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

       H.R. 960, AND H.R. 1045, GREATER AUTONOMY FOR THE NATION'S CAPITOL

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

                                    HEARING

                                   before the

                       SUBCOMMITTEE ON FEDERAL WORKFORCE,
                        POSTAL SERVICE, AND THE DISTRICT
                                  OF COLUMBIA

                                     of the

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED ELEVENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    H.R. 960

         TO AMEND THE DISTRICT OF COLUMBIA HOME RULE ACT TO ELIMINATE
               CONGRESSIONAL REVIEW OF NEWLY-PASSED DISTRICT LAWS

                                     AND ON

                                   H.R. 1045

       TO AMEND THE DISTRICT OF COLUMBIA HOME RULE ACT TO ELIMINATE ALL
    FEDERALLY-IMPOSED MANDATES OVER THE LOCAL BUDGET PROCESS AND FINANCIAL
     MANAGEMENT OF THE DISTRICT OF COLUMBIA AND THE BORROWING OF MONEY BY
                            THE DISTRICT OF COLUMBIA
                                   __________

                               NOVEMBER 18, 2009

                                   __________

                               Serial No. 111-66

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

      Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                   index.html
                          http://www.house.gov/reform

                      U.S. GOVERNMENT PRINTING OFFICE
    57-789                    WASHINGTON : 2010
    -----------------------------------------------------------------------
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001

                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                       EDOLPHUS TOWNS, New York, Chairman
    PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
    CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
    ELIJAH E. CUMMINGS, Maryland         JOHN L. MICA, Florida
    DENNIS J. KUCINICH, Ohio             MARK E. SOUDER, Indiana
    JOHN F. TIERNEY, Massachusetts       JOHN J. DUNCAN, Jr., Tennessee
    WM. LACY CLAY, Missouri              MICHAEL R. TURNER, Ohio
    DIANE E. WATSON, California          LYNN A. WESTMORELAND, Georgia
    STEPHEN F. LYNCH, Massachusetts      PATRICK T. McHENRY, North Carolina
    JIM COOPER, Tennessee                BRIAN P. BILBRAY, California
    GERALD E. CONNOLLY, Virginia         JIM JORDAN, Ohio
    MIKE QUIGLEY, Illinois               JEFF FLAKE, Arizona
    MARCY KAPTUR, Ohio                   JEFF FORTENBERRY, Nebraska
    ELEANOR HOLMES NORTON, District of   JASON CHAFFETZ, Utah
        Columbia                         AARON SCHOCK, Illinois
    PATRICK J. KENNEDY, Rhode Island     BLAINE LUETKEMEYER, Missouri
    DANNY K. DAVIS, Illinois             ANH ``JOSEPH'' CAO, Louisiana
    CHRIS VAN HOLLEN, Maryland
    HENRY CUELLAR, Texas
    PAUL W. HODES, New Hampshire
    CHRISTOPHER S. MURPHY, Connecticut
    PETER WELCH, Vermont
    BILL FOSTER, Illinois
    JACKIE SPEIER, California
    STEVE DRIEHAUS, Ohio
    JUDY CHU, California

                          Ron Stroman, Staff Director
                    Michael McCarthy, Deputy Staff Director
                          Carla Hultberg, Chief Clerk
                      Larry Brady, Minority Staff Director

    Subcommittee on Federal Workforce, Postal Service, and the District of
                                    Columbia

                   STEPHEN F. LYNCH, Massachusetts, Chairman
    ELEANOR HOLMES NORTON, District of   JASON CHAFFETZ, Utah
        Columbia                         MARK E. SOUDER, Indiana
    DANNY K. DAVIS, Illinois             BRIAN P. BILBRAY, California
    ELIJAH E. CUMMINGS, Maryland         ANH ``JOSEPH'' CAO, Louisiana
    DENNIS J. KUCINICH, Ohio
    WM. LACY CLAY, Missouri
    GERALD E. CONNOLLY, Virginia
                         William Miles, Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on November 18, 2009................................     1
    Text of H.R. 960.................................................     8
    Text of H.R. 1045................................................    14
    Statement of:
        Fenty, Adrian M., Mayor, District of Columbia; Vincent Gray,
          chairman, District of Columbia City Council; Natwar Gandhi,
          chief financial officer, District of Columbia; Alice M.
          Rivlin, senior fellow of economic studies, Brookings
          Institution and director, Greater Washington Research; and
          Walter Smith, executive director, District of Columbia
          Appleseed Center for Law and Justice.......................    33
            Fenty, Adrian M..........................................    33
            Gandhi, Natwar...........................................    52
            Gray, Vincent............................................    38
            Rivlin, Alice M..........................................    67
            Smith, Walter............................................    73
    Letters, statements, etc., submitted for the record by:
        Connolly, Hon. Gerald E., a Representative in Congress from
          the State of Virginia, prepared statement of...............    31
        Fenty, Adrian M., Mayor, District of Columbia, prepared
          statement of...............................................    35
        Gandhi, Natwar, chief financial officer, District of
          Columbia, prepared statement of............................    54
        Gray, Vincent, chairman, District of Columbia City Council,
          prepared statement of......................................    40
        Lynch, Hon. Stephen F., a Representative in Congress from the
          State of Massachusetts:
            Prepared statement of....................................     6
            Prepared statement of Robert Brannum.....................     2
        Norton, Hon. Eleanor Holmes, a Delgate in Congress from the
          District of Columbia, prepared statement of................    23
        Rivlin, Alice M., senior fellow of economic studies,
          Brookings Institution and director, Greater Washington
          Research, prepared statement of............................    69
        Smith, Walter, executive director, District of Columbia
          Appleseed Center for Law and Justice, prepared statement of    75

