centers for Medicare and Medicaid 
services in support of their Recovery Act-funded activities in 
outpatient settings that Dr. Wright just described.
    The Recovery Act and Omnibus appropriations make 
investments in healthcare-associated infection and prevention 
and healthcare quality that form the foundation of a national 
effort to improve the U.S. healthcare system. Small investments 
made across States can yield a large impact by preventing 
thousands of new infections in deaths and billions in 
unnecessary costs for patients and the healthcare system.
    We expect that with these investments, many more infections 
will be prevented, many lives will be saved, and we will not 
have as many sad stories to tell.
    Thank you for holding this hearing on this important health 
issue. I would be happy to answer any questions at the 
appropriate time.
    Mr. Obey. Thank you.
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                     Dr. Clancy's Opening Statement

    Mr. Obey. Dr. Clancy.
    Dr. Clancy. Mr. Chairman and members of the Committee, I 
want to thank you for inviting me to this important hearing on 
initiatives to improve and expand efforts to prevent altogether 
healthcare-associated infections and ask that my entire 
statement be made part of the record.
    I would also like to building on Mr. Tiahrt's comments and 
also add our congratulations to you on this important 
anniversary and thank you for your service and leadership to 
the Country.

                             AHRQ'S MISSION

    AHRQ's mission is to improve the quality, safety, 
efficiency, and effectiveness of healthcare for all Americans, 
so we do this through research to improve the quality of 
healthcare, reduce its costs, improve patient safety, and 
address medical errors.
    But a big, big focus for us is making sure that we can work 
with hospitals, clinicians, and others to translate the 
findings of research into practice and policy. So we are 
thrilled and quite delighted to be working very closely with 
our partners in HHS, particularly our partnership with CDC and 
the Office of Public Health and Science, focused on reducing 
and ultimately eliminating healthcare-associated infections.
    Our mission at AHRQ is focusing on developing practical 
scientific evidence-based information that clinicians and 
healthcare organizations can use to improve care right now, and 
this complements CDC's focus on public health and epidemiology. 
Together, our investments will strengthen capacity in States 
and local communities.
    AHRQ's role also includes helping patients and doctors to 
communicate better, so we have been working to encourage 
patients to ask questions when they are in healthcare settings, 
such as whether clinicians have washed their hands and have 
offered them suggestions on how they might do that; it is not 
such an easy thing to do. So I want to thank the Committee for 
your continued support of AHRQ's investments in helping to 
achieve this objective.
    This is a very serious issue today. The infections do not 
know any boundaries. They can affect people regardless of race, 
gender, or socioeconomic status. So, therefore, the solutions 
to this epidemic also have to break traditional healthcare 
boundaries.

                                  MRSA

    One of the most common infections is MRSA, and I know that 
this is well detailed in our written statements. Our data from 
hospitals show that these infections have increased 
dramatically in hospitals and that people with these infections 
have longer hospital stays. In addition, our data from the same 
hospitals is tracking the rapid emergence and rapid increase of 
a new dangerous infection called Clostridium difficile. This is 
alarming, to put it mildly. As you said, patients expect to go 
into hospitals and get better, not come out with a second 
problem.

                         PREVENTING INFECTIONS

    The good news here is that these infections can be 
prevented and dramatically reduced. AHRQ funded a research team 
from Johns Hopkins University--and I know you will be hearing 
from Dr. Pronovost in the second panel--that developed a 
program designed to implement CDC recommendations to reduce 
serious bloodstream infections in intensive care units. Known 
as the Keystone Project, it reduced the rate of these 
infections by two-thirds within three months in ICUs throughout 
the State of Michigan. In addition, the average ICU reduced its 
infection rate from 4 percent to close to zero. Over 18 months, 
the program saved more than 1,500 lives and nearly 
$200,000,000.
    So how did this happen? Using a simple five-step checklist 
designed to prevent certain hospital infections, and instilling 
a change in how hospitals and clinicians view infection 
prevention. Among other things, the checklist reminds doctors 
to wash their hands and put on a sterile gown and gloves before 
putting IV lines into their patients. One leader in critical 
care medicine that I met said that this was the most important 
development in his field in a generation. He said we knew about 
these infections, of course, but we kind of thought they were 
inevitable, that we could not do anything about them.
    I am sure you are used to seeing doctors and nurses on TV 
medical shows scrubbing their hands before surgery. Because of 
this project, the practice is now routine in these intensive 
care units as well.
    So we are now funding an expanded project building on this 
success and this project is being implemented across 10 States, 
with at least 10 hospitals in each State to help prevent 
infections related to the use of these central lines.
    Thanks to your support and leadership, our fiscal year 2009 
appropriation also gives us the opportunity to make this 
initiative truly nationwide. AHRQ will expand our work in 
reducing these central line bloodstream infections beyond the 
10 States. We are going to expand the number of hospitals in 
each participating State and increase the number of 
participating States by an additional 20 States. And we will be 
making sure that as our colleagues implement the funds in the 
Recovery Act and we are working with State hospitals and 
hospital associations so that our efforts are directed in such 
a way as to build capacity in these States and local 
communities.
    The goal here is to reduce the average rate of central 
line-associated blood infections in hospitals by at least 80 
percent. But the ultimate goal, of course, is complete 
eradication of these infections. We are also supporting five of 
our ACTION partners to examine the barriers and challenges to 
reducing HAIs at 34 hospitals. From this study we will be 
developing a tool kit that healthcare organizations can use to 
learn about how these projects and initiatives were 
successfully implemented, the challenges that they faced, and 
how they addressed them. Early results indicate that these 34 
hospitals showed a 60 percent decrease in infections, and we 
think that is only the beginning.
    Mr. Chairman, we greatly appreciate the Committee's 
understanding of the grave problem of HAIs and your foresight 
in providing AHRQ with additional funds in fiscal year 2009, 
and we will use the funds to invest in evidence-based research 
to reduce the incidence of MRSA and other healthcare-associated 
infections.
    I am very pleased that the interagency workgroup that you 
heard about from Dr. Wright has begun to develop potential 
projects that build on our efforts in fiscal year 2009 and 
address new high priority issues. These are also detailed in my 
written statement.
    Our funding in fiscal year 2009 will also help us address 
infections, including urinary tract infections and surgical 
site infections, as well as research on these infections in 
other healthcare settings. Your chances of getting an infection 
in a healthcare setting are not just limited to hospitals. So 
we will be looking at units outside the ICU: dialysis centers, 
nursing homes, and ambulatory care settings.
    So, Mr. Chairman, thank you again for inviting me to 
discuss AHRQ's efforts to improve and expand prevention of 
healthcare-associated infections nationwide. We are committed 
to continuing to work closely with our Department colleagues to 
improve the quality of healthcare in our Nation and to ensure 
that the public have access to the information they need to 
make educated and informed decisions about their healthcare.
    I look forward to answering any questions.
    [The information follows:]

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    Mr. Obey. Thank you very much.
    Mr. Tiahrt.

                          PREVENTION CHECKLIST

    Mr. Tiahrt. Thank you, Mr. Chairman.
    Based on the testimony today, it sounds like it is very 
simple. A five step plan? Can it be that simple? You know, 1.7 
million people, 99,000 deaths, and it just boils down to not 
washing your hands and a few other steps? This five-step 
process, when you got the 60 percent reduction in these 
hospitals, was that the inspiration of it or the methodology 
used to achieve that?
    Dr. Clancy. Five steps worked very, very well in intensive 
care units. Like many things in life, the what to do is not so 
hard; the how to do it is actually harder than rocket science. 
The difficulty is getting everyone on the same page and 
committed to consistently washing hands, sterile technique, and 
also collecting data so that people can see the connection 
between how they have changed their activities and the rate of 
infections. They can see this. In the Keystone Project, people 
got feedback quarterly. So this is not the quality department's 
problem or the infection control department's problem, this is 
our problem, and we have a role in fixing it.
    In the other activities that we are funding that look in a 
broader way across hospitals, one of the issues that they have 
found is that there are overlooked aspects of breakdowns in 
sterile technique. For example, in one institution, the 
transportation folks were able to let the doctors and nurses 
know that, once the patients go down to physical therapy, off 
came the gloves, gowns, and so forth. So people upstairs were 
working very, very hard at sterile technique and trying to 
prevent spread of infection; they got downstairs for something 
else, and all bets were off. So it is that kind of getting 
everyone on the same page, because everyone has to be part of 
the solution.
    Mr. Tiahrt. I think the feedback is very good.
    Dr. Besser, you mention in your written testimony that 27 
States require hospitals to report HAIs publicly. How many 
States require reporting but do not make it public?
    Dr. Besser. Mr. Tiahrt, I do not have an answer to that 
question. It is a moving target. Currently, of those States 
that require reporting, 19 of them are using the National 
Healthcare Safety Network, and we have more information on 
those.
    Mr. Tiahrt. Can you use a trend where they do report 
publicly that they are more attentive to these common sense 
practices to avoid infections?
    Dr. Besser. I think what we see in general is that what you 
measure drives change, and the goal of these programs is 
quality improvement at the hospital level, at the patient 
level, at the individual level. So the primary work that a 
hospital is doing by being able to look at their data and 
seeing where they have problems will drive implementation of 
improved application of hospital infection control.
    It is not rocket science. The principles that Dr. Clancy 
was talking about, about sterile technique and hand washing, 
are very simple. I served for five years as a pediatric 
residency director. Getting students and residents to apply 
these principles and do them in practice is the hard thing. So 
simple things like checklists, which just seem so rudimentary, 
can have dramatic impact.
    Mr. Tiahrt. In your testimony you talked about how 
everybody has had some kind of contact with someone. I have 
experienced it myself, going into a hospital for a knee 
operation and coming out with an infection. I had to stay a lot 
longer. I know of other instances just recently. But is there a 
risk? By requiring hospitals and other clinics and the whole 
list that you have talked about, by requiring them to publicly 
report this, does it put them in jeopardy of litigation, where 
they become part of a lawsuit because somebody has a bad 
experience like I did? Should we be concerned about that, 
public reporting ending up in a court system where the hospital 
or the physician or somebody gets sued over this reporting?
    Dr. Besser. I think whenever a preventable bad outcome 
occurs in a healthcare setting, there is risk of litigation. 
But I think without awareness of the problem, it does not give 
the institution or an individual the choice over where they 
want to acquire their healthcare, and having that choice I 
think is a major driver for change. I know that, personally, I 
would want to go to a facility that had a lower rate of 
infection than another.
    Mr. Tiahrt. And so would I. I just think there is a 
conflict here. We want the reporting. The reporting is 
successful, it helps do the things we want to do to prevent 
these from happening. Yet, it places an additional risk on 
these facilities and physicians.
    Thank you, Mr. Chairman.
    Mr. Obey. Thank you.
    Ms. Lee.

                                  MRSA

    Ms. Lee. Thank you very much, Mr. Chairman, and thank you 
very much for this hearing, and welcome to all of you.
    I guess as we age and as our family members age, we become 
more acutely aware of what is taking place, and I, again, 
personally, with a disabled sister and aging mother, have had 
many, many experiences with this; and I would want to litigate, 
let me tell you. And for those of you--and I probably know just 
enough to not know enough, but let me just mention one incident 
which confirms what you are saying as being, I think, a good 
strategy.
    A family member went into the hospital with a white cell 
count of 10,000, normal; came out with a white cell count of 
33,000, way up. Had to go right back into the hospital. Never 
once did the hospital admit, or the physician admit, what had 
taken place in terms of this infection having been developed in 
the hospital. Everyone else knew it, but we could never get--I 
knew it just by my elementary knowledge of what white cell 
count, what is normal, what is abnormal, what transpired during 
that 24-hour period. But you could never ever get the hospital 
officials, the physicians, anyone to even raise that as a 
possibility; and, as a result, we were trying to figure out 
what, legitimately, we could do and what took place and never 
got the correct answers, when we really knew what had happened.
    So I do not mind the litigation round, really, if that has 
to happen, but hopefully, with requiring the data to be 
published, the scoring and what have you, that would help 
hospitals step up to the plate and do what they need to do to 
prevent these infections from happening.
    I am concerned about the outreach efforts that are going to 
take place in terms of them being culturally appropriate, 
linguistically appropriate, because oftentimes African-
Americans, Latinos, Asian-Pacific-Americans, Native Americans, 
we have to handle our outreach in an appropriate way so that 
people understand what they are dealing with and what the 
information really means based on their cultural background.
    So I am asking you how do you plan to move forward on this 
front and how, also, are you going to review the information 
that you are proposing in your strategies with the minority 
medical schools so that they too can incorporate this now into 
some of their curriculum, if they have not already?
    Thank you very much.
    Dr. Besser. Thanks very much for the question. I will 
address part of that and let my colleagues join in.
    CDC is undertaking a campaign around MRSA, methicillin-
resistant Staphylococcus aureus infections. These have been in 
the press a lot. These occur both in healthcare facilities and 
in the community. So we have developed a lot of communication 
materials, education materials, and in the development of 
those, part of that is putting together focus groups from 
different ethnic and minority group populations to make sure 
that the messages that are in those will resonate.
    One of the areas I think that we need to do more work in, 
and we are thanks to the Committee and the resources in the 
Recovery Act, is looking at healthcare-associated infections in 
populations, so that we can get a better sense of what are the 
different rates in various populations, where are there 
disparities, and what is driving those disparities.
    We know that African-Americans have higher rates of kidney 
failure and diabetes, and that some of these infections are 
associated with those conditions; and that the efforts that we 
take to address the disparities that underlie those conditions 
will help with the infections. But I think there is more to it 
than that, and we need to understand are there particular 
infections that we are seeing at disparate rates, and we need 
to address that.

                              MALPRACTICE

    Ms. Lee. And why will the hospitals not admit that this 
infection occurred under their watch?
    Dr. Besser. I do not know if you want to go for that one. 
[Laughter.]
    Dr. Clancy. Well, I think that is fear of liability. When 
we have done work with doctors and patients, most patients say 
that if they are harmed by healthcare--and this would be a 
prime example--they want three things: they want an apology, 
they want to know----
    Ms. Lee. You are right, that is what we would like.
    Dr. Clancy [continuing]. They want to know what happens to 
me now----
    Ms. Lee. Yes.
    Dr. Clancy [continuing]. And, very importantly, they want 
to know that the hospital or organization is going to learn 
something and not do it again.
    Ms. Lee. Yes.
    Dr. Clancy. And doctors sure agree with them. They are 
terrified of step one because of the potential for litigation.
    Ms. Lee. Well, I will tell you one thing, they should be. 
But we have to make sure that somehow, short of litigation, 
that they know they have to clean their act up.
    Dr. Wright. Congresswoman, let me say I share your concerns 
about the outreach campaign and making sure that it is targeted 
to the appropriate audiences. The outreach campaign will 
actually occur within the Office of Public Health and Science, 
and we intend to make every effort to make sure that we address 
the appropriate communities. These messages will be tested for 
effectiveness moving forward to address the concern you just 
expressed.
    Mr. Obey. Mr. Alexander.
    Mr. Alexander. No questions.
    Mr. Obey. Mr. Bonner.

                        HAI REDUCTION STRATEGIES

    Mr. Bonner. Thank you, Mr. Chairman.
    As we all know, Congress provided $50,000,000 in the 
stimulus bill explicitly for States to implement healthcare-
associated infection reduction strategies. So I have got a few 
questions I would love to get your knowledge to try to help me 
understand.
    It is our understanding, my understanding, that $40,000,000 
of the $50,000,000 would be used by CDC to help States reduce 
infections. In your written testimony, Dr. Besser, you 
mentioned that the funds are being used for three purposes: 
first, creating or expanding collaboratives that will implement 
HHS recommendations; second, what appears to be enhanced 
surveillance capability; and, third, what looks to be a subsidy 
for State health departments to hire additional employees.
    So my first question is how much of that $40,000,000 do you 
expect would be spent in each of these three areas?
    Dr. Besser. We are still working through the finalization 
of the spend plan for this, but each of those components is a 
critical part of the equation. The collaboratives are 
absolutely essential because they pull all the players together 
who have a stake in this, both a stake in improving, but also 
have the ability to work with their members and with the 
medical community to address those issues.
    Healthcare-associated infections is one of those areas that 
State health departments have not had many resources to support 
for a long time, so being able to support this at the State 
level will allow them to look at data within their State and 
identify where the problems are, and have individuals who are 
focused on that and focused on working on solutions. So both of 
those components are very important.
    The other piece of looking at these infections in 
communities is important because there will be changes in how 
these infections are occurring by the very efforts we do to 
prevent them in healthcare settings. One example is the issue 
around methicillin-resistant Staphylococcus aureus, where this 
was a problem that we initially saw almost exclusively as a 
problem in healthcare facilities. Then, over time, we saw this 
in the community. And it was the work done in these 
surveillance systems that let us really understand that these 
were related problems, but had very different epidemiology and 
very different control strategies.
    So the vast bulk of the money is going to the States and 
the coalitions for the implementation of what we know are 
evidence-based strategies that work.
    Mr. Bonner. Well, how much does it cost a hospital or a 
State to report infection data to the National Healthcare 
Safety Network, and what percentage of hospitals currently 
participate in HSN?
    Dr. Besser. NHSN, we have been very pleased by the dramatic 
increase in its use over the past couple of years, from a few 
hundred to over 2,000. A third of all hospitals are now 
participating in that system. And what we are seeing is that 
the standards that are in NHSN are used by additional 
hospitals.
    Our goal is the reporting, not the system. We are really 
pleased that many hospitals find this to be a very useful 
system for reporting. We do not charge hospitals anything to 
use this system, and, thanks to the Committee and the 2009 
appropriations, we are going to be able to provide additional 
technical support to States so that there can be training, we 
can make improvements to the system, because we do hear from 
some hospitals about difficulty in data entry and problems with 
our servers. We are going to be upgrading those systems.
    So the resources that are coming from the Recovery Act and 
the resources that are coming through the Omnibus appropriation 
will synergistically help build a system that is really 
focusing on these preventable infections.
    Mr. Bonner. And that leads to my last question. If I am 
correct on the workforce issue, has any thought been put into 
how the States will sustain these new employees if and when 
Federal funding for HAIs ends?
    Dr. Besser. Well, one of the requirements is that all 
States submit a plan on healthcare-associated infections by 
January of 2010, and one of the components of that is looking 
at sustainability. What I expect States will see, States who 
take this seriously and implement this, is that they are going 
to see cost savings in terms of the added burden to their 
healthcare system and their healthcare dollars from treating 
infections that were preventable. And hopefully that will lead 
to States seeing the benefit in providing support for these 
personnel.
    Mr. Bonner. Thank you, Chairman.
    Mr. Obey. Thank you.
    Ms. Roybal-Allard.

                           OUTREACH CAMPAIGN

    Ms. Roybal-Allard. Thank you, Mr. Chairman, and thank you 
for having a hearing on this truly critical issue.
    When we are talking about this issue, sometimes I cannot 
believe what I hear. You know, when you talk to parents 
sometimes, they say, well, I try and get my children to wash 
their hands, but I cannot always get them to do that. I am 
trying to get them to eat their vegetables, but we cannot. But 
we are talking about children.
    In this case we are talking about health professionals who 
supposedly their primary goal is the care of patients. Just in 
the last few months, I have had, in hospitals and a friend, a 
newborn baby die of respiratory infection in the neonatal unit 
because of an infection, an adult died of cardiac arrest 
because they forget to put his heart monitor on, and the best 
friend of my daughter just died here, he was a U.S. marshal, 
because they released him from the hospital with staph 
infection and went into a coma at his home.
    And what I am hearing is, gee, this is a good thing to do, 
but we cannot get the students to do it and we cannot get the 
doctors to do it. To me, it is absolutely incomprehensible and 
there has to be some penalty. It is not good enough just to 
say, gee, we would like to get them and we hope that this 
happens.
    Which leads me to my question. While I do think it is 
important to empower families and individuals, the reality is--
and I spent months in the hospital with my mother and my 
father--the reality is that not every family can do what my 
family did and stay 24 hours and alternate every night. And we 
were not other to keep either my mother or my father company; 
we were there to protect them from my mother being wheeled out 
to have some procedure, operation done for which it was the 
wrong patient, and I could just go through a whole list of 
things.
    So I agree that it is important to help to empower the 
public, but also I believe the primary responsibility to ensure 
an infection-free environment starts with the healthcare 
providers themselves.
    So given the high costs associated with the national 
campaign, would not the money be better spent in educating and 
ensuring that physicians and healthcare providers are following 
the infection control guidelines, and put the focus on that, 
while at the same time there are other less expensive ways--and 
I am sure that members of Congress would be more than happy to 
assist in getting that information out to our constituents--and 
use those resources that you have to do whatever is necessary 
to get the health profession to do what they are supposed to do 
and make the care of their patients and their well-being the 
priority?
    Dr. Wright. Congresswoman, I agree and I share your 
concern. I will say that, as part of the outreach and messaging 
program, I mentioned that we were going to try to educate 
consumers, and we are. But that is not our only audience. 
Clearly, healthcare institutions have a big role in solving 
this problem, as well as health providers, and we will have an 
outreach strategy targeting those two groups as well.
    A particular focus group that we think will also be a focus 
group of this outreach campaign are paraprofessional schools--
medical schools, nursing schools and ancillary health schools. 
It must be in the curriculum of these schools--good infection 
control practices--so that we can create a culture of safety 
that will follow healthcare providers as they go through the 
next 20 or 30 years of their careers.
    We do want to address both healthcare institutions and 
healthcare providers going forward.
    Ms. Roybal-Allard. Well, I guess my point is that I do not 
think that it should be optional and we should not be hoping 
that they do this. There has to be a way that it is required 
and that there is a penalty to pay if they do not. And if it 
means that, as Congresswoman Lee said, litigation, then so be 
it.
    Dr. Clancy. The only thing I would add is I definitely 
agree with everything that you had to say. I think most of us, 
for ourselves and our family members, parents, whatever, would 
want to know ahead of time what hospital--particularly for 
elective admissions, where you are going to have a procedure or 
surgery or something--which hospitals are doing a better job. I 
do not think that is too much to ask, until we get to a place 
where they are all doing a superb job.
    Ms. Roybal-Allard. I agree, and that is why I am concerned, 
if I understand it correctly, that it is voluntary to report. 
So, therefore, how do you get an accurate picture of the 
various hospitals when everything is voluntary. And given the 
concerns that were raised about litigation and other things, 
you really are not going to have a clear picture, and it could 
be very misleading to the public to think, by looking at that 
list, they are getting the right information.
    Mr. Obey. Mr. Tiahrt.

                           INFECTION TOOL KIT

    Mr. Tiahrt. Dr. Clancy, you mentioned a tool kit that had 
some success or great success in, was it hospital ICUs?
    Dr. Clancy. No, this was hospitals more broadly.
    Mr. Tiahrt. More broadly?
    Dr. Clancy. Looking at methicillin-resistant Staphylococcus 
aureus.
    Mr. Tiahrt. Could you just give me a brief idea what is in 
the tool kit, because I picture a metal box.
    Dr. Clancy. No, and we may need a better word than that. 
Some of it is actually just decision support so that they can 
remind folks about what they need to do for those hospitals 
that already have electronic health records. Some of this work 
is coming out of Indianapolis, where they are well ahead of the 
rest of the Country in terms of not just having electronic 
health records, but actually being able to share information 
across hospitals.
    Some of the tool kit that they use in Indianapolis, which 
is probably only suitable for them, is that if you have been in 
one hospital, go home and are then readmitted, when you go to 
the second hospital, you are automatically identified if you 
have had one of these infections before. Whereas, today, that 
would depend on the patient or a piece of paper following the 
patient.
    Some of the other elements of the tool kit are protocols 
for getting all the members of the healthcare team and making 
it very clear who is the healthcare team, including people 
transporting patients and so forth, as well as a very succinct 
summary of what has worked for them and how they had to 
customize from national guidelines.
    Mr. Tiahrt. Thank you. I have a much better idea now.
    Mr. Obey. Ms. McCollum.

                               INFECTIONS

    Ms. McCollum. Thank you, Mr. Chair. I had the privilege of 
having an appointment by the Speaker to be on Government Reform 
last year, so we had several hearings on this, and I am pleased 
that we are moving forward, because we have identified that 
there is a problem. Sometimes everybody has to admit there is a 
problem. And the funding in the recovery package--and I would 
like for you to elaborate on this a little more--can be one-
time funding to help do the computer patches so that your 
system and another system can talk to each other so we can 
collect data.
    And coming together and collecting data to provide best 
practices is really important. I guess I am entitled to a few 
boasting rights with Hubert Humphrey's quote on the wall here, 
but Minnesota, when I was in the State House on health and 
human services, we started talking long and hard in getting 
everybody on board to see this as not threatening, not as 
litigation. It took a while to get everybody there, but we 
worked on developing what is in the best interest of the 
patient, the doctor, the hospital, everyone.
    So, in 2003, Minnesota was the first State in the Nation to 
pass a mandatory adverse health event reporting law, and it 
took us a while, in my opinion it took too long to get there, 
but we did get there, and people were gearing up and getting 
ready for it. So we do have some best practices out there. 
There are 23 other States that have some best practices models 
out there.
    What we found now is that Minnesota now, according to our 
hospital association, ranks first in the Nation of overall 
healthcare quality performance indicators, and what we are 
talking about today in preventing infections from happening, is 
one of those performance indicators.
    So what you are kind of looking at doing--to go back to the 
toolbox analogy--you have got some tools in the toolbox and now 
you are ready to take them out and show them to other States. 
And when you do this right, it does not necessarily mean 
litigation, but what it does mean, is that if you have the 
information in front of you, if you have had the check sheet 
and if you have not followed it, people in perhaps an operating 
room, are now bound to report that it was not followed. It is 
going to make it much easier for someone to litigate a case 
because everybody has been aware of what is supposed to happen, 
and it better not be happening; and if it does, people will be 
held accountable.
    And it goes as far as--if we had a different outcome. A 
dear friend had a baby on Christmas Day, and when I went in, it 
was at a hospital where my kids had been born too, and when I 
walked in, I knew I needed to wash my hands and everything, but 
posted up above it was, as you are washing your hands, please 
sing to the baby Twinkle Twinkle Little Star, so that you are 
washing your hands and rinsing them long enough. And it also 
had it available in Mong and Spanish, multi-language.
    So there are best practices out there. So could you maybe 
elaborate on how you are going to take these tools that you 
have in your toolbox and take them out there?
    Dr. Besser. I think that the story you tell there about a 
promising practice in Minnesota is just a great example of what 
we expect to come out of this recovery funding. The idea that 
all States are now going to be working on this, many States 
that had not been addressing issues of healthcare-associated 
infections before. We are going to see innovation. We are going 
to see creative ideas. We are going to see promising practices 
come out of that. And in our roles within the Department, we 
are going to be able to capture those and share those ideas.
    The point you made about measurement driving accountability 
is just right on target. Without measuring what is going on in 
a hospital, without bringing it to light, there is no way to 
hold individual clinicians accountable for what is taking 
place; there is no way that citizens are able to have choice 
between where they are seeking healthcare, and that will drive 
change.
    I ran CDC's program on Legionnaires' disease for a number 
of years and we faced this same issue around Legionnaires' 
disease, that if you detect a case, it is going to drive a 
lawsuit. Well, if you are not addressing this issue and looking 
at prevention as a medical institution, yes, you are going to 
get a lawsuit. But if you are taking this on and you are doing 
what has been known to be done as evidence-based practice, and 
there is still an infection that takes place, you are in much 
better shape than if you had not been addressing this problem 
in the first place.
    Dr. Wright. Congresswoman, I wanted to also point out that 
we do believe that the inspection process provides a potent 
deterrent on these lapses in infection control practices. The 
$10 million in ARRA funds is directed to that effort, to 
increase the survey process of these ambulatory surgical 
centers that have had high rates of infections to make sure 
that we can drive those rates down through the survey process 
moving forward.

               INFECTION CONTROL TRAINING IN CURRICULUMS

    Mr. Obey. Let me just make an observation. I do not want to 
take a lot of time because we have another panel, but, as I 
understand the numbers, 99 thousand people died from these 
infections last year, in comparison to, I believe, 14 thousand 
who died from AIDS last year in this Country. If those numbers 
are correct, that, to me, is astounding, because we have 
tremendous public attention paid to diseases like AIDS or 
cancer. Yet, we have six times as many people dying from 
something that ought to be much more easily correctable because 
at least we know, in most instances, what causes the problem 
and how to correct it.
    We do not know the answer to dealing with diabetes or 
Parkinson's. We are spending a hell of a lot of money on that. 
It seems to me, for a very little bit of money we could have a 
tremendous increase in the quality of public health.
    We have got a lot of talk about markets and how we should 
let the markets work. It seems to me the best way to make the 
market work in this situation is to make doggone sure that 
every single patient who walks into a hospital knows what the 
relative infection rates are in the hospital that he or she is 
considering entering. If they know that, it means that the good 
old market is going to work, because they are not going to go 
to the hospital that has a lousy infection rate if they know 
about it.
    Second thing is that, to me, in addition to having the 
patient know this information, the press is going to know it if 
you get it out there enough, and the press will raise enough 
cane. That creates additional pressure to fix the problem. That 
is part of the market too.
    I guess, in the end, the one place where I think we are on 
very weak ground is in relying on patients to ask the 
professionals to do what they ought to be doing. When you are a 
patient, you are intimidated by the people who are taking care 
of you; you do not want to antagonize the physician who is 
taking care of you because you want him to like you and care 
about you. So I think it is awfully tough to expect that the 
patient is going to blow the whistle and say, hey, did you 
change your gown.
    I mean, what is the process by which an average doctor or 
another provider in any hospital gets the information today 
about how to do to avoid this avoidable problem?
    Dr. Wright. Well, certainly, I think good infection control 
practices are part of their curriculum, whether they are in 
medical school or nursing school, and we are going to target 
that area to make sure that those curriculums are enhanced.

                               CHECKLIST

    But like other human behaviors, there needs to be 
reminders, and as one of the congressmen mentioned, there needs 
to be reminders to doctors, such as checklists, on an ongoing 
basis about the importance of hand washing. The checklist was 
basically a reminder of what the CDC had said for years was how 
you correctly insert a catheter to prevent infection, and yet 
it was this checklist that made sure that that occurred each 
and every time, and we can see what the dramatic result of a 
checklist of that nature actually did.
    So I think it has to be a multi-pronged approach to 
ensuring that healthcare providers use good infection control 
practices.
    Dr. Besser. To add to that, I think that informing 
consumers is part, in terms of choice, but I think that your 
comments about the power relationship between a healthcare 
provider and a patient is on target. I started a program at CDC 
on appropriate antibiotic use, and promoting the use of 
antibiotics only where indicated; and was in on a focus group 
and people were asked, well, do antibiotics work for colds or 
they work for ear infections, or both, and half the people said 
both. Then they were told, well, they only work for bacterial 
infections, and one of the people in the focus group said, I 
cannot believe that, last week my doctor gave me an antibiotic 
for a cold, I am furious. We said, well, are you going to say 
anything to him? And it was like, oh no, I am not going to 
question my doctor.
    So informing patients is part of it, but I think you are 
right on target that we need to work with the medical 
community. We have to ensure that the system is built to get 
these out of it. And making this information available, making 
an impact on the hospitals' bottom line, because they are going 
to see an impact on the bottom line if they are the worst 
hospital in their community in terms of infection rates; that 
is going to drive change. Each of these pieces is important, 
but there is not one that is the magic bullet.
    Dr. Clancy. So I guess I would just add to that. You know, 
I was in Ireland a couple years ago for a conference, and I 
was----

                       AWARENESS ABOUT INFECTIONS

    Mr. Obey. What is somebody named Clancy doing in Ireland? 
[Laughter.]
    Dr. Clancy. That is right. Amazing.
    I was amazed that infection rates for all hospitals in the 
country, Ireland, are tracking infections that we are not 
keeping as close an eye on. They were all over the newspapers 
every single day. I want to say a little over 90 percent of the 
hospitals reported, and those that declined the opportunity 
were dutifully noted by the press.
    I am not sure we can count on that as a full-time strategy 
here, but I think it helps.
    And, I agree with everything you said about patients.
    In terms of what students and residents learn, everybody 
learns about epidemiology and washing hands. What we have not 
valued in healthcare until recently is the notion that we are 
going to get it right every single time. So we learn about hand 
washing and infections so we can pass a test. What we do not 
get is the part that says if you do not own this and wash your 
hands every single time, then you will actually be creating 
infections. It is the not owning up to it that Representative 
Lee talked about.
    So we are getting better on that in healthcare now. We are 
starting to focus more on reliability or doing the right thing 
every single time, but we still have a long way to go.

                          FINANCIAL INCENTIVES

    Mr. Obey. One last question. Financial incentives often are 
incentives. Beyond the positive incentive of a bonus payment 
for voluntary reporting, should we be considering moving to a 
value-based performance measuring system where a portion of a 
hospital's payment would depend on actual performance, 
including infection rates?
    Dr. Clancy. CMS is doing a little bit of this now by not 
paying for the extra expense incurred by some types of 
infections that are largely preventable. In the aggregate it 
will not save that much money. What it does do is it sends a 
very powerful signal to the green eyeshade guys, the chief 
financial officers and so forth at hospitals, that this 
matters.
    So when your colleague asked how much does it cost 
hospitals to participate in NHSN, that depends how you look at 
it. They do not have to pay CDC, but they actually have to hire 
people and make sure that they are trained and have the time to 
do it.
    So I think it is a powerful signal. It is not going to be 
transformative until we build more capacity and know-how within 
hospitals. I think the good news is hospitals want to go there 
too, but right now, if you set the bar too high, a lot of 
hospitals would not be able to do it; they simply do not have 
the infrastructure.
    Mr. Obey. All right, thank you.
    Any other questions for this panel before we move to the 
next one?
    Ms. Lee. Mr. Chairman, one more, please.
    Mr. Obey. One question, sure.
    Ms. Lee. Okay, one more questions. Assuming that what you 
are proposing is enacted, what if there is no option? Public 
hospital, for example. What if the rating on infections is so 
low the people do not have an option, they have to go to the 
hospital, first of all? Secondly, an ambulance is going to take 
you to the closest hospital where there is an emergency room 
whether the rating is high or low. So how do you factor these 
concerns in to an overall rating system where the public knows? 
Because oftentimes you cannot say where the ambulance is going 
to take you, and if you are a victim of a gunshot wound, you 
are going to go to the closest trauma unit, whether the 
infection rates are high or low.
    Finally, just with regard to the infrastructure, the nurse 
shortage, physician shortage, how does that play into this, if 
it plays into this at all?
    Dr. Clancy. Right. The last thing I think anyone wants--and 
I am very worried about this--is to simply give more rewards to 
those hospitals that are already doing a good job and actually 
make it worse for those who actually do need more of a boost.
    There are a variety of technical strategies to deal with 
that, that is to say, rewarding based on achieving a certain 
level of performance, as well as rewarding improvement. I would 
be happy to follow up with you on that.
    [The information follows:]

                          Technical Strategies

    Dr. Clancy: Strategies to assist institutions with fewer resources 
might include: (1) ``pay for improvement,'' where institutions are 
provided with financial rewards for improvement from a base level--even 
if low--as opposed to getting rewarded only for reaching a threshold 
level of performance; (2) ``pay for participation,'' where institutions 
that may have trouble affording needed changes are given partial 
support as an incentive to participate; and (3) direct technical 
assistance on how to implement best practices. This could be achieved 
through AHRQ support for learning networks or partnerships, or targeted 
assistance from a quality improvement organization.

    Dr. Besser. I wanted to add to that. Recently, I have been 
asked by a number of people if there is universal access to 
care, why do we need public health. What is the value of public 
health if people can get to see their doctor? And I think that 
your question points specifically to an important role for 
public health.
    Public health is there to assure that that a public 
hospital is not allowed to have standards that are worse than 
anything else. Public health is there to be able to go in and 
look at what is driving those issues of increased rates of 
infections or worse quality. And the resources that you have 
provided will allow States to fulfill that function, and it is 
a critically important function so that we do not end up with a 
two-tiered system of healthcare.

                              TRANSPARENCY

    Dr. Wright. Congresswoman, I want to make just one point 
and you are right on target. We do believe in transparency in 
healthcare, and that healthcare consumers need to be provided 
as much information as possible to make an informed decision of 
where they get care. This is very applicable in a large city 
such as Washington, DC, where there are multiple choices.
    For rural America, there may only be one hospital in that 
area and the choice is much more limited, and that is the 
reason I agree with Dr. Besser that, for us to move forward, it 
is going to have to be a multi-pronged approach. There is no 
single bullet. All of these will contribute in a positive way, 
but there is no single answer to this problem.
    Ms. Lee. Well, thank you very much, Mr. Chairman. I still 
say litigation still has to be on the table.
    Mr. Obey. Ms. Roybal-Allard, you had a question?
    Ms. Roybal-Allard. Yes.
    Dr. Besser, my question has to do more with the ability to 
treat the infections after they occur. Some of the most deadly 
healthcare-associated infections are resistant to multi 
antibiotics. In fact, the Steering Committee has recommended 
research to prevent unnecessary antibiotic use.
    I would like to point out that 70 percent of antibiotics 
used in the United States are used by farmers, and many 
scientists believe that the farming practice of buying 
antibiotics and feeding them to healthy cows and pigs 
contributes to this antibiotic resistance.
    How does this overuse of antibiotics in agriculture 
contribute to drug-resistant infections in humans, and what 
should be done to address this overuse?
    Dr. Besser. Congresswoman, thank you for that question. The 
issue of antibiotic or antimicrobial resistance is a major 
public health problem, and it occurs for many different 
factors. It occurs because of overuse of antibiotics in people. 
We know that the use of antibiotics on the agricultural side 
drives resistance in strains that we see in animals, and that 
some of those strains then cause infections in humans.
    But this is a big problem. It is a big problem not only 
because we are seeing a rise in resistance, but we are not 
seeing the development of new drugs that can be used to treat 
these infections. In the healthcare setting there are a number 
of strains of bacteria where we are reaching the end of the 
line; we are absolutely running out of drugs that will be able 
to treat them.
    So I think you raise a very important issue. We need to 
look at the use of antibiotics in agriculture. And countries 
differ greatly in terms of their standards of what is allowed 
to be used on the farm, and we need to look at how antibiotics 
are used in this Country, both in the healthcare setting and in 
the outpatient setting, because they are all factors driving 
resistance.
    Ms. Roybal-Allard. And whose responsibility is that to 
actually do that kind of study and research?
    Dr. Besser. I think that there are pieces of this that fall 
to different parts of government. At CDC, we have a campaign 
called Get Smart: Know When Antibiotics Work, which I founded 
about eight years ago, and that is directed at reducing the 
overuse of antibiotics in the outpatient setting. Our Division 
of Healthcare Quality Promotion does a lot of work on 
appropriate antibiotic use in healthcare settings, and we have 
a group at CDC on the food side that does studies to look at 
the development of resistance in animals and the transmission 
of those strains to humans.
    A number of years ago there was a transfederal task force 
that was put together to address antimicrobial resistance that 
brought people in from across government to address these 
issues and develop an action plan. There was a lot of progress 
made on that action plan, but there is so much more work that 
needs to be done to address those issues.
    Ms. Roybal-Allard. Okay, but there is no directed effort to 
reduce this right now. Sort of what you are trying to do with 
hospitals.
    Dr. Besser. Well, there is work being done at FDA and USDA 
on the animal side, and I need to refer you to those groups to 
get details on those activities.
    Ms. Roybal-Allard. Thank you. I appreciate that.
    Mr. Obey. All right. Let me thank the panel. I appreciate 
your time.
    Next, we will ask our second panel to come forward: Dr. 
Peter Pronovost, Professor, Department of Anesthesiology and 
Critical Care Medicine and Director, Quality and Safety 
Research Group at Johns Hopkins; Ms. Rachel Stricof, Director 
of the Hospital-Acquired Infection Reporting Program, New York 
State Department of Health; and Dr. Robert Hyzy, Associate 
Professor of Internal Medicine, Division of Pulmonary & 
Critical Care Medicine, University of Michigan Health System.
    Thank you all for coming. Dr. Pronovost, why do you not 
begin?
                              ----------                              


PATHWAY TO HEALTH REFORM: IMPLEMENTING THE NATIONAL STRATEGY TO REDUCE 
                    HEALTHCARE-ASSOCIATED INFECTIONS


                               WITNESSES

PANEL 2: OUTSIDE EXPERTS
DR. PETER PRONOVOST, PROFESSOR, DEPARTMENT OF ANESTHESIOLOGY AND 
    CRITICAL CARE MEDICINE AND DIRECTOR, QUALITY AND SAFETY RESEARCH 
    GROUP, JOHNS HOPKINS UNIVERSITY SCHOOL OF MEDICINE
RACHEL STRICOF, DIRECTOR OF THE HOSPITAL-ACQUIRED INFECTION REPORTING 
    PROGRAM, NEW YORK STATE DEPARTMENT OF HEALTH
DR. ROBERT HYZY, ASSOCIATE PROFESSOR OF INTERNAL MEDICINE, DIVISION OF 
    PULMONARY & CRITICAL CARE MEDICINE, UNIVERSITY OF MICHIGAN HEALTH 
    SYSTEM