       H.R. 960, AND H.R. 1045, GREATER AUTONOMY FOR THE NATION'S CAPITOL

                                  ----------

                          WEDNESDAY, NOVEMBER 18, 2009

                      House of Representatives,
    Subcommittee on Federal Workforce, Postal Service,
                          and the District of Columbia,
                  Committee on Oversight and Government Reform,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10 a.m., in
    room 2154, Rayburn House Office Building, Hon. Stephen F. Lynch
    (chairman of the subcommittee) presiding.
        Present: Representatives Lynch, Norton, Kucinich, Clay,
    Connolly, Chaffetz, Bilbray, and Towns (ex-officio).
        Staff present: William Miles, staff director; Aisha
    Elkheshin, clerk/legislative assistant; Dan Zeidman, deputy
    clerk/legislative assistant; Adam Fromm, minority chief clerk
    and Member liaison; Howard Denis, minority senior counsel;
    Mitchell Kominsky, minority counsel; and Alex Cooper, minority
    professional staff member.
        Mr. Lynch. Good morning. The Subcommittee on Federal
    Workforce, Postal Service, and the District of Columbia hearing
    will now come to order. I want to welcome Ranking Member
    Chaffetz; members of the subcommittee; our chairman, Ed Towns,
    the gentleman from New York; all the witnesses; and also those
    in attendance at today's hearing.
        The purpose of today's hearing is to examine the merits and
    potential impact of H.R. 960, the District of Columbia
    Legislative Autonomy Act of 2009, and H.R. 1045, the District
    of Columbia Budget Autonomy Act of 2009, collectively. These
    measures introduced by Representative Eleanor Holmes Norton are
    intended to advance the concept of self governance in the
    District of Columbia.
        The chairman, ranking member, and subcommittee members will
    each have 5 minutes to make opening statements and all Members
    will have 3 days to submit statements for the record.
        Before I get started with my statement today, I would like
    to ask unanimous consent that the statement of Robert Brannum,
    chairman of the Fifth District Citizens' Advisory Council, be
    entered into the record. Hearing no objections, that is so
    ordered.
        [The prepared statement of Mr. Brannum follows:]

        [GRAPHIC] [TIFF OMITTED] T7789.001

        [GRAPHIC] [TIFF OMITTED] T7789.002

        Mr. Lynch. As mentioned earlier, the subcommittee convenes
    today's legislative hearing to examine H.R. 960, the District
    of Columbia Legislative Autonomy Act of 2009, and H.R. 1045,
    the District of Columbia Budget Autonomy Act of 2009. These are
    two bills in a series of legislative proposals introduced by
    Congresswoman Eleanor Holmes Norton to promote greater autonomy
    and self governance for the residents and elected officials of
    the District of Columbia.
        Established by Article 1, Section 8, Clause 17 of the U.S.
    Constitution, the District of Columbia came to be our Nation's
    Capital in order to protect the institutions of national
    Government and to prevent the disproportionate influence of any
    particular State. In establishing the seat of the Federal
    Government, the Constitution granted Congress exclusive
    legislative control over the District of Columbia. However,
    since ratification of the ``District Clause,'' Congress has
    employed various approaches to municipal governance in the
    Nation's Capital. Most notably, in 1973 Congress enacted the
    District of Columbia Self Government and Governmental
    Reorganization Act, also known as the Home Rule Act.
        The Home Rule Act created the District's current governing
    structure, complete with a duly elected Mayor and City Council,
    thereby setting the Nation's Capital on the road toward self
    governance. While the Home Rule Act of 1973 represented a
    significant step forward for the city's municipality, the act
    also came with an array of checks and balances such as the
    requirement that Congress review all locally passed legislation
    as well as the District's annual budget before final enactment
    can occur.
        Although the Home Rule Act attempted to strike a balance
    between Congress's constitutionally derived authority and the
    need to delegate aspects of this power to a local government,
    the fact of the matter is that certain provisions of the act
    have created a costly and sometimes unpredictable public
    policymaking process and an unaccommodating fiscal budget cycle
    for the city. It is for these reasons that my colleague Ms.
    Norton has introduced H.R. 960 and H.R. 1045 to do away with
    certain aspects of Congress's review authority as outlined in
    the provisions of the Home Rule Act.
        Specifically, H.R. 960, the District of Columbia
    Legislative Autonomy Act of 2009, would eliminate the 30 and 60
    day congressional review periods for criminal and civil laws
    passed by the District government. Along the same lines, H.R.
    1045, the District of Columbia Budget Autonomy Act of 2009,
    would remove the statutory requirement that Congress annually
    approve the District's fiscal year budget, which is principally
    raised from local revenue sources.
        While collectively H.R. 960 and H.R. 1045 will
    fundamentally reshape the way Congress is involved in the local
    legislative and budgetary matters of the Nation's Capital,
    nothing in either of the measures being discussed today can or
    will eliminate Congress's exclusive constitutional authority
    over the District of Columbia. In other words, Congress will
    retain the power to repeal or amend local laws through the
    routine passage of legislation and its right to annually review
    the myriad of Federal payments to the District of Columbia.
        That said, the subcommittee is interested in exploring the
    pros and cons of these two proposals and pro-home rule
    measures, which is the main purpose of today's hearing.
        The District is home to nearly 575,000 tax-paying American
    citizens, many of whom have served in our Nation's armed forces
    and have gone to the polls to elect their own city officials to
    carry out the business of local governance. Even in light of
    some of the city's ongoing policy challenges and its
    longstanding structural budget imbalance, the District of
    Columbia has made great strides over the past decade in its
    capacity to govern. That is why I believe today's discussion on
    revisiting Congress's approach to overseeing the legislative
    and budgetary matters of the Nation's Capital is certainly
    warranted.
        Again, I would like to thank my colleagues, especially
    Eleanor Holmes Norton for her tireless work in this policy
    matter and for bringing the concerns of her district to the
    forefront of this committee's and this Congress's business. I
    welcome all those in attendance this afternoon. I look forward
    to hearing your testimony on these important legislative
    matters.
        I welcome my colleague, Ranking Member Chaffetz, the
    gentleman from Utah, to offer 5 minutes for an opening
    statement.
        [The prepared statement of Hon. Stephen F. Lynch and the
    texts of H.R. 960 and H.R. 1045 follow:]

    [GRAPHIC] [TIFF OMITTED] T7789.003

    [GRAPHIC] [TIFF OMITTED] T7789.004

    [GRAPHIC] [TIFF OMITTED] T7789.055

    [GRAPHIC] [TIFF OMITTED] T7789.056

    [GRAPHIC] [TIFF OMITTED] T7789.057

    [GRAPHIC] [TIFF OMITTED] T7789.058

    [GRAPHIC] [TIFF OMITTED] T7789.059

    [GRAPHIC] [TIFF OMITTED] T7789.060

    [GRAPHIC] [TIFF OMITTED] T7789.061

    [GRAPHIC] [TIFF OMITTED] T7789.062

    [GRAPHIC] [TIFF OMITTED] T7789.063

    [GRAPHIC] [TIFF OMITTED] T7789.064

    [GRAPHIC] [TIFF OMITTED] T7789.065

    [GRAPHIC] [TIFF OMITTED] T7789.066

    [GRAPHIC] [TIFF OMITTED] T7789.067

        Mr. Chaffetz. Thank you, Mr. Chairman. Thank you all for
    being here.
        Our U.S. Constitution says Congress is ``to exercise
    exclusive legislation in all cases whatsoever over such
    District.''
        I yield back the balance of my time.
        Mr. Lynch. The chairman now recognizes the gentle lady from
    the District of Columbia, Eleanor Holmes Norton, for 5 minutes
    for an opening statement.
        Ms. Norton. I thank you, Mr. Chairman. I want to welcome my
    good friends from the District--Mayor Fenty, Council Chair
    Gray, and the other witnesses at the table who are most expert
    in the affairs of the District of Columbia, more so than I or
    any of us in Congress could possibly be. But particularly, Mr.
    Chairman, I want to thank you for affording us this hearing
    which helps us to reach the goal I have set out here in the
    Congress to have a hearing this year and for the second half of
    the 111th Congress to see the Congress take the historic step
    of bringing the District from its paternalistic oversight. That
    is a very kind way, Mr. Chairman, to put it, if I may say so.
        This is an anachronism. I don't think any American would be
    proud of the fact that a jurisdiction that raises $6 billion on
    its own can't spend a dime until the Congress says it may or
    would be proud of what we put our Council through in order for
    laws to become final in the District of Columbia.
        If you live in the Virgin Islands or Puerto Rico or Guam--I
    have good friends who are Delegates from those territories--you
    never hear the Congress of the United States attaching anything
    to your budget because they never see your budget. By the way,
    they don't pay Federal income taxes the way our residents do at
    a rate of second per capita in the United States.
        Mr. Chairman, so that you will understand that this is not
    so radical a proposal, in the original Home Rule Act the Senate
    would indeed have given the District budget autonomy. In the
    compromises that always go on in this place, that was removed.
        It has created huge operational problems and delays for the
    District of Columbia.
        We, the Congress of the United States, have the power to
    wipe out every law that the District passes because we retain
    authority. The Home Rule Act is a delegated authority so we
    retain the authority to do whatever we want to the District.
    That really emphasizes why it is time for the Congress to help
    the District come into the 21st century.
        Mr. Chairman, I do want to give recognition to my friends
    in the minority. During the 12 years when I was in the
    minority, I was able to negotiate two steps that make this a
    logical step.
        One was the midyear budget autonomy bill. It will seem
    astonishing to most Americans that in the middle of the year
    the District had to come here to ask the Congress essentially
    if it could spend the money it collected the first half of the
    year. So the District had to be on the first supplemental,
    creating another delay for the District. When I was in the
    minority, that was given up and that bill was passed.
        And when I was in the minority--and this is why I believe
    this is and will be a bipartisan bill--and pointed out the
    hardships on the District of having our budget go 3 or 4 months
    past even our September 30th deadline, they agreed and have for
    at least half a dozen or perhaps 10 years. So the District
    budget has gotten out on the first continuing resolution.
        But look at that. What is a continuing resolution?
    Continuing resolutions are for Government agencies. Therefore
    we continue to be treated as a Government agency.
        It is huge problem for the District that our budget year is
    attuned to the Federal budget year whereas in your district and
    in Mr. Chaffetz's district the budget year is over by the
    summer. You can prepare for school. Our folks have to prepare
    for school, which is one of the great if not the overriding
    goal or issue in the District of Columbia, without its budget
    in hand. It has created terrible problems in the past when the
    budget was delayed.
        The legislative autonomy is even more laughable. The budget
    autonomy it seems to me speaks for itself. Most people don't
    know what Chairman Gray and the Council go through in order to
    get a bill to be final.
        I am going to let him describe a process that is not even
    used in the Congress anymore. That is to say, we do not indeed
    use resolutions of disapproval. You have never had one brought
    from my colleagues on the other side and certainly not from us.
    We don't issue a resolution of disapproval, vote on it here,
    and then go vote on it in the Senate. But we require the
    District to act as if we do. The District has to come here and
    wait for 30 legislative days or 60 legislative days if it is
    criminal matter. Well, we are not in for 5 legislative days
    many days, so the District's laws can go many months without
    being final. Yet we say to Mayor Fenty and Chairman Gray, you
    run that city and you make sure you run it efficiently because
    if you don't, you will hear from people up here saying you are
    not a very efficient city.
        No jurisdiction in the United States is faced with such
    handicaps, particularly handicaps for which there is no reason
    today. If the reason is control, you retain the control.
        You will hear finally the CFO, the chief financial officer,
    talk about the cost the real cost to the city--which is not a
    State, of having redundant oversight from the Congress of the
    United States.
        Mr. Chairman, Chairman Towns, and my good friend Mr.
    Chaffetz have an opportunity, it seems to me, to do for the
    District what was done for the District in 1973--take the
    historic step of giving the District the last two important
    elements of home rule for the District of Columbia. I couldn't
    thank you enough for what you have done for us today.
        [The prepared statement of Hon. Eleanor Holmes Norton
    follows:]