                   Dr. Pronovost's Opening Statement

    Dr. Pronovost. Thank you, Mr. Chairman. Given my family 
spent this summer visiting some of our national parks, I am 
indebted to your service.
    Congressman Tiahrt, Congresswoman Lee, and Congresswoman 
Roybal-Allard, the healthcare systems ought to provide you 
better care than you receive. It ought to provide many of us 
better care, and, as a provider, I apologize for the care that 
you received at our U.S. healthcare system.
    The outrage that you express, or the incredularity about 
addressing these problems are well deserved. What I would like 
to do is think through the science of how we might get a better 
solution, and I would like you to imagine that there is a new 
deadly disease in this Country, a disease that kills 100,000 
people a year, and some researchers at Johns Hopkins tinkered 
around and found a cure. They then worked with funding from the 
Agency for Healthcare Research and Quality and implemented that 
therapy in the entire State of Michigan and virtually 
eliminated the deaths from this disease, this once thought to 
be incurable disease.
    If that word spread nationally, that would save more lives 
than virtually any other therapy in the last quarter century. 
Indeed, this 100,000 lives makes it about the fourth leading 
cause of death in this Country.
    And if that therapy were a drug or device, it would be in 
every one of the hospitals in your States within months, 
probably. The market would respond. People would produce it, 
the cost would come down, lives would be saved, jobs would be 
created, and it would work.
    And, yet, this disease is real. The disease is deadly and 
it is costly. And I can assure you the inventor of this therapy 
did not get wealthy; the market did not respond. And I think 
because the therapy is not some drug or device, it is a safety 
program. It is a safety program that has three key components 
to it: a summarizing evidence into a simple checklist, a valid 
measurement system based on CDC definitions to know whether we 
are making progress, and tools and strategies to improve 
teamwork, frankly, to get doctors and nurses to work 
collaboratively towards a common goal.
    And to develop that, we approached it with the same 
scientific rigor that you would drug develop. In the first 
phase, Johns Hopkins was our learning lab and we sought how to 
summarize the evidence using much of what CDC put together on 
how to measure these. We then tried to, in phase two, apply it 
in a whole State; and you heard the results were almost 
breathtaking, somewhere around 2,000 lives saved a year, 
$200,000,000 saved, virtually eliminated two of the main types 
of this infection, cath-related infections and pneumonias, all 
with a $900,000 investment from the Federal Government.
    In the third phase, now, we are finally, several years 
later, working to scale this nationally. We are fortunately 
coordinated under HHS to have funding from ARC to put this in 
10 more States, working with the CDC to measure and summarize 
the evidence, and I believe what we have in this is truly a 
national model; because there are many woes that befall our 
healthcare system. It just, frankly, is not performing up to 
par.
    But the reality is we do not have the equivalent of a polio 
campaign. We have not licked one of the problems, and we need 
to learn how to do it, and I think this provides a model, 
because what we saw is that debate about whether you should 
take a regulatory or a free market approach is a false choice, 
I think. It is neither efficient nor effective for every 
hospital to summarize the evidence or to develop their own 
measures; they ought to be centralized under our experts in the 
Federal Government.
    Yet, at the same time, we need to have creativity and 
innovation of how to improve and implement that evidence. So 
there needs to be all the stakeholders involved in. Yes, we 
need the courage to set national goals. Yes, we need clarity 
about what the strategy is. And, yes, we need commitment to 
deliver that strategy. But it has to pull as many levers. 
Payment policy is part of the levers, science coordinated 
centrally is part of the levers, but so is coordinating 
hospitals with the States.
    What I think is most informative is to think for us why has 
not this lifesaving therapy--literally, that would be the 
innovation of the last quarter century spread. And I think 
there are two reasons why it has not spread that can inform us. 
One is because these deaths are invisible. They are opaque and 
the public does not know about them. You do not know about 
them, for the most part. After a GAO hearing, Congressman 
Waxman surveyed States, and 11 States monitored these 
infections right at the time. As you heard from Dr. Besser, it 
is many more now.
    But all the States said they are using the checklist, and 
yet none of those States where infections were anywhere near as 
close to as low as what Michigan was, and that is, I think, 
unacceptable. If these rates were transparent, people would 
respond; hospitals would compete, and we would see things down.
    The second lesson why I think the market did not respond or 
why we did not spread this is this is really hard work, and it 
is naive to think that handing docs a piece of paper will do 
it. There is science to this, science of behavior change, 
science of measurement; and we have been woefully inadequate in 
our investment of those sciences.
    Yes, Mr. Obey, there are about six times more people who 
die of these infections a year than do AIDS. And, yet, we spend 
$2,600,000,000 on AIDS research. The entire budget for AHRQ is 
$300,000,000. We spend 14-fold more on one disease than we do 
for all of these learning how to improve quality, and 
healthcare infections are but one of the many preventable 
causes. We do not know what the true estimates are, but if we 
looked at all preventable harm, it would undoubtedly be about 
the third leading cause of death in this Country, and the 
investment has not been commensurate, because, yes, we can get 
outraged and say why is this not happening, and that is needed 
and we need malpractice reform, we need payment reform.
    All of those have to be part of the levers. But they are 
all incomplete. We have to invest in the science of this. That 
is what we did in Michigan. But there is no pipeline to say, 
well, who is funding the next program to do catheter infections 
or to prevent blood clots, because there has not been that 
commensurate investment.
    So where I think we could go is I believe, and it is 
exciting to see, that we may use some funds to say this 
bloodstream program ought to be a national program, and not 
just save the 30,000 to 62,000 lives that die from these 
infections, but learn how to work together and build capacity 
to tackle the next ill that befalls us.
    I think we need much more clarity in regulation about what 
quality data is reported. If you look at what hospitals put on 
their websites, it is far more marketing than science. You can 
click now and hospitals will say we have no infections, without 
saying which ones or for how long. You have private agencies 
rating hospitals that you can look in any State and you would 
find a hospital who makes it on somebody's top 10 list; and 
none of the three big--U.S. News & World Report, which we 
happen to be on, J.D. Power's or Health Grades--none of the 
same hospitals are on their top 20 list. How could that be if 
they are actually measuring quality? The reason is because 
there is no standards.
    So I would encourage you to do what Franklin Delano 
Roosevelt did in 1934, when he created the Securities & 
Exchange Commission, is ensure that the data that is reported 
about healthcare quality is accurate in this Country.
    I think it would be unwise to regulate ``the use of this 
checklist,'' because just this list, in a major medical 
journal, a new technology came out that I will be speaking to 
Dr. Clancy and Dr. Besser about maybe adding to our checklist. 
And regulation, I think, is too slow to allow that innovation 
to occur.
    But we ought to have confidence that you can select a 
hospital based on what these rates of infections are, and I 
think we need to invest substantially more in the science of 
healthcare delivery. If you look at what we did with the human 
genome, with your graciousness, we now sequenced, through a 
public-private partnership, all 3.2 billion letters in the 
human genome with 99.9 percent accuracy. It took us 15 years, 
but we now are using that to discover new drugs and therapy.
    We have not had the same kind of investment in the delivery 
of healthcare, and we need the human genome project in 
healthcare to create an institute that coordinates these 
efforts, that advances the science and learns how to do it, and 
that trains clinicians, public health professionals, and 
researchers to learn how to do this.
    I thank you.
    Mr. Obey. Thank you.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    Ms. Stricof's Opening Statement

    Ms. Stricof. Hi. Chairman Obey, Ranking Member Mr. Tiahrt, 
and the rest of the Subcommittee members that are still here, 
my name is Rachel Stricof, and I am very thankful to be able to 
be here today. I am the Director of the Healthcare-Associated 
Infections Program for the New York State Department of Health.
    Within our program, we do have healthcare-associated 
infection reporting and also outbreak investigation and 
guideline development. But we are a unique State in that there 
are some dedicated resources for these efforts.
    Just to give you a little background, in July 2005, 
legislation was passed requiring hospitals in New York State to 
report select hospital-acquired infections to the Department of 
Health. Our legislation had some unique features that may be 
different than other States, and I think some of those were 
very important in being able to really evaluate the data that 
we are seeing and to be able to use it.
    First of all, it gave us flexibility to decide what kind of 
reporting system we wanted and whether to use existing data or 
the National Healthcare Safety Network or our own. It provided 
us time to implement the reporting system in such a way that we 
could train the hospitals and we could truly standardize the 
way they were interpreting definitions, the way they were 
conducting their surveillance so that we would not be 
penalizing hospitals that had better surveillance systems and 
therefore were reporting higher infection rates.
    It also gave us the authority and ability to conduct audits 
in the hospitals to determine whether the reporting that we 
were seeing was accurate and reliable or not. It gave us the 
ability to consult with technical advisors and to be able to 
modify the system before we started collecting data that would 
actually be hospital-identified data that would go to the 
public. It also provided for grants for infection prevention 
and control collaboratives as a result, not only as a result of 
our legislation, but related to healthcare-associated 
infections.
    So our first challenge was really to say--and I know this 
is still a struggle at the national level--how are we going to 
report these infections. And at the time we were doing this, we 
were the seventh State to have legislation; none at the time 
had enrolled in the NHSN or actually selected the NHSN for 
reporting purposes, so we were the first State to do that.
    And I have to mention that this was really a challenge 
because there was a lot of pressure on us as a department to do 
one of two things: it was either to use an already existing 
data set, basically the hospital administrative data for 
billing purposes, and say you can use that data to really 
determine hospitals' infections rates. There was a lot of 
pressure to do that because it was an existing data set, it 
would not cost additional money, it would not take additional 
resources from the hospitals.
    The trouble is, for decades, we have been evaluating that 
data source and have found it to be very unreliable when it 
came to the actual infection rates that they were reporting, 
because that system was not developed to determine what you 
acquire in the hospital versus what came in from the community.
    Then we had another challenge even within our own 
department, because some of you may know that New York likes to 
do things their own way and likes to be totally in control. So 
we looked at whether we should develop our own unique data 
system or whether we should go with the National Healthcare 
Safety Network.
    I will tell you we ended up taking nine months, almost as 
long as to have a baby, to make this decision. Well, about the 
same. There were many reasons that went into this, and I think 
it is important for you who are going to be decision-makers as 
to how we implement this to hear some of our reasons as to why 
we picked the NHSN.
    One, it was recognized and respected worldwide; two, 
hospitals said that they were using the CDC criteria for 
measuring infections, but as we all know, if all of a sudden 
that information is going to be made public, all those 
infections get open to a lot of interpretation unless those 
definitions are truly standardized and the interpretation of 
the definitions are standardized.
    Ten percent of our hospitals were already using the NHSN. 
We had another 10 percent of sister facilities that were 
waiting to use it and another 5 percent of facilities that were 
on a waiting list to use it. So we knew there was interest in 
the hospital community to use it as well.
    It did have, again, the standard definitions, surveillance 
methods, and risk adjustment to make the rates more comparable 
between hospitals if you were going to compare infection rates. 
There were considerations into how to risk adjust for patient 
care statistics.
    The things that made it, I think, the most critical to me, 
as an individual who works with the hospitals on a daily basis, 
being in the Health Department, is that the data provided by 
the NHSN is timely, it is immediately available not only to the 
hospital, but to the CDC and to the State health department the 
minute it is entered, and it is useful and actionable data for 
the hospital themselves. The minute they enter the data, they 
can compare themselves with national rates; it can be 
generating reports for specific hospital units to report back 
the outcome indicators related to their quality improvement 
efforts; and I also knew that if we developed our own system in 
New York, it would be to give us the data, but not necessarily 
to make it meaningful and useful to the hospitals themselves.
    The other thing that went into that was it became really 
clear to me, when I was asked by the Presbyterian Network to 
come and speak to them about what we were planning to do, and 
in that case, just to give you a little background, the 
Presbyterian Network has 23 hospitals in four States and two 
countries: New Jersey, New York, Connecticut, Texas, and in 
Europe. So we sat there and said, boy, if we have legislation 
in New York and we develop our own reporting system and our own 
definitions, then the hospitals in our neighboring States and 
in Texas, in the same network, would not be able to 
communicate. They may have different definitions, they may have 
different methods of surveillance. Everything would be 
different and they could not even compare themselves for 
quality improvement purposes.
    So that, to me, was an aha moment to say, really, we have 
to use a standardized system; we need that foundation to come 
from a national level so that every State is not creating their 
own silo and they cannot communicate with one another.
    And a little bit of icing on the cake was indeed that we 
did not have to pay for the cost of developing the system nor 
maintaining it, and that the hospitals themselves could use the 
system not just for the indicators that we mandated, but for a 
full array of infection indicators. They did not even have to 
share that data, necessarily, with us, but they could use it 
given their local infection control risks and problems that 
they identify within their own hospital, which I think is a key 
issue as well.
    This is not just one kind of infection, and all of our 
infections are not easy to measure, and do not come away from 
here thinking this is nothing, this has no impact on the 
hospitals. Everything they are doing takes major resources to 
monitor and monitor the infections well.
    Again, we were able to measure and to ensure that our 
hospitals were indeed finding the infections as well, because 
our legislation provided for an audit and validation process. 
So we have gone into every hospital at least once, we have been 
in 90 percent of our hospitals twice in the last two years. We 
have audited them to find out, one, how they are using the 
definitions. We have looked at cases that were reported to make 
sure that they were reporting accurately; and also individual 
records of patients who did not have infections. We were 
looking at those to say should they have been reported, were 
there infections that were not reported.
    But also we are looking at those records to say why are 
some patients getting infections and others not. We use this as 
an opportunity to look at prevention strategies that the 
hospitals are using, to look at risk factors in the patients, 
and to turn that information into usable information, provide 
feedback to the hospitals, and also to better enhance the 
National Healthcare Safety Network.
    Beyond the reporting, we have had a definite commitment to 
not just importing data, collecting data, and reporting it out, 
but to prevention projects in New York; and we were given, from 
the State funds, we were given dollars to provide for 
collaboratives in the State. Since 2007, we have initiated nine 
healthcare-associated infection prevention projects.
    Yes, we have looked at central line infections, but we have 
also looked at them in other than ICU settings, where, quite 
frankly, now there are just as many central lines being used on 
the overall floors and not just in ICUs.
    We have looked at our regional perinatal centers, which 
take care of our highest, highest risk infants, the newborns 
who are born premature, and they are looking at infection 
reduction strategies in those units. We are looking at a full 
array of multi-drug resistant organisms in our public 
hospitals, not just MRSA, not just VRE, but these totally 
resistant strains of acinetobacter and Klebsiella that are 
killing our patients; and in some of our hospitals they have 
had to cut off all antibiotic use in some ICUs in order to get 
the organisms back to being resistant to some of our 
antibiotics. They have had to say forget it, no antibiotic use 
now, because we have made all of our antibiotics obsolete.
    We have looked at ventilator-associated pneumonias. We have 
a major prevention project looking at Clostridium difficile 
infections. We had over 42 hospitals participate. It has now 
been expanded to nursing homes in the State. Do not think that 
everything is in hospitals as well. We are also looking at 
other measures in addition.
    So we have demonstrated remarkable reductions in an array 
of healthcare-associated infections; not just one bug, not just 
one type of infection, but it has come from the local community 
to say this is our pressing infection control issue, these are 
the major risks we are seeing in this region, please help 
support us with that particular type of infection.
    We think that flexibility is very important in order to 
involve people and to get the involvement not just from the top 
down, which is also critical for every one of these efforts, 
but from, I would say, the bottom, from the people who are 
actually delivering the care, to say this is what we need in 
our hospital, this is what we should target, and to make sure 
you involve and motivate all those individuals.
    I think it is critically important that there is national 
leadership on this effort, not to just direct exactly what you 
are going to look at, but more to give us that foundation; to 
give us the foundation of the NHSN to truly support it to be 
able to utilize that system better and more quickly. It does 
need enhancements in order to make it more flexible and in 
order to meet new and emerging infection threats that we have 
not projected right now.
    We, as States, I think, need to be involved in the 
decisions as to what is a major problem for our hospitals, and 
that foresight has to come from the local and State level, and 
not just a national imposition of this as being the priority 
for every hospital in the Country.
    Given that more than 70 percent of the infections are now 
occurring outside the hospital environment, many of you may be 
aware of the numerous hepatitis outbreaks that have been 
reported recently. They are not just occurring in hospitals or 
ambulatory surgery centers, they are occurring in basic 
doctors' offices, where invasive procedures are now being 
performed; and there is absolutely no oversight in those 
facilities. There are no regulations of those facilities. We 
are now mandating accreditation in New York State, but we still 
do not regulate those settings.
    We receive over 1,000 outbreak reports a year in New York 
State in our healthcare facilities. It is not just hospitals, 
it is our long-term care facilities and these other sites.
    We need to be able to monitor things not just with the 
NHSN, but there are other electronic solutions that can be 
there, that are available in a few States. New York happens to 
have an extensive electronic laboratory reporting system, but 
this needs to be across the Country and not just in New York 
State. Even our public health labs do not have electronic 
reporting; less than half of them do.
    Our IT systems need to work together. You have already 
heard from others on that. We have mandatory infection control 
education in New York. I will tell you, every four years, every 
provider has to go through this. I cannot tell you that they 
all listen, that they all hear and they all implement 
everything that they do. I think so much of their training has 
already been ingrained.
    And if you think there is a major component in the medical 
school and nursing school curriculum on infection prevention 
and control, you are mistaken. That has gone on the wayside. 
Why? Because we have more technology to teach, we have more 
this, more that. Infection control is not a priority and 
absolutely needs to be.
    When manufacturers are making these new stellar devices 
that can go to all parts of the body through a small hole, that 
is great. But they are not putting infection prevention and 
control in the design of that piece of equipment. Infection 
prevention and control has to be a priority in medical device 
design, in the way we manufacture medications, the way we 
dispense medications. To me, it is despicable that we have 
individuals using multi-dose vials on multiple patients, and 
the inadvertent reuse of a single needle or syringe can lead to 
infection in 50, 100 or more patients just by one error. We 
have to build these errors out of the system. We have to 
engineer them away.
    Anyway, we have only had a short time. I hope I have given 
you some idea of what a State can and should be doing. But 
there are not the resources to do this. We really hope that we 
can work together to achieve success in this area.
    Mr. Obey. Thank you.
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                      Dr. Hyzy's Opening Statement

    Mr. Obey. Dr. Hyzy.
    Dr. Hyzy. Good morning, Mr. Chairman. I am Dr. Bob Hyzy. I 
am a pulmonologist and critical care medicine doctor at the 
University of Michigan Health System in Ann Arbor. I also chair 
the steering committee of the Michigan Health and Hospital 
Association Keystone IC project. And along with the work of 
dozens of people, I implement a Keystone at my office and work 
with the State association to provide local expertise in 
conjunction with national leaders, such as Peter Pronovost, who 
I am proud to share the table with.
    You have already heard today a little about Keystone ICU. 
It was a multi-faceted project. The landmark accomplishment, of 
course, being the reduction in catheter-associated bloodstream 
infections. The specialized catheter we use in intensive care 
because the patients are too sick and cannot tolerate the 
Perfil catheters.
    You have heard how our median catheter rate has gone down 
to zero and you have heard about the notion of saving 1500 
lives and almost $200,000,000.
    At my own hospital, we have dropped our rate 74 percent. We 
are doing a lot more at my hospital. Sanjay Saint, a national 
leader, is working with ureter catheter infection reduction 
through State. We heard a little bit about medical schools. I 
am working with some of our people with regard to our third 
year medical student curriculum with respect to patient safety 
education program.
    But I want to speak a little bit about Keystone and maybe 
kick the tires a little bit to make some suggestions with 
regard to what works and why. There are a number of facets to 
Keystone. I think first and foremost is leadership at the local 
level, at the hospital. The hospital administration had to get 
involved, they had to be supportive of what transpired in the 
critical care unit. The quest remains, certainly, some data 
collection elements required some money for full-time 
equivalents for collection. So their support was critical.
    I think most importantly--and I am sort of a bottom-up guy 
working in the field--you had to engage everyone with the 
experience. I think quality is everyone's business; you cannot 
just rely on some external agency. Our infection control 
committee is going to assess us and tell us what to do. You 
have to own it. And I think that is the key piece here. You 
have to have data; you have to have good data. You have to 
measure; you manage what you measure. You have to have reliable 
information that you can share and compare and benchmark.
    The MHA, I think, was also instrumental in this. One of 
Peter's key insights for this program was to choose the State 
as a logical entity for a collaborative, and you might be a 
little bit surprised. We compete with one another for business. 
We have got our billboards on the freeway, but, yet, at the 
State level, this program worked. Competitors came together to 
try to improve quality, created a bandwagon effect, in essence, 
where no one wanted to be left behind and not participate.
    So MHA was very instrumental in supporting us with 
leadership, clinical expertise, information about how to change 
culture. Our meetings that we have every year, 300 to 400 
people in the room, critical opportunity to interact with one 
another; the conference calls that we have with 100 or more 
people on the phone throughout the State with Peter or our 
local leaders to help move care forward are all key elements.
    I also wanted to point out that the original AHRQ grant 
ended in 2005, four years ago, and I guess it is additional 
testimony to Dr. Pronovost that we are still doing it, we are 
still going on. And the key word there is culture. I think what 
the original Keystone ICU project did have happen is a 
permanent change in culture, at least in our critical care 
units, and this is what we have been able to keep going now 
four years later. So when we talk about the lives saved and the 
cost-avoidance, we are still doing it. The levels are still low 
and, like I say, the AHRQ grant ended four years ago. So it is 
a change in culture I think that is so critical to work from 
the bottom up.
    And it is true the hospitals across the Country are very 
interested in this program and want to participate. With AHA's 
Health and Research and Education Trust and the money from 
AHRQ, Peter has now embarked on a 10-State rollout being called 
On the CUSP: Stop BSI.
    So the idea here, and I think it is a great one, is to take 
that nidus, that beachhead, that Keystone ICU has created to 
try to roll that out, to get that same cultural change. Yes, it 
is a checklist. Yes, you have to do the right things. But 
without the bottom-up approach to culture, I do not think you 
can be successful over the long haul. If you teach the test, if 
you just accomplish a task, if you just have reporting, I do 
not think you impact medical culture on a permanent basis.
    And I know from my experience, meeting people across the 
Country, they come up to me and ask if they can be one of the 
States. I say, I am sorry, you have to talk to this guy; that 
is not up to me.
    So I think the idea, then, would be to take this beachhead, 
roll it out first with BSI, as we intend to do. And I think 
there is an opportunity across the board for other kinds of 
infections: surgical infections you have heard about, urinary 
catheter infections, and then maybe also beyond the infection 
HAI sphere.
    So what can Congress do to help? Well, one thing they can 
not do is impose additional reporting burdens on top of what we 
already have. You know, the AHA has got the hospital quality 
lines. There are 4,900, I guess, of 5,000 hospitals already 
volunteer reporting. I think reporting is important, but I 
think not only outcomes, but process reporting. It is not just 
a question of what your infection rate is, it is also a 
question of are you doing the right thing.
    I work in a tertiary care hospital, solid organ 
transplants, bone marrow transplants, a lot of immuno-
suppressed patients. My hospital is not necessarily the same at 
all as a community hospital 20 miles down the road, which has a 
six-bed ICU. We have over 100 ICU beds. So the process measures 
are equally important, to know that you are doing the right 
thing.
    So I see this as an opportunity, then, to not overburden 
with additional reporting, but to create an organic system that 
spreads throughout the land, and I think it is a huge 
opportunity. So what can Congress do? Well, we have already 
heard mention, I guess with the support with the Recovery 
Reinvestment Act, the money that is going forward to help this 
next step that Peter has in mind.
    I mean, obviously, I am a little bit biased. I was involved 
with this project. I am involved with trying to continue its 
success. He has asked me to help out to whatever extent I can 
with this rollout and, quite honestly, it is a pleasure. This 
is what he does; I do lots of things. This is more of a labor 
of love.
    This is not the main focus of my academic ivory tower 
career; this is an important thing. I am the medical director 
of an ICU. When Peter and Chris Goshel decided on this project 
five years ago, the second I heard about it I said we are in, 
count us in, this is important, we need to be part of this.
    And just to give you an example of the cultural change, my 
ICU nurses are getting a little tired of me trying to impact 
care and change everything. They first sort of rolled their 
eyes at me and said now what does he want me to do. I said, no, 
no, you have got to stay with me on this one, I think this is 
really good and going to be really important. And I think that 
certainly the facts have borne out the case.
    So I appreciate the efforts being made by Congress's 
support of research and quality and rolling things out. I think 
that is the way forward. Again, I am biased. I think Keystone 
worked; I think it continues to work. I think there is a core 
element of truth there, the operative word being culture. 
Checklists are important; documenting that you do the right 
thing, process measures are important; but without the change 
in culture that is organic and bottom-up, I think ultimately 
you do not accomplish anything over the long haul.
    So I thank you for the opportunity to speak with you today. 
I would be happy to answer any questions and would like my 
written document entered in the record. Thank you.
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    Mr. Obey. Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.

                 INFECTION DATA REPORTING TRANSPARENCY

    Dr. Hyzy, in your written testimony there seems to be a 
difference of opinion as to what systems hospitals should use 
in reporting infection data, whether the reporting should be 
mandatory or voluntary. You, I think, favor the voluntary.
    Am I correct? And if so, could you elaborate why you think 
there is a difference in this conflict and why voluntary is 
more important?
    Dr. Hyzy. Well, again, I think, personally, the 
transparency is important, and I think that hospitals who 
legitimately take quality to heart would be the first ones to 
want to step forward and report how they are doing. So I see 
that as an opportunity. I see that as something that hospitals 
are increasingly embracing.
    Arguably, the quality movement, if you date it back to the 
IOM report in the end of the 1990s, the emphasis in the 
hospital culture has not been in this direction for all that 
much time historically, 10 years or so. So I think hospitals 
are increasingly coming to recognize that stepping forward and 
being voluntary with these activities is required. It is maybe 
a bandwagon effect. I do not think they need to be dragged 
kicking and screaming to the alter of culture of quality any 
more; I think that they want to do this and they want to 
demonstrate the quality.
    So that is why I think voluntary reporting is key. I think 
standardizing it--at this point, hospitals get it from lots of 
angles, as I understand; everyone is making a demand for this 
or that, and I think there needs to be some standardized 
approach that everyone can agree on is a recognized mechanism.
    This particular issue is not my forte. There are a lot of 
agencies out there competing for the attention of the hospitals 
and reporting, and I think ultimately, though, it needs to be 
decided. I think voluntary is the way to go, but I think some 
kind of agreeable approach between these hospitals ultimately 
has to be decided upon.
    Mr. Tiahrt. Do you think the American Hospital Association, 
would all its members be willing to participate in a voluntary 
system?
    Dr. Hyzy. Well, I believe at this point they say 4,900 are. 
So, again, I certainly am here representing MHA and AHA. I can 
give you my opinion. I am not of the AHA so much, but at least 
as I understand it that is coming to fruition, where these 
hospitals are stepping forward on a voluntary basis.

                     HEALTHCARE PROVIDER LIABILITY

    Mr. Tiahrt. We heard earlier that several members of this 
Committee think that when an infection occurs or HAI, that a 
lawsuit should result. Have you assessed the risk in reporting 
these types of infections?
    Dr. Hyzy. Congressman, I can speak to that on two levels. 
One is my own experience, which is to say in the real world, 
physicians are human. We are doing the best we can, and when 
you do make a mistake, my own personal bias, and what I tear my 
house staff is to come forward and be transparent; say this is 
what we were doing, this is why, and this is what we attempted 
and this is what happened, and we are sorry, etcetera. So on 
that one level I think that transparency is important.
    On the other level, you know, the question ultimately 
becomes, with regard to what they are calling hacks, is any 
event of this nature always constitutes a deviation from the 
standard of care, which is what malpractice is. That is why I 
think process measures are very important, to be sure that you 
are demonstrating that you are doing the right thing.
    Again, I am not trying to take a copout. Everyone always 
claims their hospital is different. But I can assure you, in a 
population of bone marrow transplants, solid organ transplants, 
when I say in my document our infection rate is near zero, that 
is true. But occasionally our patients will get a vancomycin-
resistant enterococcus in their bloodstream because they are on 
five immunosuppressant drugs and that counts as a CABSI, 
because we have no other reason for it and there is a line. 
Yet, that may not be the source; it may be the immuno-
suppression.
    So it is important that you do the right thing, but on 
occasion things still go wrong. But a bona fide mistake, I 
believe in the hack notion. I mean, if you operate on the wrong 
side of the body, that is inexcusable. Are we here to now say 
that a bloodstream infection from a catheter will never, ever, 
ever happen again, and if it does it is malpractice? I think 
that is wrong. What you can do is do the right thing by the 
patient and play it smart and demonstrate that you are doing 
the right thing, and that, at the end of the day, is all you 
can hope for in medicine with regard to infections or any 
aspect of medicine.
    Mr. Tiahrt. Ms. Stricof, in New York, is there any waiver 
of liability through the reporting process, or is it just at-
risk when you do report these things?
    Ms. Stricof. Well, there are confidentiality provisions 
and----
    Mr. Tiahrt. It is nonspecific in reporting? The data are 
aggregate enough that it is nonspecific?
    Ms. Stricof. The way we report it out is such that no 
individual can be identified. Our data also are protected under 
the highest level of protection in New York State law, Public 
Health Law 206(1)(j). You do not need to know that, but what it 
says is that we cannot release this data on any individual; we 
can only put out aggregate data. So no one can even subpoena 
from the State Health Department with regard to an individual.
    That does not mean that aggregate data are not available, 
and it also does not mean that a patient, if a lawsuit is to 
ensue, cannot go to the hospital and get the information that 
they report. But we as a State health department are protected 
from providing that information; and that is another feature of 
our law that I think is very important.
    Mr. Tiahrt. I think that is good information. I think we 
ought to pursue it. I sure would like to know before I go to a 
hospital.
    Ms. Stricof. No, we give the infection rate data. We do not 
say whether patient X developed an infection, because that 
would be a breach of confidentiality for that individual.
    Mr. Tiahrt. I think there has to be some level of security 
at these institutions so that they are free to give us this 
information so that it is provided accurately and fairly.
    Dr. Pronovost. It would be wrong to assume that lawsuits 
are not occurring now. There is a class action suit in New 
Jersey for people who have been infected. They happen all the 
time. The consumer movement and the legal movement is 
responding to that. I would be cautious, though, of thinking 
that that is going to be an exceedingly effective lever to 
improve quality of care in this Country, because its main goal 
is to either justly compensate people who have been wronged, 
and they ought to be, and, as an incentive, to improve safety, 
and it does both of those exceedingly poorly; people are not 
compensated very well and there is very little feedback.
    As Rachel said, at the aggregate level, it is not patient 
identified, it is a rate. I think the far greater risk is 
misinformation or partial truth that the data are not accurate; 
they are using administrative data or billing data that is more 
likely to mislead than really inform the public.
    Mr. Tiahrt. I just think with 1.7 million occurrences, that 
1.7 million lawsuits would not be helpful.
    Thank you, Mr. Chairman.
    Mr. Obey. I am trying to remember the words to the old Tom 
Paxton song about 1 million lawyers, but I will not recite it 
here.
    Mr. Ryan.

       NURSE AND HEALTHCARE WORKER SHORTAGES AND OPERATING COSTS

    Mr. Ryan. Thank you, Mr. Chairman.
    I just have one question. A lot of the previous panel and 
now the second panel have talked a lot about kind of 
standardized procedures and kind of the technical engineering 
the problems away, and I just have one question, if you all 
could just kind of give your opinion on it.
    What effect does the shortage with nurses and healthcare 
workers have on this? And if there is any way to quantify what 
percentage of these situations are a result of the shortage and 
the nurses that are overworked and the overall shortage in 
healthcare, because it is not just in hospitals that this 
happening.
    Dr. Pronovost. I will begin with that. Congressman Ryan, I 
think that is a substantial issue, and let me give you a 
concrete example. In our program, we require a hospital to say 
nurses will assist the physicians putting in these catheters 
and ensure that they check it off. So the nurse is essentially 
the police person or the auditor to say, yes, you are doing it 
correctly.
    And we get, including at my own hospital, a well-resourced 
Johns Hopkins substantial push-back to say there is no way I 
could afford a nurse to do that, and they are absolutely right. 
We are making tradeoffs about allocating our resources all the 
time, and it plays out, with nursing shortages, that you now 
have agency nurses or temporary nurses who may not know the 
protocols being the ones caring for your patients who do not 
have that culture of teamwork to question me when I will 
inevitably forget something. They do not know the protocols and 
they are stretched doing a million other things.
    So I think it is a factor. And you heard many of us say 
about the cost savings, and there is no doubt there are cost 
savings for quality of care. But what is often neglected is 
there first needs to be an investment in resources to collect 
data, and that is an expense that has to be incurred. And the 
savings are down-streamed. Quite frankly, most of them get 
passed on to the insurer, they do not stay with the hospital, 
which is why many of us believe they ought to be the ones 
funding a lot of this work because they are the ones who 
ultimately save the most financially.
    But without some investment in hospital resources, I think 
it is a significant barrier to doing this work.
    Dr. Hyzy. I would only echo what Peter said. At the ground 
level, what it is, when you are short, you hire an agency, and 
the agency people are not involved with your program; they 
parachute in for a shift and you have to pay them more, so it 
increases your costs. But that is where the problem is. If you 
want a culture and you want to sustain it, you have to have 
people who are more invested than just come in for one shift.
    Ms. Stricof. I would agree, and it is not just--I think the 
way you phrased it was a shortage of nurses, and even if we 
were to overcome the nursing shortages, which I think we are 
almost on our way to doing, it really is what are the staffing 
resources and what are we willing to pay for healthcare 
delivery.
    I think one of the factors, I believe it was Ms. Lee; I may 
be mistaken--who said I had to be there 24 hours when my family 
member was in the hospital. What is the education and 
background of the individuals that are now providing care, and 
how extensive is that care? How much time are people able to 
spend? And, quite frankly, part of this is no one would go into 
an OR and not scrub and not gown and not do that. When you are 
on the floor and you are covering 15 or 30 patients on a night 
shift, and somebody calls for you, it is really hard to go from 
patient 1 to patient 2 and ideally put on a new gown and gloves 
and perform hand hygiene.
    If it were simple, if it were leisurely, if it was 
available, we do not go into healthcare and try and harm our 
patients. It becomes a matter of the system and the 
infrastructure that is there to support doing the right thing 
and knowledge.
    Mr. Ryan. Do you have like a percentage that you--I know 
part of this is for us to figure out exactly how this is all 
happening. Do you have any ideas, 1 in 10, 2 in 10 is affected 
by the nurses parachuting in and out? I will let you just 
answer those questions. I think this speaks to the point that 
this is not a single shot where this is the only issue. This is 
about nursing education; this is about community colleges; this 
is about Pell grants; this is about student loans. This is 
about all of those things and addressing this in a 
comprehensive way, not just--although what you are talking 
about is extremely important and vital to solving the problem, 
this is, I think, about all of us figuring out how we address 
this from all sides.
    So if you could just give me your opinion, even if you are 
lying to me, just give me----
    Ms. Stricof. I will honestly tell you that I do not know. 
And I do not think you can make that up because part of the 
problem with any pre-established number is it assumes that 
everything is stable and the same, that all the patients on the 
unit require the same level and intensity of care. It also 
means that every individual, just because they are an RN or 
even an LPN or even a patient care tech, has that same level of 
education, training, and capability and that they know their 
hospital system, that they are already ingrained so the 
educational level, their familiarity with where they are, and a 
lot of places do things very differently.
    I wish I could give you that, but I was actually thrown out 
of a lot of conversations at the State Health Department level 
because I wanted to seek adequate staffing levels and we could 
not come up with them.
    Dr. Pronovost. I would be guessing, but I would say it is a 
substantial portion. I would say it is certainly more than 10 
percent. It happens all the time at my own place, where someone 
gets pulled away so there is no one there to audit the 
checklist. And what I applaud you for is to recognize that this 
has to be a comprehensive approach that includes education, 
that includes payment reform, that includes measurement; and I 
think the plans outlined by Dr. Wright under the Secretary's 
plan for infections are in that correct direction.
    Right now, I have a medical student with me from Johns 
Hopkins who is doing work with us. We are one of three medical 
schools that requires a safety course in this Country right 
now. It is appalling, and yet we are getting graduate medical 
education dollars from CMS and we are putting out people who 
can look at pathology slides, but not necessarily know how to 
standardize and deliver safe care or work as part of a team, 
and I think that needs to change.

                         HEALTHCARE INVESTMENTS

    Mr. Obey. Let me ask just a couple questions before we wind 
this up.
    Dr. Pronovost, you, a number of times, have said that we 
needed to invest in science of health delivery. When you are 
talking about investing, what is it that you mean? I mean, what 
is it that we should be doing in the Congress in this regard?
    Dr. Pronovost. When I say that term, I look at the 
shortcomings in quality and safety, and they have been the 
subject of many of these hearings, and the approach is often I 
get angry and I tell people to try harder. It is better 
management. And our CEO has really called to task department 
chairs for not getting their infection rates down, and they 
come to me and say, Peter, I wish I knew how to do that; I do 
not have a clue. What is the science to guide me? And I think 
the mistake that we have made is thinking the delivery of 
healthcare is just trying harder, it is pure management.
    There is no doubt there is a management component, but 
there is a science of how do you do behavior change. What is 
the impact of payment policy? How do you measure these things 
accurately? And we spend a penny on the science of healthcare 
delivery that we do finding new genes and new drugs.
    So specific things I would say build capacity. I, at a 
place as well endowed as Johns Hopkins, am one of one or two 
people who could actually teach this stuff. We have probably 
200 people who can teach genetics, because there has not been 
funding programs to train people in the science of healthcare 
delivery.
    When you look to get funding to say, okay, let us develop a 
new Michigan program for urinary tract infections or blood 
clots, there are, frankly, little places you can go to get 
funding, compared to if I wanted to study a new gene, I can go 
to the NIH and there are enormous resources. And I am not 
saying we do not need those resources, we do, because I think 
we want to keep being the world's leader in science. But we 
have to shore up the other ones because there is just not a 
pipeline for doing these things.
    And then I think for when we do find good programs and the 
science that works, like we have in Michigan, what is the 
investment to spread them? Because, again, there is some 
management component and making these measures public is going 
to be a part, but States are struggling, and I think payment 
reform alone is likely going to be pretty anemic. At least the 
evidence to date shows us that it has some role, but it is not 
going to be a blockbuster. We need to also do wise investments 
to not just put these programs in, but what lenses are we 
taking to learn, so that there is some study of what we are 
doing with this now 10 or hopefully greater State project, so 
at the end of it we can sit at the table with HHS, CDC, AHRQ, 
the States, researchers and say, okay, what did we learn that 
is going to allow us to do the next program more efficiently 
and effectively?
    Right now, what we have is hospitals doing their own thing; 
they are all summarizing their evidence, they are all trying to 
develop their own measures, they are developing their own 
curriculum and it is, frankly, a waste of resources.
    I will give you a concrete example that we did. In this 
Country, in every hospital each year some patient gets an 
epidural catheter that is often used when women are having 
babies or for pain--you may have had one after your knee 
surgery--connected to their IV catheter, and that epidural 
medicine is potentially lethal, could kill you. And the 
solution is to tell nurses to be more careful or doctors to be 
more careful, to re-educate them. And we modeled it out. Given 
that--AHA experts, correct me--there are somewhere around 1.9 
million nurses work at the hospital, and say that that 
education takes an hour and it is $50 for an hour of a nurse's 
time. That is about $75,000,000 a year spent on doing something 
that has a zero probability of working. That is insane, and we 
do it all the time.
    What makes much more sense is to say, well, why do we not 
design that catheter so it cannot fit together? Yes, there are 
going to be some up-front costs, but we would lick the problem. 
Just like you cannot stick a diesel gas pump into your 
gasoline-powered car. But we have not invested in the science 
of how to do that, so we keep plodding away, every hospital 
inefficiently doing their own way.
    And I am not for taking away that innovation, but I think, 
just like with financial reform or education reform, it is not 
a choice of whether you take a regulatory or a market approach. 
What we ought to say is what makes wise, what is more efficient 
to standardize and centralize? And I think standardizing the 
science and the measurement, and then letting hospitals work on 
what are their main problems and innovate, and being held 
accountable for doing it. But we need that balance and we do 
not have it right now, I think because we do not even know what 
to measure. There just has not been an investment like we have 
in other areas of science.
    Mr. Obey. The two of you represent approaches that have 
been very different. If you take a look at New York and 
Michigan, you have, in New York, reporting on a mandatory 
basis, and you do not. Give me the pluses and minuses, the ups 
and downs of both of those approaches.
    Ms. Stricof. I do not think they have to be exclusive of 
one another. Maybe you see them as very different, but I think 
we have taken different approaches but integrated some of the 
same thing. We mandate the reporting of data. What I--and I do 
not want to speak for this, but by not auditing the data that 
has been reported by the Michigan hospitals, I do not really 
know that all the hospitals are measuring things in the same 
way. I do not know that the patients--all the facilities who 
say they have had zero ventilator-associated pneumonias--and I 
am picking that because I think there is nobody who can 
systematically diagnose that properly. So I am going to tell 
you that I do not know the impact of that because I do not even 
think every hospital is doing it the same way.
    So I think a combination of efforts can be very important 
and achieve the same thing. I think to put a lot of meaning 
into a sign on the door that says my hospital rate is such-and-
such, when the hospital is in total control of defining what 
that infection is and how to count it, then I say that is 
meaningless, because I will tell you, when I talk to the 
cardiac surgeons, none of their infections are infections, and 
when I talk to the colorectal surgeons, theirs are not 
infections; they were all patients who came in infected, that 
was there to begin with. You are not going to count that 
against me; we need an objective view.
    If I am going to give the public the data, I want to know. 
If that is what is mandated from me, then I am going to make 
sure that that report is as accurate and meaningful as 
possible. And while trying to do that I want it to be useful to 
the hospital as well.
    So I think what he has done has done miraculous work, and 
we have tried to copy and emulate what he has done. I am just 
saying that maybe I do not trust the data as much, but I think 
they have made a remarkable impact. So if it is not by this 
percent, it is by this percent. That does not matter as much to 
me.
    Dr. Hyzy. I think that ultimately a volunteer participation 
and culture is the better way to get accurate information. You 
know, I think it is actually wrong to state that we are not 
attempting to standardize our approach and what definitions of 
infection is, either it is a vap or a cath-associated, that is 
exactly not true. We actually do standardize our approaches 
and, in fact, rigorous data collection is one of the greatest 
strengths of what we have and it is not just every sort of 
hospital for itself to decide what is and is not an infection.
    I think by creating a culture and getting voluntary 
participation reporting, you are far more likely to get 
transparency and accuracy than when you engage in sort of, 
again, the top-down punitive manner. So it is actually the 
active engagement of our institutions that has given this legs, 
has made this sustainable, because people take it to heart.
    But do not think for a second, Mr. Chairman, that we do not 
have a fairly rigorous approach to data definitions and data 
collection, because without that we know we are nothing; and we 
have that. And that was actually one of the great successes 
that we have had is data. Without the data, we are nothing. And 
data definition. So that is I think what gives us credibility, 
is that we do have data and it is meaningful.
    Mr. Obey. Last question. What is the biggest single barrier 
at the hospital level to seeing this job done the way it ought 
to be done?
    Dr. Hyzy. I think it is often money in a certain way, 
because I sit in the ACCP, American College of Chest 
Physicians, a quality improvement committee, and we have looked 
at an array of performance measures that the National Quality 
Forum has advocated for, and they have got criteria about 
feasibility. Feasibility. Well, if you look at these 
performance measures, you are having an unfunded mandate on the 
hospital to collect data. Who is going to collect that data? 
Collecting data at this point requires people.
    Now, until we all have electronic medical records where you 
can create a little computer program and all this data is 
getting entered and you just push a button and spit out a 
performance measure, until that point, it is people, and people 
are salaries and benefits, and that is extremely expensive.
    That is why one of the key components with regard to 
Keystone success was support by the hospital administration 
leadership. And our nurses would say, when we go to our 
meetings, they will say because of Keystone's reputation, the 
ICU head nurse would say I need this or that because Keystone 
wants it. With the support of the administration, then they are 
willing to make a little extra effort to spend that money that 
is required. But it is a money issue. You cannot have data at 
this point. I wish we were at a point where we could just push 
a button, but we are not. It is people going bedside to bedside 
collecting data, and that is not cheap.
    Ms. Stricof. I just think with each--they have made a 
commitment to select infections, which I think is absolutely 
critical. They found ways to work and to try and reduce those 
selected infections. The question is what do we as a society or 
the public want to know about. I would say how many--you know, 
is it this infection or that infection or you know, everything 
is a matter of resources. It is where do I dedicate resources.
    Ideally, quite frankly, I was not 100 percent a proponent 
for mandatory healthcare-associated infection reporting. The 
fact was we passed legislation. I think we have also seen the 
effect of mandating these select indicators, because for our 
select indicators collaboratives evolve. The minute they knew 
and they put on there that we were going to monitor central 
line-associated bloodstream infections in ICUs, we had every 
hospital--well, not everyone in Greater New York got to sign on 
of 37, then added another 19 hospitals among their 90-some odd 
members who volunteered to participate because they knew that 
that particular infection indicator was going to be monitored 
by the State and was going to be made available to the public.
    I think that both can work hand in hand. I am not such a 
separatist. And I am not saying that--I am just not sure that 
there is one answer to everything.
    Dr. Pronovost. I think there are resources, but that it is 
solvable; that the hospitals should be provided methods to 
accurately monitor data. It is crazy that every hospital 
develops their database. I think things like NHSN are a model 
for how to do that. They ought to be provided what the evidence 
is in a digestible format.
    I completely agree that the public ought to be ensured that 
data is accurate. There ought to be auditing. I wish I had 
authority to audit data in Michigan. It was a voluntary thing, 
but the reality is reporting of healthcare quality in most 
hospitals is like Enron. That is the normal reporting rather 
than the exception in the world, and the public deserves 
better.
    I do believe there are resources because we have cut 
margins so much in healthcare that staff have time to do the 
work barely. But managing the work takes effort. So someone has 
to collect data; someone has got to train people and educate 
them. And we have ratcheted down the reimbursement so much that 
at my hospital we have cut all those positions, so the nurse is 
at the bedside, but there is no time for you to work on these 
projects. And it is kicking out resources, as I said, but it is 
staying in, likely, the insurer's pocket; and I think we have 
to think about reinvesting those so that hospitals do have the 
resources to collect data to participate in these programs and 
the society will see the cost savings that we all hope for.
    The investment in health IT is an enormous opportunity, but 
I hope it is linked to measuring quality and reducing costs. If 
it is divorced from that, I doubt you are going to get the 
returns that are anticipated in the budgets. You will have a 
very expensive medical record, but not improvements of quality 
if we do not build standards for these measures and cost 
reductions into it.
    Mr. Obey. I just wish this were as simple as guaranteeing 
that my Uncle Dan's patients, when he was a dentist, would have 
received quality treatment. The best way to guarantee that was 
to see to it that they saw him before 2:00 in the afternoon, 
before the Jack Daniel's got to him. [Laughter.]
    Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Dr. Pronovost mentioned that one of the reasons we have not 
had more progress on this is these 100,000 deaths a year are 
invisible, and I think the record should show that the 
visibility that you are giving this issue actually started 
behind closed doors in conference committee last year, and I 
want to thank you for your leadership, because it is an 
injustice that we want to correct. And I think making it 
visible is going to get it a long way down that road to 
stopping 1.7 million HAIs. So thank you for bringing this 
hearing together and thank you for your leadership on this 
issue.
    Mr. Obey. Thank you.
    And let me thank you all for coming. I appreciate it. Keep 
doing what you are doing.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                             Tuesday, May 12, 2009.