    [GRAPHIC] [TIFF OMITTED] T7789.005

    [GRAPHIC] [TIFF OMITTED] T7789.006

    [GRAPHIC] [TIFF OMITTED] T7789.007

    [GRAPHIC] [TIFF OMITTED] T7789.008

    [GRAPHIC] [TIFF OMITTED] T7789.009

        Mr. Lynch. I thank the gentle lady. I would like to go out
    of order just to allow the full chairman of the committee, the
    gentleman from Brooklyn, NY, Mr. Towns, 5 minutes for an
    opening statement. We thank him for his attendance here today.
        Mr. Towns. Thank you very much, Congressman Lynch. I would
    like to thank Congressman Lynch and Congressman Chaffetz for
    holding this hearing on autonomy for the District of Columbia.
    I thank my good friend, Congresswoman Eleanor Holmes Norton,
    for her hard work on behalf of the District.
        Let me again thank the witnesses for their attendance here
    today. I want to let you know that we really appreciate your
    being here. Welcome, Mayor Fenty. On behalf of the Committee on
    Oversight and Government Reform, I thank the Mayor for his
    attendance this morning. I want to thank Councilman Brown. I
    want to thank Councilman Gray and the other elected and
    appointed officials for coming.
        I support home rule and self governance in the District.
    Over the years the District has achieved great independence. Of
    course, this has been done through the District's own advocacy.
    By the adoption of the Home Rule Act and the end of involvement
    by the Control Board in the District's finances among other
    measures, the District has steadily proved its ability to
    manage its own affairs. They even passed a balanced budget
    during an economic crisis that has greatly affected many State
    and local governments. I applaud the progress that has been
    made in the District and your efforts to implement the
    principle of home rule.
        I look forward to working very closely with Congresswoman
    Norton; Chairman Lynch; the ranking member, Congressman
    Chaffetz; and of course you, too, Mayor Fenty to make certain
    that home rule is a reality. Now I know that it has been a long
    battle and a long struggle. But I think that we have to
    continue the fight and continue to push on.
        My son, who serves in the State Assembly in New York, says
    to me that sometimes people just catch on faster than others.
    There is a thing called individual differences. He says
    sometimes it takes people 2\1/2\ hours to watch 60 Minutes. It
    doesn't mean they can't watch it, it just takes them a lot
    longer. So we hope, as we continue to talk about the importance
    of home rule, that eventually the other Members of Congress
    will get it and understand how important it is to move this
    forward. Congresswoman Norton, keep pushing.
        I yield back.
        Mr. Lynch. I thank the gentleman. The Chair now recognizes
    the gentleman from Maryland, Mr. Cummings, for 5 minutes.
        Mr. Cummings. Thank you very much, Mr. Chairman. I want to
    thank you and Mr. Chaffetz for holding this vitally important
    hearing to examine two pieces of legislation that would
    increase autonomy for the Federal tax-paying residents of the
    District of Columbia--H.R. 960, the District of Columbia
    Legislative Autonomy Act of 2009, and H.R. 1045, the District
    of Columbia Budget Autonomy Act of 2009.
        I appreciate the opportunity to move forward on these
    pieces of legislation as part of Congresswoman Eleanor Holmes
    Norton's Free and Equal D.C. Legislative Initiative. I must say
    to Ms. Norton, I thank you for all that you do. You have
    constantly been on the battlefield on this issue and so many
    others. You had to convince some of us and then to bring others
    of us along to do the right thing. But you know that there are
    many who are on your side. We have just got to get a few more.
        In the Constitution, the ``District Clause'' was crafted to
    help protect Federal interests without State cooperation and to
    prevent particular State influences on the Legislature where
    the Federal capital was located. Mr. Chairman, the time has
    changed. The residents of the District of Columbia deserve a
    government that operates for them as effectively and
    efficiently as possible. These two pieces of legislation would
    help achieve this goal.
        H.R. 960, the District of Columbia Legislative Autonomy Act
    of 2009, would eliminate congressional review of newly passed
    District laws. Since the Home Rule Act established the local
    District government in 1973 by allowing constituents to elect a
    Mayor and City Council, Congress has rarely taken advantage of
    the review process to overturn passed legislation. In fact,
    only once has a resolution of disapproval been signed by the
    President. That was President Bush in 1991 when he signed the
    resolution related to restricting the height of buildings in
    the District. This process imposes an unnecessary burden on the
    U.S. Congress. I believe it is time we trusted the District of
    Columbia government to pass laws for its own citizens.
        H.R. 1045 would allow the District to forego congressional
    review and approval of its operating capital budgets financed
    from local revenues. The District budget moves through the
    routine Federal appropriations process, which Congress
    regularly falls short of passing before the beginning of the
    fiscal year. In fact, only once since 1996 has Congress enacted
    the District's budget before the start of the District's fiscal
    year. Allowing the District to implement its local budget
    without mandatory congressional review will prevent delay in
    service funding and, more importantly, service delivery.
    Citizens of the District of Columbia pay taxes and the way
    those tax dollars are spent should be determined by their
    elected officials.
        The people of the District of Columbia deserve and demand
    the full rights that they are due. I appreciate again
    Congresswoman Norton's tireless efforts to achieve this for
    them.
        With that, Mr. Chairman, I look forward to hearing the
    testimony of the witnesses. I yield back.
        Mr. Lynch. I thank the gentleman. The Chair now recognizes
    the gentleman from Virginia, Mr. Connolly, for 5 minutes for an
    opening statement.
        Mr. Connolly. Thank you, Chairman Lynch. Thank you for
    holding this hearing. I want to thank Congresswoman Norton for
    her leadership on the District of Columbia. It is a pleasure to
    welcome this panel, especially my old friends Mayor Fenty and
    Chairman Gray with whom I worked for many years on the local
    regional issues here in the National Capital Region.
        For the life of our Republic we have relied on the
    Federalist system to deliver services in a cost effective
    manner that protects individual civil rights and general
    welfare, except in Washington, DC. Our founders established a
    system of government that constrained the power of the Federal
    Government and protected local and State prerogatives, except
    in Washington, DC. For the last two centuries, we have
    witnessed the creative evolution of the roles of local, State,
    and Federal Governments except in Washington, DC, where the
    City Council's attempts to govern in accordance with its
    residents' needs and desires has been constrained and thwarted
    all too frequently by political gamesmanship and obstruction by
    this Congress.
        The District of Columbia faces many challenges.
    Unfortunately, the District's residents' capacity to hold local
    officials accountable in addressing these challenges is
    compromised because those local officials are constrained by
    congressional attempts either to manipulate laws in the
    District and/or congressional failure to approve District
    budgets in a timely manner. If the residents of the District
    are going to hold their elected officials accountable, Congress
    needs to get out of the way.
        Congresswoman Norton has presented us with two bills that
    would restore a Federalist balance of power to local government
    in the District of Columbia. The District Legislative Autonomy
    Act and the District of Columbia Budget Autonomy Act are two
    notable and worthy pieces of legislation.
        Some may be concerned these bills would result in things
    like tighter gun controls or protection for certain people with
    certain lifestyles. Whether they do or not I don't think is the
    business of this Congress. I believe that Congress needs to
    defend the underlying principle of local autonomy even if the
    District contemplates actions with which we individually or
    even collectively may disagree. It is not our business. It
    simply should not be the role of Congress to meddle with local
    decisionmaking. That is a principle I have always held. It is a
    principle that will guide me in my future policy and votes with
    respect to this local government.
        I thank the Chair and yield back.
        [The prepared statement of Hon. Gerald E. Connolly
    follows:]

    [GRAPHIC] [TIFF OMITTED] T7789.010

        Mr. Lynch. I thank the gentleman. Before we turn to the
    testimony of our witnesses, I would like to offer some brief
    introductions of our first panel.
        The Honorable Adrian M. Fenty was elected to serve as the
    fifth Mayor of the District of Columbia in November 2006. As
    Mayor, Mr. Fenty has made high quality public education for all
    and efficient and accountable government his administration's
    policy priorities. A native Washingtonian, Mayor Fenty attended
    Oberlin College before earning a juris doctorate degree from
    Howard University Law School. After graduating from law school,
    Mayor Fenty went on to serve as a local ANC commissioner and
    later as the ward 4 council member from 2001 to 2007.
        The Honorable Vincent C. Gray is the current chairman of
    the District of Columbia City Council. Also a native
    Washingtonian and a proud graduate of the District of Columbia
    public school system, Chairman Gray has developed a reputation
    as a champion of young people by helping them and their
    families gain access to critical social services. Prior to
    being elected to chair the city's legislative body, Chairman
    Gray represented the city's residents of ward 7 on the City
    Council. Chairman Gray is also well known for his service as
    the first executive director of the Covenant House in
    Washington, an organization dedicated to serving homeless and
    at risk youth.
        Dr. Natwar Gandhi serves as the chief financial officer for
    the government of the District of Columbia. In his position,
    Dr. Gandhi is responsible for the city's finances, including
    its approximately $7 billion in annual operating and capital
    funds. Dr. Gandhi was appointed to this position in June 2000
    and was reappointed by Mayor Fenty in January 2007. As the
    independent CFO, Dr. Gandhi manages more than 1,000 staff
    members in the Tax and Revenue Administration and in the
    Treasury, Comptroller, and Budget Offices of the District of
    Columbia.
        Ms. Alice Rivlin served as the first Director of the
    Congressional Budget Office and as the Chair of the District of
    Columbia Control Board. Ms. Rivlin is an expert on urban issues
    as well as on fiscal, monetary, and social policy. Currently
    she directs the Greater Washington Research Project as a senior
    economic studies fellow for the Brookings Institution.
        Mr. Water Smith is the executive director of the D.C.
    Appleseed Center, a nonprofit public interest organization that
    addresses issues facing the Nation's Capital. Prior to his
    position with D.C. Appleseed, Mr. Smith was a partner for 16
    years with the city's largest law firm, Hogan and Hartson.
        It is the committee's policy that all witnesses to appear
    before the committee and submit testimony shall be sworn. Can I
    ask you each to stand and raise your right hands?
        [Witnesses sworn.]
        Mr. Lynch. Let the record show that all of the witnesses
    have answered in the affirmative.
        Your entire written statements are entered into the record.
    I trust that you have been before this committee before but I
    just want to go over the ground rules. Those small boxes in
    front of you will indicate green, which means that you have
    time to submit your opening statement. When it turns to yellow,
    it means that you should probably conclude your statement. Then
    the red light means you have exceeded your time limit.
        So with that, Mayor Fenty, it is an honor to have you here
    before this committee. I welcome you. You are now recognized
    for 5 minutes for an opening statement.

      STATEMENTS OF ADRIAN M. FENTY, MAYOR, DISTRICT OF COLUMBIA;
      VINCENT GRAY, CHAIRMAN, DISTRICT OF COLUMBIA CITY COUNCIL;
     NATWAR GANDHI, CHIEF FINANCIAL OFFICER, DISTRICT OF COLUMBIA;
     ALICE M. RIVLIN, SENIOR FELLOW OF ECONOMIC STUDIES, BROOKINGS
      INSTITUTION AND DIRECTOR, GREATER WASHINGTON RESEARCH; AND
        WALTER SMITH, EXECUTIVE DIRECTOR, DISTRICT OF COLUMBIA
                  APPLESEED CENTER FOR LAW AND JUSTICE

                      STATEMENT OF ADRIAN M. FENTY

        Mayor Fenty. Thank you very much, Chairman Lynch; Ranking
    Member Chaffetz; and distinguished subcommittee members
    including my own Congresswoman Norton, Chairman Towns, and
    others. It is my pleasure to be here today to speak to you
    about H.R. 1045, the District of Columbia Budget Autonomy Act
    of 2009, and H.R. 960, the District of Columbia Legislative
    Autonomy Act of 2009.
        Both bills, if enacted, would represent an important step
    forward for the District of Columbia and its residents. To that
    end, I would like to take a moment to recognize the outstanding
    work of the District's Representative in the House,
    Congresswoman Eleanor Holmes Norton, who for years has
    championed the bills before this subcommittee today and many
    others designed to grant the District the autonomy it deserves.
        These bills simply provide the District the same
    flexibility and autonomy afforded other jurisdictions around
    the country to ensure the efficient and effective delivery of
    services, a fundamental responsibility of good government.
        In 1973, Congress granted the District limited home rule
    powers and empowered the citizens of the District to elect a
    Mayor and a City Council. At the same time, however, Congress
    retained the power to review and approve all District laws
    including the District's annual budget. This makes the District
    unique among jurisdictions that perform State level functions,
    as the District does, in that Congress approves not only
    Federal funding for the District but also the spending of our
    local funds, a practice that ultimately hinders good
    government.
        The District government of today is not the District
    government of the 1990's which saw the creation of the
    congressionally mandated Control Board because of unsound
    financial practices. Thanks in part to the work of my
    predecessor, Mayor Anthony Williams, we have come a long way
    since then. We are not going back.
        This year the District submitted to Congress its 14th
    consecutive balanced budget. We continue to exercise sound
    financial management practices, a fact validated by the A+
    credit rating awarded to our bonds by the Nation's rating
    agencies. I am confident Dr. Gandhi will speak to the
    significance of that in a few minutes but I hope my point is
    clear. The District's fiscal house is in order. The time has
    come to lessen the burdens imposed by congressional approval of
    the District's budget.
        Current law subjects the District's budget to the Federal
    appropriations process which requires District agencies to plan
    their budgets almost a year in advance to allow for
    congressional approval. The approval process often causes
    unnecessary delays in service delivery and prevents the
    District from responding quickly to changing public needs.
        As a primary deliverer of services, local governments can
    only be effective if they can respond to changing circumstances
    in a timely and responsive manner. Unfortunately, Congress
    fails to approve the District's budget on time virtually every
    year, resulting in a near 3 month delay on average, a period in
    which critical new investments cannot be made. The District
    also faces challenges over the course of the fiscal year as any
    midyear adjustments caused by changes in revenue must be
    reviewed by Congress.
        Many of the issues I have raised regarding budget autonomy
    also apply to the issue of legislative autonomy. Article 1,
    Section 8 of the Constitution allows the House and Senate to
    examine every piece of legislation by the Council. Depending on
    the nature of the legislation, however, we must wait 30 or 60
    legislative days for passive congressional approval before
    legislation becomes law. As I said in my testimony on this
    matter 2 years ago, this makes me the only chief executive of a
    city or State in this country for whom the act of signing
    legislation does not make the legislation final. It also means
    the Council of the District of Columbia passes hundreds of
    bills every year that must await congressional approval, the
    vast majority of which are of no interest to Congress
    whatsoever.
        The limited legislative autonomy granted by the bill
    proposed by Congresswoman Norton would maximize the use of
    taxpayer dollars, reduce inefficiencies caused by a complicated
    legislative process required to comply with Federal law, and
    allow the District to realize a greater measure of self
    government. I urge this Congress to take swift action on these
    two pieces of important legislation.
        Thank you for the opportunity to testify today. I am happy
    to answer any questions you may have.
        [The prepared statement of Mayor Fenty follows:]