                        U.S. DEPARTMENT OF LABOR

                                WITNESS

HON. HILDA SOLIS, SECRETARY, U.S. DEPARTMENT OF LABOR

                       Chairman's Opening Remarks

    Mr. Obey. Well, good morning, everyone.
    Mr. Lewis. Good morning.
    Mr. Obey. Good morning. I am pleased to welcome our former 
colleague and new Secretary of Labor to her first appearance 
before this subcommittee. Madam Secretary, you face some pretty 
daunting challenges. The country is experiencing the longest 
and the deepest economic downturn since the Great Depression. 
More than 5.7 million jobs have been lost during the recession. 
And that understates the true gap between how many jobs there 
are today and how many are jobs needed simply to keep up with 
the growing population.
    The economy needs to add about 127 thousand jobs each 
month. That means the economy is nearly 8 million jobs below 
where it needs to be just to maintain pre-recession levels of 
employment for the American workforce. Nearly 14 million 
unemployed Americans are actively looking for work, with 
3,700,000 people out of work for more than 6 months. That is 27 
percent of the unemployed persons in April, the highest 
proportion of long-term joblessness on record.
    That indeed is something to worry about. And I think the 
crisis is magnified for the American workforce because their 
problems are not solely the result of the current economic 
downturn. The earnings disparity between the working class and 
the wealthiest workers has been growing for the past three 
decades. Between 1979 and 2000, real after-tax incomes grew by 
256 percent for the top 1 percent of households. That compares 
with 21 percent growth for households in the middle fifth, and 
11 percent growth for households in the bottom fifth of the 
income spectrum. One of the primary drivers behind that growing 
earnings disparity is the inability of workers to reap the 
economic benefits of their increased productivity. And that is 
at least, in part, a result of the decline of unionization.
    During our post-World War II economic expansion, the so-
called heyday of the American economy, union membership 
fluctuated between 30 and 35 percent of the workforce. By 2006, 
it had fallen to 12 percent, including only 7.4 percent in the 
private sector. And according to the Economic Policy Institute, 
the gap between pay and productivity growth is the result of 
economic and employment policies that shift bargaining power 
away from the vast majority and toward employers and the well 
off. I would hope that to confront this rising income 
disparity, this administration will refocus on programs and 
policies that help our Nation's workers and strengthen the 
middle class, the foundation of our Nation's economy.
    I am pleased to see a number of items in your request, 
including investments in green jobs, YouthBuild, and the Career 
Pathways Innovation Fund. I am pleased to see a request for 
increased funding for state unemployment insurance operations. 
I am also pleased to see the Department renew its focus on 
workplace health and safety. In 2007, 5,657 workers died as a 
result of job-related injuries, an average of more than 15 
deaths a day. And as many as 8 million to 12 million workers 
sustain job-related injuries or illnesses each year. 
Approximately 50 thousand workers die each year from illnesses 
in which workplace exposures were a contributing factor. Let me 
put it this way: While I am positively impressed by most of 
your budget, I am concerned about a couple of items.
    As you know, the Congress included $250 million in the 
Recovery Act to train workers for high growth jobs, especially 
in the health care sector, which continues to add jobs, one of 
the few sectors of the economy that does. The BLS reported last 
week that the health care industry added 17 thousand jobs in 
April, in line with its average monthly gain since January. In 
2008, the average gain was 30 thousand jobs per month. However, 
your fiscal 2010 budget does not appear to continue any 
targeted investment to address the critical shortage in the 
health care workforce, including a long-term need for 2.8 
million nurses and nearly 2 million allied health workers.
    It seems to me that if we are serious about significant 
health care reform that we have to build the capacity of the 
system, and we are falling short in this area. I am also, 
frankly, disappointed by the administration's proposal to 
freeze the number of participants in Title V Community Service 
Employment Programs for older Americans. There are a lot of 
good reasons why this program ought to be expanded. The most 
important reason, in my judgment, is that the unemployment rate 
for seniors age 65 and up is at its highest recorded level 
since the Federal Government began tracking this figure after 
World War II, according to a recent report by the Urban 
Institute.
    Let me simply conclude by saying that, on balance, I think 
you are presenting a strong budget, certainly one that I think 
represents a much greater effort to meet the needs of workers 
than the budget we received a year ago. But I still think that 
there are gaps that the administration needs to be aware of and 
consider, and I look forward to working with you as we deal 
with these issues in the coming weeks. Mr. Tiahrt.

                    Ranking Member's Opening Remarks

    Mr. Tiahrt. Thank you, Mr. Chairman. I know you have been 
quite anxious to get moving forward on the administration's 
budget request and begin the committee's work. First, I would 
like to welcome our new Labor Secretary, our former colleague, 
Hilda Solis. Congratulations. And I hope you enjoy your 
experience on the other side of the dais. Today more than ever, 
Americans eagerly await the news from the Department of Labor, 
hoping for good news about job growth. And our task in Congress 
is to ensure that you have the tools necessary to help our 
fellow citizens realize their dreams. It is in this vein that I 
am sure all my colleagues, as well as myself, examine the 
Department's budget request. Last Friday, the Department of 
Labor's Bureau of Labor Statistics announced that the Nation 
lost 539 thousand jobs in April, and that the unemployment 
rates rose to 8.9 percent from 8.5 percent in March. In 
addition, the Bureau reported that for the 12-month period 
ending April 30th, the Nation lost 5.24 million jobs, a 
decrease of 3.8 percent. We can only hope that this news could 
be the first indication that the pace of job loss may be 
slowing.
    Remarkably, in April of last year, the unemployment stood 
at only 5 percent. Today, Americans are facing the kind of 
economic conditions that would have seemed unfathomable a 
couple of years ago. In fact, since the recession started, the 
Nation lost 5.7 million jobs, the deficit soared to over $11 
trillion, and Congress faces daunting choices. In the last 100-
plus days alone, the deficit has increased with the 
administration's spending spree in the stimulus bill, the 
omnibus, and the supplemental. We are printing more money than 
we can keep up with. And I am concerned about the long-term 
effect on our economy, especially jobs.
    Let me start by saying I appreciate that on the 
discretionary side, you have requested only about a 3 percent 
increase over the fiscal year 2009 non-Recovery Act budget 
authority. Nevertheless, prior to considering this budget 
request, it seems only logical for Congress to ask what has 
become of the $4.8 billion in discretionary budget authority 
that Congress provided to the Department of Labor in the 
Recovery Act. How much of the funding has been expended? What 
has been accomplished so far? It has come to my attention that 
the Recovery Act reports, while featured prominently in the 
Department of Labor's Web site, have since their inception been 
decreasing rather than increasing in program level obligation 
and expenditure detail. Naturally, I have concerns about this 
fact. This seems to be the antithesis of transparency that the 
American public was promised.
    Furthermore, the Department of Labor seeks appropriations 
that will maintain funding for some programs at levels more 
similar to the augmented fiscal year 2009 levels. Congress 
needs to consider whether program levels can be justified at 
this time. One example is the YouthBuild program. The Budget in 
Brief states few studies of YouthBuild demonstrate promising 
results. And it designates significant increases in budget 
authority for both YouthBuild program level and its evaluation. 
Saying a few studies detected merit with respect to YouthBuild 
raises questions about the studies which have not found merit.
    In fact, our own government's evaluations have identified a 
number of shortfalls in this program. Seeing as how YouthBuild 
just received an infusion of $50 million in Recovery Act and in 
light of the Department's tepid, if not cryptic, 
acknowledgement of YouthBuild's lack of notable success, I am 
curious as to why the Department seems to want to gamble on 
YouthBuild's track record with a $45 million increase in 
program level funding. That is about a 64 percent increase over 
fiscal year 2009. This seems to be counterintuitive.
    I would think that there would be more than enough activity 
generated by the additional Recovery Act funds to support a 
thorough evaluation of this program. And that evaluation would 
be more properly conducted prior to the appropriations of 
significant increases to the budget. Another concern I have is 
the notion of green jobs. The President desires to 
simultaneously create new green jobs, stimulate the economy, 
and wean America off foreign oil. This is a social experiment 
that appeals far more to environmental interests than our own 
workforce community.
    A study conducted by King Juan Carlos University in Spain 
found that based on the European or Spanish model cited by 
President Obama as the model for green policies, they are 
likely to destroy upwards of nine conventional jobs for every 
four green jobs created. I find myself quite reluctant to 
support policies underlying the need for green jobs training. 
This poor timing of the scheme cannot be overstated, in my 
opinion. I am further concerned that these jobs will be just 
temporary, and too few in number, and will fail to justify the 
level of government intervention being directed at them. The 
net reduction in the budget request for the Office of Labor-
Management Standards also concerns me.
    The Office of Labor-Management Standards is the lone 
Federal agency with the job of protecting workers' interests in 
how their unions are managed. I am not pleased that the 
Department of Labor has already signaled it will not enforce 
compliance with current conflict of interest disclosures in 
addition to recommending that we slash funding for this 
extremely important division, all the while announcing its 
desire to increase worker protection. The fact that from 2001 
to 2008, the Labor Department secured more than 1,000 union 
fraud-related indictments and 929 convictions proves that the 
workers deserve protection from more than just employers in 
many cases.
    I oppose the reduction in funding for the OLMS, and intend 
to watch very, very closely to ensure that the mission of this 
important agency is not being diluted. With regard to the 
mission area increases, I would like to take note the of the 
Department's request for a large increase in the area of worker 
protection. The budget request includes 9.9 percent increase in 
the area of worker protection. I think we can argue that safe 
and fair workplaces should never be a luxury.
    Yet I am curious about the evidence on which the Department 
of Labor has based its request for such a significant increase, 
especially when the Office of Labor-Management Standards has 
been reduced. I look forward to hearing the background on this.
    Finally, on a personally directed note, I just want to 
mention my desire to work with the Department of Labor to 
rectify a situation that has impacted some of my constituents 
over the last year. In fiscal year 2007, the Department of 
Labor awarded by competitive bid a Garden City community 
college in Garden City, Kansas, a community-based job training 
grant. The grantee had intended to use the grant to train 
workers in the construction of two coal-fired power plants. 
Unfortunately, last year the governor of my State blocked the 
construction of these power plants, and created a delay which 
made it impossible for the grantee to comply with the terms of 
the grant.
    Recently, however, our current Democrat Governor of Kansas 
permitted the construction of the plants to move forward. While 
I am aware there may be some hurdles to overcome with respect 
to the grant at this time, I look forward to working with the 
Department to find a way for this important job training 
opportunity to get back on track. I want to thank the 
Department in advance for its cooperation on this project.
    Madam Secretary, at the end of the day, I am sure we all 
want the same thing, high quality, high paying jobs for all 
Americans. And it is your Department's responsibility to see 
that we are prepared to fill those jobs. Let us know how we can 
work together towards that common goal. Thank you, Mr. 
Chairman.
    Mr. Obey. Mr. Lewis.
    Mr. Lewis. Mr. Chairman, outside of welcoming the 
Secretary, I am anxious to hear her testimony and participate 
in the questions. Congratulations, Madam Secretary, and I look 
forward to working with you.
    Secretary Solis. Thank you.
    Mr. Obey. Madam Secretary, why don't you proceed.
    Secretary Solis. Thank you. Thank you, Mr. Chairman, and 
Ranking Member Tiahrt, and the subcommittee members that are 
here this morning. I especially want to say a thank you for 
your gracious welcome, Mr. Chairman and the ranking member. It 
is good to be able to see friends here in the House. This is 
the first time that I am actually testifying before a 
committee. So it is with a great deal of privilege and an honor 
for me. So with that, I will begin my statement.
    And as I would like to suggest, if I would like to provide 
a summary of my remarks and ask that my written testimony be 
entered in the record.
    Mr. Obey. Sure.

                     Secretary's Opening Statement

    Secretary Solis. The total request for the Department of 
Labor is $104.5 billion. And $15.9 billion is before the 
committee, and $13.3 billion of the request is for 
discretionary budget authority. Our budget for DOL requests 
funding programs for the Recovery Act. And we all know that 
families right now are struggling. We see this economic crisis 
every single day. Investing in our Nation's workforce and 
creating new jobs is a critical component of President Obama's 
effort to jump-start our economy. The Department of Labor is 
using its Recovery Act resources to help ease the burden of 
unemployment and to put people back to work. And I would like 
to highlight some of our recovery activities, which include the 
following: Providing new training and employment opportunities 
for unemployed adults, youth, and seniors; enhancing and 
expanding the Unemployment Compensation and Trade Adjustment 
Assistance Act; and also launching a new COBRA premium 
assistance outreach program; and fourth, initiating additional 
worker protections to ensure that economic activity spurred by 
the recovery occurs in workplaces which respect workers' 
rights, which provide safe and healthy environments.
    And then building on the recovery efforts, the Department's 
fiscal year 2010 budget features three overall priorities: 
First, worker protection. We are beginning to restore the 
capacity of our programs that protect workers' health, safety, 
pay, and benefits.
    Secondly, a green recovery. We are implementing new and 
innovative ways to promote economic recovery by working toward 
energy independence and increasing the competitiveness of our 
Nation's workforce.
    And third, accountability and transparency. We will ensure 
that our programs are carried out in a way that is accountable, 
transparent to our stakeholders, and to the public. And in all 
these efforts, I am committed to fostering diversity and to 
ensuring that our programs are accessible to previously 
underserved populations, including those in rural America. And 
I am particularly proud that fiscal year 2010 begins to restore 
programs to protect workers. These programs enforce laws 
governing minimum wage, overtime, family, and medical leave. 
They also protect workers' pensions and their health benefits, 
while ensuring workplaces are safe and healthy. They ensure 
equal opportunity in Federal contracting. And in fiscal year 
2010, the Department is requesting $1.7 billion for worker 
protection programs, an increase of 10 percent above fiscal 
year 2009. By adding a total of 878 full-time employees such as 
investigators, inspectors, and other program staff, the budget 
will return worker protection efforts to a level not seen since 
fiscal year 2001.
    Increasing our capacity so dramatically in a single year, 
as you know, is unprecedented. And it illustrates, again, the 
President's commitment to America's workers and the workforce. 
And I can assure you that we have developed an aggressive, 
comprehensive, hiring plan which will be implemented as soon as 
fiscal year 2010 funding is available. The plan prioritizes the 
hiring of multilingual inspectors and investigators to enhance 
our enforcement outreach. We will provide additional $35 
million to add 288 FTE for the Wage and Hour Division, which 
protects over 135 million workers in more than 7.3 million 
establishments.
    These additional resources will allow the Wage and Hour to 
improve compliance in low wage industries that employ 
vulnerable workers and youth, increases its focus on reducing 
repeat violations, and strategically conducts complaint 
investigations. The increase for OSHA will allow it to also add 
213 new staff such as enforcement personnel, standards writers, 
technical support, and bi-lingual staff to address the changing 
demographics in our workplace. In recognition of the work of 
our State partners, the budget request includes nearly a $14 
million increase in State program grants. The number of 
enforcement staff in the Employee Benefits Security 
Administration will also be increased by 75 FTE, allowing the 
agency to conduct an additional 600 investigations.
    To help promote equal opportunity in Federal contracting, 
we will expand the Office of Federal Contract Compliance 
Programs and the number of compliance officers and other field 
office staff by 213 personnel. By returning to fiscal year 2001 
levels, there will be a reduction in the Office of Labor-
Management and Standards. And I can assure you that the 
resources requested will allow the agency to accomplish its 
core mission, and that the reduction in FTE will occur through 
the transfer of staff to other protection programs which we 
have seen a drop in levels of enforcement over the past 8 
years.
    The increases in our enforcement programs will also require 
legal services and support from the Office of the Solicitor. To 
help meet these needs, the budget request includes an increase 
of $14,800,000 to support additional 82 FTE. And I am hopeful 
that this Congress will endorse our worker protection program 
request and allow the Department to revive these programs to 
meet our responsibility to all American workers. The DOL is 
also currently using Recovery Act funds for a range of other 
activities, to provide transitional benefits, job training, and 
placement assistance to unemployed workers.
    And I want to thank the Congress personally for providing 
these dollars. The fiscal year 2010 budget request supplements 
the Recovery Act funding through targeted investments in 
employment and training programs, and I am very pleased and 
excited about the use of innovative strategies and programs 
that are designed to increase the skills and competitiveness of 
all our workforce. Our $71 million increase in the Dislocated 
Worker National Reserve Account will help fund national 
emergency grants, allowing for targeted response to large scale 
worker dislocations. $135 million for a new Career Pathways 
Innovation Fund, which will provide fund grants to community 
colleges and other educational institutions to help individuals 
advance up the career ladders in growth sectors in our economy.
    The Career Pathways program involves a clear sequence of 
course work and credentials, each leading to a better job in a 
particular field, such as in health care, in law enforcement, 
and in clean energy. The budget requests an additional $50 
million for enhanced apprenticeships and competitive grants for 
green jobs. And we are pursuing those strategies to ensure that 
all of our training programs are equipped to provide training 
for the new green economy. And have included funds from the 
Bureau of Labor Statistics to produce valuable information on 
defining green jobs. Within our request for pilots and 
demonstrations, the budget includes a new investment of $50 
million for transitional jobs to help young and noncustodial 
parents gain employment experience and sustainable employment.
    The budget also includes $114 million to expand the 
capacity of the YouthBuild program to train low income and at 
risk youth. This is an increase of $44 million over the fiscal 
year 2009 level, and will allow us to build on the Recovery Act 
funding for the program. In addition, the request is also made 
for $255 million for the Veterans Employment and Training 
Services program known as VETS, which contains strategic 
investments to allow the agency to do the following, to reach 
out to homeless women veterans, to make employment workshops 
available to families of veterans and transitioning service 
members, and to restructure existing training grants to focus 
on green jobs.
    These innovative strategies supplement our core workforce 
security programs that are extremely sensitive to economic 
conditions. Thus, in the budget you will also see an increase 
of $860 million for the newly expanded Trade Adjustment 
Assistance program and $3.2 billion for State grants to fund 
the administration of unemployment insurance to support the 
increased demand on State systems. In addition to providing 
States with the funding they need to cover these increased 
workloads, our approach includes an increase of $10 million to 
expand reemployment and eligibility assessment to help 
claimants return to work as soon as possible. I believe that 
spending tax dollars wisely helps the Department achieve our 
mission on behalf of American workers and builds trust among 
our stakeholders.
    A number of other fiscal year 2010 budget proposals support 
these goals. For example, the budget request also includes a 
$15 million workforce data quality initiative, which will help 
us develop data to understand the effect of education and 
training on worker advancement. A $5 million increase for job 
training program evaluation to help us understand which job 
training approaches are more effective, and will help inform 
the direction of future programs. And a new $5 million program 
evaluation initiative to help the Department of Labor examine 
all programs, not just those in employment and training. I 
would like to just say a few words about the programs at the 
Department. First, the budget does provide $10 million for the 
Office of Disability Employment Policy.
    The increase will allow us to build on the lessons that we 
learned through the Work Incentive Grant demonstration 
programs. It will allow us to promote opportunities for 
individuals with disabilities, particularly our youth, in 
employment, in apprenticeship, pre-apprenticeship programs, and 
community service activities. Fiscal year 2010 budget also 
includes the program known as Add Us In!, a new grant program 
with the Agency's base budget to help minority youth with 
disabilities who are interested in entrepreneurship. And 
secondly, the budget request provides an increase of $5.3 
million, 12 FTE to the Bureau of International Labor Affairs, 
known as ILAB. With these funds, ILAB will be able to step up 
its monitoring and oversight of labor rights through close 
monitoring, reporting on labor conditions worldwide, 
particularly with our trading partners. Through these efforts 
we can help reduce instances of child labor, forced labor, 
human trafficking, and violations of worker rights. Fiscal year 
2010 budget will also maintain the child labor and worker 
rights technical assistance activities at the same level of 
2009.
    In conclusion, I am committed to ensuring that these new 
efforts, along with all the programs supported by the 
Department's fiscal year 2010 budget, will help to demonstrate 
that we are working to meet the needs of all American workers 
and their families, and I ask for your support and look forward 
to answering your questions. And thank you for having me here 
this morning. Mr. Chairman.
    Mr. Obey. Thank you.
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    Mr. Obey. Mr. Tiahrt.

                  ADVOCATE FOR A SAFE WORK ENVIRONMENT

    Mr. Tiahrt. Thank you, Mr. Chairman. There is an overall 
philosophical, I think, debate maybe or question that we should 
ask with the idea of enforcement. Our current philosophy is one 
of adversarial contact. When you think of how the public sector 
interacts with the private sector, it seems to be on an 
adversarial basis in each case. I had an instance that happened 
in Wichita that I think could give us some grounds for a good 
debate on how we view the philosophy of our interface between 
the public and private sectors. OSHA targeted three counties in 
Kansas in the home building industry. This is 3 years ago. They 
came into Sedgwick County, where Wichita is located, and 
literally shut down the home building business. All the agents 
that OSHA had in Kansas came to that area, and they started 
writing citations and fines. And I got a call and asked to come 
back and meet with the Wichita area builders. I met with them, 
and I think it was all summed up by a framing contractor who 
said I just recently got a $5,000 citation for having a 
Styrofoam cup on the front step of a house that I was framing. 
He said my normal profit for a framing job is about $2,500, so 
it does not pay for me to go to work while so many of the 
agents are in town. He was one of about 6,000 people in the 
home building industry that currently were not working.
    So I met with the regional, or I called the regional office 
of OSHA, and they agreed to meet, which is in Kansas City, they 
agreed to meet in Topeka. And together they came up with a plan 
that I thought was very interesting. They decided that they 
would announce when OSHA would be at a job site. They would 
meet with the superintendent or the contractor of that job 
site. They walked through the area. They made a list of 
violations or potential violations. They agreed to the list, 
without any fines and citations. And then OSHA gave them 6 
weeks to comply. While OSHA gave them that time, the Wichita 
area builders hired an expert out of the insurance industry 
that focuses on workplace safety. He came in and conducted 
training at each major job site. And they brought people in 
from the other sites. When OSHA returned, they went around the 
job sites, and they didn't find any violations. And the common 
goal was achieved, a safe workplace.
    When I talked with the contractors, you know, many of them 
hire friends and family, and they do not want anybody to get 
hurt on their job. The last thing they want to do is report at 
a family reunion why somebody lost a finger or broke a leg, 
because quite often it is their own family that is involved. So 
I thought this is an interesting philosophy change, where OSHA 
actually worked with the private sector to achieve a common 
goal of a safe work environment. They were an advocate for a 
safe work environment instead of an adversary to the private 
sector. And that worked for a couple of years.
    And then when the OSHA office here in Washington, D.C. 
found out what was going on, they said, no, you've got to go 
back to the old method of enforcing regulations, which is this 
adversary method. Are you open to discussing how we could 
change our philosophy in the regulatory scheme to advocate for 
a safe work environment instead of being an adversary to those 
people who are keeping and creating jobs here in America?

                  INCREASE IN FUNDING FOR ENFORCEMENT

    Secretary Solis. Thank you, Mr. Tiahrt. I appreciate your 
concern and sharing that. That is the first time I have heard 
of a citation for a Styrofoam cup. I will certainly take that 
information back to my Department. But I do want to say that 
one of the reasons that you are seeing an increase in funding 
for enforcement is because, quite frankly, over the last eight 
years OSHA and Wage and Hour have not received sufficient 
funding. In fact, OLMS has received more substantial funding 
over the course of the last 5 years. So there was not a 
balance. And one of the things I know that the Congress is 
particularly concerned about is the fact that there have been 
very serious, fatal injuries on the job, whether it is in 
construction, the mining industry, or in other service-related 
areas. And my concern is not to drive down industry or 
business, because what we are talking about here is really 
making it more feasible for people to go to work and to be able 
to come home.
    That is my goal. One of the things that I intend on 
providing through our offices in Wage and Hour and in OSHA is 
enough technical assistance, not just compliance information, 
but to actually provide on-the-job and on-the-site assistance 
to those businesses that are open and may not even be aware of 
some of the laws and safety concerns and regulations that they 
must abide by. I do not expect that we are going to go out of 
our way to just create a problem for businesses. Right now we 
know that we need to have jobs. And one of the things is, my 
highest priority is to make sure that we find people 
employment. Secondly, the goal of the DOL, Department of Labor, 
is to provide safety and protection for them to be able to come 
home. I have traveled to different parts of the country where I 
have heard stories where people have lost family members, have 
lost their lives because there was perhaps an employer not just 
once or twice, but repeatedly did not abide by citations or 
particular penalties. That, to me, is egregious and should not 
be--that should not be tolerated. I think that we do not have 
enough resources in our budget to go after everybody so I have 
asked my staff to come up with a plan to work more 
strategically. We do not have time to waste taxpayer dollars. 
But I will not tolerate when I see someone abusing 
periodically, time and time again, their workers in a way that 
puts them in harm and then causes----
    Mr. Tiahrt. I think we would agree--my time is almost out, 
excuse me, Madam Secretary--I think we would agree that when 
you have somebody who egregiously violates, they should be 
reprimanded at the most severe levels. But I would hope that in 
the future we would work with companies that are trying to 
comply, educate them in the regulatory scheme.
    Secretary Solis. And I would be happy to work with you on 
coming up with a program that looks at that.
    Mr. Obey. Mr. Jackson.

                   REDUCING UNEMPLOYMENT DISPARITIES

    Mr. Jackson. Thank you, Mr. Chairman. And let me also 
congratulate Secretary Solis for an extraordinary job that she 
is attempting to do at the Department of Labor under 
extraordinary economic circumstances. I have two questions. One 
I think is thoughtful because my staff helped prepare it, the 
other of which I am trying to formulate. But let me start with 
the thoughtful question. Earlier this month, the Bureau of 
Labor Statistics reported the national unemployment rate at 8.9 
percent. The unemployment rates for white Americans stood at 
8.0 percent, 11.3 percent for Hispanics, and a high of 15 
percent for African Americans. Currently, African American 
workers are experiencing close to double the rate of 
unemployment as white Americans in the United States. In my 14 
years representing the second district of Illinois, I have 
worked to increase access to high quality education, to reduce 
health disparities, and increase job opportunities for minority 
communities, for which my district is mostly comprised.
    What is the Department of Labor and this administration 
doing to reduce unemployment disparities? Can you point to 
specific programs and job training programs that will work to 
reverse these trends given the density of some urban 
communities and the nature of unemployment? And then I have a 
second question.
    Secretary Solis. Thank you, Congressman Jackson. And I 
appreciate that question, and, of course, your leadership and 
also Congresswoman Barbara Lee's continued leadership on this 
effort. I too have a great, great concern that we are not 
seeing enough minority representation in programs that are 
currently being administered by the Department of Labor. And I 
have taken a strong approach to see how we can integrate this 
goal in any type of guidance that is being provided, especially 
for funding that is going to be made available within the next 
month. And I am talking not just about the summer youth 
employment programs, but I am talking also about the 
opportunities through green jobs and through the health care 
industry. We have several programs that help to provide 
incentives.
    One of the things that I am trying to cast here is that we 
provide stakeholders who have traditionally not been a part of 
the makeup of these organizations and infrastructure that we do 
our best through our reasonable offices to contact these local 
CBOs, these various faith-based groups, various nontraditional 
groups that have not been a part of the discussion. And that 
has been a very clear signal that I have given to my staff, as 
well as any correspondence or speeches that I am making out in 
public. So I have the highest concern that you do. It is 
unacceptable to have a 15 percent unemployment rate for African 
Americans and over 11 percent for Hispanics. And we 
traditionally see that cohort continually being affected when 
we are in recessionary times, and we have to turn that around. 
So I know that we have much to do and we have to prove that 
these programs can work. So I will be very diligent in how we 
administer the money, that it is accountable, and it is also 
transparent.

                         JOBS IN MANUFACTURING

    Mr. Jackson. We seem to be the last hired and the first 
fired in difficult economic times. And so any attention that 
your administration and your Department could give to these 
troubling statistics would be helpful. Let me try and formulate 
another question. I spoke this weekend at the college 
commencement of Lincoln College in downstate Illinois. 
Approximately 194 graduates at Lincoln College this past 
weekend. 2 million college graduates will graduate during this 
graduation season from colleges and universities across the 
country. And I found this year's commencement address to be 
particularly difficult to deliver in part because at least for 
me, the economic outlook for those students entering the 
workplace is profoundly troubled by the highly competitive 
nature, the fact that so many Americans with college degrees 
have been laid off, have been displaced, have suffered during 
the economy. That as these students leave college at one level 
or another optimistic about their hopes and about their 
chances, they are also entering probably the most competitive 
job market in a generation. That does not include the millions 
of high school students who are graduating, many of whom will 
not attend college, but also enter the workforce looking for 
jobs.
    My question turns, I think, on manufacturing. It was 
brought to my attention this morning that there is a Ford 
plant--and as you well know, Ford did not take advantage of any 
of the Federal bailout moneys for the automobile industry--
there is a Ford plant in Brazil that makes four different 
models of Ford. Not a single model touched by a human hand from 
the beginning of the car to the completion of the car. Not a 
single model. The plant is so modern that they have to change 
nothing to produce different cars on the exact same assembly 
line. That is, they do not have to stop making the Ford Taurus 
to produce a Ford F-150. An F-150 can be there, a Taurus can be 
there, another car can be there, and four different cars on the 
exact same assembly line. I realize that my time has expired.
    Can you quickly tell us and share with us the 
administration's thoughts on what we are going to do to try and 
save U.S. manufacturing jobs here in the United States? Thank 
you, Mr. Chairman.
    Secretary Solis. Thank you. I will try to be brief. But I 
think one of the urgent matters right now is trying to provide 
assistance to dislocated workers. And we have been doing that 
through the National Emergency Grant Program as well as through 
the dislocated worker program. That program, as you know, 
provides assistance to people who are unemployed, but it also 
provides a safety net. It also allows you to get training. It 
also allows you, in some cases, to get health care. I have just 
returned yesterday from Michigan, visiting a battery plant that 
is going to be producing batteries for the new latest 
electrical vehicles. Most of the equipment that I saw that was 
needed there was imported.
    That is another area that we have to focus in on, on 
providing a workforce that can create and manufacture the 
supplies, and also the educational wherewithal so that we can 
produce these cars that many in the public want. We are making 
a tremendous investment here. We know that things are not 
looking good. We know that it is not just about statistics, it 
is about real people that are not able to make home payments, 
cannot send their kids to college, and do not have any luxury 
of finding a good job at this time. We are promoting that by 
providing incentives. I know we are working in collaboration 
with the Department of Energy right now as they give out monies 
for research and development in these high-tech, renewable 
energy areas.
    We then couple our programs for training so that we can get 
the up-skills available for those people that are off the 
assembly line from the auto industry, or perhaps they have been 
working as a banker and they need to look at an entirely 
different career. This is going to take a lot of courage on the 
part of the public as well as this administration to try to 
move folks in a direction where there will be job growth. We 
did not talk a whole lot about health care, but that is one 
additional area of growth, as well as IT, and obviously the 
renewable energy industry.
    Mr. Jackson. Thank you, Madam Secretary.
    Mr. Obey. Mr. Lewis.

                          JOB TRAINING DOLLARS

    Mr. Lewis. Thank you very much, Mr. Chairman. Madam 
Secretary, Southern California has been particularly severely 
hit with unemployment. You and I have experienced that in our 
home districts. The region of the Inland Empire suffered as 
greatly as any section of the country relative to housing 
foreclosures in no small part because of crazy housing policies 
developed by Democrats and Republicans over a 30-year period 
that really kind of forced the marketplace with our goal to 
have everybody have a chance to buy a home. But as the 
marketplace changed, we found people going into homes they 
never should have been in in the first place, they could not 
afford them. And in the meantime, the vacancy is there. And I 
understand that there are still hundreds of billions 
potentially of dollars of homes that could be in a very similar 
circumstance.
    So that problem and its impact on unemployment is going to 
extend itself over a considerable time. As we go about trying 
to train and retrain those people, I certainly do not have any 
bias myself about green job advocacy. I think you may know I 
sponsored the Air Quality Management Act in Southern California 
years ago. In the meantime, though, my local Workforce 
Investment Boards are saying in our region, looking at the 
unemployment problem, being forced to push money or training in 
the direction of green jobs could very well have us spending 
dollars in a direction where there really is not the problem 
and will not solve the relatively short term circumstance for 
these communities.
    So the question they are asking is, is it feasible to have 
more flexibility and giving the local communities a stronger 
voice relative to the way those job training dollars will be 
applied?
    Secretary Solis. Thank you very much, Congressman Lewis. 
That is a very good question. I do believe that there is enough 
flexibility, at least in the guidance that we are going to be 
providing, to allow for that growth in the green collar 
industry, but also to provide assistance for those folks that 
maybe need an additional skill, maybe an IBEW worker, an 
electrician or a plumber wants to now better understand and get 
into wind power and help develop that industry, or perhaps just 
upgrade their skills, maybe entering into an apprenticeship 
program or a community college program.
    I believe the regions do have the ability to control where 
monies can be sent, and certainly would want to hear what their 
greatest concerns are. I do not think we necessarily need to do 
that from Washington, D.C. I think that we have to attack this 
program on a regional level and want to see discussions about 
that. As we are seeing the automobile industry being affected, 
you are talking about regions across the country where workers 
are being dislocated. California, it is the hotel-restaurant 
industry, it is the service sector, and we ought to be looking 
at how we can be flexible to make that arrangement. So I am 
willing to work with you on that, and I believe our 
administration, our President is very open to that.

              IMPACT OF RECOVERY ACT MONEY ON PROGRAMMING

    Mr. Lewis. Thank you very much for that response. Madam 
Secretary, the stimulus package has caused many an agency 
suddenly to find themselves awash in money, with a good deal of 
flexibility given to the directors, and yet that leads to a 
tendency to want to expand programming. And clearly you are 
expanding programming. If the levels that the stimulus raised 
us to in many a sector are not reflected with a similar level 
of growth from the 2009 to the 2010 years and the 11th year and 
the 12th year, will that cause serious impact upon your agency? 
Have your people helped you to begin to evaluate that question? 
And I would appreciate first your responding, but then beyond 
that, responding further for the record.
    Secretary Solis. I think, Congressman Lewis, you bring up a 
very good point, because we realize that the Recovery Act money 
is somewhat of a one-time opportunity for us. And we have not 
seen this unprecedented level of support. But by way of saying 
that, it is very important that the programs that we have 
funded through the recovery program where we were able to make 
some initial funding and growth and expansion in dislocated 
worker programs and also the other programs that provide 
assistance in the UI program because of the tremendous 
unemployment, the financial crisis, there was a need to provide 
that safety net. However, in upcoming fiscal budget rounds, I 
am certain that we are going to see some tightening of the 
belt. And I am sure that we will be looking at programs that 
have not worked efficiently, and where we can find and cut down 
on any type of fraud or misuse of funds. I believe in 
competitive grant making as well. I do not believe that anyone 
should have an opportunity to sole source a contract out. I 
think the public spoke very clearly about that to many of us.
    Mr. Lewis. Secretary Solis, I have other hearings going on, 
so I am going to have to run in a while, but in the meantime, 
congratulations on your new assignment. And I look forward to 
working with you.
    Secretary Solis. Thank you very much.
    Mr. Obey. Mr. Moran.

                     PUBLIC TRANSIT BENEFIT AT DOL

    Mr. Moran. Thank you very much, Mr. Chairman. I will try to 
continue to get here early. I appreciate the incentive. Madam 
Secretary, a few years ago, I put a provision into the bill to 
encourage people to use public transit in Federal agencies. It 
was a public transit benefit of $100 a month. Every Federal 
agency embraced it but one. And that particular Secretary said 
that all of her employees were eligible unless they joined a 
union. But if they were a member of a Federal employee union, 
they would not be eligible to receive any public transit 
benefit. Of course, that being the Secretary of Labor, I found 
it somewhat ironic. Now, I understand that you fixed that. That 
is the question. I trust that everyone is eligible whether or 
not they join a Federal employees union?
    Secretary Solis. Yes, Congressman Moran, thank you for your 
question. And yes, we have made that available to our 
employees.

                          WIA REAUTHORIZATION

    Mr. Moran. Thank you. The second question, I hate to be 
parochial, but you know, we all have to deal with our own 
economic situations. In the BRAC closure, the Base Realignment 
Closure of 2005, Arlington County lost 17,000 jobs that were to 
be moved out. That is the equivalent to four major military 
bases. And there is a program in the Department of Labor that 
is specifically designed to help with relocation. There are 
emergency grants that are made available. And but that money 
was not made available until December of 2008. In other words, 
just a few months ago. And now I understand that you have 
decided to terminate the program this July.
    So in other words, there would only be a period of six or 
seven months where the money might be available, but all of the 
people have to move out by 2011. So this is the time, the 
fiscal year 2010 budget, when the money would be most needed. 
So I wanted to ask you about that. Can we get an extension or--
it just seems as though the timing is not particularly 
consistent with the demand that all of these people be moved 
out of the community.
    Secretary Solis. I realize that many of our States are 
going through this readjustment, and to be honest, this is 
something that is inherent in the legislation. It is part of 
the formula that is actually made available by Members of the 
House. They set that schedule for the formula for the 
allocation of these funds that you are talking about. And we 
are finding that while your State may have been hit hard 
earlier, before the recession, obviously 2 or 3 years before, 
now that we see other States coming on board with very high 
unemployment rates, that money is not as easily available at 
the same amount that it was to prior years. I do believe that 
we are making every effort, though.
    We do have a contingency fund of about $200 million for 
dislocated workers. And we also have revenue, I hope that will 
be approved by this committee, to the tune of at least $71 
million that can also be available to help with the dislocated 
worker national reserve money. So there will be, I think, our 
ability to make these kinds of adjustments. And I certainly 
will want to work with you and your staff on this. But know 
that I too am well aware that we have a problem, and I hope 
that this might be something that could be taken up when we 
reauthorize the WIA reauthorization.
    Mr. Moran. Thank you, Madam Secretary. So in other words, 
you are saying we found the source of the problem, and it is us 
rather than you. I cannot say I am surprised at that. Thank you 
very much. I know so much of the Department is mandatory in 
origin given the authorizations. Very little of it is actually 
discretionary. I hope we can fix that imbalance a little bit, 
give you a little more discretion to meet the specific and the 
most intense needs around the country. But again, it is very 
nice to have you as Secretary, and thank you, Mr. Chairman.
    Mr. Obey. Mr. Cole.

                         H-1B AND L VISA FRAUD

    Mr. Cole. Thank you very much, Mr. Chairman, and let me add 
my congratulations. It is always a great thing when somebody 
from our body goes to the other side and can explain this to 
one another. You mentioned in your written testimony that the 
administration was going to be seeking changes in the H-1B and 
L visa fraud prevention fees, statutory changes. And I have two 
questions along those lines. One, could you acquaint us to what 
the nature of the changes are going to be? And two, as somebody 
that frankly favors raising the limits on H-1B and H-2B visas 
in terms of the numbers of people that we allow to come into 
the country, are you comfortable you are going to have what you 
need in terms of enforcement and fraud if Congress does indeed 
at some point raise those numbers?
    Secretary Solis. I would like to answer the latter part of 
the question first. We are going to, I think, be diligent in 
seeking a better assessment of how the program is operated 
because we know there have been abuses. And I think that is the 
number one. We want to make sure that we get to those bad 
apples. And that sends a signal, right there. I think also we 
want to do an evaluation to make sure that we are actually 
assessing the area most impacted, if we are, in fact, doing our 
best to inform American workers who might be eligible for these 
jobs. That is one of our priorities that the President and I 
both have. So we want to do what we can to help make sure that 
there is ample information, that those surveys are reflective 
of the working pool that is available, and then begin, if there 
is more need, to have further discussion and have a bigger 
debate with all the stakeholders.
    Mr. Cole. Okay. And can you tell us what the nature of the 
changes are going to be in the easing of the statutory limits 
on the using of the fee at this point?
    Secretary Solis. I think it is somewhat premature at this 
time, but I will certainly get back to you on that.

              SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM

    Mr. Cole. Thank you. I appreciate that. Secondly, I am very 
pleased to see your efforts to expand expenditures in 
YouthBuild. I am a little concerned that we are not seeing a 
comparable increase in Senior Community Service Employment 
Program. That is a great program. And I think you are going to 
see, frankly, sadly, more need for that program in the current 
economic teams. We have got a lot of people who are being 
forced out of jobs early in their 50s and 60s, and they are 
going to need some sort of bridge to retirement, or people 
again that just simply need the supplemental income, they are 
post-65. Are you comfortable we have got what we need there?
    Secretary Solis. Well, I know that the recovery program did 
give us a bump up, and that was helpful. But looking into this 
next program year, fiscal year, it is going to be a challenge. 
And I know the chairman and I have spoken about this. I have a 
strong commitment and support to our senior citizens and our 
elder population. When you think about it, in a short time we 
are seeing so many people that have been displaced. They are 
55, 60 years old even, and we are seeing a larger number of 
people who really do need this kind of program. I have seen it 
work very effectively in my own State in California. In East 
Los Angeles, there is a health program actually that helps to 
retrain seniors.
    I met a woman that was 77 years old who was a bookkeeper. 
Spoke Spanish. But it was tremendous that she was able to have 
that as her fulfillment and extra earnings that she could have. 
So I do want to enter into that discussion with the committee 
members. And I am very, very pleased to hear that from you, 
Congressman.
    Mr. Obey. Would the gentleman yield?
    Mr. Cole. I certainly will, Mr. Chairman.
    Mr. Obey. Let me simply say to the gentleman that I think 
he can count on that program being one of the programs that 
receive a bump up when we get to markup.

                  PENSION BENEFIT GUARANTY CORPORATION

    Mr. Cole. I appreciate that, Mr. Chairman. I am glad to 
hear that. Because it is a great program. Let me ask you 
another area where I am a little worried that we may have 
undershot rather than overshot is the Pension Benefit Guaranty 
Corporation. Again, I think we are going to see a lot of 
pressure. We are already seeing a lot of pressure on that. And 
there is nothing worse than being at retirement age and all of 
a sudden losing--you do not have the time horizon to recover.
    So are you comfortable you have the tools you need to make 
sure that when companies have guaranteed workers pensions that 
they have got the wherewithal to back up the commitments they 
have made and you are sort of on top of it and able to monitor 
it?
    Secretary Solis. I think that this is one area where the 
funding for this particular program has been somewhat stable. 
We have not seen the dramatic decreases, as we did in 
enforcement in other agencies in the Department. I do think 
this will be an area that will be of continued concern as we 
see big corporations going under and the effects that it will 
have, and really getting more staff involved to help look at 
those cases where there is fraud or where there has been 
embezzlement or things of that nature. I think at this time, we 
are prepared to kind of stay the course where we are. But when 
it is appropriate, I would like to have those discussions with 
you and with other members of the committee.
    Mr. Cole. I see my time is up, Mr. Chairman. So I will hold 
for later. Thank you very much, Madam Secretary.
    Mr. Obey. Ms. DeLauro.

                OPPORTUNITIES FOR WOMEN IN THE WORKFORCE

    Ms. DeLauro. Thank you very much, Mr. Chairman, and 
welcome, Madam Secretary. What a joy, what a joy. We miss you 
here. We all feel that way. But we are so delighted that you 
are at the helm of this Agency, because we know at your core 
about your concern and your caring about what is happening with 
working Americans, and also the balance that you spoke about 
before between workers and business in order to create the best 
environment and atmosphere so that people will have jobs and 
businesses will be strong. Your budget makes it clear that this 
Department is in capable hands, and that there is a kind of a 
renewed sense of purpose at this Department.
    And we want to help people build their skills and face a 
recession with the assistance they need. I will make a point 
and then get to my questions. I, for one, am so delighted to 
see what you are done at the core of your mission with worker 
health and safety. The funding increases for regulatory 
enforcement agencies such as OSHA, Wage and Hour, Office of 
Federal Contract Compliance Programs. For too long, my view, we 
have had a group of folks that relied solely on voluntary 
compliance.
    And it is fair to say that with this budget that those days 
are over. Let me kind of frame my one question, but it is with 
3 pieces. I have a concern with the Recovery Act and a fair 
chance for women in their employment, and I think we need to 
find ways to ensure women, minorities, economically 
disadvantaged job seekers are provided with equal access to 
training. So first question, and I will give you the other two 
and then let you answer. Given the number of new jobs that are 
going to be created, how do you see the role of the Office of 
Federal Contract Compliance in ensuring that the contractors 
who received Recovery Act funding have a plan, a concrete plan 
to recruit, retain women, people of color, veterans, and people 
with disabilities?
    How would the funding be used to create guarantees so that 
we are not going to be with the contract compliance office of 
identifying contractors who have not done enough of a good job 
after the fact, that is after they have the money to do that? 
So that office. Secondly, with regard to the Women's Bureau, I 
think women are--this is a tough recession for everyone. I 
think women are the hardest hit. There are circumstances 
undergirding all that is they are paid $0.78 on the dollar. But 
the hidden gem, I think, at the Department of Labor is the 
Women's Bureau. We know from this committee that the prior 
administration tried to weaken it, ultimately tried to 
eliminate it, and this committee prevented that from happening.
    Let me ask you this: How you see the role of the Bureau as 
we move forward. Personally, I would like to see the funding 
doubled, but that is me personally. But I think it is a 
powerful agency. And if you could just give us some insight 
into how you plan to reinvigorate that.
    Last piece of this question is, I do not know if you are 
familiar with the Pathways Advancing Career Training 
legislation. And you probably are. The PACT Act. It is 
Congresswoman Linda Sanchez, Jared Polis, Mary Jo Kilroy, and 
myself. This would prepare women for employment in high wage/
high skill fields. My hope would be that with regard to the 
Women's Bureau we would be willing to open a dialogue about how 
the policies can be implemented both under current law and as 
we consider new legislation. Let me ask you to respond.
    Secretary Solis. Thank you, Congresswoman DeLauro. It is a 
pleasure to be here with you. And I know you understand my 
personal commitment to women, having served on the bipartisan 
Women's Caucus with your leadership and so many members of the 
committee here. I continue to feel the need for us to move the 
Department of Labor so that every aspect of our agencies 
reflect not only the goals of achieving better representation 
for women, but making sure that there are opportunities at 
every level. The Women's Bureau, for example, is one part of 
that. But we should have a seamless system where if OFCCP has a 
mandate and guidelines set forth, where they are following 
through on making sure that there is nondiscrimination 
occurring with protected classes and groups, but also women.
    And we are looking at pay equity. That is something that we 
are going to require a lot of help on. I think the Women's 
Bureau can play a role there, helping us to gather the data 
that are going to be necessary, because there is going to be a 
lot of Federal contracting opportunities. Here is our chance to 
open up that door and have better relationships, but also let 
people know that this is a priority of the Federal Government, 
and DOL will work with them on that. In terms of Office of 
Contract Compliance, I know there are many issues there. We 
have not been as diligent as in the past.
    And I have not yet identified our leader for that 
particular position. We are interviewing now. So I hope to soon 
have someone who will lead that charge. And you know from 
personally working with me that I am very, very concerned about 
making sure that there is equal representation with respect to 
Federal contracting. With respect to the Women's Bureau, I, 
too, want to see a more robust program there. They will be 
involved in helping us identify women in nontraditional fields. 
We just had a roundtable a month ago with 35 women from around 
the country to talk about the notion of green jobs, whether it 
is in high-tech, and whether it is other low level 
apprenticeship programs, community college, and women who are 
just entering the workforce after leaving TANF or welfare.
    So there are many, many opportunities, and I can see us 
working very closely with you. With the last item you 
mentioned, the PACT Act, I believe that was introduced before, 
and I think I had supported it. And certainly the concept is 
something that I know has to be something that we need to be 
involved in.
    So my office would work very closely with you on providing 
any technical assistance and information that you need to help 
support your legislative agenda in that respect.
    Ms. DeLauro. Thank you and congratulations.
    Mr. Obey. Ms. Roybal-Allard.

                       CHILDREN IN THE WORKFORCE

    Ms. Roybal-Allard. Thank you, Mr. Chairman. And welcome, 
Madam Secretary. Let me just associate myself with the comments 
that were made by Rosa DeLauro and others about how pleased we 
are that you are at the helm of the Department of Labor, 
because we know of your commitment to the working men and women 
of this country. And I know that one area of concern for you 
has always been the children in the workplace. And I would like 
to bring your attention to the plight of children in 
agriculture. While only 8 percent of children work in 
agriculture, according to a Human Rights Watch study, 
approximately 40 percent of all workplace deaths, and nearly 
half of all workplace injuries suffered by children occur in 
agricultural jobs.
    And unfortunately over the past few years, little attention 
has been paid to these children by the Department of Labor. For 
example, of the 1,344 child labor investigations the Department 
undertook in 2006, only 28 were in agriculture. Do you 
anticipate increasing investigations into the injuries and 
deaths of these children? And will the Department increase its 
oversight of children working in agriculture?
    Secretary Solis. Thank you, Congresswoman Roybal-Allard. 
Yes, as I mentioned earlier in my testimony, we plan to have I 
would say a very robust Wage and Hour enforcement. And that 
also lends itself to providing more inspections in this area. 
I, too, am very saddened by the number of investigations that 
have not occurred, quite frankly. And this is an area that we 
do need to focus in on. And I do know that there need to be 
more opportunities for our young farm-worker youth. And there 
are incentive programs available to help them with that. We 
hope to expand that. I hope to work very closely with our 
regional offices to make sure that they go out, identify those 
programs that have the capability of taking on this project, 
but also knowing that we have to have good enforcement and good 
data to report so that you send a signal that this is something 
that will not be tolerated.
    Ms. Roybal-Allard. Madam Secretary, I will be introducing a 
bill known as the CARE Act in June that extends the same child 
labor protections afforded other children to the 400,000 youth 
working in agriculture, who are four times at risk of fatal 
injuries than children working in other industries. And I look 
forward to working with you as that bill moves forward.

    PROTECTION OF HEALTH CARE WORKERS IN THE EVENT OF A PANDEMIC FLU

    For several years, health care workers have petitioned OSHA 
for an enforceable standard to protect health care workers in 
the event of a pandemic flu. And this standard would require 
hospitals to provide respirators to protect hospital workers 
while they treat sick patients. The CDC has warned that it is 
simply a matter of time until we face a pandemic flu. And the 
H1N1 flu reminds us that that threat is real. Will your 
Department direct OSHA to issue enforceable guidelines to 
protect hospital workers in the event of a pandemic flu? And 
what steps will the Department of Labor take to ensure that our 
Nation's health care facilities have in place enforceable and 
appropriate standards for infection control and respiratory 
protection?
    Secretary Solis. Thank you, Congresswoman. This is a very 
timely question, and one that just a week ago or two we had a 
discussion with our internal office, OSHA, and they have 
prepared discussion points and guidelines to work alongside 
with CDC. We know that the respirator option here, wearing what 
they call an N 95 respirator is what we would want to see occur 
for health care workers. It provides better protection for 
them.
    Typically, the masks that you see being used right now, for 
example, do not prevent someone from being contaminated with 
the H1N1 virus, or any virus. So that is, I think, a better way 
of moving towards that protection. We are coordinating with all 
the other agencies in terms of getting out our directives so 
that we can protect all the workers that are providing 
services, that are front line workers, first responders, and 
obviously health care workers. So we are doing our best. It is 
something that I know that we do have addressed in our budget. 
I know the President has an additional request for money there. 
And I think we are satisfied with that amount that he is asking 
for.

                    WAGES FOR JOB CORPS INSTRUCTORS

    Ms. Roybal-Allard. Okay. As you know, the Job Corps 
program, which provides at risk youth with critical 
occupational and employment skills, relies on a cadre of 
dedicated teachers. However, the Job Corps instructors are paid 
on average 30 percent less than public school teachers, even 
though they have the same credentials and are required to work 
year round. And this makes it incredibly difficult for Job 
Corps centers to recruit and retain the staff needed for this 
important program. And unfortunately, after several years of 
flat funding, Job Corps, I understand, faces a $127 million 
operational shortfall, and there is not enough money, 
unfortunately, in the President's budget to provide the centers 
with the resources that they need for the staff. Do you have 
any plans to review this issue and to find ways to address the 
high turnover rates and the recruitment difficulties that 
plague the Job Corps program given the fact that, you know, we 
understand that there is not enough money to make up what is 
needed to retain the teachers?
    Secretary Solis. Thank you, Congresswoman. I know that, you 
know, I came into the budget process when things had already 
started, when I finally was able to begin my work at the 
Department of Labor. So much of what was said in the budget was 
already agreed to. I know that the next round of discussions on 
the budget, this is an area that I will want to focus in on. 
And I am glad you are bringing it to my attention at this time. 
And I have asked my staff to look into it to give me an 
assessment. And once we do have a reordering also of where Job 
Corps will be. Currently, it was in the Secretary's office. We 
plan to put it back where all the employment training youth 
programs are. That is where it should be. It is a fine program. 
And congratulations, I know that we are going to be breaking 
ground in Los Angeles for the Job Corps facility there. And we 
should all be very proud of that. But I do intend on working 
with you and others to make sure that we are accurately paying 
satisfactorily the wages that are due to the instructors. 
Because they also provide a very meaningful part of the program 
so that these young people who need remedial education or other 
assistance get and are able to have qualified teachers get the 
pay that they deserve.
    Ms. Roybal-Allard. I want to thank you for your help and 
support in the Los Angeles Job Corps program.
    Mr. Obey. Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman. And welcome, Secretary 
Solis. It is a proud moment for those of us who have known your 
work and followed your history, too.
    Mr. Obey. A California conspiracy.

                     EDUCATIONAL SYSTEM INVOLVEMENT

    Mr. Honda. Actually, it is our class also. And so they say 
that the budget is a reflection of our values. And certainly 
this budget is clearly quite different from the past 
administration's budget. And some comments have been made as to 
the increases in certain categories from one budget to another. 
And I think that it is worthy to note that some of the high 
increases are a result of great cuts that were experienced in 
the past. So this is about catching up also. So I appreciate 
your great work. And also some of the comments that you made 
about the kinds of workers, kinds of employees that the 
Department will be employing to work with the community, 
multilingual, culturally sensitive, things that will make the 
Department more amenable to the communities that we serve.
    So I just wanted to share that with you. I also wanted to 
extend a personal thank you for your staff's swift attention to 
all the inquiries that were sent by my office to your 
Department. You know, my district has a significant lack of 
middle skilled workers. In the budget justification, you 
mention the ETA will be strongly encouraging the one-stop 
centers to take an expansive view of how to integrate the funds 
into the training system. Can you elaborate on some of the 
innovations local one-stops have proposed or ideas that the 
Department will be implementing to fill this kind of a need? 
And how will these ideas and efforts work with the community-
based job training grant programs?
    Secretary Solis. Thank you, Congressman Honda. It is good 
to see you. I understand your frustration with the past 
practices of these programs. And I am also looking forward, by 
the way, to working with individuals on the appropriate 
committees to help reauthorize WIA, because we know that there 
are some structural problems, and the fact that there may not 
be enough flexibility. And that has impeded, I think, the 
ability for stakeholders that you just described from actually 
being a part and participating in these programs. So what I am 
doing now, through the funding that is going out for the 
Recovery Act, is setting forth guidelines that say that we have 
to involve CBOs, community colleges, and that we should also 
look at other educational institutions and higher education as 
well. It does not just stop with the community colleges.
    There is a role for every part of our educational system. 
We have a need for, for example, maybe more literacy for 
different segments of our population. The adult schools can do 
a good job there. We may have a need for allied health careers. 
That too I can see being fulfilled by a community college. But 
yet we also have a shortage of folks that are really prepared 
in the higher skill levels. So we need to also make sure that 
four-year universities are a part of this discussion. And I 
hope that we can generate regional support so that we look at 
the program more as something that we can solve on a broader 
level as opposed to just one source of funding going to one 
center. It should be a collaborative effort given that we do 
not have a lot of funding available from all these other 
streams. We are going to have to work collectively. So that has 
been my priority.

          INDUSTRIES WITH POTENTIAL FOR INVESTMENT AND GROWTH

    Mr. Honda. And we will look forward to doing that. Our 
city, San Jose, has made a serious effort to make itself the 
greenest city in the United States. And it just received a 
platinum certification. And the city has also partnered with 
local labor organizations like Working Partnerships USA to 
develop green jobs, programs that provide good paying, secure 
employment for workers. How is the Department going to foster 
and support partnerships like this through the Green Jobs 
Innovation Fund? And what are some of the primary industries in 
which you see significant potential for investment and growth?
    Secretary Solis. Well, I know that we have a very ambitious 
program to provide and expand weatherization in partnership 
with the Department of Energy. And one of the things we want to 
target there is the fact that after you complete your 
certification for weatherization that you also be in a program 
that can allow you to grow, to get another step up into another 
career if possible, or the same career but more expansive 
responsibilities.
    There has been a lot of discussion with some of our friends 
who work in that industry, and also some of our apprenticeship 
programs that offer that. We want to make sure that whatever 
opportunities are available that we really do kind of cross, I 
do not want to say cross-pollinate, but really get as many of 
those stakeholders involved that really have not had that 
opportunity to expand. And there is a lot of great 
demonstration programs out there now. We will be looking at 
those as models, and hopefully using our funding in a way that 
we can provide incentive to people to follow suit and use those 
as models that we can hold up.
    Mr. Honda. Very quickly.
    Mr. Obey. The gentleman's time has expired. I am sorry. Mr. 
Ryan.

                          WIA REAUTHORIZATION

    Mr. Ryan. Thank you, Mr. Chairman. Welcome, Madam 
Secretary. It is great to have you here. I have a couple of 
questions and a couple of comments. As far as the questions go, 
some of the WIA dislocation or dislocated worker money, it 
seems like the formula, and we had dealt with this with 
demolition money, where States who have been having problems 
for a long time, Ohio being one of them, losing their 
manufacturing base, the formula is tilted towards States who 
have had recent decline because of foreclosures. And States 
like Ohio are going to get a 30 percent cut, where States like 
Nevada are going to get a 135 percent increase. So we want to 
work with you on trying to fix this, because Ohio has been 
dealing with this for a long time, as a lot of other industrial 
States have.
    So we want to try to fix that formula. And also we know you 
have some ability with the national emergency grants. And one 
of the issues that if you can just comment on this, we want to 
work with the Department on States like Ohio having a little 
more flexibility with those kinds of grants. Because they are 
very specific towards a specific industry or a specific 
business. So is there a way we can kind of work through this 
where if you do get the emergency grants there will be a little 
more flexibility for the States to work with the Department?
    Secretary Solis. Thank you, Congressman Ryan. Earlier I was 
asked a similar question, and there is a problem I believe with 
the formula that drives the funding. And it is unfortunate that 
it does penalize States like yours that have been going through 
high unemployment and dislocation of workers for a long time. I 
know that this is something we probably want to work on as we 
go through to reauthorize WIA, which I hope we can do this 
legislative session.
    Meanwhile, there is some Dislocated Worker National Reserve 
money available at the Department of Labor that is in the 
amount of about $200 million that we can work with your State 
and work with those officials there, because this has been 
brought to my attention by one of your Senators already. And 
likewise----
    Mr. Ryan. I wonder which one that was.
    Secretary Solis. And likewise, we do have, hopefully, 
through our request here for the 2010 budget, we are requesting 
an additional $71 million for the national reserve for this 
particular effort. There has to be a better way, though, of 
dealing with this financial crisis, because it is longer, it is 
more persistent, and I do not think anybody has seen anything 
like this for several decades. And there probably has to be 
some rethinking on how we do that. So I would love to be able 
to talk to you about that.

                  NEW WAYS OF ADDRESSING OLD PROBLEMS

    Mr. Ryan. Great. I wanted to reaffirm that position as far 
as the formula is in and working. I have a couple of ideas. I 
think that you are new and you are from this body, and we have 
a new President, and I think we have to start looking at new 
ways of addressing some old problems that we have. I will give 
you an example. Our area we have a lot of auto in Youngstown, 
Ohio, a lot of Delphi workers. And a lot of Delphi salaried 
workers as well. And when Delphi hit tough times, we had a lot 
of engineers, we had a lot of tool and die workers who were in 
the area. And I know we have to try to retrain and move people 
into other jobs, but there is a talent pool in some of these 
communities.
    In Ohio, Dayton and Warren have a lot of Delphi workers, a 
lot of engineers. I think we need to have a conversation and 
talk about how we not retrain some of these workers, but how to 
get them involved in creating new employment, how to plug them 
into incubators, how maybe the Department of Labor and maybe 
the Small Business Administration can create incubators in 
areas where there is a high talent pool that necessarily will 
not go and become nurses or get trained in a green collar job, 
although they could, but they are very talented, they are 
engineers.
    So they could realistically start a company at some point 
with a little bit of assistance that would employ 50 people. 
And so I just wanted to throw that out at you just so we can 
continue to have a conversation maybe over the next few months 
and few years on how maybe we can put something together that 
would be innovative, but yet tap into the kind of talent pools 
that we have in some of these regional areas. And then another 
comment, as my time is running down, along the lines of 
YouthBuild, there has been a tremendous success in this country 
with the FIRST Robotics program. And we see kids in high 
schools gravitate towards the robotics program. And it changes 
their whole perception and their whole approach to education. 
You know, instead of teaching them physics and all of the, you 
know, more sophisticated, having all the more sophisticated 
classes, that teachers throw a bunch of junk on the ground and 
they say build a robot.
    And then they build the robot and then they teach 
afterwards. And it is just a different way of learning. And we 
have had some kids in some of our inner city schools who have 
just gravitated towards this. They got to kick them out of the 
schools at 10 p.m. So I think as much as YouthBuild is for 
construction, I think we should also talk about in the future 
about implementing some kind of robotics programs.
    Mr. Obey. If you want to respond very briefly.
    Secretary Solis. I am glad you brought up YouthBuild, 
because we do have guidance to promote green jobs, but not 
necessarily the way you described it. We certainly want to have 
more math and science applied, and that can certainly help with 
this population. So I am very much in agreement to allow for 
that creativity to occur, and we would be interested in seeing 
those kinds of programs develop.
    And then, secondly, I just want to tell you that, through 
our office, the recovery of the auto communities and workers is 
headed now by Dr. Edward Montgomery. He has been out I think in 
some of the different States that have been more dramatically 
affected by the downsizing of the auto industry and certainly 
will be helpful and I am sure will make himself available, as 
well as I, to see how we can try to provide that assistance so 
that that talent pool, that brain trust that we have does not 
leave and that we nurture it and that we do do some creative 
programs with SBA. We do have some training programs, too, for 
small businesses.
    So those are some things that I am very excited about 
working with you on, because I have not seen that kind of 
support in the past.
    Mr. Ryan. That is great.
    Mr. Chairman, if I could just comment on that.
    In these old----
    Mr. Obey. Very briefly.
    Mr. Ryan. Very briefly.
    In these old industrial areas, you know, all the young 
people have left. They went off, they got educated, their 
parents had good-paying jobs, they went off to school, and they 
left. So the only talent pool left were in those industries, 
the Delphis of the world, the auto industries. So I think it is 
critical that part of this comprehensive program is to try to 
keep that talent in that area, in that geographical area.
    So thank you. Thank you, Mr. Chairman.
    Mr. Obey. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.

    INCREASING TRAINING OPPORTUNITIES IN HEALTH CARE-RELATED FIELDS

    And, Madam Secretary, I just wanted to tell you that I 
share the enthusiasm of my colleagues; and we look forward to 
working with you. Now, not only is Madam Secretary a friend, 
but she is also my neighbor. We leave so early, I think you are 
still there. Thank you.
    I just want to begin by commenting that what we see in our 
health care systems in the U.S. in both private and public, we 
are facing a widening gap between the number of positions and 
the number of qualified applicants to fill them; and nowhere is 
this more evident than the shortage of nurses and nurse 
faculty. In fact, in 2008, almost 50,000 students were denied 
admission to schools of nursing, primarily due to an 
insufficient number of faculty.
    We agree, I know, that we must create better training 
opportunities in the fields with the greatest needs in the 
coming years. So if you can comment on the Department's 
strategy for increasing training opportunities in health care-
related fields, particularly through the new Career Pathways 
Innovation Fund, and what role can community colleges play in 
expanding career opportunities in health fields.
    Secretary Solis. Thank you, Congresswoman Lowey.
    Yes, while I did want to mention that earlier in my 
testimony I had pointed out that we did get $250 million 
through the Recovery Act to help us with high-growth 
occupations--and, obviously, the health care industry is a 
prime sector--I do believe there is a lot more we can do.
    I think we need to also be collaborating now with the 
Cabinet Secretary of Health and Human Services. They also 
received a substantial amount of money, I believe it is about 
$200 million, to look at health careers and professions; and it 
just does not make sense for us not to be able to coordinate. 
We know there is a shortage in all, all parts of the country 
and particularly when you talk about underserved or rural 
areas. So I am very hopeful that we can utilize this money to 
look at not just the first tier but also developing the second 
and third tier of these career programs.
    So we do have to work closely with our 4-year universities, 
community colleges to begin with, and then also make sure that 
we have the availability to have a classroom, first of all. 
Because I am hearing a tremendous amount of pressure being 
placed on the community colleges, that they do not have 
sufficient funding to open up a classroom and then pay the 
instructor or a particular professor there to be able to come 
in, because they make more money out in the field than they 
would as a faculty member.
    That is something that has to be addressed I think at 
another level. But, nevertheless, it does impede our ability to 
get people into those programs to get trained.
    And I have seen some very good programs, but they are very 
limited, and of course they are very rigorous. And for minority 
people who want to get into these programs, it becomes even 
more difficult. And I just feel that there does have to be more 
attention placed overall in the health care arena and be happy 
to work with you and with the chairman on this to see how we 
can expand that area.
    Mrs. Lowey. Thank you.

                       IMPROPER BENEFIT PAYMENTS

    I was shocked to learn, despite efforts of States to reduce 
improper benefit payments, more than $3.9 billion in 
unemployment benefits were paid erroneously in 2008. Now, the 
chairman probably recalls, because we have been talking about 
this--I have been around here for about 20 years--antiquated 
computers, processing systems in various States and within the 
Department. As far back as I can recall, we were told that the 
computers still do not talk to each other. So you can be on 
Social Security, and you can get unemployment benefits. You can 
get all kinds of things.
    I just wonder whether the budget addresses this problem. 
How is the Department working with the States to reduce and 
recover improper or fraudulent payments? And as you are just 
beginning your important assignment, maybe this committee can 
help you and work with you to address the problems of computers 
that do not coordinate, do not talk to each other.
    Secretary Solis. Congresswoman Lowey, you bring up an 
excellent point. It is one that I am very frustrated with 
myself. And, again, this is my second month into the job. I am 
not even there a hundred days yet. But I am learning very 
quickly where some of these gaps are, and I really do want to 
work closely with you and with the members of this committee to 
see how we can fix those gaps.
    Not only the Federal Government has problems, but, of 
course, some of our bigger States, New York, California, Texas, 
others are having problems with also processing the amount of 
paperwork. And we are finding that some systems are 30 years 
old, the COBOL system. I remember that as an undergrad, that 
program.
    But I am just saying that we do need to have funding to 
help upgrade our infrastructure; and that is probably one of 
the most neglected areas, just like our bridges, when we forgot 
to also provide I think the necessary support that is needed to 
help our IT system be up to date. Because there is no reason 
why we should not.
    Mrs. Lowey. Now I see my red light on, so I will not ask 
you for another minute. At another time I will like to talk to 
you, because I know how passionate you are about the 
International Labor Affairs Bureau. My colleague, Ms. DeLauro, 
just whispered to me that the worst abuse, the ILA has said in 
Agriculture, is in the United States. And so that is something 
that we have to work on.
    Thank you, Mr. Chairman.
    Mr. Obey. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair.

                           JOB OPPORTUNITIES

    Well, a lot of the questions have been asked; and it is 
wonderful to, as Congressman Honda pointed out, to watch you 
blossom and grow. It is great to have someone from our class 
that we can now call Madam Secretary.
    I think what I am going to do instead is kind of have a 
conversation about some things that I have seen out in the 
district and the challenge that I think we face as a Nation 
gearing up not only to come out of these difficult economic 
times but to prepare ourselves to be competitive in the future.
    So I am going to start with we know we have got an 
unemployment problem. We know it could very likely go up. This 
is like the first time Minnesota, because we have such a 
diverse economy, has really faced hard unemployment that we 
know is going to be extended for a long time. We have high 
school students that we want to encourage to stay in high 
school. We have high school students that are graduating that 
had really no plans about continuing education. We have high 
school students who were planning on continuing an education, 
but their families are looking at the cost of college or voc 
tech school saying, you know, jeez, we are going to have to 
pace ourselves a little different doing this.
    College students who are going to come on line now who I do 
not know how they are going to be recorded in the unemployment 
statistics because they have not lost a job, but they are not 
going to be able to find a job. High school students and 
college students competing with adult workers for part-time 
jobs, people underemployed. You know the picture.
    But let me tell you about some of the solutions that I am 
seeing out there or I see as a possibility.
    I was at Arlington High School just yesterday, very diverse 
high school. As you know, my district is very, very diverse. 
And they have a bioscience program in which one of the 
cornerstones of it is students who want to sign up for it can 
take this Red Cross class, which then at the end of it they are 
qualified or they are certified to be a type of medical helper. 
Pays $10 an hour. But, at the same time, those students are 
being reinforced with math, science. But it is broken down in 
bite-sized chunks that a lot of my new, vibrant immigrant 
population sees as a can-do possibility.
    So I know there are opportunities in programs like that 
happening all over, and on page eight and nine of your budget 
summary that you have given us you are talking about you are 
going to work with the Department of Education to track 
longitudinal studies. So I think this committee wants--at least 
I want--to work with you on how we put that together.
    Because if you look at the Department of Labor and its 
interrelations with the Department of Health for jobs, for 
training, as well as for workers' health, the Department of 
Education for jobs and training, the Department of Energy for 
jobs and training, how do we get everyone around the table 
talking so that we can, just as the computers are talking, so 
that we are creating incentives and opportunities as we 
reauthorize all these different programs? We are not doing them 
in silos? So let me kind of close with this.

                        OPPORTUNITIES FOR YOUTH

    Another place I was recently in the district was talking 
about volunteering and community service, something that 
President Obama is very focused on. There are so many 
opportunities out there, whether it is YouthBuild or our Young 
Conservation Corps or something like that to do service, maybe 
not necessarily be paid for it. We know cities are under a lot 
of stress with homes that need the grass cut, neighbors that 
need fix-up projects and that in homes. How do we look to 
create a youth service corps that creates educational 
opportunities, does exactly what Congressman Ryan was talking 
about, makes kids excited about learning? How do we help you 
with that not only in this budget but future budgets? How can 
we help you?
    Secretary Solis. Thank you very much, Congresswoman 
McCollum. I am really excited that you are excited and that I 
am hearing so many enthusiastic voices about things that I know 
we have been struggling over for the last 8 years.
    Youth are a very, very important element in our recovery 
effort. And I am very happy to say that, looking at this new 
round of funding that is going out now through the recovery 
program, that there is going to be some area for testing. So 
new models can also be interjected for students that go through 
our summer youth employment programs. For example, we will have 
guidance to say that we do want them to focus somewhat on green 
jobs, but that does not necessarily mean that it has to stay 
there. It can also go into maybe health, as you are saying, 
with the Red Cross or working volunteer. The program allows you 
to get instruction and also receive a small stipend if you fall 
under the category of being disadvantaged.
    But I see where you are going, where we have to have more 
of a long-term program that is really extended throughout the 
year but has an educational component added to it. So I am 
working right now, and our staff is, with the Department of Ed, 
because we want to try to minimize where there are areas where 
we can work together and not duplicate our efforts. But I am 
very enthusiastic about the ability to see our young people 
really be a part of this growth that we need to see, badly need 
to focus in on our youth. Their unemployment rate is way above 
21 percent.
    Ms. McCollum. Thank you.
    Mr. Chair, I think one area in which I am becoming more 
convinced than ever that we have missed the boat is we did not 
think we needed high school counselors any more because the 
jobs were out there and the economy was successful and 
everything was going smooth. By not having high school 
counselors, we do our economy a disservice, we do our youth a 
huge disservice, and I am hearing from parents a disservice, 
because they do not know about all the job opportunities that 
are out there to even have conversations with their children.
    Thank you.

                           CRITICAL POSITIONS

    Mr. Obey. Madam Secretary, let me ask a couple questions. 
And, incidentally, because of the time, when I finish my 
questions I am going to try to do a 2-minute second round for 
people so we can get Secretary Solis out of here as quickly as 
possible.
    Madam Secretary, you have been on the job for about a 
month, as you said. If you look at the Department's roster of 
critical positions--Deputy Secretary, Employment and Training 
Administrator, OSHA Administrator, MSHA Administrator, et 
cetera, et cetera--can you tell me how many of the senior-level 
vacancies at the Department of Labor you have been able to 
fill? I mean, how close are you to being in a home-alone 
situation?
    Secretary Solis. Unfortunately, the process has been so 
cumbersome that I have had actually just two; and one of them 
is here with me today, who is overseeing my Congressional and 
intergovernmental relations, Mr. Brian Kennedy.
    Mr. Obey. So you are in the position of speaking for the 
Department, defending the Department, and so far you have no 
lieutenants in sight save one. Is that right?
    Secretary Solis. Two.
    Mr. Obey. Two.
    Secretary Solis. Maybe our colleagues in the Senate will 
heed your call and help us expedite.
    Mr. Obey. That would be nice.

                           FRAUDULENT CLAIMS

    Secondly, I hope that in whatever meetings you participate 
in having to do with fraudulent claims, I hope you will convey 
the message to the executive branch that nothing is more 
important in budgeting than eliminating fraudulent claims. 
Because every single fraudulent claim that is paid discredits 
programs that are meant to provide badly needed benefits to the 
deserving. And I hope that the administration will put together 
a--I do not know, I do not care whether it is a task force or 
you name it. Whatever they call it, we need a crash course to 
eliminate that nonsense because we just cannot afford it.

                           RETURNING VETERANS

    I would also like to simply say that I am concerned about 
the steep rise in unemployment for returning veterans returning 
from Iraq and Afghanistan. According to BLS, the unemployment 
rate for post-9/11 veterans jumped from 8.9 percent in January 
to 11.2 percent in February, a single-month increase of 26 
percent. The overall unemployment rate for post-9/11 veterans 
is 32 percent higher than the unemployment rate for the general 
population.
    How is the Labor Department enforcing Federal laws ensuring 
that military personnel returning from Iraq and Afghanistan are 
able to return to their jobs they left behind?
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    And what can the Labor Department be doing for unemployed 
veterans?
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Secretary Solis. Thank you, Chairman Obey.
    This is of great concern to me as well. Having over the 
last 8 years represented a district in Los Angeles with one of 
the highest rates of veterans and homeless veterans, this is an 
issue that I do not think many of us quite understand how to 
get our arms around. But we do have incentives in our budget to 
provide assistance for homelessness for veterans but also for 
female veterans, because we are also seeing an increase there. 
And they face different problems, because many of them may have 
children. There is not enough space available at some of these 
transition homes, and there is a need for that.
    So as we are uncovering and seeing our young people coming 
back from Iraq and Afghanistan, we are finding that they have 
multiple different types of challenges. But one that I am 
charged with overseeing is the fact that if a returning 
soldier, he or she, goes to a place of employment that they 
previously worked at and are denied that placement, we have an 
obligation to go back there and investigate and then file our 
complaint. That is something that I hope to beef up, because 
there are too many of those reports that are coming out.
    And then, secondly, I am trying to work closely with DOD to 
look at their programs where returning soldiers are given 
appropriate information, not just a one-time kind of drop in 
the bucket, of different services or things that they can apply 
for but being a little bit more consistent with them and their 
spouses. Because the spouses are also an important element 
here. And I believe that the President's wife, Michelle Obama, 
also has a great initiative there to try to help with our 
veterans' spouses and the families.

                      ENHANCED ENFORCEMENT PROGRAM

    Mr. Obey. I just want to make a last point on my time.
    In the early years I was on this subcommittee, I worked 
with Silvio Conte and to some extent with Bob Michel in trying 
to see to it that OSHA was more flexible in dealing with 
employers who were generally trying to meet their obligations 
to their workers. We worked to do a number of things that 
required retraining of inspectors so they quit focusing on the 
minutiae and started focusing on the real problems, and so I am 
all for the agency being reasonable. But there are also other 
kinds of employers who are not at all helpful.
    Example, when my sister was dying, at first the doctors did 
not know what was wrong with her. Her lungs were filling up 
with fluid. They thought she was having an allergic reaction to 
something she was working with in the plant. And so they asked 
her husband if he could check on the plant floor, because they 
both worked at the same place. The doctor asked her husband if 
he could check to see what the chemical content was of the 
solvent that they were using on their machines. He tried to do 
that and was blocked from doing it by the employer, even after 
the doctor called and asked them to allow him to check that 
out.
    So while there are certainly legitimate employers with whom 
we need to work, there are also people who put the dollar 
bottom line ahead of everything else. And that is why we need 
to have an OSHA that performs much better than it has in recent 
years, when we discover that the Inspector General showed that 
the OSHA enhanced enforcement program was a spectacular failure 
because of OSHA's failure to go after employers who really 
needed going after.
    And, with that, Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.

                          CREATING GREEN JOBS

    The study that was conducted at King Juan Carlos University 
in Spain found out that the European model of creating green 
jobs cost 2.2 jobs on an average for every job created. In the 
study, they talk about how the government got locked into old 
technology in their pursuit of green jobs. And I see that 
already in our own government, where we are sort of locked into 
solar panels to generate electricity while the private sector 
is moving to photovoltaic panels; and they can generate more 
electricity. And they are going into parking lots, like in 
Phoenix, and getting landowners to allow them to create shade 
for their customers, while they put these panels overhead to 
create the shade and also generate electricity.
    So with the innovation in the private sector and the 
tendency for our government to get locked into a technology 
that becomes stagnant, what level of job loss does the 
administration find acceptable to create green jobs?
    Secretary Solis. Well, I look at this a bit differently. We 
have had tremendous job loss for the past--what--December 2007, 
long before this new administration was here. So this has been 
an ongoing issue for some time with high rates of unemployment 
that are not acceptable to anyone.
    I think that green jobs is not a silver bullet by any 
means. I think that there is ample opportunity, however, for us 
to begin to invest R&D into research and new science and 
technology to help create our security independence away from 
fossil fuels and look at how we can use materials and resources 
that we have here at hand and be better navigators of those 
resources.
    The study that you cite I understand was conducted by 
industry individuals who feel that there may be a job loss in 
their industry. I see this as an opportunity, as we heard a 
theme recurring here, is that we have many people who are being 
dislocated and displaced--engineers, bankers, people who are 
well educated and qualified to do many things. I hope that when 
we begin the discussion of looking at new, renewable jobs and 
jobs of potential growth that we look at all opportunities. But 
I do see green jobs as one of our priorities for this 
administration but certainly not the only one.
    Mr. Tiahrt. Just to correct the record, the study was 
conducted by King Juan Carlos University and Dr. Alvarez. So it 
was done by the University and not the private sector.
    Thank you, Mr. Chairman.
    Mr. Obey. Ms. DeLauro.
    Ms. DeLauro. I have a very quick question, Madam Secretary.

                                DIACETYL

    This is about an issue that I have worked on for a number 
of years, and it follows up with what Chairman Obey was talking 
about, the potential harm that is caused by the chemical 
diacetyl to thousands of workers who are mainly working at 
popcorn manufacturing facilities. You have taken initial steps 
to address the issue, and you have convened a Small Business 
Regulatory Enforcement Fairness Panel to look at it. I 
understand there is a process in place, including a 60-day 
comment period. I want to ask for your assurances that this 
will be a priority for the Department and OSHA; and, if so, can 
we anticipate seeing a proposed rule on diacetyl in the Federal 
Register?
    Secretary Solis. Congresswoman DeLauro, I am happy you 
brought this item up. It is one that I know I worked on here as 
a House Member with other members of the Labor and Education 
Committee, and it is something that we are taking very 
seriously.
    Right now, we are finishing up a small business review 
process that has to be taken for diacetyl; and we will soon be 
able to move forward with a formal proposal.
    Ms. DeLauro. Okay. Thank you. I would like to continue to 
work with you on that.
    Thank you, Mr. Chairman.
    Mr. Obey. Mr. Cole.
    Mr. Cole. Thank you, Mr. Chairman.
    I know we are operating under an abbreviated time schedule 
here, so let me make two points, if I may, and then entertain, 
obviously, whatever response you would like.

                  OFFICE OF LABOR-MANAGEMENT STANDARDS

    First, I would like to very much associate myself with Mr. 
Tiahrt's remarks about the concerns and the cuts in the Office 
of Labor-Management. You know, frankly, most of our money in 
the Department of Labor is appropriately spent on protecting 
workers in the workplace and mitigating disputes between 
employers, et cetera. But labor unions are not always a force 
for the good, and there certainly has been plenty of instances 
of abuse. And if we ever pass Card Check in this Congress, 
potentially you might need more oversight rather than less. So 
that does concern me greatly.
    Second, while I appreciate the emphasis on green jobs, I 
want to say for the record in my State, in Oklahoma, frankly, 
the energy industry, the oil and gas industry has provided more 
opportunity for more people than any other industry in the 
history of the State. Upward mobility, the greatest 
concentration of technical talent, the highest salaries are 
paid there. We have the number one and two producers of natural 
gas in America headquartered in Oklahoma City, and even critics 
of carbon-based energy generally recognize natural gas as the 
least objectionable of the carbon-based energy sources. So if 
we are going to have an emphasis on green jobs, I would suggest 
natural gas is one that ought to get an emphasis.
    And, honestly, nuclear energy ought to also get an 
emphasis. I do not see any way with renewables alone this 
country will be remotely energy independent in our lifetime. We 
are going to have a carbon-based energy sector. It is going to 
be extraordinarily important; and, frankly, we ought to follow 
the example of our friends in Europe, particularly the French, 
and look pretty seriously at our nuclear-based capabilities, 
where I think we have basically abandoned a lead that we had 20 
or 30 years ago. They have actually done better than us in 
recycling and taking care of the waste products. So I would 
hope you look, when you think green, you do not exclude natural 
gas and you certainly do not exclude nuclear.
    Secretary Solis. Thank you, Congressman Cole.
    I would just concur that I think that natural gas is 
another source of energy that we should be utilizing more. I 
know that might be something that the Department of Energy will 
probably undertake, as well as the nuclear energy debate; and 
certainly we have to look at what resources we do have here. 
Hopefully, whatever takes place, it will be done in a manner 
where we can have the cleanest energy provided with the less 
egregious outcomes in our communities. So I am with you on 
that.
    And with respect to OLMS, I would just say to you that they 
have had substantial increases in their budget for the last 4 
or 5 years, more so than the other agencies; and what we are 
trying to do is level the playing field. We will be moving some 
of those investigators over to Wage and Hour, where we do need 
them, and in OSHA.
    Now, there are appropriate skilled areas where there is a 
better fit. That does not mean we are going to hold back on 
looking at any fraud or misconduct facts if folks are not 
complying with the law. So we will be very diligent there, and 
I can promise you now that we are already keeping that pace 
now.
    Mr. Cole. Thank you.
    Mr. Obey. Ms. Roybal-Allard.
    Ms. Roybal-Allard. Just a quick statement.