        [GRAPHIC] [TIFF OMITTED] T7789.011

        [GRAPHIC] [TIFF OMITTED] T7789.012

        [GRAPHIC] [TIFF OMITTED] T7789.013

        Mr. Lynch. Thank you. Chairman Gray, you are now recognized
    for 5 minutes.

                       STATEMENT OF VINCENT GRAY

        Mr. Gray. Thank you very much, Chairman Lynch. Thank you to
    the ranking member, Mr. Chaffetz, and to the other Members who
    have joined us today. I am Vincent C. Gray, chairman of the
    Council of the District of Columbia.
        I want to thank you again, Chairman Lynch, for holding this
    hearing on two important pieces of legislation--H.R. 1045, the
    District of Columbia Budget Autonomy Act of 2009, and H.R. 960,
    the District of Columbia Legislative Autonomy Act. I also want
    to thank my Congresswoman, Eleanor Holmes Norton, for
    introducing both of these bills on behalf of the District of
    Columbia.
        These two bills, along with the District of Columbia House
    Voting Rights Act, would provide the first real advancement of
    home rule in the District since the congressional enactment of
    the limited Home Rule Act over 30 years ago.
        The District must develop its budget in a timeframe that
    complies with the complicated and lengthy Federal
    appropriations process, as has been stated. The Federal
    appropriations process forces the District to develop its
    budget months in advance of the timeframe needed by the city.
    In fact, the District has had to adopt the Federal fiscal year
    of October 1st to September 30th when another fiscal year may
    be more appropriate to the city. The congressional
    appropriations schedule prevents the District from using more
    current revenue estimates and expenditure needs that would lead
    to a budget based on better and more complete data.
        In the last several years, Congress has granted approval of
    the District's local budget by the beginning of the fiscal year
    without approving Federal appropriations. But that timely
    approval is not guaranteed for every year. The approval of H.R.
    1045 would provide that guarantee by removing the approval of
    the District's local budget by the Congress. Under the proposed
    legislation, Congress would still maintain its constitutionally
    established oversight authority.
        Half of our total budget is funded by local dollars
    generated within the District of Columbia. The local budget is
    funded by local District revenue, not Federal dollars. This
    reason alone justifies why the District should be allowed to
    approve its own budget.
        I believe the District has earned the right to budget
    autonomy. We have come from under the authority of the
    Financial Control Board. We have maintained a strong financial
    position, including a fund balance of $1 billion. We have
    received clean audits for the last decade. Bond rating agencies
    have consistently increased our ratings. We have strong
    internal financial controls.
        On the issue of legislative autonomy, after 35 years the
    process for enacting laws in the District needs to be revised.
    This process once again denies District residents the basic
    right granted to other U.S. citizens--the right to enact our
    own local laws. What is even more interesting is the fact that
    four territories have been allowed to enact their own laws
    without congressional review.
        The current process involves a review period of 30
    legislative days for civil laws and 60 legislative days for
    criminal laws. Because the actual legislative days depend on
    when Congress is in session and not on calendar days, enactment
    of many District laws is delayed well beyond the 30 or 60 days
    involved. This prevents the city from enacting laws that are
    important to addressing the continuous and often changing needs
    of the city in a timely manner. An example of this was the
    enactment by the Council of updated terminology found in the
    D.C. Official Code changing the word ``handicap'' to
    ``disability.'' The congressional review for this change was 9
    months.
        In order to address the needs of government, the Council
    must use a Byzantine process of passing laws on an emergency,
    temporary, and permanent basis. A bill passed on an emergency
    basis is enacted for only 90 calendar days. Because many pieces
    of legislation passed by the Council do not complete their
    congressional review during the emergency enactment period, the
    Council must also pass temporary laws that are in effect for
    225 days following the end of the emergency enactment period.
    In addition, the Council must pass the permanent bill so that
    ultimately there is a final law that becomes part of the D.C.
    Code.
        In fact, in most of the years between 1997 and 2008,
    emergency and temporary bills have amounted to over two-thirds
    of the bills enacted by the Council. We have appended to our
    testimony a graphic example of that which hopefully you will
    take a look at. But just within the last Council period that
    ended in 2008, we had over 600 laws that were passed in the
    District of Columbia; 465 of those laws were emergency and
    temporary laws in order to be able to deal with the very
    difficult process that we face as a result of the current
    provision under which we operate.
        Now is the time to grant the District the right to self
    determination, budget autonomy, legislative autonomy, and the
    right to voting representation. I ask you, Chairman Lynch, and
    the other members of the subcommittee to grant the District
    government the self determination that all other governments in
    our country enjoy and to move our residents toward more full
    citizenship in this Nation.
        Thank you very much, Mr. Chairman.
        [The prepared statement of Mr. Gray follows:]

        [GRAPHIC] [TIFF OMITTED] T7789.014

        [GRAPHIC] [TIFF OMITTED] T7789.015

        [GRAPHIC] [TIFF OMITTED] T7789.016

        [GRAPHIC] [TIFF OMITTED] T7789.017

        [GRAPHIC] [TIFF OMITTED] T7789.018

        [GRAPHIC] [TIFF OMITTED] T7789.019

        [GRAPHIC] [TIFF OMITTED] T7789.020

        [GRAPHIC] [TIFF OMITTED] T7789.021

        [GRAPHIC] [TIFF OMITTED] T7789.022

        [GRAPHIC] [TIFF OMITTED] T7789.023

        [GRAPHIC] [TIFF OMITTED] T7789.024

        [GRAPHIC] [TIFF OMITTED] T7789.025

        Mr. Lynch. I thank you, sir. Dr. Gandhi, you are now
    recognized for 5 minutes for an opening statement.