                   MIGRANT AND SEASONAL FARM WORKERS

    I have been asked, Madam Secretary, to thank you for 
recognizing the value and the contributions of migrant and 
seasonal farm workers to our society. This is the first time in 
8 years that the job training program for these hardworking 
people has been included in the Department's budget. During the 
last 8 years, under the leadership of our chairman and his 
efforts, we have had to restore the funding for the over 45,000 
eligible farm workers who have been trained and placed in 
steady, year-round employment. However, as you know, the 
funding for the program only permits us to reach a little less 
than 3 percent of the eligible population. So my hope is that 
we can continue to find ways to increase the funding for this 
very effective and successful program so that it can reach more 
farm workers.
    Secretary Solis. Thank you, Congresswoman.
    I would just add that we are trying to, with one of our 
notices that did go out, to the workforce investment system to 
provide additional information for funds for the national 
emergency grant program to be used for this particular 
population. So I am excited about that. But I know that we 
should have those discussions to further figure out how we can 
address the long-term issues here that I know both you and I 
are very concerned about.
    Mr. Obey. Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman.

                       TELEWORK AND TELECOMMUTING

    One question. I know the Secretary of Transportation and 
the Secretary of HUD are working together on a Sustainable 
Cities, Livable Cities Initiative; and one that I read in last 
year's report that the Department of Labor is looking at is the 
telework and telecommuting and those kinds of things. So if you 
could just comment on your opinion on telecommuting I think 
from traffic purposes and the whole greening of our country. 
This could be a component to it. So are you going to be 
involved in any of those discussions or initiatives?
    Secretary Solis. Well, we are collaborating with Department 
of Energy and HUD and Department of DOT, and we know that it is 
very important to allow for flexibility in the workplace so 
that families--and this comes up often with respect to folks 
that need to work from home and having that flexibility. I 
think that that is a way to go. It saves costs overall, 
transportation congestion, but also probably more productivity 
on the part of the employee. So I think that those are 
mechanisms that, as you have outlined, that are very important 
for us to follow up on; and we will be working with our 
partners in the other agencies to see how far we can promote 
this program.
    Mr. Ryan. Thank you.
    Mr. Obey. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chair.

                   INTERNATIONAL LABOR AFFAIRS BUREAU

    I referenced before the International Labor Affairs Bureau, 
and I know you care very much about it. I am very pleased that 
the budget sets the number at $92,000,000, which is an increase 
of more than $6,000,000 from fiscal year 2009. This is 
certainly a welcome increase, given that the previous President 
attempted to drastically reduce this account every year. At a 
time when we have taken on greater responsibility abroad, we 
have a duty, in my judgment, to do more to improve labor 
conditions in foreign countries, including reducing child 
labor, protect women's rights, maintain our education in the 
HIV/AIDS initiative.
    My colleague whispered to me, and I repeated it before, 
that the worst abuses around the world are right here in 
agriculture. So, obviously, we have to address that; and I know 
you will.
    Could you share with us how the Department plans to use the 
proposed increase to address these priorities?
    Secretary Solis. Thank you, Congresswoman Lowey.
    You know of my passion and concern for trying to provide 
information and data as to what the conditions are with trading 
partners in particular, and I think there has been an absence 
in this particular division for the last few years. It has not 
been a priority. While there has been funding incrementally 
provided for the exploitation of children and trafficking, 
those are good things that should continue; and I do not see us 
minimizing that. But I think now with the new President coming 
out with his proposals that he would like to introduce trade 
agreements again, it is very important that we do have the best 
data available; and I think that we have not had sufficient 
funding to allow the Department to be able to get that data, to 
work with NGOs, to work with our partners, to also help provide 
assistance to our trading partners so they can help hopefully 
elevate our standards. That helps American workers in the long 
run.
    So I do have a vision, and I would like to be able to sit 
down when we can to tell you a little bit about more what my 
thoughts are.
    But I was able to attend the Americas Summit with the 
President and met with many of my counterparts from countries 
representing Labor Secretary positions, and we had very good 
discussions. One of which I heard resoundingly is that they 
want to have more assistance from us; they want training from 
us as well. They could benefit from our OSHA staff going and 
conducting seminars and meetings with them but also importantly 
helping them to understand what our labor standards are. So 
this is something that is of great importance I know to the 
President as well as to myself.
    Mrs. Lowey. Thank you very much. I look forward to working 
with you.

                               STATE AID

    Mr. Obey. Madam Secretary, let me just make one point in 
ending the hearing. The new estimates have come out on the part 
of OMB, and they are indicating that we are going to experience 
an even larger deficit than we expected. One of the major 
reasons for that is because of the drop in revenue into the 
Federal Treasury.
    And I would point out that the same thing is happening at 
the State level. In my own State, just in the last 3 months, 
their estimate of the size of the State deficit that they are 
going to incur has risen by $1,500,000,000.
    The Washington Post this morning carried--and I just want 
to read a couple paragraphs--they carried an article this 
morning which says this:
    Eleven weeks after Congress settled on a stimulus package 
that provided $135,000,000,000 to limit layoffs in State 
governments, many States are finding the funds are not enough 
and are moving to lay off thousands of public employees. And 
they tell stories about what is happening in the State of 
Washington, Massachusetts, Arizona, et cetera, et cetera. It 
says the layoffs are one early indication of how the stimulus 
funding could be coming up short against the economic downturn.
    As the stimulus plan was being drawn up, there was 
agreement among the White House, congressional Democrats, and 
many economists that a key goal was to keep States from making 
big layoffs at a time when 700,000 Americans were losing their 
jobs every month. The House passed a stimulus bill with 
$87,000,000,000 in extra Medicaid funding for States, as well 
as $79,000,000,000 in stabilization money to plug gaps in State 
budgets for education and other areas.
    But in the Senate the stabilization funding was cut by 
$40,000,000,000 to secure the necessary support to pass the 
bill. The article says, supporters of the final 
$787,000,000,000 bill, which included $25,000,000,000 less in 
State aid than the House plan, said it would help States avoid 
severe cuts, but tax revenues are coming in even lower than 
feared.
    I would simply make the point that, as we discovered during 
the Carter and Reagan deficit era, when the economy was going 
to pot at an earlier time, we will never balance the budget or 
come anywhere close so long as this economy does not get moving 
again. With all of the attention that is being paid to the 
negative impacts of deficits, I would urge the administration 
to remember and remind the country that, at least in the short 
haul, the economy needs to be stimulated by those short-term 
deficits; and if we do not have enough stimulation, we are not 
going to get out of this hole. Because if the unemployment 
continues to rise and if we continue to lay off more workers, 
those revenues are going to continue to drop, and that is going 
to leave us with an even bigger hole than we thought we were 
facing.
    That can be avoided with the right policies, and I hope 
that the administration will recognize that the situation at 
the State level is significantly more serious than was thought 
at first, as is the situation at the Federal level, and it 
requires something more than simply hoping for the best.
    With that, I appreciate your coming; and I wish you luck.
    Secretary Solis. Thank you, Mr. Chairman.
    Mr. Obey. And I hope you eventually get some people around 
you on your team so that you do not feel like----
    Secretary Solis. I am a one-woman show.
    Mr. Obey [continuing]. You are holding court alone. Thank 
you very much.
    Secretary Solis. Thank you so much, Mr. Chairman, and 
members and ranking member. Thank you.

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                                             Tuesday, June 2, 2009.

              U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

                                WITNESS

HON. KATHLEEN SEBELIUS, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN 
    SERVICES
    Mr. Obey. Madam Secretary, welcome. We are pleased to have 
you here for your first appearance before this subcommittee.
    I note the presence of a Kansas cabal. And we welcome that 
too today.
    Madam Secretary, when I was in the legislature, I served 
with a fellow by the name of Harvey Duhall, who is a retired 
dairy farmer, homely as a basset hound on a bad day. And he was 
probably the best human being I ever served with anywhere.
    And one of the things he always said, was, ``Do you know 
what? The problem with this country is that all too often the 
poor and the rich get the same amount of ice, but the poor get 
theirs in the wintertime.''
    It is my understanding that you have the outrageous view 
that that can change. It is also my understanding that you are 
coming in here today intending to do something very radical, 
which is to try to provide health care coverage for every 
American. I would just like to know where you get that crazy 
idea, because it seems to me that we have already seen hundreds 
of billions of dollars go out the door to help strengthen 
banks, insurance companies, and auto companies under both 
President Bush and President Obama. But now, evidently, you 
have the outrageous gall to come in here thinking that if we 
are going to have socialism for big people, we ought to provide 
at least a shadow of socialism for little people.
    I don't happen to regard it as socialism, but as you know, 
some people like to refer to it that way and scare people with 
those naughty words. I just want to say that I hope that your 
secretaryship is marked by our finally achieving that long-
sought goal of providing health access and affordable health 
care to every single American.
    I know this hearing is supposed to be largely about your 
budget, but that is the great issue that hangs over all of our 
deliberations on this subcommittee this year. I for one hope 
that, as the administration puts together its plans and 
establishes its negotiating position, you along with the 
President will fight just as hard as he can to see to it that 
among the options available to American citizens will be a 
public plan.
    I find it ironic that some of the people in this society, 
especially in the insurance industry, talk so vociferously 
about the need for consumer choice, I find it interesting that 
many of those same people would deny consumers the choice of 
having a government plan. I fully recognize that we are not 
going to have anything like the Canadian single-payer plan. 
This is a different country than Canada. And I recognize that, 
in the end, we will be building primarily on a private 
insurance system. But I would certainly expect that we would 
have as an option a government plan for those who choose to 
have it and not imposed on anybody. I would hope that the 
administration would hang tough on that issue.
    I know that I am told that the administration is probably 
going to be sending down to us additional requests for funding 
for pandemic flu, and simply ask you to convey to the White 
House that, since we are trying to finish the supplemental 
conference this week, they do so immediately so that we can 
give it full consideration in the conference.
    In my view, President Bush was correct to ask for full 
funding for that program more than 5 years ago. This committee, 
for a variety of reasons, didn't quite measure up to that. I 
think we have got to get on with that business. And so I hope 
that the administration will send down to us, as quickly as 
possible, whatever their estimates are of what the true need 
would be.
    I also have some concerns I would like to express to you 
with respect to certain aspects of your budget, especially 
LIHEAP, and what I regard to be a peculiar request that they 
had within NIH which I will save that for the question period.
    Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    And as a fellow Kansan, I want to provide a warm welcome 
for Secretary Sebelius. Congratulations on your confirmation. I 
know that after getting back to Washington and seeing the 
traffic, you have the same thought that I have: We are not in 
Kansas anymore.
    As Secretary of Health and Human Services, you have the 
responsibility to ensure our Nation's health care and social 
services remain excellent and indeed improve. But like a 
physician, your philosophy should be, first, do no harm. This 
often is hard for the government; for meddling in access and 
choice, that government does in fact do harm.
    I am interested in hearing how you will balance the desire 
to improve access to health care and human services while not 
interfering in the quality of the systems themselves. One of 
the biggest concerns with government interference in a health 
care delivery system that I have is that, and I am sure health 
care reform will be a large part of our discussion today, is 
that we will limit the innovation to choice and access to this 
process that we are going through to try to involve more 
government in the process.
    The three areas of concern that I have with the 
administration's proposals are the utilization of comparative 
effectiveness to ration health care; the elimination of the 
conscience protection; and the overall concept of moving people 
from the private health insurance to public health insurance. I 
believe these three policies will negatively impact the quality 
in America's access to health care.
    First, regarding comparative effectiveness, in the stimulus 
bill we included money that not only was for comparative 
effectiveness but also language directing your Department to 
use this research to make decisions about what treatments the 
government will and won't approve. The government will fund 
research to decide which medicine or medical treatment works 
best for most people. Then and only then will they pay for that 
one option.
    In other words, ``comparative effectiveness'' is just 
another way to say rationed health care. Who is going to be 
affected by this policy? Unfortunately, I think it is those who 
can least afford to lose will be the ones that experience the 
loss.
    A fellow Kansan, Jennie Jobe from Johnson County, was in my 
office earlier this spring. She has an immunosuppressant 
disease. And under private insurance, she had medication that 
would allow her to fight off the common cold and the flu.
    When she visited my office, she was suffering from the flu 
and was afraid to shake hands. She had left the life where she 
was completely able to function; she could play with her 
grandchildren, she could shop, she could be productive. 
Unfortunately when she switched to Medicare, the government 
would not fund her therapy or her medication, so she was forced 
to take a new medication in which provided her with headaches 
and backaches, and it did not protect her from diseases, such 
as a common cold.
    When she came to my office, she was considering wearing a 
mask and was very worried about the H1N1 virus. And it was all 
because of the interference in the decision that was between 
her physician and herself.
    Personalized medicine is a new frontier, and developing 
applications to meet these medical needs of individuals as 
individuals, as you know our own University of Kansas is 
developing the technologies that can not only detect and 
analyze an individual's unique physiological response to a 
disease, such as cancer, but also tailor the optimum treatment 
for that person. The outgrowth of the genomics research, 
personalized medicine has already seen success and is realized 
at the direction in which medicine should be moving.
    In early February, the FDA announced that the creation of a 
new position to focus on ushering in new personalized medical 
methods came about. On one hand, the government promotes this 
personalized medical research, and on the other hand, it is 
stymieing the progress through comparative effectiveness 
policy. Comparative effectiveness will directly affect a 
doctor's ability to make the best decision for his patients.
    The Federal Government is the largest customer in the 
health care industry. Once it no longer pays for certain 
medicines or treatments, it becomes financially unsound for 
manufacturers to be able to recoup their costs from research 
and development and thus limit their development of new 
products. Similarly, innovative research on gene therapy and 
other personalized medicine options will be threatened.
    Second, I believe that the removal of the conscience 
protection will threaten our Nation's health care access. As 
Americans we believe that no one should be forced to act in a 
way that violates his or her morals or religious beliefs. There 
are many excellent health care professionals and health care 
facilities that do not believe abortion is a right or is right 
and do not provide that procedure. Now the administration wants 
to remove their right to refuse and provide a service that 
violates their moral principles and/or religion.
    Besides the civil rights aspect of this policy, there will 
be a severe impact on access to health care. Catholic 
hospitals, clinics, and medical professionals are the bedrock 
of our health care delivery system in most parts of the Nation. 
In Kansas, it is 40 percent of our hospitals. As not-for-profit 
hospitals, they take care of all who come through their doors. 
They provide excellent care.
    But if they are forced to close their doors or stop 
practicing, many Americans in Kansas will be left without a 
place for medical treatment. I am interested in hearing how the 
administration plans to ensure that our health care system 
doesn't come to a grinding halt if they stop reimbursing 
medical centers for freedom of choice.
    Finally, in this area in which I know you are intimately 
familiar as former insurance commissioner of the State of 
Kansas, I would like to hear about your rationale for moving 
people from private health insurance to the public system. Not 
only will this exponentially increase the cost to the taxpayer, 
but it will also further rationed health care. The 
administration has expressed a desire for a public insurance 
plan that will directly compete with private health insurance 
plans.
    Employers will see this as a cost avoidance and move their 
employees and their cost from their own pocketbook and bank 
account to the taxpayers. We have seen this already in SCHIP.
    How will we pay for this as a Nation? Have you accounted 
for the vast enrollment beyond just today's uninsured?
    Further, current public insurance accounts for about 40 
percent of the health care coverage, while private insurance 
covers about 60 percent of it. We all know that the 
reimbursement rates are much lower than the actual cost when it 
comes to the public portion. In Kansas, they are experiencing 
from 25 percent to 70 percent below cost on reimbursement 
rates. And it is not one entity alone; it is hospitals, clinics 
and physicians.
    They try to make ends meet by shifting costs from the 
private insurance payments to cover the shortfalls in the 
public funding insurance. Today in Kansas, one-third of the 
physicians will not take any new Medicare or Medicaid patients 
because of this. If HHS cannot find a way to meet the seniors' 
health care costs, then how will they be able to pay for the 
entire populace under government-run health care?
    The only way this would be feasible would be a rationed 
health care system similar to what we find in other countries, 
like Canada, the United Kingdom, Norway, anywhere else on the 
face of the earth that has a similar program. And I believe 
this is completely unacceptable.
    More importantly, I am concerned that it will be the 
downfall of the American health care quality and indeed in the 
world as we know it as a standard bearer in health care.
    Secretary Sebelius, it is good to have you here today. I 
look forward to working with you to ensure that every American 
has the ability to pursue his or her dream, including access to 
the best health care and wellness programs in the world.
    Thank you, Mr. Chairman.
    Mr. Obey. Mr. Lewis.
    Mr. Lewis. Mr. Chairman, thank you very much. I have no 
formal statement. I will wait for the Secretary's statement and 
hope I will have a chance to ask some questions.
    Mr. Obey. Okay. Madam Secretary, please proceed.

                         Secretary's Statement

    Secretary Sebelius. Thank you, Mr. Chairman.
    It is good to be with the committee today, and I appreciate 
the greetings from my fellow Kansan and new ranking member of 
the subcommittee, Representative Tiahrt.
    And it is nice to have Mr. Lewis also here today.
    I appreciate the opportunity to come and discuss the 
President's 2010 budget for the Department of Health and Human 
Services. And this does mark my first appearance before this 
committee as Secretary. And I want to begin by thanking members 
of this committee for your hard work and your leadership. I 
know we do face tremendous challenges in our Nation today, and 
I hope we can work together to tackle those challenges.
    One task we need to complete together is health reform. And 
as you consider the budget before you, you and your colleagues 
are working on a historic effort to reform our health care 
system. Like you, I know America simply cannot afford the 
status quo when it comes to health care. We have all heard from 
people throughout this country who don't know what they will do 
if they or their children fall ill. Too many families in 
America are one illness or accident away from financial ruin.
    Businesses are suffering as well. Yesterday's bankruptcy of 
General Motors reminded us that the cost of health care makes 
it more difficult for American businesses to compete and 
succeed with their global competitors.
    Today a report was released by the President's Council of 
Economic Advisors. It outlines how health care reform can help 
strengthen our economy and shows us the high cost of doing more 
of the same. The report found that if we continue on the path 
we are on today, by the year 2040, 72,000,000 Americans will be 
uninsured, and health care costs will account for over 34 
percent of our gross domestic product. Without reform and 
action now, the Federal deficit will continue to rise, and 
Americans who receive insurance from their employers will see a 
larger portion of their salary go to health benefits instead of 
their take-home pay.
    This is a problem we can avoid if we act now. The Economic 
Advisors' report found that real reform slows the growth rate 
of health care costs by about 1.5 percent, would help cut the 
Federal deficit, boost our economy, save jobs, and put more 
money in the pockets of American families. For a typical family 
of four, real income would be up about $2,600 by 2020 and 
$10,000 more in 2030, but only if we make health reform a 
reality.
    The message is clear: health reform can give us a stronger 
economy and better health care system and boost families' 
bottom line. But if we do more of the same, we all will pay a 
heavy price. We need reform that protects what works in health 
care and fixes what is broken. The budget we are considering 
today invests in key priority areas and puts us on the path to 
health reform. It builds on the investments already made in the 
21st century health system that you all made in the American 
Recovery and Reinvestment Act. It sends a clear message that we 
can't afford to wait any longer if we want to get health care 
costs under control and improve our fiscal outlook.
    Fraud costs our Nation billions of dollars every year, and 
the budget proposes that we further crack down on individuals 
who cheat the system. The Attorney General and I recently 
announced an interagency effort to fight and prevent Medicare 
fraud through improved data sharing, joint strike forces in key 
areas of the country, and increased operations. This budget 
includes increased funding to help HHS achieve our part of the 
bargain.
    The budget also helps move us toward a central goal of 
health reform, improving, as Congressman Tiahrt has already 
mentioned, the quality of care. Now, thanks to Chairman Obey's 
leadership, the Recovery Act has already included critical new 
resources to fight health-care-associated infections, as well 
as new support for prevention and wellness programs that can 
keep Americans out of the hospital in the first place.
    The 2010 budget builds on these investments. The budget 
includes critical support for patient-centered research that 
will give doctors and patients access to better information and 
treatments, as well as quality incentive payments to hospitals 
and physician groups who have better rates of readmission. It 
invests $354,000,000 to combat health disparities, improving 
the health of racial and ethnic minorities in low-income and 
disadvantaged populations.
    And the budget recognizes that if we want to ensure that 
millions of Americans who lack insurance get quality affordable 
care, we need to increase the number of health providers in 
this country. We are responding to the challenge by including 
over $1,000,000,000 within the Health Resources and Services 
Administration to support a wide range of programs to 
strengthen our Nation's health care workforce.
    The funding enhances the capacity of nursing schools; 
increases access to oral health care; targets minority and low-
income students; and places an increased emphasis on ensuring 
that America's senior population gets the care and treatment it 
needs.
    Finally, the 2010 budget will support our Department as we 
work to protect health and safety of our citizens. As the 
recent outbreak of the new H1N1 flu virus reminded us, HHS has 
a significant and critical role to play in preparing for and 
responding to the outbreaks that threaten the health of 
American people. The previous investments made in pandemic 
planning and preparation by this committee and this Congress 
allowed our Department to respond quickly and efficiently to 
the H1N1 virus when it first presented itself and to get 
Americans the information and resources they needed early in 
the outbreak.
    But we still don't know what is coming later this fall and 
winter or what exactly will happen this summer in the southern 
hemisphere as the H1N1 virus mixes with seasonal flu virus. 
Putting safety of the American people first, this 
administration's supplemental request will help support the 
Federal response to the recent outbreak of the H1N1 flu.
    These funds, in addition to the funds requested in the 2010 
budget, will allow HHS to continue to respond to the current 
outbreak and remain prepared to protect the American people.
    Mr. Chairman, President Obama has committed to creating a 
safer, healthier and more prosperous America, and this budget 
will help our Department achieve those goals. It invests in 
reform; will improve quality of care; and continues to provide 
essential services that so many families depend on.
    I look forward to discussing the budget with you and your 
committee today, and I am happy to take your questions.
    [The information follows:]

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              HEALTH CARE REFORM AND HHS BUDGET PROPOSALS

    Mr. Obey. Thank you very much.
    Just a couple of things. First of all, with respect to 
health care reform, I do hope that as the process moves along, 
we will not give short shrift to long-term care. I think that 
has to be a key part of whatever we do.
    Secondly, without belaboring it, I do take issue with the 
administration's request for low-income heating assistance. I 
understand that the amount that is being requested by the 
administration is significant in historical terms, but it still 
represents a reduction below last year, and I would think that 
that ought to be corrected.
    Let me simply express one concern about your budget for 
NIH. I have been on this committee since 1974, and we have 
steadfastly, regardless of which party controlled the White 
House or the Congress, insisted that allocations to research on 
diseases be handled by scientists rather than politicians. And 
so we have always resisted efforts to direct a specific amount 
of funding at a specific disease.
    As you know, and I understand this happened before you were 
appointed, that in the administration's initial request, they 
have crossed that line, and they have moved to request a 
specific amount of funding for cancer and autism to the 
exclusion of almost every other disease.
    I don't think there is anybody on this panel who is in love 
with cancer or autism. I think all of us have a long record, 
regardless of party, in trying to combat both.
    But I do think that it is important that we recognize that, 
once we start politically determining funding levels for one 
disease versus another, then the door opens and every group in 
society is going to be expecting to be in the front car on the 
train. Nobody is going to want to be in the caboose. The result 
will be political chaos in an area that ought to be determined 
by science.
    So this committee will not follow the lead of the 
administration on that. I would urge that you talk to whoever 
made those decisions and suggest that there is a better way to 
skin a cat than that one.
    The only other thing I would say, and then I would invite 
your comments if you want, on NIH, I would again ask that the 
administration as quickly as possible send us your full request 
for pandemic flu, because as you know, we had money in the 
supplemental that was ridiculed by some of our friends in the 
Senate. We have now again put money in--I mean, we put it in 
the stimulus initially.
    We have now again put a significantly amount of money in 
the supplemental. But it is apparent I think to all of us that 
even that amount is not enough. So whatever the amount is the 
administration is going to request, I would hope that they 
would do it pronto.
    I simply invite your comments before I pass you on to the 
next questioner.
    Secretary Sebelius. Well, Mr. Chairman, I will certainly 
share your interest in avoiding disease-specific funding in the 
future with the administration.
    I do know that the President personally feels very strongly 
about the opportunity to cure cancer in his lifetime and has 
talked about that for years based in large part on his personal 
experience. And I think that is a funding initiative that is 
reflected in this budget priority.
    Having said that, they are also, both in the Recovery Act 
and again in the 2010 budget, as a significant investment in 
research. And the President also fully supports letting science 
guide the research. So I think that is a balancing act.
    And I will share your concerns with him.
    It is my understanding that the budget resolution, unlike 
the initial budget proposal, has retooled the LIHEAP funding in 
a way that I think is more suitable in terms of where you feel 
it is appropriate to go. I think the goal initially was to 
provide a little sort of truth in funding by putting the 
trigger in, in case the oil prices were as high as they had 
been in previous years.
    But I understand your commitment to the program and assure 
you that we share that commitment. It is an essential program 
for really what are life-saving services for seniors around the 
country.
    And finally, in terms of long-term care, there certainly is 
already an investment and interest in rebalancing a lot of our 
long-term care issues, funding more of a continuity-of-care 
system, and funding that part of the workforce. This speaks to 
the fact that for many Americans, care in their home, care with 
some assistance, before they would reach a nursing home, is 
much preferable and often provides a much higher quality of 
care.
    So there are some underpinnings that are already in the 
budget, but I think it is very appropriate in the discussion of 
health reform overall that we address that issue, because right 
now, Medicare does not fund long-term care unless you are 
impoverished, and that has become somewhat of an industry to 
try and see that families can save some assets as one or other 
member of the couple faces that situation. So I think that has 
to be part of our discussion going forward. And I look forward 
to working with you and others on that issue.
    Mr. Obey. Thank you.
    I would simply say, with respect to NIH, I think every 
member of this committee shares the President's concern about 
cancer and autism, but there are also legitimate and equally 
important concerns about Parkinson's, about Lou Gehrig's 
disease and diabetes, et cetera, you name it. And I think 
virtually all of us are more comfortable with the final 
decisions being made on the basis of what peer-reviewed process 
leads us to the best scientific judgments as opposed to doing a 
political balancing act.
    Mr. Tiahrt.

                   COMPARATIVE EFFECTIVENESS RESEARCH

    Mr. Tiahrt. Thank you, Mr. Chairman.
    I want to go back to the first one on comparative 
effectiveness. There was $400,000,000 that the stimulus bill 
passed on to your agency, and it is to determine the optimum 
procedure or a pharmaceutical for a given symptom.
    As we experienced with Jennie Jobe when she came to my 
office, she lost access to the best solution for her symptoms 
because of Medicare.
    How will you apply comparative effectiveness? Will you 
allow it to be used like it was for Jennie Jobe as rationed 
health care, or will you use it as an advisory tool for 
physicians in clinics and hospitals, so they can make the best 
decision how to apply the information they have?
    Secretary Sebelius. Well, Congressman, let me start by 
saying, in my service as Kansas Insurance Commissioner for 8 
years, I spent a lot of time and energy fighting the rationing 
of health care, which I saw each and every day, being conducted 
by private insurers who were making treatment choices and 
overruling doctors' medical decisions about drug applications 
and medical procedures.
    So I share your goal that in transforming the health 
system, we not get to a system of rationed care; that medical 
protectives should make medical decisions--not government 
bureaucrats, not insurance companies, not others.
    As you know, the language around comparative effectiveness 
research prohibits Medicare from using that research for cost-
based decisions, for spending decisions. So it is established 
as a methodology to do exactly what you have just described: to 
identify not only best practices and effective outcomes, but to 
increase transparency, inform consumers and providers, and move 
us in a direction where we are using more cost-effective 
treatments, and also higher quality treatments which are in 
place in some parts of the country but too often not in place.
    Mr. Tiahrt. Apparently, CMS hadn't gotten the memo about 
rationed health care because they did ration Jennie Jobe's 
health care.
    Let me move on----
    Secretary Sebelius. That may have been in a formulary that 
was created. I have no idea.

                 CROWD OUT OF PRIVATE HEALTH INSURANCE

    Mr. Tiahrt. It is a danger I think that we are facing in 
America today. And we are seeing it play out in not only 
Medicare but also Medicaid.
    In the public health insurance plan currently today 60 
percent of health care is privately funded; 40 percent public 
funded. And every hospital clinic and every physician in 
America today covers the shortfall of public-funded health care 
by cost-shifting. They use the term cost-shifting. They budget 
cost-shifting. Because as you move towards public health 
insurance, how are you going to pay for it? How are you going 
to avoid not having the ability to cost-shift as you shrink 
that portion of privately-funded health insurance, because that 
is the direction that it is going to go?
    And here is how it works. An employer has 10 employees. He 
pays $500 a month for each employee to have health care. That 
is $60,000 a year. If you give him the alternative to push them 
into Medicaid, like we did with SCHIP, he is going to say I 
have got a $60,000 break here. So he says to each one of his 
employees, you know, like you have here, we are going to change 
the benefit package; you are no longer going to get health 
care, but you do have access to it through Medicaid. And he 
saves $60,000 a year, and it comes to the taxpayers to pick up 
that cost.
    So how are you going to pay for the public health insurance 
program that your Department is moving forward and the 
administration is moving forward?
    Secretary Sebelius. Well, Congressman, I think that the 
President starts with a principle that he does not support 
dismantling the system that we have for employer-based health 
coverage. He recognizes that 180-plus million Americans have 
coverage they like, have coverage that they want to keep, have 
a doctor they go to.
    Mr. Tiahrt. It is not a point about them keeping the 
coverage. Excuse me for interrupting, because I am on limited 
time. It is not like the Governor's Office where you have 
control of all your time.
    Today it is going to be an economic advantage for the 
employer. The individual won't have a choice. It will be the 
employer that makes that decision based on pushing cost to us 
taxpayers, which will be a cost advantage to him.
    Secretary Sebelius. Well, I would suggest the biggest cost 
shift that is going on right now is the uninsured Americans who 
come through the doors of that hospital in Wichita and in 
Topeka and in Kansas City every day, and those costs are 
shifted directly onto private employers who are desperately 
trying to keep their employer coverage.
    The system of providing a payment for every American, of 
having preventive care, of driving wellness care, reduces the 
kind of cost shift that we have right now, which falls most 
often on small business owners and small coverage. So as the 
health plan is being debated and constructed in Congress, I 
think that having a fair payment system, having shared 
responsibility and making sure that all Americans have access 
to more affordable and more effective health care treatment at 
the front end prevents the kind of cost-shifting that you have 
just described.

                          SINGLE-PAYER SYSTEM

    Mr. Tiahrt. Health care reform does need to occur. I think 
we should have a good open debate about whether we use a 
different alternative rather than just a single-payer system 
that we are moving towards now. And I am glad that you are open 
to that debate, and I look forward--
    Secretary Sebelius. I am. Congressman, I can assure you 
that I don't support and the President doesn't support a 
single-payer system. He wants to build on the system that we 
have, recognizing that 180,000,000 Americans have coverage they 
like, and they want to keep it. We are trying to determine how 
to get more effective and affordable coverage for everyone 
else.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Mr. Obey. Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    And welcome, Madam Secretary. What a delight to have you 
here today, knowing of your interest in health care and also 
your record as a Governor.
    I want to say a particular thank you. We have had a chance 
to work together with regard to what was happening in rural 
America and your focus in that area, but also in this job as 
how in fact, with your leadership and the President's 
leadership, we will be able to provide affordable health care 
for every American. It has been a long time in coming. And we 
didn't succeed in 1993, and the problems have only gotten 
worst. We cannot fail this time around. And I believe the 
President believes that, as do you.
    I want to first associate myself with the comment on health 
care that the chairman pointed out. I am a very strong 
proponent of a public plan as part of the options that we 
provide to people today, that it helps us to level the playing 
field, and it does provide real choice there.
    I would also would remark on the issue of this committee, 
and on a bipartisan basis, I think what we have tried to do is 
to not pick and choose the various diseases or illnesses that 
are focused at the NIH and our other research institutes so 
that, while, and I, too, have a personal interest in cancer as 
a survivor, but the, if you will, earmarking of autism and of 
cancer, I think we are best if we are not picking and choosing.

                    EARLY CHILDHOOD AND HEALTH CARE

    I am going to go to another question, and hopefully in a 
second round I will come back to health care. But I wanted to 
just briefly talk about early childhood and Head Start if I 
might. And the recovery program did provide funding for Head 
Start as part of a safety net, but the dollars, as you know, 
don't increase the base funding for the program. The Recovery 
Act also provided resources for child care and development 
block grant, but again it isn't a part of, really, the 2010 
budget which only included a slight increase for the block 
grant program. And what I wanted to do is to check in with you 
about your plans for working to ensure that the increased 
Recovery Act funding is sustained in 2011 and beyond with 
regard to early childhood and health care and how in fact you 
plan to work with the Secretary of Education, Secretary Duncan, 
to look at the coordination of services for children who are 
under 5.
    Secretary Sebelius. Well, thank you, Congresswoman.
    As you just said, the 2010 budget does include an increase 
in funding for Head Start and early Head Start that would start 
with a platform that was put in place by the enormous 
investment of the Recovery Act money. And I think that is so 
essential. I have had the opportunity to do a lot of work in 
early childhood education, and I take very seriously the notion 
that this is probably the best single investment we could make 
in America. The research on brain development is pretty clear 
that between birth and 3-years-old, particularly, is an 
enormous growth period.
    Secretary Duncan and I have already had several preliminary 
conversations. In fact, I had the first one, when I was still 
governor of Kansas and he was already the Secretary, about how 
the work we were doing in Kansas could be expanded with some 
early education money. And I have circled back around now as 
the new Secretary to talk about ways that we can have a very 
collaborative and coordinated strategy.
    I think it is important to have all the early childhood 
providers at the table to have a mutual goal about where this 
money is best directed, based on science- and evidence-based 
research, and also to recognize that all children don't thrive 
in identical programs, that we need a variety of programs for 
parents and children to succeed. So I can assure you those 
conversations are very much under way, and it is a passion that 
both of us share.
    Ms. DeLauro. The $300,000,000 Early Learning Challenge 
Grants, do you have any thought as to how that is going to be 
implemented with regard to States and how we are going to look 
at that?
    Secretary Sebelius. Again, those conversations are just 
under way. But I think that what is important is to set up some 
kind of a platform for a program that is based on what we know 
works in the long run, what gets children ready to go to 
school.
    We did an alarming study in Kansas a couple of years ago 
conducted by the Board of Education that found that about 50 
percent of the 5-year-olds who hit kindergarten were not ready 
for kindergarten for a variety of reasons. And so early 
childhood education needs to target school readiness and close 
that learning gap so kids are ready to learn when they hit 
kindergarten.
    Ms. DeLauro. Thank you.
    Thank you, Mr. Chairman.
    Mr. Obey. Mr. Lewis.
    Mr. Lewis. Thank you very much, Mr. Chairman.
    Once again, welcome, Madam Secretary. It is a pleasure to 
be with you.
    Secretary Sebelius. Thank you.

       HEALTHCARE REFORM, H1N1 FLU FUNDING AND PROJECT BIOSHIELD

    Mr. Lewis. The last time we had a mutual review of the 
Nation's health care system and raised questions and discussed 
what the Federal Government might be doing about it was when 
Secretary of State Hillary Clinton was then associated with the 
President of the United States William Clinton, and he formed a 
commission that she headed. And they spent considerable time 
and energy reviewing where we should go with our health care 
system.
    Once the product was developed itself I think many a 
message was sent to the Congress that we would be well served 
by reflecting upon, or that package hung out there long enough 
that essentially the people got a chance to understand what was 
in it, and they didn't want it very much. And they sent 
messages back to us that were very clear and rather direct. 
They said first that which the chairman suggested, and I 
believe your statement suggested, that people want first to be 
able to keep what they have. And then above and beyond that 
they want to ensure that they maintain choice as we go forward 
with such a package.
    I do not know what a government single-payer system might 
lead us to. But a lot could be learned by also not just looking 
at the Hillary Clinton Commission, but some of that which John 
Maynard Keynes may have taught us about what socialized 
processes deliver in the final analysis. All of that will be a 
part of the discussion that is ahead of us. It will be a 
healthy one and an important one. The Chairman and I have spent 
some energy attempting to figure out what we do with a thing 
called pandemic flu.
    I want to commend the Department for taking on H1N1 virus 
seriously and going forward with a program that will attempt to 
make sure that we are ready and that we benefit from that which 
we have learned so far as a result of work by people like Julie 
Gerberding and the like. I note that within your budget there 
is a request that includes $354,000,000 for public health and 
social service emergency funds.
    At the same time, I am concerned that there are plans to 
move bioshield money for flu vaccine production. Within that 
mix, it is awfully important that we make sure we are not 
stealing from Peter to pay Paul, that we have enough money to 
ensure that we are protecting the public and our country from 
difficulties with bioshield chemical, biological, radiological 
problems, et cetera. Could you tell me what your thinking is 
presently regarding that funding and if you agree that there 
are conflicts that could lead to funding difficulty?
    Secretary Sebelius. Well, Congressman, I don't think that 
there is any question that the investment made over the past 5 
years by this Congress and the previous administration in 
preparation and planning and beginning to work on the new 
vaccines that potentially are needed for a variety of deadly 
diseases have been critically important. And I know this 
committee and Chairman Obey and others have been in a real 
leadership role on pushing that ahead. I think that as a 
governor I was able to see some of the results of that because 
we were able to do planning and put a pandemic plan together, 
do cross-State preparation, involve private industry, and do a 
whole series of initiatives to prepare for an outbreak, which 
would not have been possible with only State funds.
    So I have seen it both at the Federal level, but also 
experienced what those investments have done. I know that 
currently we are in the process of evaluating steps forward 
with H1N1, and at the same time recognizing that we need to 
keep the planning stages in place with BioShield for whatever 
eventuality might hit next. So I think that the budget and the 
administration's request for supplemental funding to deal 
specifically with H1N1 reflects a notion that safety and 
security are first. We know what is facing us right now with a 
whole series of uncertainties with H1N1. We know we have a new 
virus, and we know we have a need to take a look at the 
potential vaccine program. But we also know that there are a 
series of other outbreak potentials and terrorist acts that 
still are looming and we need to do both simultaneously. That 
is what is reflected in the budget before you and in the 
supplemental request.

                              NIH FUNDING

    Mr. Lewis. Mr. Chairman, could I just proceed with one more 
question?
    Mr. Obey. Sure.
    Mr. Lewis. Thank you, Mr. Chairman.
    I can't help but be concerned about the fact that we have 
within the stimulus package increased NIH funding 
significantly, like a $10,000,000,000 adjustment in that 
baseline. As we go forward, I know that your Department is 
making a request, it is a pretty modest request, of 1.3 
percent, I believe, in the projected year ahead of us. There is 
kind of a cliff out there that involves the $10,000,000,000, 
and it is bound to create pressures and a shift in priorities, 
et cetera. I would appreciate your letting the committee know 
what your thinking is and how you are going to deal with that 
very real $10,000,000,000 problem.
    Secretary Sebelius. Well, Congressman, I would love to tell 
you I know what the request will be in 2011. I am aware that 
there is a significant investment in the Recovery Act, which I 
think is very appropriate and will pay enormous dividends. And 
I can assure you that we are going to begin to work and look 
forward to working with this committee and the committees in 
the Senate side about the future, about a multi-year planning 
strategy. Because I think that everyone is aware that there has 
been a significant investment, it is basically out there. But 
the worst of all worlds is to, I think, key up a number of new 
initiatives and then take a huge step back. So, I do look 
forward to your ideas and suggestions and working with you as 
we look at the out years.
    Mr. Lewis. Thank you, Mr. Chairman.
    Mr. Obey. Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman. Let me first begin by 
welcoming the Secretary to our subcommittee and thanking her 
for her testimony.
    I also want to associate myself with Chairman Obey and 
other members who have spoken on the question of specific 
earmarks for health-related diseases in this bill. Every member 
of this subcommittee has a personal story to tell, every member 
of the subcommittee has a case to be made for their 
constituents that drove us to seek an appointment to the 
subcommittee in the first place from cancer to mental health to 
meditation and other forms of health related practices that 
could improve the Nation's health. And there is a constant 
battle on this committee for the years that I have been on it 
to try and find the appropriate necessary resources to address 
each of our individual and collective concerns.