                       STATEMENT OF NATWAR GANDHI

        Mr. Gandhi. Thank you, Mr. Chairman. Good morning, Mr.
    Chairman, Chairman Towns, Ranking Member Chaffetz, our own
    Congresswoman Norton, and members of the committee. As you
    pointed out, I am Natwar Gandhi, chief financial officer for
    the District.
        I am here to testify today and wholeheartedly endorse
    expanding the authority of the District to manage its own
    financial affairs. Not only do I believe that the District's
    elected leadership has demonstrated its ability to adhere to
    principles of fiscal responsibility, I also believe that
    greater budget autonomy would provide the citizens of the
    District as well as visitors with the highest quality of public
    services in a timely manner.
        The chart that appears before you, Mr. Chairman, is a
    history of the remarkable fiscal comeback achieved by the
    District over the past dozen years. Our fiscal low point
    occurred in 1996 when the General Fund balance hit a negative
    $518 million. Through the efforts of the elected leaders and
    the Control Board, we were able repeatedly to balance the
    District's fiscal operations and the Control Board was
    deactivated in 2001. Between 1996 and 2001, there was a $1
    billion increase in the fund balance. But the real test for the
    District was the challenge of sustaining fiscal stability in
    the post-Control period. As you can see at the end of 2005, the
    General Fund balance rose another $1 billion to $1.6 billion, a
    turnaround of more than $2 billion.
        This improvement was reflected in the credit ratings
    assigned to the District by the major bond rating agencies. Our
    bond ratings, which were junk bonds in the mid-1990's, were
    upgraded to the current A+ category by all three rating
    agencies simultaneously. Indeed, the turnaround by the District
    was faster than any major city that experienced severe fiscal
    distress including Philadelphia, Cleveland, Detroit, and New
    York.
        In addition, our income tax bonds--issued for the first
    time in March of this year--were assigned a rating of AAA, the
    highest possible rating by Standard and Poor's, and AA by
    Moody's and Fitch. I should note that the initial offering of
    $800 million in income tax bonds has been nominated the ``deal
    of the year'' by Bond Buyer magazine. This is a remarkable
    achievement for a city that was in dire financial straits only
    a dozen years ago.
        Let me note here that the District and nearly every other
    State and local government in the Nation have been profoundly
    affected by financial problems because of the depth and
    duration of this recession. What will distinguish the District
    when we look back at this period is our absolute commitment to
    balancing our budget. Mayor Fenty, Chairman Gray, and the
    Council reacted quickly each time there was a revenue re-
    estimate to close the budget gaps that were created by lower
    forecasts.
        I would now talk about budget autonomy. Under the current
    law, all District spending is authorized by the Congress
    through the Federal appropriation process irrespective of the
    sources of the revenue.
        In the District's 2010 proposed gross budget of $8.8
    billion, about $6 billion or 68 percent comes from revenues
    raised through local sources. Only $188 million in Federal
    payments were specifically requested from Federal sources. The
    balance is comprised of formula-based Federal grants which are
    available to all jurisdictions nationwide.
        I would argue that only Federal payments that are
    specifically and uniquely earmarked for the District should be
    appropriated by the Congress.
        If the District Council were able to set its own schedule
    to enact the budget, the Mayor and the legislature could always
    rely upon revenue estimates based on more current data.
    Currently, the budgets are based in large part on revenue
    estimates completed in February, some 7 months before the start
    of the new fiscal year in October and a total of 20 months
    before the end of the fiscal year. The District does not get
    actual data on how accurate these revenue estimates are and
    whether budget expenditures are fully covered until after the
    end of the fiscal year, almost 2 years later than the budget
    estimates that were provided at the beginning.
        In summary, the District's leadership has the will and the
    necessary resources to make informed decisions and the District
    has a proven record of functioning in a fiscally responsible
    manner.
        Mr. Chairman, this concludes my remarks. I will be
    delighted to answer any questions you may have.
        [The prepared statement of Mr. Gandhi follows:]

        [GRAPHIC] [TIFF OMITTED] T7789.026

        [GRAPHIC] [TIFF OMITTED] T7789.027

        [GRAPHIC] [TIFF OMITTED] T7789.028

        [GRAPHIC] [TIFF OMITTED] T7789.029

        [GRAPHIC] [TIFF OMITTED] T7789.030

        [GRAPHIC] [TIFF OMITTED] T7789.031

        [GRAPHIC] [TIFF OMITTED] T7789.032

        [GRAPHIC] [TIFF OMITTED] T7789.033

        [GRAPHIC] [TIFF OMITTED] T7789.034

        [GRAPHIC] [TIFF OMITTED] T7789.035

        [GRAPHIC] [TIFF OMITTED] T7789.036

        [GRAPHIC] [TIFF OMITTED] T7789.037

        [GRAPHIC] [TIFF OMITTED] T7789.038

        Mr. Lynch. Thank you, sir. Ms. Rivlin, you are now
    recognized for 5 minutes for an opening statement.