                           HEALTH DISPARITIES

    One of my central projects since I have been on the 
subcommittee has been addressing issues of health disparities. 
When I first got appointed to the subcommittee, then-Chairman 
Porter of the subcommittee, while I was trying to advance what 
I thought would close profound gaps that exist in our society 
insisted on good science.
    And he said, Congressman, as much as I want to be 
supportive it needs to be driven by good science. So I put 
language in an appropriations bill many years ago to address 
ethnic and racial health disparities. And the language charged 
the top scientists, doctors, and Nobel Laureates around the 
country at the Institutes of Medicine to come up with an 
approach, a scientific approach that would justify spending on 
this committee for addressing some of the profound gaps that 
exist in treatment. The scientists named the report, ``Unequal 
Treatment.'' And for as long as I have been on the committee 
since the report was released, this committee has basically 
essentially attempted to follow the path, the roadmap laid out 
by these scientists in terms of the appropriations requests 
that we make to close these gaps.
    Madam Secretary, as you know, many of us on the 
subcommittee have made it a point to prioritize reducing health 
disparities through a variety of programs at HHS. At the Office 
of Minority Health and at the National Center of Minority 
Health and Health Disparities, we further focus on reducing 
health disparities by supporting many of these programs that 
contribute to diversity in the health care workforce. If you 
could, and I do understand that the budget lays out 
specifically another $354,000,000 for combatting these issues, 
could you lay out for us your thoughts, and over time we will 
get to even more specific, your thoughts on how the Department 
will approach the issues of health disparities?
    Thank you, Mr. Chairman.
    And thank you, Madam Secretary.
    Secretary Sebelius. Well, thank you, Congressman.
    And again, thank you for your leadership on that critical 
issue of health disparities. I know you have been working on it 
for a long time, and the work has paid off to some degree, but 
there is a lot more work to be done.
    In my first week as Secretary, we released this year's 
report on health disparities, which continues to be pretty grim 
in terms of the appropriate treatment really by ethnicity is 
very disparate around the country. And I think that one effort 
that can be enhanced is just the transparency about what is 
going on. I don't think there is any question that the debate 
that is currently under way about health reform will have an 
impact on health disparities, because, unfortunately, what we 
know is that, by income and by minority group, the likelihood 
of individuals lacking insurance or being under insured is a 
predominant case.
    And I think having an opportunity for a health home and an 
ongoing treatment protocol for every American is a step in the 
right direction. Certainly some of the steps to address also 
include workforce issues, not one that we necessarily 
automatically think as part of health disparities. There is 
some investment in the workforce money that looks particularly 
for minority students and combines that with underserved areas, 
because I think cultural competency is an issue with health 
care delivery. And whether or not folks feel comfortable about 
seeking out health information and follow it is often due to 
whether or not they feel a relationship with the health 
provider.
    So, in addition to the funding that you have just cited for 
specific programs, I think there is another range of 
investments on workforce issues, on health reform, that will 
also help close the gap of disparities that we continue to see.

                          MANDATORY INSURANCE

    Mr. Jackson. Thank you, Madam Secretary.
    Thank you, Mr. Chairman.
    Mr. Obey. Mr. Alexander.
    Mr. Alexander. Madam Secretary, welcome.
    Secretary Sebelius. Thank you.
    Mr. Alexander. I have spent a great deal of my time last 
week traveling around the State of Louisiana. We had several 
health care summits, if you will. We had panelists made up of 
physicians, nurses, health care providers, nursing home owners 
and so forth.
    They are afraid. They are scared about what lies ahead. I 
represent the ninth poorest congressional district in the 
Nation; I am told one of the unhealthiest in the Nation.
    My question is, in Louisiana, we have had a successful 
SCHIP program. We call it LaCHIP program in Louisiana. I voted 
against the expansion of SCHIP simply because we have not met 
all the needs in Louisiana yet, although it has been an 
effective program compared to other studies.
    I don't know if it is apathy or lack of knowledge about 
where people can sign up, but the question is, how now, as we 
look at the potential of compulsory insurance, what happens? 
How do we make it work? In Louisiana, we still have 100,000 
children who are eligible for SCHIP or LaCHIP that are not 
signed up. So how do we encourage, how do we engage people to 
care and go sign up? And what happens if--do we turn them away 
at hospitals, emergency rooms because they don't have insurance 
of their own? What happens? How does it work?
    Secretary Sebelius. Congressman, that is a great question. 
I think that one of my interests in the CHIP program is 
certainly taking some of the best practices in enrollment and 
trying to assist in spreading those throughout the country, 
because there are States that have done pretty creative work 
and had great success in enrollment and others that have not. 
And I think that one of the key building blocks for health 
reform is actually getting folks to enroll and engage in 
programs that they are currently eligible for and providing the 
coverage that Congress and the administration have seen as a 
high priority.
    So outreach strategies, assisting with everything from 
presumptive enrollment to simplifying enrollment forms are 
important. Unfortunately, some States still, rather than 
relying on fairly easy technology, are relying on face-to-face 
visits, which often are complicated for families that are 
working and juggling opportunities. So I think there are a 
bunch of strategies that we can engage in in the Departments of 
Medicare and Medicaid to make it easier and more seamless for 
families to actually enroll their children in programs that 
they qualify for.
    But I think as we move forward, having discussion and 
debate about everything from auto enrollment--which is, I know, 
one of the strategies that some Members of Congress are taking 
a look at--to presumptive enrollment, to how you make it easier 
for people who are eager to find affordable health coverage, to 
actually sign up and become engaged, is one of the discussions 
that are under way with the committees that are looking at 
this. Because the last thing we want is to make affordable 
health care have another huge barrier and that be some 
enrollment that becomes terribly complicated and sets up its 
own restrictions along the way.
    We know what has worked in many areas. We know what has 
worked for employer care and for other care, and I think we can 
take those lessons learned and help spread that information as 
we move forward.
    Mr. Alexander. Thank you.
    Mr. Obey. Ms. Lee.

       HEALTH DISPARITIES, SINGLE-PAYER SYSTEM AND SEX EDUCATION

    Ms. Lee. Thank you very much, Mr. Chairman.
    Hello, Madam Secretary; good to see you. And 
congratulations. I look forward to working with you, and I will 
just say how delighted I am that you are there in this very, 
very critical position.
    I want to follow up on Congressman Jesse Jackson's point, 
first of all, with regard to health care disparities. As Chair 
of the Congressional Black Caucus, along with, of course, 
Congressman Mike Honda as Chair of the Asian Pacific American 
Caucus and Congresswoman Velazquez who chairs the Hispanic 
Caucus, we are working on a health care disparities bill, 
closing the disparities, and you know the problems. You have 
acknowledged it.
    But I am wondering, in this overall health care debate now 
that is taking place, we don't hear much in the debate about 
this being a critical element of the health care reform 
package, whatever package may come out.
    So I want to raise that with you, because I have raised 
this with the White House several times. And just know that in 
this debate, this has got to be front and center for many of 
us, because our communities, of course, are the ones who are, 
you know, the unfortunate, you know, beneficiaries, the 
terrible beneficiaries of these disparities.
    Secondly, with regard to single payer, I know the realities 
of single payer as it relates to what ultimately will be the 
type of health care package that we come up with, but I hope 
that single payer is on the table for discussion. I don't think 
we need a health care reform debate without looking at all of 
the options that exist, and so single payer is an option that 
needs to be considered on the table as part of our efforts.
    Thirdly, I just want to commend you and the President for 
your proposing to end the ineffective and discredited 
abstinence-only education programs. For many years now, Senator 
Lautenberg and myself have worked on legislation, H.R. 1551, 
the Responsible Education About Life Act, that allows for 
States--it is very simple--that allows for the States to use 
Federal money if they want to teach comprehensive sex 
education. It is abstinence and abstinence-plus. So I hope you 
will look at that. But I want to commend you and the President 
for that.
    Finally, let me just say on behalf of Congresswoman Roybal-
Allard, who comes from California--southern California; I am 
northern California--she was detained in her district until 
this morning. Unfortunately, she couldn't be back in time, but 
she wanted you to know she would be submitting questions for 
the record and to extend her welcome to you, Madam Secretary.
    Secretary Sebelius. Thank you so much. I think that the 
health reform debate and discussion is firmly, here at the 
Capitol, under way in both the House and the Senate--three 
committees in the House and two committees in the Senate--and 
lots of you have been intimately involved. So whether it is 
single payer or health disparities, that information that you 
have the expertise about and the data that you know so well 
needs to be part of the discussion as the bills move forward. 
And I think that is not only very appropriate, but very 
important, that the options be looked at.
    As you know, the President laid out some principles that he 
believed in with health care moving forward, and he felt very 
strongly that we needed to build on the current system and not 
dismantle employer-based health coverage. But I know there are 
a number of strong advocates for the single-payer system, 
particularly here in the House, and I assume that will be part 
of the options that you look at as you move along.
    Ms. Lee. Thank you. Let me just ask, make a point with 
regard to that though.
    Yes, we are going to make sure that here in the House that 
is laid on the table and that is included as part of the 
debate, single payer and health care disparities. But I hope we 
hear from the administration the importance of not letting that 
slide, because sometimes, you know, we follow in many ways what 
the administration is laying out in terms of the general 
parameters.
    Finally, the HIV-AIDS travel ban. I know HHS sent over a 
proposed rule, but it has taken a long time. Do you have an 
idea of when we are going to be able to finally lift the ban as 
it relates to HIV-positive people coming into the United 
States?
    Secretary Sebelius. My understanding is that issue is very 
much on the radar screen, and it should be soon.
    Ms. Lee. Thank you very much, Madam Secretary.
    And thank you, Mr. Chairman.
    Mr. Obey. Mr. Cole.

                   NIH FUNDING AND HEALTH CARE REFORM

    Mr. Cole. Thank you, Mr. Chairman.
    And, Madam Secretary, it is great to have you here. I just 
want to quickly associate myself with probably the common 
bipartisan sentiment here about directing money towards 
specific diseases. If I was drawing on personal examples, I 
would talk about Alzheimer's and MS in my family. If I was 
looking at my district, I would talk about diabetes for the 
Native American population and what that does for the cost. So 
once we go down this slope, we would have a lot of arguments 
here that would be well-intentioned, but probably not 
productive for us; and I don't see how you open the door for 
two and not open it up for all.
    Let me ask you specifically--I think I know the answer, but 
I want to make sure--is the President's position on health care 
now that it would be mandatory that everybody participate?
    That is somewhat of a shift from the campaign. So has he 
made that decision yet?
    Secretary Sebelius. He has not, Congressman. As you know, 
in the campaign he supported a mandate with regard to parents 
with children. He did not support an individual mandate. I 
think what he has said pretty consistently, though, is he is 
open to engaging in that conversation with Congress. He knows 
that a number of Members of Congress are very committed to an 
individual mandate, as have been some of the stakeholders at 
the table. But at this point, he has not made that part of his 
proposal.
    Mr. Cole. That, as I am sure you know, is a concern simply 
because, while we use a lot of numbers about the uninsured 
population, there is always a subset, 25 percent to one-third 
or whatever, that really could afford insurance, but choose not 
to. So that is going to be a discussion we have.
    The second question, because the single payer or government 
plan option is a big impediment for a lot of us, and I think it 
actually makes a bipartisan compromise much more difficult: 
Have you thought about anything modeled after something like 
Medicare Part D, which actually has worked pretty well? It came 
in at a lot less than estimated in terms of the cost. It has a 
high satisfaction rate. The premiums are comparatively low, 
lower than we estimated, CBO estimated at the time. It is an 
all-private system, but obviously has a government framework to 
operate in.
    While it was a matter of a great deal of contention when we 
dealt with it, it has been interesting to me that almost nobody 
has wanted to go back and undo it. It has actually worked 
pretty well without a government plan as an option.
    Secretary Sebelius. Well, Congressman, I certainly think 
that is one of the recent examples of a benefit package that 
was put on the table.
    I would suggest, though, that it is not accurate to 
describe the public option, which would be part of the health 
exchange, as a single-payer plan. I don't think that is an 
accurate description.
    What is envisioned is a health exchange where private plans 
side-by-side compete with public plans, and as they do now in 
many States in the country in State employee health plans, and 
as they do in many States in the country with the children's 
insurance program. Absent a public option, in many parts of the 
country you would not have choice and you would not have 
competition because one private insurer essentially has a 
monopoly over the marketplace.
    So, again, in my insurance commissioner days, you can 
easily design an actuarially level playing field where it 
really is a competitive goal. And, frankly, I think that having 
a plan that has potentially miserable benefits and low provider 
rates is not likely to attract many Americans to choose that 
plan if they have a choice of another plan.
    The notion of a public plan is to have a health exchange, 
where you provide choice and competition--to me, two great 
driving features--and give a number of Americans, who right now 
don't have a choice and there is nobody to compete with, some 
cost competition.
    Mr. Cole. I would just suggest a lot of us share Mr. 
Tiahrt's concern that that is going to lead us toward a lot of 
private employers pulling out and effectively shifting.
    I have got very limited time. Let me ask you one last 
question here.
    You and the chairman in a dialogue, and I think 
appropriately so, expressed concerns about long-term care. It 
is obviously a huge problem for the country in terms of how you 
fund it. There are a lot of folks obviously that clearly start 
moving assets early.
    Have you thought about or are considering any kind of 
expansion of health care savings accounts, again with the idea 
that over a lifetime you can build up a certain amount of 
capital and use that to defray long-term health care costs? I 
am not saying it is a solution for everybody, but the more 
people you pull out of the system that way or allow them to 
operate that way, the less public cost you might have.
    Secretary Sebelius. I have not been engaged in that 
particular discussion. I was engaged over a number of years, 
and I know it has been a proposal before Congress for years, 
that looked at everything from tax credits to incentives for 
individuals to do more purchasing of private long-term care 
policies. I think the balance always was that a number of the 
private long-term care policies did not include very robust 
consumer protections, and in fact many of them had cost 
escalators that had people paying in for a decade and then the 
policy became so expensive that they dropped it and ended up 
with nothing.
    But we need to look at a variety of strategies, because as 
you well know, if you end up meeting the income guidelines, 
then you become eligible for long-term care benefits at 
basically the State level, and if you don't meet the income 
guidelines, Medicare does not provide those benefits. So we 
really do have a significant disparity right now.
    Mr. Cole. Thank you, Mr. Chairman.
    Mr. Obey. Mr. Moran.

                        INTEGRATION OF SERVICES

    Mr. Moran. Thank you, Mr. Chairman.
    Welcome aboard, Madam Secretary. I know you are going to 
make us all very proud.
    The Department of which you are Secretary used to be called 
the Department of Health, Education and Welfare. When it was 
set up in the early 1950s in the Eisenhower administration, the 
idea was to address the whole panoply of needs of the 
individual. And they didn't use the term ``holistic'' in those 
days, but that is really what they meant.
    We haven't achieved that objective. I think in large part 
the Congress is as much to fault as anyone, because as the 
chairman suggested, we identify particular needs, fund them, 
and as a result, we have this vast array of different programs: 
different people and programs to deal with education; others 
deal with health; others deal with human services; others deal 
with nutrition, et cetera, et cetera, all of the various needs 
of the individual. The problem is, it is the same individual.
    If we really wanted to achieve the most savings, but even 
more importantly, perhaps most effectively, address the needs 
of that single person, we would start combining and finding 
overlapping jurisdictions and find ways that we could better 
integrate the services that we are trying to offer. Your budget 
alone, even after we take out education, there have got to be 
hundreds of programs, and some individuals are eligible for 
half of them.
    One of the things that has been done around the country, 
for example, is to set up school-based health clinics. I know 
we had some opposition when I did that as mayor of Alexandria, 
Virginia, but once it was set up, we reduced the level of 
teenage pregnancy and, thus, abortions. We found any number of 
cases of cancer in adolescents who wouldn't have had a checkup 
and identified at an early stage, mental health problems, et 
cetera; and we achieved the kind of coordination-collaboration 
that I think best serves the individual.
    Now, I am wondering how you feel about those kinds of 
efforts, of achieving more overlapping, more integration of all 
those hundreds--myriads of services that you are responsible 
for?
    Secretary Sebelius. Congressman, you make a great point 
that all too often the same family may have people coming at 
them from 14 or 15 different angles, and only four or five hit 
the mark; and as we just talked about, enrollment strategies 
often fail. So I am a huge fan and believer in a systemic and 
collaborative approach.
    In my brief tenure in this position, I know the President 
also shares those concerns and has implored Cabinet members to 
come together on strategies, leveraging assets and 
opportunities in departments. We have had some robust 
conversations already on childhood obesity and strategies of 
the Food and Drug Administration.
    My first few days in Washington were focused on Cabinet-
wide approaches to address H1N1, and it was a great 
illustration of how various members of the Cabinet and various 
departments needed to collaborate and cooperate, not just for 
that emergency, but on a regular basis.
    So I look forward to not only figuring out within our own 
agency how to break down some of those silos and put people at 
the table on cross-cutting issues, but also to do that with 
colleagues in Cabinet agencies. Because often all of us are 
approaching the same problem, but through different lenses; 
taxpayer dollars will go much further, and programs will be 
much more beneficial if we can approach them holistically.

                      FINANCING HEALTH CARE REFORM

    Mr. Moran. Thank you very much, Madam Secretary.
    Madam Secretary, the President requested over $600 billion 
as sort of a set-aside, seed money for the health reform 
proposal, although half of that was dependent upon generating 
revenue by reducing the tax deductibility of charitable 
contributions. It looks like the Senate has rejected that; so 
we are probably at about $300 billion in terms of revenue that 
would pay for health insurance overhaul, and yet the cost over 
10 years is $1.2 trillion. I should have said the $600 billion 
was over a 10-year period. The cost is $1.2 trillion over a 10-
year period, most people assume. So we are really short about 
$90 billion a year, $900 billion over the decade.
    Are there other ideas that the administration may propose 
to Ways and Means and Finance particularly as to means of 
financing this gap, or are you anticipating any modification of 
the original goals?
    Secretary Sebelius. Well, Congressman, that discussion is 
very much under way. I would suggest that the President hasn't 
retreated from his initial proposals, even on the revenue side, 
and I find that as Members engage in the work of trying to 
identify where money is available, the proposals are likely to 
be back on the table for starters.
    Our agency has been asked, as have other agencies, to 
identify additional opportunities, and we are in the process of 
doing that right now within the Department of Health and Human 
Services. I also think that there are opportunities for various 
savings that haven't been scored; whether or not they will end 
up being scored remains to be seen, but prevention and 
wellness, at least in the outyears, may have significant 
payoffs.
    We are now spending 75 percent of our health costs on 
chronic disease, and some efforts to better manage, better 
control, and improve outcomes with chronic disease management 
have significant payoffs down the road. So we are currently 
working on that.
    There is also a great belief that the investment in health 
technology will pay huge dividends, not just in helping to 
drive appropriate protocol, but in lowering medical errors, 
again not quite in the system yet.
    So there is some work to be done in terms of identifying, 
some of those outyear savings that most people agree are very 
much there, but just haven't been part of the discussion yet.
    Mr. Moran. Thank you, Secretary Sebelius.
    Thank you, Mr. Chairman.
    Mr. Obey. Mrs. Lowey.

   ENDING VIOLENCE AGAINST ABORTION PROVIDERS AND HEALTH CARE REFORM

    Mrs. Lowey. Thank you, Mr. Chairman.
    I join my colleagues in welcoming you, Madam Secretary.
    Madam Secretary, many of us were shocked and saddened by 
the horrific murder of Dr. George Tiller over the weekend. For 
years, the Bush administration went out of its way to protect 
doctors from being forced to provide services they found 
objectionable, yet did nothing to shield physicians providing 
legal and life-protecting medical care to women from ongoing 
harassment, threats and violence. This is unconscionable and 
must change. In my judgment, the Federal Government must send a 
message that acts of violence against health care providers 
will not be tolerated.
    I was pleased to learn that Attorney General Holder has 
indicated that the U.S. Marshal Service will begin protecting 
certain abortion clinics and doctors, and this is a good first 
step. Today, the New York Times also called on Attorney General 
Holder to revitalize the National Task Force on Violence 
against health care providers that was originally established 
in the 1990s.
    Now, I realize this task force would be under the 
jurisdiction of the Department of Justice, not HHS. I want to 
know, number one, would you support its revitalization and how 
does HHS intend to work with the Department of Justice to 
ensure that these acts of violence are eliminated? And do you 
agree that this type of violence could discourage medical 
schools from teaching doctors how to perform abortions, and how 
will HHS work with medical schools and provider organizations 
to ensure that this procedure is being taught?
    Secretary Sebelius. Well, Congresswoman, I share your 
interest in making sure that health services are delivered 
within the law and that providers are protected. The Attorney 
General was quick to reach out and make it very clear that acts 
of violence would not be tolerated, that he would use the 
assets of the Justice Department to provide protection. He sent 
a very strong message about acts in the future that would be 
prosecuted.
    I am not familiar with the task force that you have 
described, but would look forward to working with you, to take 
a look at it. If it is revived, I think the jurisdiction, as 
you note, is within the Department of Justice. But certainly 
having providers be able to deliver health services to men and 
women across this country is essential.
    Mrs. Lowey. I thank you.
    And following up on another issue, given your experience as 
the Kansas State Insurance Commissioner, you understand the 
threat to quality and affordable care posed to the insurance 
industry when multiple insurance companies merge or have record 
profits at the expense of health providers and consumers. In 
fact, from 2001 to 2004, health plans in New York State made 
more than $5 billion in profits while its hospitals lost $600 
million. I think it is interesting that the Westchester County 
Association, which is run by many the businesses in Westchester 
County, points this out in many of their discussions and 
sessions with us.
    So, first of all, do you agree that the relationship 
between private payers and the financial viability of the 
health care system needs to be examined? And if you could share 
with us your experiences battling the insurance industry in 
Kansas and how that impacted consumers, I would like to know if 
there are lessons from this experience that can be applied 
across the country and included in health care reform 
legislation.
    Secretary Sebelius. Well, Congresswoman, I share your 
concern about oversight, and my colleagues who are serving as 
insurance commissioners across the country have jurisdiction to 
review everything from loss ratios to appropriate rate-setting. 
Some are aggressive and others, frankly, have very little 
choice because often there is a dominant carrier and a single 
provider, so the opportunity to have regulatory oversight is 
fairly limited.
    When I was commissioner in Kansas we had a situation of a 
proposed takeover of the Blue Cross-Blue Shield Plan of Kansas 
by an out-of-state company, and I ended up ruling against that 
takeover ultimately because after reviewing all the testimony, 
after having a series of hearings, after having providers and 
hospitals come before us, it became clear that the only way to 
produce the profit statements to the shareholders, which the 
company had promised, was either to reduce benefits or to 
reduce payments to providers, all of which would not have been 
good for Kansas consumers.
    So I do think there is an appropriate oversight role. It is 
certainly one that is in the proposal of the public plan. It is 
the President's goal and Congressional Members' goal that 
either regulatory oversight or competition within a marketplace 
work very well, and those things are part of the goal of the 
public plan option.
    Mr. Obey. Mrs. McCollum.
    Mrs. McCollum. Thank you.
    Madam Secretary, it is truly a pleasure to have you before 
the committee today. The Department of Health and Human 
Services has a full plate, and I am very grateful for your 
commitment and your team at HHS to work to reform health care 
and meet the needs for the services upon which millions of 
Americans depend. You have a big job, and I know you will do it 
well.
    As you know, as Congresswoman Lowey pointed out, on 
Saturday an assassination took place in your home State of 
Kansas. A physician was murdered. It was an act of terrorism, 
and it was in his church. This act of an anti-abortionist 
vigilantism inspires fear and terror for not only health care 
providers, but for women who need those services. The murdered 
doctor had previously been shot, and the clinic in which he had 
worked had previously been bombed.
    Abortion in this Nation is a legal health care procedure, 
and I support a woman's right to make her own health care 
choices. The work of the courageous health care providers meet 
women's needs daily, and they should do so without fearing loss 
of life.
    What America witnessed on Sunday was a Taliban-like tactic 
to prevent abortions by murdering a doctor. This is terrorism, 
and I hope this administration, as you have pointed out, will 
continue to extend protection to women's clinics all across 
this country. I know that Planned Parenthood in Minnesota--
there was an article in the paper--has been targeted in the 
past, and they have received protection.
    Thank you so much, and the women in the area that receive 
those services also thank you and thank Mr. Holder.
    Madam Secretary, I support comprehensive sex education 
based on science. Comprehensive family planning and 
reproductive health care for all women and counseling to ensure 
women of all ages have the best information to make good 
choices about when they decide to have their children, that is 
how we reduce abortions and that is how we empower individuals 
to prevent the need for abortions.
    So, I want to thank you so much for your commitment in the 
2010 budget to provide women of all ages comprehensive 
information and reproductive health services. Thank you, and 
you can count on my support to do everything to get that 
passed.

                        HEALTH CARE FOR CHILDREN

    But I do have a question. As we take on the challenges of 
health reform, I firmly believe that every American has the 
right to health care, and this should be especially true for 
every single one of our children. As we reform our health care 
system, we need to remember that no population stands to gain 
more from national health care reform than our children. 
Children insured by Medicaid and CHIP are covered under 50 
different State programs and the D.C. to account for 51 
different programs. A child's access to health care coverage 
and health care should not vary by location in this country.
    So, the question is, how does the Federal Government ensure 
that its most important investment, the investment in the 
health of its children, be standardized in terms of uniform 
eligibility, national pediatric benefit set, and access to 
pediatric specialists for medically necessary care? How can I 
work with you to make this a reality, Madam Secretary?
    Secretary Sebelius. Well, Congresswoman, I would love to 
have a chance to work with you on that critical issue.
    As you know, there are some mandated benefits for young 
children in the Medicaid packages, which all States must 
follow. But beyond that, you have correctly identified that 
eligibility rates vary from State to State, particularly for 
the CHIP program, and vary regarding the very earliest prenatal 
care. So the likelihood of having reduced low-birth-weight 
babies and bringing people into the system varies.
    This is a huge challenge, and I support--and I know that 
the President supports--the notion that the system start with 
the focus on children. I think that is why he was so 
enthusiastic during the course of the campaign about a mandate 
applying to families with children; he felt that we need to 
start universal coverage with children.
    So I would look forward to working with you to make sure 
that all children have access to the benefits you have 
described.
    Mr. Obey. Mr. Kennedy.

                    HEALTH CARE REFORM AND OVERSIGHT

    Mr. Kennedy. Thank you, Mr. Chairman.
    Welcome. Can I ask you, in terms of health insurance 
reform, the most basic tenet of health insurance reform is 
community rating. That means that insurance companies can no 
longer cherry-pick who they cover based upon who is healthy and 
who is sick and thereby make their money not by how well they 
provide the care and manage the care, but rather how good they 
are at choosing this person versus that person to be in their 
plan, therefore, excluding the sick people and only covering 
the healthy people.
    Is the administration going to commit itself to community 
rating as an essential part of any health care reform plan?
    Secretary Sebelius. I definitely think that the commitment 
that the President has made consistently is to eliminate the 
preexisting condition opportunities and to move to a system of 
affordable coverage for everyone. I haven't seen the specifics 
around community rating and how wide the bands would be, but 
certainly that is an essential element of the preexisting 
condition discussion.
    You have accurately described the market as it often 
exists, where either a health condition eliminates you entirely 
or at least puts you in an unaffordable category. So either 
one, I think, would not be part of the health exchange moving 
forward.
    Mr. Kennedy. That is good to hear.
    In terms of the whole issue of insurance oversight, we now 
know that insurance companies, it is roughly like 30 cents on 
the dollar for administration, versus Medicare and Medicaid, 
which is 3 cents on the dollar for administrative oversight. 
What is this plan going to do to go into and do a forensic 
audit of these insurance companies to ensure that they are not 
going to be able to pass along these enormous administrative 
costs they have embedded in the current administration of their 
plans that they pass on to the consumers?
    This is part of something that I think you already know, 
being an insurance commissioner, is untenable for us. This is 
where our saving is going to be, is going after these 30 cents 
on the dollar that never make their way to health care at the 
bedside.
    Secretary Sebelius. That is one of the essential elements 
of having some competition in the new marketplace. A health 
insurance exchange would combine private plan options with the 
public plan option, and they would compete for benefits and for 
costs; and I think that part of the competition is a way to get 
to regulatory oversight over the overhead costs.
    Thirty cents on the dollar may be high for administrative 
costs, but I don't think there is any dispute that the figure 
is somewhere in the 15, 20, 25 range, depending on if you are 
talking about a large employer plan or a smaller plan. Not only 
are those medical dollars not being spent, but the estimate is 
that most Americans who have private health insurance currently 
are paying another 10 to 15 cents on the dollar for the cost of 
those coming through emergency room doors without insurance.
    So you get close to 50 cents on the dollar that is not 
buying a drop of medicine or a doctor's visit or a wellness 
visit or a treatment, and I think that is why we need 
competition and why we need choice.
    Mr. Kennedy. Would you not say when we have this new plan 
that we need to have teeth to enforcing regulatory oversight of 
the insurance companies, whatever happens?
    I think of what happened recently with AIG, and I think if 
we are going to put out to bid billions and billions of 
dollars, essentially to manage our dollars in health care for 
provision of health benefits, what scares me is I see the 
battle on the Hill between Northrop Grumman and Raytheon for a 
particular weapons system. I can't imagine the lobbying that is 
going to go on up here between health care providers when it 
comes to health care contracts.
    So, don't you think it is important that we have really 
strong oversight at the Department of Justice to make sure that 
when it comes to these bidding wars for various health 
contracts, that there is government oversight through the 
Department of Justice to make sure there are no shenanigans?
    Secretary Sebelius. I think the appropriate jurisdiction 
for the Department of Justice is probably any antitrust issues 
that could come up.
    I do think that a regulatory framework makes sense, but I 
also believe that competition goes a long way to help regulate 
cost, and that if you have a competitive marketplace, you don't 
need as heavy a hand in regulatory oversight. For this reason, 
I am often an enthusiastic supporter of a public option 
standing side-by-side with private plans, and of letting 
competition be the determinant of the price and benefit.
    Mr. Obey. Mr. Ryan.

                         UNPLANNED PREGNANCIES

    Mr. Ryan. Thank you, Mr. Chairman.
    Thank you, Madam Secretary, who is a Buckeye, I must remind 
everyone, originally from Ohio, and her father was the Governor 
of Ohio at one point in the early 1970s.
    One issue that has come up a couple of times is the issue 
of unplanned pregnancies and abortions. The President--and I 
watched with great interest his speech at Notre Dame, and I 
thought he articulated not only a framework for our public 
discourse over the next few decades, but also a way of 
approaching these controversial issues that we truly want to 
find some common ground on. And I know Chairman Obey and 
members of this committee have made a large commitment toward 
reducing unplanned pregnancies and therefore reducing the need 
for abortions and supporting pregnant women.
    As you know, Chairman Obey in the past has directed 
significant funds towards this purpose, and Congresswoman 
DeLauro and I have been working for a number of years to 
introduce legislation in the past several Congresses that would 
help address this issue.
    What is the Department doing, going to do, to try to 
implement President Obama 's initiative and partner with 
Congresswoman DeLauro and me to reduce the need for abortions?
    Secretary Sebelius. Well, Congressman, I think it is an 
enormous challenge that we face and one that is something I 
have been working on in my home State of Kansas for a number of 
years. This issue brings together people who have varying views 
on abortion services and provides some common ground: if we can 
work to provide a host of services to reduce unintended 
pregnancies, we therefore reduce, by anybody's count, the 
number of abortions that are performed in this country. I think 
this is a goal that all of us could support.
    We have a range of services in HHS that work toward that 
end. It includes comprehensive sex education, which has already 
been discussed. Affordable, available health care is an 
important piece of the puzzle. There are adoption incentives 
that work along the way. Early childhood education, support for 
women, and a range of programs for women and girls that provide 
an environment where they have options and choices are all 
essential to reducing the situations that produce unintended 
pregnancies.
    I was alarmed by the recent CDC study that says we have an 
increase in teen pregnancies again, after having had a decrease 
for the last number of years. That is not good news. We know 
that 40 percent of births right now are to single parents. That 
is not the hallmark of good news.
    So there is a lot of common ground and a lot of work to be 
done, and I think that a lot of the assets to do that work are 
in the Department of Health and Human Resources. And I look 
forward to working with you and Congresswoman DeLauro and 
others, because I think this is an issue where some real 
focused, collaborative attention can pay huge dividends in the 
long run.

                            STRESS REDUCTION

    Mr. Ryan. I appreciate that. And I think Congresswoman 
DeLauro and I and other members of the committee would like to 
sit down with you and hash this out.
    One other topic I would like to touch upon: I feel like 
when we have these discussions about health care, there is 
always an issue that we never really talk about, and that is 
the issue of stress. A lot of us are seeing it now in our 
congressional districts because of the economic situation we 
are dealing with. And the issue of stress leads to, I think--we 
know--increased illness, and these people who are losing their 
jobs and losing their health care, it has an effect.
    I just want to ask, and we had this conversation a little 
bit with NIH, the brain research on being able to regulate 
yourself and regulate your emotions and reduce your level of 
stress is significant. So when NIH was here, I asked them 
specifically about doing more and more research on mindfulness, 
and Congressman Jackson brought up meditation and mindfulness-
based stress reduction. They have been studying this for 30 
years at the University of Massachusetts and different places 
across the country.
    I just want to know if you are familiar with this, if it is 
a part of your approach moving forward here, the physiology of 
stress, the neuroscience behind it. This is a very inexpensive 
way to teach kids how to increase their level of attention, 
their attention span, their level of focus, how people who are 
dealing with the chronic pain you mentioned earlier and how you 
want that to be a significant savings, how dealing with chronic 
pain can be treated with this method as well.
    So I just wanted to see if you are familiar with this and 
if there is any approach within the Department to not only 
increase the research, but increase the programming and the 
education of this.
    Secretary Sebelius. I am certainly a bit familiar with it, 
but not nearly to the extent that you have just outlined. It is 
a prevention strategy that has the potential of paying huge 
dividends. I have seen it used as a violence prevention 
technique with kids in school, in lessons about various kinds 
of control methodologies.
    And you see violence levels rise with, as you say, folks 
becoming unemployed, and the stress that is related to that. We 
will have a new leader in the mental health area soon, and 
certainly this issue overlaps with health reform and with work 
we are doing with early childhood. I would like an opportunity 
to continue this discussion. I am not sure what exactly is 
going on now with stress reduction, but I think it is a 
wonderful strategy.
    Mr. Ryan. I have some information. I would like to get it 
to you. I don't want to book up your whole calendar, but I 
would like to sit down and talk to you in detail about this as 
well.
    Mr. Obey. Mr. Honda.
    Mr. Ryan. I am done. I guess so.
    Secretary Sebelius. But in an unstressful way.

              AIDS FUNDING AND MINORITY HEALTH DISPARITIES

    Mr. Honda. Thank you, Mr. Chairman.
    And welcome, Madam Secretary. Let me again focus back on a 
couple of issues that have been mentioned before, and I mention 
it because it needs to be mentioned, and when these are not 
mentioned it doesn't exist. These are the two things: the 
minority AIDS initiative and the issue of health disparities.
    On the minority AIDS initiative, I met with the National 
Minority AIDS Council a few months ago, and they expressed the 
initiative funding has not been reaching the grassroots 
organizations, but was being redirected to other priorities 
within HHS or being redirected to other priorities, to larger 
HIV/AIDS organizations that don't focus on minority communities 
and women, but on the white gay population; and that is not the 
intention of the MIA.
    This year the funding was opened up for competition to for-
profit organizations for the first time, and this put a lot of 
pressures on the community organizations and the local 
community organizations.
    Understanding this, and understanding the possibility of 
this pressure on the organizations, what thoughts do you have 
about that process? Are you thinking of changing that, or is it 
your opinion that it is a fair process, that everybody is on an 
even playing ground?
    And would you also commit to meet with the National 
Minority AIDS Council so they can also express themselves, for 
themselves, the way they see the issue? I think that those 
issues will come with them, and they will be able to express 
that more fully with you. I hope that you would be able to make 
some time for them.
    The other area is the health disparities, the racial/ethnic 
health disparities, the Tri-Caucus. And when we say the Tri-
Caucus, I want to emphasize also that there is a recognition 
that there is a stark disparity and that is evident in the 
tribal reservations, where very few people take time to visit. 
But it is stark, and I think it is time for this country to 
take a codel through those tribal areas and look at that and 
understand what is going on and what is not happening in those 
areas.
    Coming back to the other areas of disparities, where we 
look at the needs that the communities have, we always talk 
about the great expenses that are in the area of health, and a 
lot of times it is because we are not paying attention to the 
gaps and the disparities in our communities. I think that there 
needs to be a conscious discussion and attention paid to the 
issue of disparities that exist in our communities for 
cultural, social and linguistic reasons; and I think a 
blueprint on that needs to be put together so that it will 
always be on people's minds as they discuss the critical issues 
of health and health care. I was hoping you might have some 
thoughts about that.
    I know you mentioned disparities toward the end of your 
discussion, but it needs to be said up front very clearly, so 
that people understand that this is an area that needs to be 
paid full attention to as we move forward.
    Secretary Sebelius. Well, Congressman, first of all, on the 
minority AIDS issue, I would welcome the chance to meet with 
the council. In preparation for these budget hearings, this 
change in procedure was brought to my attention, and I must 
confess I don't know enough about it to tell you if I am going 
to change it or not change it. But it certainly is on my radar 
screen, and I intend to go back and take a look at how it 
operated in the past and why the change was made, and make 
inquiries.
    I think that not only does competition need to be on a 
level playing field, but that we make sure that we get 
resources into the hands of folks most likely to reach out to 
the population needing to be served. I think that is a very 
appropriate question to ask.
    Even though it is not in the jurisdiction of this 
subcommittee, to your latter point about disparities, the 2010 
budget does have a significant request for an increase for 
Indian Health Services and one that I would suggest is long 
overdue. We have a great new leader who has been confirmed by 
the Senate, Yvette Roubideaux, a doctor and Native American who 
is coming in to lead the Indian Health Services and who has 
worked in this area for a long time. I think there is a 
recognition that we haven't lived up to our commitment for 
appropriate health services to that community for generations. 
In the whole overview of health disparity, the Native American 
community has been very much off the radar screen. I think the 
President recognized as much in his budget request, which calls 
for a 13 percent increase for the Indian Health Service. This 
community is one that I will personally commit to paying a lot 
of attention to.
    As a governor, I worked closely with the tribes in Kansas. 
The first day I was on the job, I went to the tribal leaders' 
meeting and told them that I want to stay involved and 
committed, and I will continue to do that.
    Mr. Obey. The gentleman's time has expired.
    What I would like to do is to run a 2-minute round so 
everybody gets a chance to ask one additional question.
    Mr. Tiahrt.

            HEALTH CARE REFORM AND PRIVATE INSURANCE OPTIONS

    Mr. Tiahrt. Thank you, Mr. Chairman. I will try to confine 
all my questions here to 2 minutes.
    I think we are on a path to single-payer rationed health 
care, starting with competitive effectiveness, the concept of 
having a subsidized public insurance company compete with the 
private sector. I think we will get further down that path. You 
have heard on this committee that many would prefer a single-
payer system.
    I would like to see your organization consider some free 
market competitive methods of approaching the problem. In many 
States, including Kansas, we require everybody who drives to 
have car insurance. The result was that we have a fundamental 
insurance package for automobiles, for car insurance.
    We could do the same thing for a basic health care policy 
that included a certain number of visits to physicians, 
including hospital days. We can have an annual physical, which 
I think would be very good, including counseling for a healthy 
lifestyle, which would probably avoid a lot of costs in the 
future. We could have an annual dental visit on it, which many 
people need as well. We could provide tax incentives for 
everybody to purchase a basic health care policy, and if they 
couldn't afford it, a voucher--for example, those under the 
poverty level--where they could go out and shop for it.
    It would have a provision that I think would address the 
need that Mr. Kennedy brought up, a very compassionate man, who 
knows there are some people who get denied coverage. In the 
example of auto insurance, we have a high-risk pool where each 
provider takes a turn at drawing a name from a pool which would 
cover people who have preexisting conditions.
    It is an alternative that would provide competition. It 
would be lower cost. And if you look, right now health care is 
about 20 percent of our gross domestic product. If we did 
privatize or take the privatized portion and move it into the 
public sector, it would cost at least $1.5 trillion a year. 
That is almost a 50 percent increase in what our current 
Federal budget is. I don't think we can afford that in today's 
economy. So for us to provide an insurance plan that would be 
competitive would be a good alternative.
    Would you consider developing a basic health care policy 
that could be considered as part of the debate?
    Secretary Sebelius. Well, Congressman, those policies exist 
across the country, and in most cases they are not attractive 
to other employers or employees going to an individual market, 
which is really the description that you are giving, is not 
what insurance is about. It is about sharing risk.
    People right now are interested in getting in a pool where 
they are pooling their own health situations with others and 
driving the market. This has been suggested, I would say, 
strongly, in the last 8 years. It was the administration's 
primary suggestion for solving the health crisis--having all 
Americans move towards individual coverage. Dismantling the 
employer coverage that we currently have is not something that 
I support, and I know it is not something that the President 
supports.
    Mr. Tiahrt. Perhaps you misunderstood me. It is not a pool 
of one, it is a pool of 300 million. It would be a policy that 
would be applicable to everyone. So I think that is something 
that I would like you to consider.
    Secretary Sebelius. If you are talking about a health 
exchange that you could join as an employer or an individual, 
that is exactly what is being contemplated, with a benefit 
package that would be affordable.
    Mr. Tiahrt. I will be glad to look at it.
    Thank you, Mr. Chairman.
    Mr. Obey. Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman.
    Madam Secretary, just let me make a comment, and I will get 
the piece of legislation to you. I think my colleague Mr. 
Kennedy would be interested in this. It is called the Informed 
Consumer Choices in Health Care Act. Senator Rockefeller 
endorsed it in the Senate, and Congresswoman Schwartz and 
myself have introduced it here.
    It would provide consumers with a coverage facts label, 
similar to the nutrition label, which would streamline--it 
would make it consistent as to what was being offered so people 
could understand what is being offered.
    Secondly, it creates a Federal Office of Health Insurance 
Oversight to deal with oversight and regulation. Obviously, the 
States have a major portion of that, but at the Federal level 
it would be helping to monitor that effort. I would love to get 
your thoughts, taking a look at conceptually whether or not 
this is something that can fit in with the health care debate.

                              FOOD SAFETY

    Let me move quickly to food safety. I know you have had 
just a little bit of time to settle into the Department, and 
you do cochair the Food Safety Working Group. I was wondering 
what you see as clearly the most important goals and 
objectives. How do you believe we ought to measure its success?
    A final comment there is, you know where I stand on the 
issue of food safety functions and taking them out of the FDA 
to an agency that has its own commissioner and its own agency. 
Is this an idea you would be open to considering?
    Secretary Sebelius. I am enthusiastic about the 
collaborative work between the Department of Agriculture and 
HHS on food safety, and certainly appreciate your passion and 
leadership on this issue over the years.
    We have a new commissioner of the Food and Drug 
Administration, Peggy Hamburg, who has now been confirmed. The 
deputy is in place.
    Redoing the inspections and food safety system is 
essential. It has got to be a public-private partnership. 
Whether or not it is a stand-alone agency or in the Food and 
Drug Administration, I think is almost secondary to what the 
system needs to examine. I am eager to restore the FDA to its 
gold standard, which it certainly is a long way from right now.
    Ms. DeLauro. Thank you.
    Mr. Obey. Mr. Lewis.

                    STATE AND COMMUNITY INVOLVEMENT

    Mr. Lewis. Thank you, Mr. Chairman.
    Madam Secretary, historically our health insurance programs 
and systems have been driven by the individual States. New York 
State law used to dominate this whole arena. Commissioners 
across the States play a significant role. You had that 
experience yourself.
    You have indicated, by way of your statement for the 
record, that you intend to begin by building on the system that 
we have. Doing that, do you see the Federal Government's role 
being one of cooperatively working with the individual States, 
trying to react and support their challenges and their solution 
or do you foresee a more centralized Federal Government system?
    Secretary Sebelius. I met with my former colleagues the 
other day; the insurance commissioners were here dealing with 
this very issue and coming to lobby some of you, I am sure.
    I am a strong supporter of the consumer protection role 
that States play in the health insurance area; I was engaged in 
that myself, and I saw firsthand the individuals covered by 
ERISA plans who really had nobody to turn to if those benefits 
were denied or if the claim wasn't paid or if the company 
suddenly ceased offering insurance. So I am a strong believer 
that there is an important consumer protection role, and also 
an important oversight role the States will continue to play in 
the future.
    Markets are often regional or local, and I think having 
somebody in that role who understands that and not a cookie-
cutter approach that is nationwide makes very good sense. 
Nothing I have seen being discussed runs counter to that at 
this point.
    Mr. Lewis. Thank you.
    Mr. Obey. Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman.
    Madam Secretary, I have been a longstanding supporter of 
community health centers because in my district health centers 
provide access to affordable, high-quality, culturally 
competent care to medically underserved individuals who might 
otherwise go without. I know that President Obama is well 
acquainted with the central role health centers play in health 
care in Illinois and nationwide. Indeed, the President recently 
stated, ``Health centers, primary care and prevention are at 
the heart of my plan for an affordable, accessible health care 
system.''
    My first question: Do you agree that we must continue 
growth of this important program as we undertake comprehensive 
health reform?
    Secretary Sebelius. Yes, I do.

                      HIV/AIDS, HEALTH DISPARITIES

    Mr. Jackson. Secondly, the epidemic of HIV and AIDS 
continues to rage in the African American community. According 
to the CDC, even though blacks account for about 13 percent of 
the population, they account for about half, 49 percent, of 
people who get HIV and AIDS.
    I am pleased to note that while CDC's budget continues to 
prioritize prevention, testing and treatment activities among 
African Americans, I am concerned that the program entitled 
``The Heightened National Response to the HIV-AIDS Crisis in 
the African American Community'' has been slow to mobilize to 
conduct the HIV and AIDS testing activities called for in the 
initiative.
    Madam Secretary, can you please review this situation and 
see what needs to be done to facilitate this important testing 
activity?
    Secretary Sebelius. Yes, I will.
    Mr. Jackson. Thank you.
    Thank you, Mr. Chairman.
    Mr. Obey. Mr. Cole.

                    FINANCING FOR HEALTH CARE REFORM

    Mr. Cole. Thank you, Mr. Chairman.
    We all agree, whatever our stance is, it is an enormously 
expensive undertaking for health care if we have a government 
program. It is expensive for families individually. So I have 
got two questions.
    One, is the administration considering taxing current 
health care benefits to pay for the expansion of health care? 
And, second, is the administration considering allowing those 
who are not in employer-based plans, that are paying for health 
care currently, or insurance, with after-tax dollars to do it 
with pretax dollars, to have the same deductibility that people 
that are covered governmentally or by private companies have?
    Secretary Sebelius. Congressman, as you know, during at 
least the course of the campaign, the issue of taxing employer-
based health coverage was discussed in a fairly robust fashion. 
The President opposed then and continues to oppose taxing 
employer-based health benefits, as he feels that it would 
dismantle the current system that 180-plus million rely on.
    Having said that, he also proposed and continues to support 
tax credits, particularly for small employers, but for a 
variety of individual employers who are currently struggling in 
the marketplace. And he has said he is open to further 
discussions about the whole taxing issue.
    I think there is no question that looking toward the 
future, there are a variety of ideas on the table in both the 
House and the Senate. But at this point he feels that providing 
a tax to all employer benefits would dismantle the market that 
so many rely on.
    Mr. Cole. Thank you. Thank you, Mr. Chairman.
    Mr. Obey. Ms. Lee.

    RECOVERY ACT FUNDING: MINORITY OUTREACH, MENTAL HEALTH SERVICES

    Ms. Lee. Thank you very much, Madam Secretary. A couple of 
things with regard to the Recovery Act funding. One is as you 
know it is very difficult oftentimes for communities of color 
to access Federal funds for grants. And so I appreciate the 
diligence and the urgency that HHS has placed in putting these 
funds forward that we provided in the economic recovery 
package. But I wanted to see if you had any specific outreach 
efforts for the African American, Latino, Asian-Pacific 
American and Native American communities to be able to compete 
with these funds, and if so, how you are coordinating that?
    And also ensuring that minority serving institutions such 
as Hispanic serving institutions and historically black 
colleges have the benefit of being able to understand and 
compete for these funds so that they can certainly access them. 
And then secondly, I wanted to ask you about mental health 
services as a part of the economic recovery funding. I know we 
provided funding for a variety of health care strategies and 
initiatives, but how does mental health fit into that. And 
finally, thanks to Congressman Kennedy and others, his father, 
Senator Kennedy, we do have mental health parity now as the law 
of the land. And so have we considered that in the allocation 
of the funding under the Economic Recovery Act?
    Secretary Sebelius. In the Recovery Act, there is a new 
stream of funding that is targeted for capacity building of 
community and not-for-profit organizations that, while not 
exclusively targeted to minority groups, certainly would be an 
applicable source of funding to build capacity of the 
neighborhood resource groups that are often so vital to deliver 
services. Back to Congressman Jackson's notion, there is also 
an expansion, as you know, of community health centers, and of 
the workforce in community health centers, through minority 
student loan assistance designed to increase the number of 
health providers.
    So there are a series of strategies under that umbrella to 
target services to appropriate populations. This 2010 budget 
request also includes an increase request for mental health 
services, particularly for children. It has a grant proposal to 
serve 11,000 more children and provide services, to 35,000 
additional parents and siblings, something that I know 
Congressman Kennedy and others have worked on diligently. 
Expanding those health services is an important feature of this 
budget request.
    Ms. Lee. Thank you.
    Mr. Obey. Mr. Kennedy.

                EARLY EDUCATION; MENTAL HEALTH SERVICES

    Mr. Kennedy. Thank you. Madam Secretary, thank you for 
mentioning that. I think if we could elaborate on the expansion 
of services for young people mental health needs, could you 
explain your work with your counterpart, Arne Duncan, about 
early education and how we could better use the monies that are 
being appropriated for Head Start early education programs from 
his point of view and his Department so that the dollars are 
really used where they are needed the most as opposed to across 
the board. Because frankly we need to target the dollars, 
target them towards children who come from families where there 
is domestic violence, where there is depression, where a parent 
is in jail, where there is addiction. We know those are the 
dollars that are going to go to make the biggest difference as 
opposed to trying to blanket the whole country with dollars for 
every child. We would love to do that for every child, but 
frankly, in the metrics of things, those aren't going to be as 
successful as if we really target the dollars to where they 
make the most sense.
    If you could respond to that as one point. And then the 
second point is in terms of the prominence of mental health in 
the administration and where it will figure in to health care 
reform. Obviously there has been no appointment yet to the 
SAMHSA director. But could you comment on the notion of a 
medical home as a central part of any health care reform, 
meaning coordination of an integration of services, and mental 
health being a key part of any medical home that is being 
adopted under the President's plan for purposes of 
reimbursement and particularly the ASPR program which 
reimburses doctors in the white coat community through the ICD 
codes for their work doing brief screening intervention and 
treatment for mental health services.
    Secretary Sebelius. Congressman, I know you have done 
extraordinary work in this area, and I would look forward to 
learning more about the identification that you have been able 
to make of what are the most cost effective strategies and the 
best practices, because they exist. But I can tell you that 
there is no question, as we look at overall health costs, that 
focusing on mental health as a strategy is going to be 
extraordinarily effective. Depression is often an underlying 
related link to a number of chronic diseases that we just 
talked about as being one of the cost drivers and vice versa.
    If you suffer from depression, you often are more likely to 
have some of the conditions which create chronic disease. So 
there is a partnership there that has to be addressed as we 
look at ways to reduce not only the 75 percent of health 
dollars we are spending on chronic disease, but also to produce 
healthier lifestyles in the long run. The earlier 
identification of precursors to mental health issues is done in 
young children. So having a strong link in the early childhood 
Head Start community with those warning signals of violence 
potential and high stress households and, as you say, substance 
abuse households and focus on those children as an early 
prevention strategy also pays huge dividends down the road.
    We have had those discussions with potential SAMHSA 
directors and are looking for somebody who really understands 
that this can't be an isolated strategy, a stand-alone or a 
second or third chapter; it has got to be at the forefront of 
our dealing with health reform.
    Mr. Kennedy. Thank you very much.
    Mr. Obey. Ms. McCollum.

            OVERSIGHT AND MEDICARE REIMBURSEMENT DISPARITIES

    Ms. McCollum. Thank you. And thank you for your comments 
about Indian health care services. I was just with Ojibwe, the 
band in Leech Lake, Minnesota and Malax, Minnesota. They are 
very excited that there was an increase. They are very happy 
for the other tribes who have seen their health care facilities 
being listed in the upgrades. They are anxiously awaiting their 
opportunity as well, so I know that we will be working with you 
with that.
    And I was with some Pueblos in New Mexico too. In fact, I 
will get some information to you. I personally was in a 
hospital that I thought should have been shut down. I was very 
concerned about the patients who were there, and the patients 
who were there were concerned about the type of health care 
they were going to get. One Pueblo had great health care, one 
moderate and another one was awful. I want to also let you know 
I am going to be submitting a question for the record on health 
care technology.
    I am concerned about some of the contracts, and I know the 
chairman was trying to get copies of all the contracts that had 
been submitted by the administration for providing many health 
care services, but I am very concerned about a health IT 
contract that was submitted under a previous administration. I 
am very supportive of health care but I don't want the fox 
watching the hen house, and that might be happening. But I 
would like to just very quickly point out to you that I am very 
concerned about low cost high quality states like Minnesota. We 
are doing everything the Medicare program could ask to have 
done. We are delivering services in a cost effective manner yet 
we are being hammered. We are losing physicians because of the 
reimbursement formula.
    So I applaud you for making high quality health care long-
term sustainability of medical and health care reform a 
priority. But I urge you, as we move forward, to bring a 
comprehensive health care reform, I urge you, I can't urge you 
enough, to carefully craft provisions to avoid having 
disproportionate impacts on Medicare beneficiaries like States 
like Minnesota that are doing everything that is asked for 
them, but at times being paid half, half the amount for States 
with doctors and facilities that are delivering abysmal 
outcomes compared to what we are doing.
    Secretary Sebelius. It probably won't come as a great 
surprise to you that I just had this conversation with Senator 
Klobuchar an hour or 2 ago before I came over here, so I am 
very well aware of that situation. And the last thing we want 
to do is discourage high quality lower cost services from being 
delivered. In fact, we want to highlight them, not only as best 
practices but to drive other systems toward delivering that 
same kind of care. So whether it is Mayo or others who are at 
the front of the line, I can assure you we are taking a careful 
look at how we can make sure that doesn't happen in the future.
    Ms. McCollum. Mr. Chairman, I have some bedtime reading for 
you on the IT issue.
    Mr. Obey. I will think about it. Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman. Quick things. You have 
two great experiences in your background; one is being 
governor, the other is commissioner of insurance. As us, with 
the governor's background in your current position, have you 
thought about having your Department do an internal audit in 
terms of them asking themselves where are the gaps that we 
think are there? And perhaps there might be an exercise that 
can be done administratively where they can do the internal 
kinds of questioning so that they can perhaps just by 
themselves come up with some identifications of gaps in 
services and disparities. It can be everything from CDC to 
medical school and things like that.
    Second, as commissioner of insurance--I know that there is 
50 states and territories. I also know that when I ask the 
question about antitrust and its role in health costs and other 
costs in this country, the issue of reimbursements from the 
Federal Government to the cost of medical services and doctors 
being able to afford protecting themselves through insurance 
premiums. What impact would there be if there were antitrust--
if we brought the insurance companies under the Federal 
antitrust laws as the other corporations are.
    I could get my answer in writing if you want, but it is 
still on my mind, these kinds of things. And I am not an expert 
on these areas but it certainly seems like the insurance 
companies are players in a lot of these arguments we have about 
premiums, rising health costs and things like that.
    Secretary Sebelius. Congressman, I am not quite sure what 
the system is that you are describing for the future, but I can 
tell you that oftentimes there is a prohibition that currently 
exists with companies collaborating in terms of price fixing, 
having discussions prior to submitting rate proposals on what 
prices should be. But there are varying degrees of oversight 
that currently take place in terms of rule submissions and loss 
ratios. So as we move forward in health insurance and health 
reform, one of the issues is, can you deliver an insurance 
package to more Americans at a more affordable rate? And again, 
I am a believer that not only appropriate oversight is 
important, but competition is very important. And I have seen 
that work effectively in marketplace strategies over and over, 
which, again, is why I think that having some public options 
side by side with the private plans is the way to keep a 
competitive marketplace and give consumers and employers the 
kind of choice they need.
    Mr. Honda. Thank you.
    Mr. Obey. Mr. Tiahrt, did you have one last question before 
we shut it down?
    Mr. Tiahrt. No, thank you.
    Mr. Obey. Madam Secretary, let me simply add my voice to 
the remarks of Congresswoman McCollum on reimbursement rates. 
These reimbursement disparities are outrageous in my view. I 
just hope that people putting this bill together in the end 
will understand that they would make a big mistake if they 
would take for granted the support of people from States like 
Wisconsin and Minnesota if this outrageous disparity in 
reimbursements is not corrected to a significant degree. Our 
States feel like we have been taken for suckers for years, and 
those outrageous disparities are just going to have to shrink 
significantly if we are going to get a product that everybody 
can support. With that, I thank you for coming. I am happy to 
see you where you are. We look forward to working with you and 
will see you again. The committee is adjourned until 2:00 
tomorrow afternoon. Thanks.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                           Wednesday, June 3, 2009.

                      U.S. DEPARTMENT OF EDUCATION

                                WITNESS

HON. ARNE DUNCAN, SECRETARY, U.S. DEPARTMENT OF EDUCATION

                       Chairman's Opening Remarks

    Mr. Obey. Good afternoon, Mr. Secretary. I will give you a 
minute to get organized.
    Well, Mr. Secretary, welcome. This job would be a great job 
if we didn't have to vote, but I am told that, within a couple 
of minutes, we are going to get some roll calls on the House 
floor which will discombobulate this hearing. But we will try 
to do the best we can.
    Mr. Secretary, I am not quite sure where to start. Let me, 
first of all, state that we want to be on the same team. We 
want to work with you. We want you and this President to 
succeed, and we enjoyed the opportunity to work with you on the 
initial stimulus or recovery package, as people are now calling 
it. But Will Rogers said once that when two people agree on 
everything, one of them is unnecessary. And I find myself in 
that position this afternoon, as I indicated to you to some 
extent yesterday, and let me paint you a picture of what is 
happening in my district.

                UNEMPLOYMENT IN THE CHAIRMAN'S DISTRICT

    A year ago, Taylor County was riding at 7 percent 
unemployment; today, it is 14.5. Rusk County a year ago, 7.3; 
today, 17 percent. Polk County, 5.9 percent a year ago; 12.5 
today. Oneida, 6.7 a year ago; 12 percent today. Marathon, 4.1 
percent a year ago; 9.4 today. Lincoln, 5.3 percent a year ago; 
12.6 today. Langlade, 5.8 a year ago; 12.1 today. Iron, 8.7 a 
year ago; 14 percent today. Clark, 5.7 a year ago; 11.3 today. 
Chippewa, 5 percent a year ago; 11 percent today. Burnett, 7.1 
a year ago; 13.2 today.
    Now, I cite those numbers to try to make a point, which I 
will eventually get to.

              RECOVERY ACT FUNDS AND BUDGET STABILIZATION

    As you know, we tried to--in the stimulus package, we tried 
to take into account that this was happening and that is why we 
provided large amounts of money to States to try to stabilize 
their budgets. That is why we provided a good deal of 
additional funding in direct financing to local school 
districts by formula. And if you take a look at what is 
happening around the country, according to the Center on Budget 
and Policy Priorities, some 47 States are facing fiscal stress. 
According to one analysis from the University of Washington, 
State education budget shortfalls could result in the loss of 
nearly 600,000 jobs in K-12 education alone.
    Mr. Secretary, you have established certain principles to 
guide the expenditure of Recovery Act funds: one, to preserve 
and create jobs; two, to improve student achievement through 
innovation and reform. And you have been quoted as saying that 
schools face a perfect storm for reform. That may be, but I 
think that they also face a devastating storm in terms of just 
general economic conditions. I am concerned that there are so 
many communities that are so cash strapped that they are using 
Recovery Act funds simply to mitigate State and local revenue 
shortfalls in order to prevent layoffs; and, for those 
districts, all they may be able to do is to pay for existing 
teachers, keep the lights on, and pay for other essentials.

          TIMING OF PROPOSED INITIATIVES AND ECONOMIC TURMOIL

    If the first focus of States and school districts is to 
plug these devastating budget gaps and avoid deep layoffs, then 
I think it is legitimate to question whether it is realistic to 
also expect them to implement dramatic new reforms until the 
economic situation stabilizes. I don't want to set them up for 
failure in the public's eyes because they can't do two things 
at the same time because of the extreme economic collapse that 
we have seen in the country, and so I would hope that you would 
take that to heart in the way that you administer the funds 
under your control.
    Secondly, I have been on this committee for almost 40 
years, and I think I have got a track record of giving a damn 
about what happens to these programs. But I am not so much 
interested in programs as I am performance. And I am certainly 
supportive of reform, if that process occurs in the context 
that makes it possible for people to think about reform.
    I voted for No Child Left Behind because I thought the 
previous President had a right to have his first domestic 
priority supported. Unfortunately, I overestimated his 
willingness to live up to the financial commitments attendant 
to that deal.

                 PROPOSED EDUCATION BUDGET INITIATIVES

    But I am concerned, frankly, about the direction some of 
your budget decisions would take us. You request $800 million 
for new early childhood education, $300 million more for new 
reading initiatives, next, $100 million to expand the 
Innovation Fund and to scale up best practices from $650 
million in the Recovery Act to $750 million in your budget. You 
propose a large increase for the Teacher Incentive Fund which 
supports the design and implementation of performance-based 
teaching compensation systems, more than quadrupling from $97 
million to $487 million, and to $717 million with Recovery Act 
funds, even though the Department has yet to complete any 
rigorous evaluation of the effort which began 4 years ago.

                     ESEA TITLE I DECREASE PROPOSED

    I want to support the Administration and its education 
priorities but not at the expense of reliable and predictable 
Federal support for thousands of school districts across the 
country that depend on that funding. And I confess I find 
troubling the $1.5 billion, or 10 percent, cut in basic Title I 
grants that you provide for in your budget in order to finance 
these new initiatives.
    In essence, your budget would force school districts to 
backfill this deep reduction with Recovery Act funds. It will 
put additional strings on Title I by requiring districts to 
commit other Recovery Act funds to start new preschool programs 
as a condition of receiving Title I early childhood grants, and 
I am not at all convinced that that is not unfair and untimely, 
given the economic situation.

                 PROPOSAL TO MAKE PELL GRANTS MANDATORY

    I also want to express reservations about your higher 
education budget. I am a huge fan of Pell grants. I have been a 
champion of Pell grants every year I have been in this 
committee. But I confess I am dubious about the wisdom of this 
committee, in the midst of trying to convince people that we 
are responsible financially and fiscally, I am not convinced 
that this is the time to create another, in essence, 
entitlement by putting another program on automatic pilot. In 
fact, I am concerned that the recommendation that you have with 
respect to Pell might in fact have a perverse reverse effect 
by, in essence, actually putting a ceiling on the amount of 
future increases in the maximum award under Pell.
    So, as I say, we are all friends here and we want to work 
together, but I have got to be honest and lay out my misgivings 
about some of the directions that I see you and the 
Administration going in, and I hope that we can work them out.
    Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. Congratulations on your new role 
here.
    You have a very interesting history. I think you have 
accomplished quite a bit in the State of Illinois and in 
Chicago, and I think those accomplishments would not be 
classified particularly as supporting a Democratic point of 
view or a Republican point of view. I think you took a 
refreshing approach in a lot of new areas.
    I understand you have a background in basketball. Each 
year, Congress plays the business community in September and we 
are going to try to recruit you for that game.

                    EDUCATING THE NATION'S WORKFORCE

    We hear a lot about a changing economy and changing world 
and a need to prepare our children to participate in the 21st 
century and in the job market that is going to be coming about 
during that time. In the last Administration, we worked a lot 
on accountability and how to best ensure that school districts 
help every child reach his or her potential. This is still an 
issue, and there are many debates surrounding No Child Left 
Behind and the emergency alternatives such as charter schools 
and the like, and we will probably discuss that later. I look 
forward to hearing your views on accountability and how to fix 
No Child Left Behind without discarding, quote, principles that 
I think we all agree upon.
    As for the issue of preparing our workforce and children 
for the future, I would argue that the future is here. It is 
today. Michael Wesche of Kansas State University has done a lot 
of research about today's technology revolution and its impact 
on society, the marketplace, and education. He correctly points 
out that we need to be adapting faster and more efficiently in 
order to keep up.
    I do have concerns, however, with his views and others and 
the insistence that the education systems of old are outdated 
and should be overhauled. Yes, new technologies need to be 
incorporated into classrooms from a young age so that children 
can learn how to use these tools and be safe while they use 
them. And, yes, schools should work to capture the attention of 
a child. But these aren't new issues or new views. There have 
been age-old education problems from which slide rules have 
transformed into calculators and one-room schools into the 
separation of grades and ability levels. Our school systems 
should be challenged to continually meet those needs and 
continually improve.
    There is reason to be concerned, however, that we push to 
move out of the traditional classroom and permit children to 
not pay attention to lessons they do not feel are relevant to 
their future careers. Besides basic knowledge of the world 
around us, one of the most important aspects of education is 
teaching us how to learn and how to analyze new information and 
to put it into use, how to focus on issues that might not be to 
our liking or in which we may not have a natural aptitude, how 
to meet deadlines, how to work with others, how to still learn, 
and so on.
    Most of what I learned in school was not applicable to my 
job as a systems engineer or as a proposal manager and 
certainly not as a Member of Congress. But the fundamentals are 
age-old and should not be thrown out with the bathwater.
    I am interested in hearing your thoughts on this issue and 
how we balance the desire for more technology and personal 
education and make sure our children are prepared to meet the 
timeless challenges of learning in a real word.

                 EDUCATION, JOB TRAINING AND RETRAINING

    Education and retraining are keys to ensuring that American 
workers are the most competitive around the world. Modern 
economies are driven by knowledge and skills. Just as America's 
public education system changed the notion that schooling is 
for the upper class, we now need to change the notion that 
education ends at 18 or 22. Job retraining and school 
enhancement are in addition to schooling. They are part of the 
larger continuum, a lifelong pursuit of education.
    Most importantly, for the short and long term, we need to 
help Americans access not only higher education but also 
continuing education. Job training and retraining is necessary 
to keep up in today's environment.
    I also have a couple of concerns about overall spending and 
specifically the impacts that the chairman made about Pell 
grants and the mandatory program, rather than discretionary. 
But in this changing world we need innovative ideas and should 
have a vigorous debate on how to best educate our children.
    I look forward to working with you and to ensure that every 
child achieves his or her dream.
    Thank you, Mr. Chairman.
    Mr. Obey. Mr. Secretary, please proceed.

               Opening Statement of Secretary Arne Duncan

    Secretary Duncan. Thank you so much, Mr. Chairman. I just 
appreciate your support and decades of leadership on this issue 
and your passion. I look forward to working with you to 
dramatically improve the quality of education for children 
around the country, and I appreciate the tremendous leadership 
you have shown for a long, long time on these issues.

                  FY 2010 EDUCATION BUDGET PRIORITIES

    Thank you for the invitation today to talk about President 
Obama's fiscal year 2010 budget request. This budget makes 
important choices to continue and expand programs that will 
support our children from cradle to career. It provides the 
resources necessary to expand access to high-quality early 
childhood programs, to ensure that our K-12 schools are 
preparing their students for success in college and the 
workplace, and to provide college students with the money they 
need to pay for college and the assurance that the Federal 
Government will be there to help them. Together, all of these 
policies will help our children reach the President's goal 
that, by 2020, the United States once again will have the 
largest proportion of college graduates in the world.

             U.S. 1ST IN WORLD IN COLLEGE GRADUATES BY 2020

    Secretary Duncan. I just want to stop there for a moment. I 
think that is a very ambitious goal. I think it is critical. 
About 20 years ago, a generation ago, we led the world in the 
number of college graduates. It is not so much that we have 
declined; we have flat-lined, and other countries have passed 
us by. I think that presents some real challenges for our 
country and for our long-term economic vitality.

                 AMERICAN RECOVERY AND REINVESTMENT ACT

    I am extremely grateful for the work you have already done 
to help our Nation's schools, and I look forward to working 
with all of you in the future. As you know, in the American 
Recovery and Reinvestment Act, you provided $100 billion to 
schools and to students. The law provides a phenomenal start in 
addressing the needs at every point along the cradle-to-career 
spectrum. Thanks to your support, we were able to stave off an 
education catastrophe and save a generation of children. And we 
estimate as many as 375,000 jobs can be saved with the money we 
have given out already through the first round of stimulus 
funding.
    As you know, ARRA had two goals in education: to create and 
preserve jobs and to promote school reforms. Even though the 
U.S. Department of Education hasn't yet distributed all of the 
money in the stimulus, we are seeing signs that we are meeting 
that goal of preserving jobs of teachers and other educators. 
We are collecting data on the number of jobs preserved. We can 
point to several districts around the country where the 
stimulus funding has made a dramatic difference already. 
Because of ARRA, Los Angeles Unified School District averted 
almost 3,800 layoffs; in New York, it is 14,000 jobs; 139 
teachers kept their jobs in Seminole County, Florida; in 
Boston, the teacher union leaders say the stimulus money 
ensures that the city won't lay off any teachers; and the 
Alabama State superintendent has said the stimulus money will 
help avert all layoffs in his State.
    I am confident that just about all of the 15,000 districts 
around the country will be using stimulus money to preserve 
jobs that otherwise would have been lost or to create jobs they 
never would have been able to add if they didn't receive money 
from ARRA.
    Before the stimulus, we were headed for an education 
disaster. With it, we have largely avoided that catastrophe and 
now must also work to continue to improve student achievement. 
I am convinced we have to educate our way to a better economy.

                     POLICY COMMITMENTS UNDER ARRA

    Through ARRA, States are promising to make commitments on 
policies that we consider to be essential to reform. They will 
improve the effectiveness of teachers and work to make sure the 
best teachers are in the schools that need them the most. They 
will improve the quality of their academic standards so that 
they will lead students down a path that truly prepares them 
for college, the workforce, and global competitiveness.
    These standards need to be aligned with strong assessments. 
I am particularly concerned that these assessments accurately 
measure the achievement of English language learners and 
students with disabilities.
    Under the third assurance that Governors must make under 
the State Fiscal Stabilization Fund program, States will commit 
to fixing their lowest-performing schools. Finally, they will 
build data systems that track student performance from one year 
to the next, from one school to another, so that those students 
and their parents know when they are making progress and when 
they need extra attention. This information must also be put in 
the hands of educators so they can use it to improve 
instruction.

            SCHOOL REFORMS IN EXTENDING SCHOOL DAY AND YEAR

    Another key ingredient to reform is to add more time for 
instruction. I grew up in my mother's after-school program in 
Chicago, so I know firsthand the critical importance of after-
school and summer programs. That is why we are asking districts 
to consider using Recovery Act funding, as well as Title I 
funding, to extend the school day, the school week, and the 
school year. And we are already seeing real innovation. In 
places like Cincinnati, that innovation is actually beginning 
this summer. They are adding what they call a fifth quarter and 
keeping students for a month after school gets out to continue 
to drive reform and keep teachers employed. This is a key 
component of our school turnaround strategy, because we know 
that students who are struggling need more time to catch up.
    Through ARRA, we will be rewarding States, districts, and 
nonprofit leaders that have dedicated themselves to moving 
forward in each of these areas of reform. The $4.3 billion Race 
to the Top Fund will reward States that are making commitments 
to reforms so they can push forward and provide an example for 
others. The $650 million What Works and Innovation Fund will 
provide grants to districts and nonprofits to scale up 
successful programs and evaluate promising practices. My 
Department expects to issue invitations for applications this 
summer and start to award grants late in the fall.

                    FY 2010 EDUCATION BUDGET REQUEST

    With ARRA as a foundation, we have submitted a fiscal year 
2010 budget that will build on the Recovery Act and advance all 
of the President's priorities. Overall, President Obama is 
asking for $46.7 billion in discretionary funding for the 
Department, an increase of $1.3 billion over the comparable 
2009 level.
    I want to highlight our request in several important areas: 
investing in early childhood education, improving the pay and 
professional development of teachers, turning around low-
performing schools, and ensuring that college students have the 
financial aid and student loans they need to complete college.

          IMPROVING TEACHER QUALITY AND LOW-PERFORMING SCHOOLS

    In K-12 education, we are requesting important investments 
in two of the key priorities identified under the stimulus: 
improving the quality of our teachers and turning around low-
performing schools.
    In other countries, the top third of college graduates 
enter the teaching workforce. Too often, here in the United 
States, our best choose other professions. We need to change 
the way we promote and compensate teachers so we can attract 
the best and brightest into the profession by rewarding 
excellence and providing supports that enable success.

                ADDRESSING THE NATION'S DROPOUT PROBLEM

    As for turning around low-performing schools, we know that 
too many of our schools are letting our children down. In too 
many places, achievement is low and not improving. For example, 
in approximately 2,000 high schools, 60 percent of the entering 
freshman class will drop out by the time they are supposed to 
be seniors. That collective loss of human potential and the 
long-term negative impact on our economy are both staggering.
    Under ARRA, we will ask States to identify the bottom 5 
percent of their schools. In our fiscal year 2010 budget 
request, we want to give them the resources to fix those 
schools, with a strong focus on dropout prevention in the so-
called ``dropout factories.''
    This dropout challenge is a national plague that I think 
strikes a real blow to where we are trying to go as a country. 
Half these schools are in urban areas, 20 percent are in rural, 
and 30 percent are in suburban. So this is a real national 
problem.
    And a recent study from the Alliance for Excellent 
Education came to the conclusion that if all the students in 
the class of 2008 had graduated, the benefits to our economy 
would have been an additional $319 billion in income over their 
lifetimes. And if we don't change, over the next decade another 
12 million students will drop out, and the cost to our economy, 
to our Nation is $3 trillion. So the economic impact, as well 
as the loss of human potential, is absolutely devastating.

                  RESOURCES FOR LOW-PERFORMING SCHOOLS

    Our budget includes $1.5 billion for the Title I School 
Improvement program. That is almost a $1 billion increase over 
last year. When that amount is added to the $3 billion the 
program received in the ARRA and the $545 million in fiscal 
2009 funds, we have more than $5 billion to help turn around 
low-performing schools.
    I am talking about dramatic changes here. I won't be 
investing in the status quo or in changes around the margins. I 
want States and districts to take bold actions that will lead 
directly to improvements in student learning and better 
outcomes. I want superintendents to be aggressive in taking the 
difficult step of shutting down a failing school and replacing 
it with one they know will work. When we talk about 2,000 
schools producing half of our Nation's dropouts, and 75 percent 
from the minority community, that is the number we have to get 
our hands around and really challenge in a substantive way.

                 NATIONAL TEACHER RECRUITMENT CAMPAIGN

    To improve both the quality of teachers and the support 
they receive, we are requesting $517 million for the Teacher 
Incentive Fund, including $30 million for a National Teacher 
Recruitment Campaign. This program is designed to improve the 
quality of the teaching workforce using innovative professional 
development and compensation systems as a core strategy.
    I want to be clear that I want the grants awarded in this 
program to be a cooperative effort between districts and 
teachers. The President has often said that he believes changes 
to the teaching profession must be made by working with 
teachers, not by doing things to teachers. The chance for real 
collaboration here is remarkable.
    Chicago was one of the first 34 projects to receive a grant 
from this program. Like many others, we worked closely with our 
teachers to create the program. In fact, a team of our best 
teachers actually gave the program shape and chose the design 
framework that became our foundation. Together, we created a 
program that emphasized improving professional practices of 
teachers, identifying what it takes to make teachers better, 
and those teachers and those schools that have improved.

                     TEACHER INCENTIVE FUND CHANGES

    One important change that we are requesting to the Teacher 
Incentive Fund would allow districts to reward all employees of 
a school for helping to improve student achievement. Students 
excel and thrive when all adults in the school work together. 
The custodians and the cafeteria workers also need to be 
rewarded when the students in their school succeed. When every 
adult in a school building collaborates to create a culture of 
high expectations, magic happens for children.

                        STRIVING READERS PROGRAM

    In addition, we are seeking $370 million for the Striving 
Readers program. The program now works to improve the literacy 
skills of adolescent students who are reading below grade 
level. We will dedicate $70,000,000 for that purpose, almost 
double the amount in the fiscal year 2009 budget.

                         YOUNG READERS PROGRAMS

    With the remaining $300 millions, we will create a 
competitive grant program to support districts that create 
comprehensive and coherent programs that address the needs of 
young readers. These programs ensure students learn all of the 
skills they need to become good readers, teaching them 
everything from phonemic awareness to reading comprehension. We 
intend to build upon the successes and lessons of the Reading 
First program while simultaneously fixing that program's 
problems.

                ESEA, TITLE I AND IDEA STIMULUS FUNDING

    I would like to say a word or two about the two largest 
programs for K-12 students, the Title I program and the 
Individuals with Disabilities Education Act. Both Title I and 
IDEA Grants to States programs received dramatic funding 
increases under ARRA. Title I received $10 billion for grants 
to districts, in addition to the $3 billion for the school 
improvement program, while IDEA Grants to States received $11.3 
billion. That is almost as much as the IDEA Grants to States 
program received in fiscal year 2009. We are working closely 
with districts to ensure that they spend this money wisely and 
not put it into programs that they won't be able to sustain 
when the money has run out.
    I would also like to note that both of these programs 
didn't receive the increases they otherwise might have in the 
fiscal year 2010 request because of the amount of money 
provided under ARRA and the period of availability. We hope to 
resume our commitment to funding increases for these programs 
once the stimulus money has expired.
    In the short term, we need increased funding for school 
turnaround efforts. The students attending these schools cannot 
afford to wait. We are at a crisis. More of the same in our 
dropout factories will not help our children succeed and beat 
the odds. It will only ensure that we educators actually 
perpetuate poverty and social failure. We have too many 
examples of what does work and what is possible all around the 
country to continue to allow this devastating failure to exist.

                    EXPANSION OF PRESCHOOL PROGRAMS

    In fiscal year 2010, we will also be making investments in 
early childhood programs. Under Title I, we are requesting $500 
million, to encourage districts to use the program's money to 
expand preschool programs. This money will help build one piece 
of the comprehensive early childhood programs that President 
Obama has proposed. It is necessary to schools serving a Title 
I population, which will benefit the most from early childhood 
education.

                     EARLY LEARNING CHALLENGE FUND

    The budget also includes $300 million to start the Early 
Learning Challenge Fund. The program's initial goal is to help 
States build a network of services that will maximize the 
investment in early childhood education. Expanding access to 
high-quality early childhood programs is one of the best 
investments we can make. All of these changes will help push 
school reform in K-12 schools.

             COLLEGE ACCESS AND COMPLETION BUDGET PROPOSALS

    We also have significant and important policy changes for 
higher education. The Recovery Act made an important 
downpayment on our plans to expand student aid. In addition to 
more aid, we want to make sure that more students are not just 
attending college but graduating. And in our proposal is a $2.5 
billion request over 5 years for a college completion and 
access grant. The stimulus bill provided $17.1 billion so we 
could raise the maximum Pell award from $4,850 to $5,350.

                PROPOSED CHANGE TO MANDATORY PELL GRANT

    Now, in the fiscal year 2010 budget, we propose important 
and permanent changes to ensure students have access to Federal 
grant aid and loans. The first thing we propose is to move the 
Pell grant program from discretionary to a mandatory 
appropriated entitlement.
    Second, we propose to link the increase in the Pell maximum 
grant to the Consumer Price Index plus 1 percent every year, 
which will allow the maximum grant to grow at a higher rate 
than inflation so it can keep up with the rising cost of 
college.
    I am grateful for the tremendous work that the 
appropriators have done to fund annual increases for the Pell 
grants, particularly in the last 4 years. But even with their 
dedication, the maximum grant has not kept up with the rising 
cost of college tuition. By making the Pell grant program 
mandatory and indexing annual increases to the CPI, we are 
ensuring that students will know that their Pell grant will 
increase at the same rate as their tuition. This will give them 
the assurance that they will have the tuition assistance they 
need to make it through college.
    This is absolutely a major financial commitment. We are 
able to pay for this change in part by streamlining and 
improving the Federal student loan program. We will move the 
loans over time from the Federal Family Education Loan program 
to the Direct Loan program, making loans more efficient for 
taxpayers and freeing up money for Pell grants. In doing so, we 
can dramatically expand access to college without going back to 
taxpayers and asking them for another dollar.

                    BUDGET PROPOSALS SAVINGS OFFSETS

    In closing, I would like to note that this budget makes 
tough decisions. President Obama asked all Cabinet agencies to 
examine their budgets, line by line, and to identify programs 
that are ineffective or too small to have significant impact. 
Our student loan proposal saves more than $4 billion annually. 
In addition, we are proposing to eliminate 12 programs, 
creating an additional savings of $550.7 million.
    Even though we recommend cutting these programs, we remain 
absolutely committed to their goals. We are eliminating the 
$294 million State grant program under the Safe and Drug-Free 
Schools and Communities program, because several research 
studies have found that the program is ineffective. But we 
remain committed to fighting drug use and stopping violence in 
our schools, which is why we are recommending a $100 million 
increase in spending for the national activities under the Safe 
and Drug-Free Schools programs. Even as we are proposing to 
eliminate the Even Start program, we will continue to support 
the program's focus on comprehensive literacy programs through 
the expanded Striving Readers program and Early Reading First.
    These program eliminations show that our fiscal year 2010 
budget is a responsible one. It invests in our country's future 
economic security while also making tough decisions to 
eliminate programs that aren't working.
    I appreciate the opportunity to discuss our fiscal year 
2010 budget. I look forward to your committee's questions.
    Thank you so much, Mr. Chairman.
    [The information follows:] 

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              NCLB REQUIREMENTS FOR SPECIAL NEEDS STUDENTS

    Mr. Obey. Thank you.
    Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    We had a little discussion earlier about No Child Left 
Behind. I didn't support it. I thought there were better 
methods of achieving the same goal. And I have seen some really 
dramatic problems with the legislation, and let me give you an 
example in rural Kansas.
    There is a young man named Joshua in a high school, in 
Chaparral High School. He struggles with his grades. He suffers 
from Tourette's Syndrome, which he is on medication for. His 
parents were called in to the school, where the superintendent 
informed them that he needed to be removed from school. And 
they suggested he go to a nearby small town and enroll in a 
learning center.
    The parents didn't know how to react to all this. They 
ended up taking him down to the center. They found out that 40 
other students from that high school were also enrolled in the 
learning center, all of whom were struggling with their grades. 
Since that time, there have been several other students come in 
to that center.

            IMPACT OF REQUIREMENTS ON SOME LEAS AND SCHOOLS

    What it appears to be is that, because of the demands of No 
Child Left Behind and the stringent percentages of students 
that are special-needs students, many school systems cannot 
meet that small percentage. And there is no variable system to 
allow them to accommodate these students, and so principals 
simply force them out of the school.
    These are the small high schools in rural Kansas, and they 
really have very little places to go, very little choices. So 
this child has to carpool with other kids and travel a 
significant amount of distance to go to an alternative learning 
center so that this school system can abide by No Child Left 
Behind.
    Part of this reform has to take into consideration that, in 
many areas, some schools systems have actually specialized 
because they are compassionate and they want to help these kids 
achieve their greatest potential. But because of the rigidity 
in the program, we can't accommodate them. And so, you know, 
they fail on these five categories and the two major 
categories--math and reading. It just takes one and the whole 
school system fails.
    So we have instituted a program that forces students out of 
schools. And I don't think that is your goal. It is not my 
goal. And it is certainly not fair to Joshua. He comes from a 
good family, pillars in their community, a well-respected 
family. He is the third child. The other two kids are doing 
very well and moving on to higher education. But here he is 
left without the high school experience, without the 
opportunity, because of a system that we put in place here in 
Washington that I disagree with.

               NCLB GOALS, ACCOUNTABILITY AND FLEXIBILITY

    How can we change the system so that we don't leave 
children behind? And can't we find some flexibility here? And 
accountability is good; I don't disagree with the concept. But 
I don't think it should be so inflexible that we can't 
accommodate kids like Joshua.
    Secretary Duncan. The NCLB reauthorization is probably a 
couple-hour conversation. I will try to keep my remarks pretty 
quick.
    And, just to give you context, obviously I lived on the 
other side of the law for 7 1/2 years, so I have my own strong 
opinions. But I am in the midst of traveling to 15 different 
States and meeting with teachers and meeting with parents and 
meeting with children and principals to really get the pulse of 
the Nation to figure out what folks think is working, and what 
is not.
    Let me start with what I think is working. I think the idea 
of accountability, the idea of disaggregating data and shining 
a spotlight on the horrendous achievement gap between white 
students and African American and Latino students, I think that 
is very important. And, as a country, we can no longer sweep 
that conversation, that tough conversation, under the rug. And 
we want to keep that front and center.
    There are also numerous challenges. As Chairman Obey said, 
one of the biggest challenges was a dramatic underfunding of 
the law. And with his leadership, now there is a step in the 
right direction, unprecedented steps in the right direction, to 
add unprecedented resources to helping students and schools be 
successful.
    Big picture, I will just say what I think fundamentally 
happened--I don't know if it was intended or unintended, it was 
wrong. I think any time you are trying to manage, whether it is 
a business or an education system, locally or nationally, you 
have to be very thoughtful about what you manage loose and what 
you manage tight. And what NCLB did is, it was very loose on 
the goals. You have 50 different States, 50 different goalposts 
all over the map. And, due to political pressure, many of those 
got watered down to the point that we were lying to children.
    Where they were very tight and very prescriptive is in 
terms of how you try and succeed, how you try and improve. But 
when I was in Chicago, I didn't think all the good ideas came 
out of Washington. And now that I am in Washington, I know all 
the good ideas don't come out of Washington.
    What I want to do is fundamentally flip that on its head. I 
want to think about a high common bar, common standards, 
rigorous goals that we all have to hold ourselves accountable 
for, that really provide creativity and flexibility at the 
local level; hold folks accountable, but give them their chance 
to innovate and be successful.

                      INCREASING GRADUATION RATES

    Secondly, I am a big believer in looking at outcomes. And 
we ultimately have to help more students graduate. We can't 
push the special education students out the door. We can't hide 
from those challenges.
    And I want us to think about what we do to dramatically 
improve our graduation rate. When we talk about 30 percent of 
our Nation's students dropping out, the economic cost to our 
country, the loss of human potential, is absolutely 
unacceptable. And, as you well know, a couple of decades ago, 
there actually was an acceptable dropout rate. You could drop 
out and go get a job and support a family and own your own home 
and make a good living. Today, every child who drops out is 
basically condemned to social failure.
    And we have to stop pushing students out. We have to start 
finding ways to keep those students in, and reward those 
schools and those school districts that are working with the 
hardest-to-serve students and keeping them on track.
    Mr. Tiahrt. Thank you. I know our time is limited so I will 
wait for future comment. Thank you.
    Mr. Obey. Thank you.
    Ms. DeLauro.

              EVEN START PROGRAM--FAMILY LITERACY SERVICES

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Welcome, Mr. Secretary. It is another opportunity to be 
with you, and I appreciate your testimony before the Budget 
Committee some time ago.
    You have an extraordinary commitment to education and to 
our children, as does the President, which is why, quite 
frankly, I am puzzled. I am puzzled by the Administration's--I 
will put it this way--Bush-inspired elimination of the Even 
Start family literacy services. Ninety-one percent of families 
in the program are at or below the poverty level. Ninety 
percent of the parents in the program do not have a high school 
diploma or a GED. This program serves children, and it serves 
their parents and those who are in the greatest need.
    Even with the decline in funding that we have seen through 
years, I will be specific and parochial about how the program 
continues to thrive in my State of Connecticut. We have had a 
Wesleyan University study of the Middletown, Connecticut, Even 
Start Program. Parent outcomes showed positive results, showed 
that Even Start parents are more likely than a control group to 
advocate for their children's educational needs and discuss 
educational progress with their kids. Even Start parents were 
also found to have higher educational aspirations for their 
children.

                         EVEN START EVALUATIONS

    Your budget documents justified a cut by citing an 
evaluation using data now 10 years old and based on a program 
reformed 9 years ago. Let me just ask you why you took a page 
out of the Bush budget proposals and proposed to eliminate this 
critical program.
    Secretary Duncan. We looked at three national evaluations, 
and these three separate national evaluations reached the same 
conclusion: that Even Start did not result in significantly 
greater gains for children or adults participating in the 
program than for nonparticipants.

                        STRIVING READERS PROGRAM

    We also added money to the Striving Readers program, $370 
million, to try and help both the young children and adolescent 
literacy.
    So, again, we are absolutely committed to the goal. But 
that program, from a few different national evaluations, didn't 
seem to be producing the results that we wanted.
    Ms. DeLauro. Well, I would have to say to you that to 
suggest that Even Start services can be replaced by either 
adult ed funding or Title I preschool ignores, I think, the 
tenets and the structure of the program.
    I am not about protecting programs. I mean, I think if 
programs are not working, I think we ought to, you know, shut 
them down. But I am about helping those that need some sort of 
a comprehensive approach for their entire family. And, you 
know, adult education is one component of family literacy.

                     EARLY LEARNING CHALLENGE FUND

    Secretary Duncan. Let me be clear. It is not just adult 
data. We add up to $300 million for the Early Learning 
Challenge fund. So there is a significant pool of money to make 
sure that we are getting students off to a good start and 
getting those early literacy skills intact.

               COMPREHENSIVE APPROACH TO FAMILY LITERACY

    Ms. DeLauro. Uh-huh. Well, I think that if you take a look 
at how you impact the lives of children, I think that you would 
concur with this. And this is not something that I have 
invented. I think you would hear from people who have spent a 
lifetime in education, Dr. Heckman and others, who are very 
clear about the role of parents and their influence on their 
children.
    And unless, quite frankly, we deal in a comprehensive way, 
and whether that is literacy, whether that is economic concerns 
and jobs, et cetera, if we do not address the needs of parents 
and their literacy skills, then, quite frankly, we are not 
going to really be making a difference in the lives of these 
children.
    Secretary Duncan. I appreciate your concerns.

          AFTER-SCHOOL PROGRAMS AND LENGTHENING THE SCHOOL DAY

    Ms. DeLauro. Okay, thank you.
    Let me then ask you about after-school programs, another 
area. I was a teacher in the after-school programs many, many 
years ago, so I am a strong believer in these efforts.
    And I know you are supportive of this, but how will the 
Administration demonstrate its support for after-school when it 
has only proposed level funding for the 21st-Century Community 
Learning Centers program? And that is the only Federal funding 
stream, as far as I know, that is dedicated to after-school.
    Secretary Duncan. Yeah, obviously, this is a really 
important issue. And when I talk to students, this is the line 
that usually gets booed, not applause. But I think we have to 
think dramatically differently about time. We need our days to 
be longer, we need our weeks to be longer, and we need our 
school year to be longer----
    Ms. DeLauro. I agree.
    Secretary Duncan [continuing]. And that after-school 
timeframe is hugely important.

            FUNDING SOURCES TO EXTEND LEARNING OPPORTUNITIES

    There are a number of different funding sources for this in 
the budget. You are starting to see some really creative 
things. You have, obviously, the stimulus dollars that can be 
used to lengthen time, after-school, during the summer. You 
have Title I dollars. This is a great, great use of these 
funds. I worry particularly about children who come from poor 
families who aren't being read to at home. That is a huge use 
for these increased Title I dollars, to do more after school.
    And then there are significant competitive grants: again, 
the $4.3 billion Race to the Top Fund and the $650 million What 
Works and Innovation Fund. So there are multiple pools of money 
for States and school districts to start to think very 
differently about time.
    And, again, just one quick example. This summer, 
Cincinnati, using stimulus dollars, is keeping school open a 
month longer. I think that is a great step in the right 
direction, and you are going to see lots of other folks do 
that. So there are unprecedented resources available for 
schools to think about longer days, longer weeks, longer years.
    We have put out clear guidance with all of our funding that 
we think this is a very important use of money and a great 
strategy to help students who are historically low-performing 
and come to school from a disadvantaged background. It is a 
great way to level the playing field. So we are going to 
continue to provide incentives for this, to encourage this, to 
highlight those best practices. And there has never been more 
flexible money to use to extend learning time.
    Ms. DeLauro. My time has expired. Mr. Chairman, thank you. 
And I hope we will have a second round.
    Thank you very much, Mr. Secretary.
    Mr. Obey. Mr. Rehberg.
    Mr. Rehberg. Thank you, Mr. Chairman.

                        RURAL EDUCATION CONCERNS

    And I appreciate you having traveled to Montana just 6 days 
ago. I am a little disappointed you are not wearing your War 
Bonnet blanket that you were given.
    Just to put it into perspective, both my grandmother and 
mom were teachers and came from Landyer, which is where you 
were. And so you know particularly the problem that exists 
within education in rural communities.
    I am, I guess, a little surprised and perhaps a little 
disappointed in the budget presentation as we see it as it 
relates to the rural educational needs. While I may have had 
heartache with many areas of No Child Left Behind, I found the 
Bush Administration at least amenable to flexibility. And I 
hope that you will be, as well, as you manage many of the 
programs within the budget.
    But, in particular, the shift from formula to grants within 
the budget is something that scares me a bit. Because coming 
from a rural area like Montana, we find that we don't have 
maybe the level of expertise to have grant writing as other 
areas that have economy of scale. So I would like to point that 
out to you, in particular.

                         RURAL EDUCATION CAUCUS

    And I have a letter that is outside. I have the preliminary 
report from the Rural Education Caucus, just talking a little 
bit about your budget. I formerly chaired the Rural Education 
Caucus and turned that over to other more capable individuals. 
But I would like to have this presented to the record, as soon 
as it gets here.

                TRIO PROGRAMS AND POSTSECONDARY SUCCESS

    Mr. Rehberg. Some of the words you used in your 
presentation were ``perpetuate poverty and social failure,'' 
and not just attending but graduating from college.
    Having traveled to now the Cheyenne reservation and seeing 
the kinds of students--Mr. Chairman, I just might point out 
that your numbers were impressive, but our unemployment rate on 
the Cheyenne reservation is 70 percent. That is 7-0. And that 
is something that definitely concerns us.
    One of the programs that is very successful in Montana, may 
not be so much in other areas, is the TRIO program. And if you 
want to do something to not perpetuate poverty and social 
failure, and not just attending but graduating from college, it 
really is important not to necessarily create a mandatory 
program in Pell grants but to fund appropriately programs like 
TRIO, which are a more holistic approach to providing 
assistance to graduating seniors going on to college.
    And just real quickly, I looked up the numbers. Nationwide, 
the percentage of low-income high school graduates enrolling in 
postsecondary education is 24 percent. In Montana, it is 73 
percent. So this is really a program that has given us an 
opportunity to take our kids and give them something more so 
that they can compete when they get to college.
    And it is more of the holistic approach that I would hope 
that you would seriously take a look at and see that perhaps 
these funding levels aren't necessarily appropriate for the 
assistance of rural education.
    And I will give you a chance to respond.

                    CHEYENNE RESERVATION IN MONTANA

    Secretary Duncan. Let me just start. I am learning so much 
every day about, you know, not just there but West Virginia and 
Vermont. But let me tell you, my visit to Northern Cheyenne, to 
the reservation there, is something I will never forget. And I 
have been in some pretty tough areas in my life and worked in 
some pretty tough areas, and the level of desperation, the 
level of poverty, was heartbreaking.
    And the high school I visited--this is not a scientific 
study, but the teacher said, to the best of their knowledge, 
they had had one child in the past 6 years graduate from 
college--one. And as I talked to the students, they were smart, 
they were committed, they wanted more, and they were 
desperately pushing against expectations. They repeatedly told 
me that they are being told on multiple fronts that they are 
not good enough and they can't make it, and they are fighting 
that.
    So let me tell you, there are lots of areas of this country 
where we need to improve the quality of education, but that is 
not one that I am going to forget. That is one that is very 
personal to me. And I am going to figure out, not just there 
but in other places, how we help children who have been trapped 
in--you know, I can't even imagine 70 percent unemployment. I 
am still trying to get my head around that number; it is almost 
incomprehensible.
    We have to do something there. And, again, I am convinced 
the only way we get to there is through better education. So I 
don't have all the answers, but I want you to know I am 
absolutely committed to trying to make a difference there.

                            TRIBAL COLLEGES

    Mr. Rehberg. And I appreciate your recognition of the 
tribal college issue, as well. We are very proud of the fact 
that I think we are the only State that has a tribal college on 
each of the seven reservations.
    Secretary Duncan. Yeah. And it is pretty remarkable 
leadership. I met with a number of those tribal college 
presidents.

                       TRIO AND GEAR UP PROGRAMS

    I will just say quickly that I am a big fan of the TRIO 
program, a big fan of GEAR UP. We haven't talked about dual-
enrollment programs, where high school students start to take 
classes on college campuses and get exposure there. And the 
more we can bridge that divide and help students really believe 
that college is a possibility for them, that is hugely 
important.
    And we have too many children around the country, including 
those I met there, who are smart enough, who are working hard 
enough, but are being told college is not for them, it is a 
different world. And we need to break through that 
psychological barrier and raise our expectations dramatically.
    Mr. Rehberg. Thank you.
    Thank you, Mr. Chairman.
    Mr. Obey. Ms. Roybal-Allard.

          PROPOSED EVEN START ELIMINATION AND FAMILY LITERACY

    Ms. Roybal-Allard. Thank you, Mr. Chairman.
    And welcome, Mr. Secretary.
    First of all, let me associate myself with the concerns 
that were raised by Congresswoman DeLauro about the elimination 
of the Even Start program, particularly since it has been based 
on this 2003 study in which the evaluators themselves said, and 
this is a direct quote: ``Care should be given in applying the 
findings to Even Start as a whole.'' And then, furthermore, a 
2007 Pennsylvania State University study found that the 2003 
evaluation had inherent design flaws. So eliminating a program 
as important as this based on questionable studies I think is 
something to be concerned about.
    And also, although I realize money is being shifted to 
other places, the point that Ms. DeLauro made I think is very, 
very valid. And those programs do not provide family literacy. 
And family literacy, as you know, is key to having parents 
involved with their children. And when parents are involved, 
the research has shown that children succeed at a much higher 
rate.
    So I just want to associate myself with the comments that 
were made by Ms. DeLauro, in also hoping that you will take 
another look at this proposal.

                      EDUCATION TECHNOLOGY FUNDING

    Another concern that I have about the budget deals with 
education technology funding. Now, President Obama has spoken 
at length about the importance of equipping our schools, our 
community colleges and public universities with 21st-century 
classrooms. The Enhancing Education Through Technology Grant 
program was designed to achieve those very goals. Yet, the 
budget cuts this already underfunded program from $269 million 
to $100 million.
    Now, while it is true the program receives $650 million in 
the stimulus bill, there is a problem using that as the 
rationale. First of all, the fact is that the stimulus was 
intended to supplement and to not supplant existing funding. 
Furthermore, the drastic cuts put the only significant 
technology program that the Department of Education has at a 
terrible disadvantage, because, by funding the technology 
program at $100 million in fiscal year 2010, you are lowering 
the baseline for future funding. And it could take years for 
this program to regain even its 2009 funding level of $269 
million.
    Can you explain the rationale for such a dramatic cut in 
funding for education technology, especially now when it is 
more needed than ever?
    Secretary Duncan. Again, I mean, you hit on both the 
challenges and the opportunities. But when we have, as you have 
stated, $650 million in new money--unprecedented increases for 
education technology. There is a huge influx of money to go 
across the country to folks to work very, very hard in this 
area. And we have never seen that kind of support, ever, for 
education technology.
    Ms. Roybal-Allard. So you are basically supplanting, then, 
in other words. And the program, as I said, is going to be put 
in a terrible disadvantage in the future, because that then 
becomes the baseline.
    Secretary Duncan. I understand the concern. Again, there 
was two to three times as much money going in through the 
stimulus package than this program has ever seen before.
    Ms. Roybal-Allard. Okay, but that doesn't address the 
problem it creates in the future.
    Secretary Duncan. No, I understand that challenge. I 
totally understand that challenge.

        SAFE AND DRUG-FREE SCHOOLS AND COMMUNITIES STATE GRANTS

    Ms. Roybal-Allard. Okay. The Safe and Drug-Free Schools and 
Communities program provides very effective, research-based 
approaches to drug abuse and violence prevention. And the 
program reaches about 37 million students in every school 
district across the United States.
    Now, the President's budget eliminates the $295 million 
State grant program and replaces it with a much smaller $100 
million competitive grant program. And it is my understanding 
that the Department justifies eliminating this program on an 
old 2001 study.
    Many changes have been made to this program in the last 8 
years. And not only will there be less money available for 
school drug programs--which, I might add, are badly needed. We 
definitely have a drug and alcohol problem with our young 
people. But by making it competitive, the result will be that 
some school districts will be left without these vital funds, 
because they will not be able to compete and get that money to 
support their programs.
    And in cases where schools were getting just a small 
amount, what they are able to do is use that small amount of 
Federal money to leverage other State and local funding. So 
they are going to lose that ability.
    So, again, what is the rationale for limiting the scope and 
the reach of this program? And what will be done to help those 
schools that will not be able to compete and get the money and 
will no longer be able to leverage even a small amount of 
Federal money in order to help them to be able to have these 
drug prevention programs in their schools?
    Secretary Duncan. I really appreciate the question. 
Obviously, these are huge, important issues, and continuing to 
make sure our schools are violence-free and drug-free is hugely 
important. And, Mr. Chairman, we made tough cuts. They are hard 
and controversial and not easy, and I understand that.
    It wasn't just a 2001 study, just to be clear on the facts 
base. There was a 2007 study, as well, that talked about these 
programs not really making a significant difference. That is 
much more current than the 2001 study.
    And what we really found was that money that was trickling 
out to States wasn't making a big difference. And we want to 
get that money directly to schools and into school districts, 
and to be much more tangible, much more hands-on with students. 
And that was the shift in strategic focus. We remain absolutely 
committed to the goals.
    Mr. Obey. Let me explain. We have four votes coming up. And 
the Majority Leader has announced that, in contrast to recent 
practice, he is going to hold these votes to a tight timeframe. 
So if we don't want to miss the votes, I would suggest that we 
go over to the House now.
    I am sorry, Mr. Secretary, but we are going to be stuck 
over there; my guess would be for about 30 to 40 minutes.
    [Recess.]
    Mr. Obey. Mr. Secretary, I know this is a wonderfully 
productive use of your time, but we will try to screw things up 
again in about 10 minutes.
    So, having said that, Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair.

                 NATIONAL EDUCATION STANDARDS AND GOALS

    And, Mr. Secretary, it is good to see you again. When you 
were before the Budget Committee, we had an opportunity to 
speak a little bit about national standards and national goals 
development. And I know that you are working with NCSL and 
school boards and superintendents and parents all over across 
the country to work on that. So I hope to talk to you more 
about that and how my concern that is going to come up shortly 
about funding is going to fit in.

                        NATIVE AMERICAN STUDENTS

    But I do want to thank you for your sincere acknowledgment 
of what our tribal schools need, as well as, as you become even 
more immersed in this issue for our young children and leaving 
truly no one behind, the needs that many Native American 
children face in our urban and suburban settings, as well as 
what you have seen on the reservations.
    I was just at Mille Lacs and Leech Lake, where I saw great 
things going on in school buildings that were second-rate, but 
the hearts of those kids were first-rate in being there and 
learning, and so were their elders and their community behind 
them 100 percent.

                STATE BUDGET DEFICITS AND ACCOUNTABILITY

    I want to talk to you for a second about what I consider 
becoming near a national security issue, and that is the 
economy and the role of education in the economy. And, as the 
economy has worsened, I am afraid we are seeing opportunities 
for education, for many of the things that you want to do, and 
President Obama and I and the parents in my district, slip 
through our fingers. That is, as I said, a national security 
issue, not only as, I think, making us being able to compete in 
this world, but also for keeping our democracy vibrant and 
strong and a beacon for other countries to look at.
    The Center on Budget and Policy Priorities recently issued 
a paper on Federal fiscal assistance for State governments. It 
has seen what the recovery package has done. It has enabled 
States to not decrease their budgets quite as much as they 
might have with the shortfalls that they are seeing. In other 
words, it is smaller cuts for education than what would have 
been.
    And I am concerned about this, because if you look at what 
is going on in 46 of the States, they have deficits for fiscal 
2010 and beyond. The gaps total $133 billion for 45 States, and 
they are estimating the size of these gaps could grow. 
Minnesota alone has a $654 million mid-year budget deficit.

                ACCOUNTABILITY FOR USE OF RECOVERY FUNDS

    So what I am concerned about is that Recovery funds are 
really supplanting regular education funds. This Congress made 
a decision not to do matching funds to give States some 
flexibility. We gave governors and their departments of 
education the dollars without going through their legislative 
branches, assuming that these funds would be used, yes, to 
maybe supplant a little, but they are being supplanted for 
everything.
    So how do we move forward? And I agree with Chairman Obey. 
With all the goals, all the wonderful goals in this budget, and 
with the money that you have planned to achieve these goals, if 
we send the money to the States and they just use it to provide 
basic education and still cut basic education, then we are set 
up for failure, President Obama is set up for failure, but, 
most importantly, our children are set up for failure.
    So how are we going to hold these school districts 
accountable? Where is the shared responsibility for our 
children's future?
    Secretary Duncan. That is a great question. And I am a 
believer in both awards and consequences, and let me tell you 
what we are doing at both ends of the spectrum.
    First of all, in the first round of the stimulus package, 
we put out tens of billions of dollars, and our staff has 
gotten that money out extraordinarily quickly. We committed to 
putting it out within 14 days, and our staff has been getting 
it out in closer to 6 days. They have been working nights and 
weekends to really respond to the urgent need.
    But we also held back billions of dollars. And where we see 
States playing shell games or acting in bad faith, we have the 
opportunity not to put out that second tranche of money. And we 
are not looking for a fight, we are not looking to be the tough 
guy or the bad guy, but we are absolutely prepared to do that, 
if necessary. So we have a real significant stick there.
    Secondly, we talked about unprecedented discretionary 
resources: $4.3 billion for the Race to the Top Fund, $650 
million invested in the What Works and Innovation Fund. And 
where we see States playing games or acting in bad faith and 
doing the wrong thing by children, they will basically 
eliminate themselves from that competition.
    So they have a chance to bring in, on top of unprecedented 
stimulus resources, a chance to bring in hundreds of millions 
of dollars into their States if they are creative, if they are 
innovative, if they are pushing the status quo and challenging 
the status quo. But if they are doing the wrong thing, they 
could lose out in the second set of stimulus money, and they 
would absolutely put themselves at huge risk, huge jeopardy, of 
just being eliminated from the competition for discretionary 
dollars.
    So I think we have real carrots and real sticks to try to 
encourage States to act in good faith and do the right thing by 
children.
    Ms. McCollum. Thank you, Mr. Chairman.
    Mr. Obey. We now have another vote going on with 12 minutes 
left.
    Mr. Moran, why don't we take you? And then I am afraid we 
will have to go vote again.
    Mr. Moran. Who is in charge of this place anyway?
    Mr. Obey. Nobody.
    Mr. Moran. Okay.

                     EDUCATION FUNDING DISPARITIES

    I want to ask you, on a macro issue, Mr. Secretary, related 
to the geographic and economic disparity in our public school 
system, bearing in mind that what the Federal Government does 
is at most capacity-building and gap-filling. It is a 
relatively small fraction of the public education budget. But 
some trends have been occurring that have been exacerbated in 
the last several years.
    One is geographic. It is clear that the best, from an 
academic and creative standpoint, students in much of the 
heartland of the country, they are moving. They are moving to 
the coast, the east or west coast, to what Richard Florida 
calls the ``creative class communities.'' They prefer, you 
know, Metro and the coffee shops and so on, or the principal 
suburbs. You are aware of that geographic disparity. And it is 
causing a major employment and economic potential gap.
    But the other problem is an economic one, and it is really 
based upon the way we fund public education. As you very well 
know, we are too reliant upon property taxes. The problem there 
is that the parents who have the most at stake in our public 
school system are the least likely to own much property. And so 
they really are kind of powerless in terms of putting adequate 
resources into the public school system.
    Those who have the money are either retired, or they are in 
their fifties or whatever, they have accumulated some wealth, 
so they have substantial property, or they are wealthy enough 
that they send their kids to private school. And we are seeing 
that over and over again, particularly in inner-cities and some 
of the exurban areas. There is a lessening of the political 
support for adequate investment in education.
    So, of all the things that we do, perhaps the best thing we 
could do is to try to restructure our national system for 
funding education. It is regressive now; there is a built-in 
perverse incentive. And it is one of the reasons why, in terms 
of comparativeness to the rest of the world, we tend to be 
dropping each successive year in terms of our global 
competitiveness and the preparation of the workforce.
    So I would like to get some thoughts from you, because I 
have heard you express yourself before and you, I think, would 
have some useful suggestions. But I would like to know if the 
Administration has thought about taking this issue on.
    Secretary Duncan. It is another long, long conversation, 
but this issue is very personal for me. I come from a State, 
Illinois, and my numbers may not be exactly right, but we were 
48th in the amount of money going to education, so we were 
virtually dead-last. And we were 43rd in the disparities 
between wealthy districts and poor districts. And I was at the 
poor end of that. I worked in a district that was 90 percent 
minority, and 85 percent of my students lived below the poverty 
line.

                     EQUALIZING ASPECT OF EDUCATION

    And when the children of the rich get dramatically more 
spent on them than the children of the poor, it exacerbates the 
great disparities and outcomes. I think public education, at 
its heart, should be the great equalizer. And every child, 
regardless of whether he or she is wealthy, poor, black, white, 
Asian, Latino, it doesn't matter, every child should have a 
chance to get a great education.
    And money doesn't begin to answer all our problems, and we 
have seen lots of money spent on things that don't make sense. 
But it is interesting, in every wealthy district they seem to 
spend a lot of money on education, and there is a value there. 
And it needs to be spent well.
    And so, this is one that I think we have to really think 
about. And I don't have answers today. You know, our folks are 
thinking about it and looking at it. But when we are 
contributing, when we are perpetuating a system of haves and 
have-nots, I think that is not the principle upon which our 
country is based and that is not the point of public education 
in our country. And we need to be very, very thoughtful about 
what we are doing to give every child the chance to have a 
great education.

                 TAX REMEDIES VS. PROGRAM PROLIFERATION

    Mr. Moran. Yeah. Well, I hear you, and obviously no one 
could disagree with you. But I think if we were to reassess 
this whole situation and come up with a far-ranging plan that 
addressed it from a tax standpoint, it might be the most 
important thing we could do, instead of this proliferation of 
programs trying to meet needs where it is really a marginal 
improvement we can make to fixing of the underlying cause of 
the disparity.
    We have very little time, so I won't pursue it further or 
even ask further questions, because we are going to have to go 
vote. But I thank you for your thoughtfulness and your 
background. We are going to have a lot of time to work 
together. But I am glad you are on board.
    Mr. Obey. I am going to suggest, Ms. Lee, it is futile to 
try to come back here, with what is going on on the floor. We 
have 6 minutes and 40 seconds left to vote. It is going to be a 
short vote, so I would suggest you take 2 minutes to ask a 
question. And then we will have to hang it up or we will all 
miss the votes.
    Ms. Lee. Okay.

                         MINORITY DROPOUT RATES

    Well, first, welcome, Secretary Duncan. It is good to see 
you again. And, again, I just want to reiterate a couple of 
things we talked about at your meeting with the Congressional 
Black Caucus. I serve as Chair, as you know, and one the areas 
that we are extremely concerned about is dropout rates in 
minority communities, especially with young African American 
and Latino boys.
    The statistics are African American men have a 30 percent 
chance of serving in prison before the age of 30, but among 
young African American men who drop out of high school it jumps 
to 60 percent. And so it is just outrageous. It is astounding. 
And I need to look at your budget and just look at how you are 
really beginning to address this dropout rate, especially among 
minority groups.

                    EDUCATION--A CIVIL RIGHTS ISSUE

    And, finally, let me just say I am very pleased to see that 
you acknowledge that education is the civil rights issue of our 
time and that it is a truly effective weapon in our Nation's 
long war on poverty, because you are absolutely correct. And to 
have that perspective coming from your department I think is 
wonderful.
    Thank you.

                     ADDRESSING THE DROPOUT PROBLEM

    Secretary Duncan. Thank you. And just quickly, as we talked 
about, I think there is nothing more important we can do as a 
country than dramatically reduce that dropout rate. And the 
economic cost to the country and the personal loss is 
tremendous.
    We can identify 2,000 high schools around the country that 
produce half of our Nation's dropouts and 75 percent of our 
minority students' dropouts. And so what we want to do is not 
tinker around the edges, not just effect incremental change. We 
want to--and this is tough, tough work, but I think we have to 
do it--we have to engage these tough issues in a real and 
honest way. We need to fundamentally turn around, over time, 
not overnight but over time, those schools and those feeder 
middle schools and elementary schools.
    We can identify the problem. And this has been going on for 
far too long, and these children do not have a chance at being 
successful when we have these kinds of dropout rates.
    Ms. Lee. But, Mr. Secretary, I hope--and could you follow 
up with us, or in writing perhaps to the committee, how in your 
budget, what is the strategy, because I don't see this targeted 
in your budget.
    Secretary Duncan. $5 billion in school improvement money, 
Title I--unprecedented dollars going in to help the neediest of 
schools.
    Mr. Obey. I am going to have to call this hearing to an 
end. I will save my questions for another time, Mr. Secretary. 
I apologize for the discombobulation, but that is life around 
here. Thank you.
    Secretary Duncan. No problem. Thank you so much for the 
opportunity, and thanks for your leadership, Mr. Chairman.
    [The following questions were submitted to be answered for 
the record:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           W I T N E S S E S

                              ----------                              
                                                                   Page
Alexander, Duane.................................................    85
Besser, Dr. Richard..............................................   199
Briggs, Josephine................................................    85
Clancy, Dr. Carolyn..............................................   199
Duncan, Hon. Arne................................................   461
Ellis-Lamkins, Phaedra...........................................    30
Fauci, Anthony...................................................    85
Fitzgerald, Joan.................................................    30
Grady, Patricia..................................................    85
Hall, Keith......................................................    30
Hyzy, Dr. Robert.................................................   249
Kington, Raynard.................................................    85
Krugman, Paul....................................................     4
Landis, Story....................................................    85
Niederhuber, John................................................    85
Pronovost, Dr. Peter.............................................   249
Rodgers, G. P....................................................    85
Ruffin, John.....................................................    85
Sebelius, Hon. Kathleen..........................................   369
Solis, Hon. Hilda................................................   313
Stricof, Rachel..................................................   249
Tabak, Lawrence..................................................    85
Wright, Dr. Don..................................................   199


                               I N D E X

                              ----------                                
        

                     National Institutes of Health

                                                                   Page
American Recovery and Reinvestment Act..........................175-176
ARRA and Comparative Effectiveness Research.....................154-156
Asthma and Allergy Diseases.....................................144-145
Basic Behavioral and Social Science Blueprint...................141-143
Borderline Personality Disorder.................................158-160
Chronic Kidney Disease..........................................160-161
Comparative Cost and Comparative Effectiveness in Research......139-141
Controlling High Blood Pressure and Heart Failure...............170-171
Coordination and Funding of Health Disparities Research.........171-172
Coordination of TBI and PTSD....................................143-144
Cross Cutting Research...........................................   150
Dr. Kington's Oral Statement..................................... 86-89
Dr. Kington's Written Statement.................................. 90-98
Efforts to Reduce Stroke Minority Health Disparities............169-170
Elevation of National Center on Minority Health and Health 
  Disparities to Institute......................................183-184
Elevation of NCMHD Institute.....................................   172
Glomerular Disease.........................................161-162, 168
Health Disparities and Equal Access Bill........................120-123
HIV/AIDS Microbicide Research...................................186-188
HIV/AIDS Research................................................   185
HIV/AIDS Vaccine Research........................................   186
Impact of Toxic Chemicals on Health and Development.............134-136
Improving Mitochondrial Disease Research........................166-167
Increased Support for RCMI's.....................................   173
Interacting and Engaging Minority Communities in Research........   192
Job Estimates from ARRA Funds...................................123-124
    Jobs Created with $10 Billion................................   124
Job Estimates from Construction Funds...........................117-118
    Construction Jobs Created with $1.5 Billion..................   118
Mesothelioma Research...........................................132-134
Mitochondrial Research..........................................164-166
Neuroblastoma Research..........................................163-164
NIH Research Contributing to the Elimination of Health 
  Disparities...................................................181-183
NIH Research Facilities Construction Modernization...............   117
Outreach for Minorities in Research Professions.................137-139
Participation of Minorities in Accessing ARRA Funds.............178-179
Pre-Exposure Prophylaxis.........................................   188
Psychological Factors Affecting Organ Systems....................   128
Public Access Policy............................................156-157
Scientific Priorities............................................   152
Scleroderma.....................................................176-177
Selected Disease Research and EPSCoR.............................   145
    Attention Deficit/Hyperactivity Disorder....................146-147
    Autism Spectrum Disorder.....................................   148
    EPSCor Consideration for ARRA Funds..........................   149
Sickle Cell Testing.............................................150-151
Small Business Participation in NIH's Funding from the American 
  Recovery and Reinvestment Act of 2009..........................   196
Stem Cell Guidance...............................................   154
Support for Nurse Scientists Faculty............................190-191
The National Children's Study..........................119-120, 153-154
The Recovery Act and HIV/AIDS Research...........................   197
Translating NIH Research to Racial and Ethnic Groups............180-181
Trans-NIH Primary Care Research.................................184-185
Tuberculosis Disparities Research...............................192-193
Tuberculosis Research...........................................174-175
Update on Diabetes and Sickle Cell..............................188-190
``Valley of Death'' Commercializing NIH Research Results........194-196
Vulvodynia.......................................................   158

                Department of Health and Human Services

AHRQ's Mission...................................................   227
Awareness about Infections.......................................   246
Development of the HHS Action Plan..............................201-202
Financial Incentives............................................246-247
FY 2009 Funded Activities Outlined in the action Plan............   202
HAI Reduction Strategies........................................239-240
Healthcare Investments..........................................300-303
Healthcare Provider Liability...................................296-298
Healthcare-Associated Infection Prevention in a Reformed Health 
  System........................................................202-203
Healthcare-Associated Infections................................305-309
Infection Control Training in Curriculums.......................244-245
Infection Data Reporting Transparency............................   296
Infection Prevention Education...................................   312
Infection Tool Kit...............................................   242
Infections......................................................242-244
Keystone Project................................................310-311
Malpractice.....................................................238-239
MRSA.......................................................227, 237-238
Nurse and Healthcare Worker Shortages and Operating Costs.......298-300
Opening Statements
    Dr. Besser..................................................213-215
    Dr. Clancy..................................................227-229
    Dr. Hyzy....................................................283-285
    Dr. Pronovost...............................................249-252
    Dr. Wright..................................................200-203
    Ms. Stricof.................................................270-274
Outreach Campaign...............................................240-242
Preventing Infections............................................   228
Prevention Checklist.......................................236-237, 245
Technical Strategies.............................................   247
Transparency....................................................247-248
Written Statements
    Dr. Besser..................................................216-225
    Dr. Clancy..................................................230-234
    Dr. Hyzy....................................................286-292
    Dr. Pronovost...............................................253-265
    Dr. Wright..................................................204-211
    Ms. Stricof.................................................275-280

                           Secretary of Labor

Advocate for a Safe Work Environment............................333-334
Chairman's Opening Remarks......................................313-314
Children in the Workforce.......................................343-344
Creating Green Jobs..............................................   361
Critical Positions..............................................353-354
Diacetyl........................................................361-362
Educational System Involvement..................................346-347
Enhanced Enforcement Program....................................360-361
Fraudulent Claims................................................   354
H1-B and L Visa Fraud............................................   340
Impact of Recovery Act Money on Programming......................   338
Improper Benefit Payments........................................   351
Increase in Funding for Enforcement..............................   334
Increasing Training Opportunities in Healthcare-Related Fields..350-351
Industries with Potential for Investment and Growth..............   347
International Labor Affairs Bureau..............................364-365
Job Corps and Green Jobs........................................367-368
Job Corps Funding Request........................................   367
Job Opportunities...............................................351-352
Job Training Dollars............................................337-338
Jobs in Manufacturing...........................................335-337
Migrant and Seasonal Farm Workers................................   363
New Ways of Addressing Old Problems.............................348-349
Office of Labor--Management Standards...........................362-363
Opportunities for Women in the Workforce........................341-343
Opportunities for Youth.........................................352-353
Pension Benefit Guaranty Corporation.............................   341
Protection of Health care Workers in the Event of a Pandemic Flu344-345
Public Transit Benefit at DOL...................................338-339
Ranking Member's Opening Remarks................................314-316
Reducing Unemployment Disparities...............................334-335
Returning Veterans..............................................354-360
Secretary's Opening Statement...................................317-320
Secretary's Written Statement...................................321-331
Senior Community Service Employment Program......................   340
State Aid.......................................................365-366
Telework and Telecommuting......................................363-364
Wages for Job Corps Instructors.................................345-346
WIA Reauthorization........................................339, 347-348

                 Secretary of Health and Human Services

Abstinence Only Programs........................................417-418
AIDS Funding and Minority Health Disparities....................406-408
Alabama Medicaid.................................................   459
Area Wage Index..................................................   460
Assisting Refugees to Achieve Self Sufficiency..................427-428
Bioterrorism Funding............................................435-436
Cancer Research.................................................453-455
CDC HIV Prevention.........................................416, 436-437
Chronic Disease.................................................429-430
Chronic Disease Prevention Programs.............................416-417
Chronic Underfunding of the U.S. refugee resettlement Program...423-424
Collaboration in Medical Research................................   453
Community-Based Prevention......................................430-432
Comparative Effectiveness Research..............................386-387
Comprehensive Sex Education Funding..............................   440
Crowd Out of Private Health Insurance...........................387-388
Drug Resistant Tuberculosis.....................................433-434
Early Childhood and Health Care.................................389-390
Early Education; Mental Health Services.........................412-413
Emergency Housing Assistance....................................424-425
Ending Violence Against Abortion Providers and Health Care Refor400-402
Financing Health Care Reform...............................399-400, 411
Food Safety.....................................................409-140
Head Start.......................................................   434
Health Care for Children........................................402-403
Health Care Reform and HHS Budget Proposals.....................385-386
Health Care Reform and Oversight................................403-404
Health Care Reform and Private Insurance Options................408-409
Health Disparities.....................................392-393, 450-451
Health Disparities, Single-Payer System and Sex Education.......394-396
Health IT Systems...............................................448-450
Health Reform and Hidden Costs of Private Insurers..............440-442
Healthcare Reform................................................   458
Healthcare Reform, H1N1 Flu Funding and Project Bioshield.......390-391
Healthcare System...............................................451-452
HIV/AIDS Funding for the CDC....................................446-447
HIV/AIDS, Health Disparities.....................................   411
Influenza Antiviral Treatment vs. Prophylaxis...................432-433
Institute of Medicine Report on the Critical Role of Title X 
  Funding........................................................   447
Integration and Support to Professional Refugees................426-427
Integration of Services.........................................398-399
Mandatory Insurance.............................................393-394
Medical Advances and Comparative Effectiveness Research.........345-457
Microbides to Prevent HIV/AIDS..................................420-422
NIH Funding.....................................................391-392
NIH Funding and Health Care Reform..............................396-398
Office of Refugee Resettlement: U.S. Domestic Refugee 
  Resettlement Program and the Economic Crisis.........422-423, 437-439
Oversight and Medicare Reimbursement Disparities................413-415
Pandemic Influenza...............................................   452
Participation of Minorities in Accessing ARRA Funds.............443-446
Personalized Medicine...........................................455-456
Psycho-Social Needs of Refugees and Other Vulnerable Populations.   427
Public Health Workforce.........................................418-420
Recovery Act Funding: Minority Outreach, Mental Health Services..   412
Refugee Women...................................................425-426
Ryan White HIV/AIDS Program......................................   416
Secretary's Oral Statement......................................373-375
Secretary's Written Statement...................................376-383
Single-Payer System.............................................388-389
State and Community Involvement..................................   410
Status of HIV Travel Ban........................................442-443
Stress Reduction................................................405-406
Substance Abuse Testing..........................................   422
Tuberculosis.....................................................   448
Unplanned Pregnancies...........................................404-405
Utilizing Remaining ARRA Funds for Prevention....................   446

                         Secretary of Education

Access to ACG/SMART..............................................   506
Accountability for use of Recovery Funds........................486-487
Addressing the Nation's Dropout Program....................467, 489-490
After-School Programs and Lengthening the School Day.............   480
American Recovery and Reinvestment Act..........................465-466
ARRA Funds and HBCUs............................................492-493
ARRA Student Aid Funding by state................................   493
Asian American and Native American Pacific Islander-Serving 
  Institution Program (AANAPISI).................................   504
Budget Proposals Savings Offsets................................470-471
Bullying........................................................496-497
Chairman's Opening remarks.......................................   461
Charter Schools--Promoting Accountability and High Standards.....   497
Cheyenne Reservation in Montana.................................482-483
College Access and Completion Budget Proposals...................   470
College Completion Rates........................................495-496
Comprehensive Approach to family Literacy........................   480
Department Programs Helping Veterans Transition to College......499-500
Early Learning Challenge Fund..............................469-470, 480
Educating the Nation's Workforce................................463-464
Education--A Civil Rights Issue..................................   489
Education Funding Disparities....................................   487
Education Technology Funding.....................................   484
Education, Job Training and Retraining...........................   464
Encouraging States to Engage with HBCUs..........................   493
Engaging HBCUs in Teacher Education, School Reform, and Teach for 
  America........................................................   494
English Language Acquisition Program Evaluations.................   501
Equalizing Aspect of Education..................................488-489
Equity...........................................................   503
ESEA Title I Decrease Proposed..................................462-463
ESEA, Title I and IDEA Stimulus Funding..........................   469
Even Start Evaluations...........................................   479
Even Start Program--family Literacy Services.....................   479
Expansion of Preschool Programs..................................   469
Funding Sources to Extend learning Opportunities................480-481
FY 2010 Education Budget Priorities..............................   465
FY 2010 Education Budget Request.................................   467
HBCUs and Direct Lending.........................................   496
Historically Black Colleges and Universities....................491-492
Impact of Requirements on Some Leas and Schools..................   477
Improving STEM Education........................................504-505
Improving Teacher Quality and Low-Performing Schools.............   467
Increasing Graduation Rates.....................................478-479
Long Term Plan to meet Federal Financial Obligations under IDEA..   506
Minority Dropout Rates...........................................   489
National Education Standards and Goals...........................   485
National Teacher Recruitment Campaign............................   468
Native American Students.........................................   486
NCLB Goals, Accountability and Flexibility......................477-478
NCLB Requirements for Special Needs Students.....................   477
Policy Commitments Under ARRA....................................   466
Proposal to Make Pell Grants Mandatory...........................   463
Proposed Change to Mandatory Pell Grant..........................   470
Proposed Education Budget Initiatives............................   462
Proposed Even Start Elimination and Family Literacy..............   483
Race to the Top.................................................503-504
Recovery Act and IDEA Funds......................................   505
Recovery Act Funds and Budget Stabilization.....................461-462
Resources for Low-Performing Schools.............................   468
Rural Education Caucus..........................................481-482
Rural Education Concerns.........................................   481
Safe and Drug-Free Schools and Communities State Grants484-485, 502-503
School Reforms in Extending School Day and Year.................466-467
Secretary's Opening Statement...................................465-471
Secretary's Written Statement...................................472-475
State Budget Deficits and Accountability.........................   486
Statutory Provisions Promoting Accountability and High Standards.   498
Striving Readers Program...............................468-469, 479-480
Support for Latino Students.....................................500-501
Tax Remedies vs. Program Proliferation...........................   489
Teacher Incentive Fund Changes...................................   468
Three-Part Accountability and Technical Assistance Model for 
  Charter School Programs.......................................498-499
Timing of Proposed Initiatives and Economic turmoil..............   462
Title I Grants to Local Educational Agencies.....................   491
Transition to Teaching Program and HBCU's.......................494-495
Tribal Colleges..................................................   483
Trio and Gear Up Programs........................................   483
Trio Programs and Postsecondary Success..........................   482
U.S. 1st in World College graduates by 2020......................   465
Unemployment in the Chairman's District..........................   461
White House Initiative on HBCUs.................................493-494
Young Readers Programs...........................................   469