                      STATEMENT OF ALICE M. RIVLIN

        Ms. Rivlin. Thank you, Mr. Chairman and members of the
    committee. Thank you for holding this hearing.
        I am happy to be here to discuss greater autonomy for the
    District of Columbia. I strongly support both the bills before
    you but I will confine my remarks to budget autonomy.
        I believe that greater autonomy for the District of
    Columbia is a test of the seriousness of Congress's commitment
    to democracy. The United States is justifiably proud of our
    democratic tradition. We send our finest young men and women to
    faraway places to fight and die for democratic ideals. Our
    national leaders advocate democracy around the world. But right
    here at home, Congress apparently doubts that the citizens of
    the District of Columbia can be trusted to elect leaders who
    will make wise decisions about local policy and even about how
    to spend our own locally collected tax revenue. When Congress
    passed the Home Rule Act in 1973, it retained ultimate control
    over D.C. legislation, budgeting, and borrowing.
        At that time, congressional skepticism was understandable.
    The citizens of the District had been ruled like colonial
    subjects for a long time and had no experience with electoral
    politics or self government. And the inexperience showed when
    the city faced fiscal crisis in 1995. And I believe that the
    Congress, working with the Clinton administration, took the
    necessary and appropriate action when it created the D.C.
    Financial Resources Management and Assistance Authority--that
    was its real name--better known as the Control Board. That same
    legislation created an independent office of the chief
    financial officer, a much needed contribution to strengthening
    fiscal oversight in the District. As the CFO has said, Control
    Board actions, supported by the City Council combined with an
    improving economy, turned the District's budget outlook from
    dismal to positive in a very short time.
        Young democracies learn from their mistakes and the
    District of Columbia government has amply demonstrated in
    recent years that it learned from the experience of the 1990's
    and is able to manage its own resources responsibly. It has
    balanced its budget every year since the control period ended
    and earned clean audits, albeit with some expressions of
    concern from the auditors from time to time. It has built up a
    large fund balance and significant cash reserve. Growing Wall
    Street respect for the District's financial management has been
    reflected in increasingly favorable ratings for its general
    obligation bonds and a AAA rating for its recent income tax-
    backed bond issue, as the CFO has noted.
        Now is the time for Congress to show its commitment to
    democratic government by trusting the citizens of the District
    of Columbia through their elected officials to handle their own
    fiscal affairs without interference or delay from Congress. In
    fact, in recent years Congress has interfered far less than it
    used to in the District's budget and tried to accommodate the
    District's needs by keeping District appropriations from
    getting caught in lengthy disputes over Federal spending bills
    that drag on long after the budget year has begun. This
    confidence is reassuring but it should be reflected in law.
        If H.R. 1045, the District of Columbia Budget Autonomy Act
    of 2009, were enacted, District officials could design their
    own process for coming to budget decisions. Once a budget
    reflecting spending out of its own revenues was passed by the
    Council and signed by the Mayor, it could not be altered by
    Congress or delayed by the congressional appropriations
    process. Budget autonomy for the District is a win-win for the
    District and the Federal Government as well a demonstration of
    national confidence in the democratic process.
        Thank you, Mr. Chairman and members of the committee.
        [The prepared statement of Ms. Rivlin follows:]

        [GRAPHIC] [TIFF OMITTED] T7789.039

        [GRAPHIC] [TIFF OMITTED] T7789.040

        [GRAPHIC] [TIFF OMITTED] T7789.041

        [GRAPHIC] [TIFF OMITTED] T7789.042

        Mr. Lynch. Thank you. Mr. Smith, welcome. You are now
    recognized for 5 minutes.

                       STATEMENT OF WALTER SMITH

        Mr. Smith. Good morning. Thank you, Mr. Chairman. It is an
    honor for me to appear before this distinguished panel. It is
    also an honor for me to be a member of this distinguished panel
    this morning. I am from D.C. Appleseed. We are a nonprofit
    organization that tries to address the issues facing citizens
    of the District, and one of the issues that has always faced
    citizens of the District was striving toward getting the same
    kind of full democracy that other citizens of this country
    have. These two bills are an important step in achieving that
    greater democracy.
        The bill that I want to talk about is the legislative
    autonomy bill. It seems to me that bill is the right thing to
    do for three reasons. First of all, it is a fair and sensible
    thing to do and it is a practical thing to do. Second, it is
    completely consistent with what the Congress did in the Home
    Rule Act. And third, it is completely consistent with the
    District Clause authority that the Congress has and will retain
    if this bill is passed.
        What makes it such a practical thing to do is that the
    Congress has not used this layover authority once in almost 20
    years. It has only used it three times since the Home Rule Act
    was passed. Congress has found other means and methods to
    review actions by the D.C. Council. And yet, as Chairman Gray
    pointed out, the Council has to continue to bombard you and
    members of your staff with pieces of legislation, the majority
    of which are designed to address the fact that they have to
    have emergency bills and temporary bills to be a gap-filler.
        In fact, the numbers are actually staggering. Since Home
    Rule, 4,400 pieces of legislation have been passed. They are
    sent to 11 different places upon the Hill, which means almost
    48,000 pieces are coming up here. As Mr. Cummings pointed out,
    this avalanche of documents is unnecessarily burdensome to the
    Congress. Presumably Members of Congress and their staff are
    looking at these pieces as they come up to no effect at all.
        As the Home Rule Act itself said when passed, the purpose
    of the Home Rule Act was to grant to the inhabitants of the
    District of Columbia powers of local self government and to
    relieve Congress of the burden of legislating upon essentially
    local District matters. This bill advances that very important
    purpose of the Home Rule Act.
        The other important point to make is that even if you
    remove the layover provision, you retain the full authority and
    responsibility under the District Clause to review and revise
    any legislation as you choose, as the Home Rule Act otherwise
    points out. But it is important to remember, and I urge upon
    you what the Framers had in mind when they first adopted the
    District Clause: It was to protect the Federal Government's
    interest in the national capital. The purpose was not to
    entrust to the national legislature the burden and the
    responsibility of legislating upon local matters.
        I would just urge upon you, if you ever want to read what
    the Framers had in mind, it is contained in Federalist No. 43,
    which James Madison wrote. Let me just quote what I think is
    the most important part of that Federalist No. 43 for purposes
    of the legislative autonomy bill before you today. He said,
    ``Residents of the District,'' this has to do with ceding land
    for purposes of founding the Nation's Capital. He said
    residents of the Nation's Capital, ``will find sufficient
    inducements of interest to become willing partners of the
    session, because a municipal legislature for local purposes,
    derived from their own sufferages, will, of course, be allowed
    them.''
        Mr. Madison was recognizing that the District Clause was
    designed to protect Federal interests, not to take away from
    the citizens who lived in what would become the Nation's
    Capital the right to have their own self government and to
    decide local issues for their own municipal legislature.
        So I applaud Ms. Norton and the supporters of this bill
    because this bill takes a step--a practical, fair step--toward
    achieving what James Madison was talking about so long ago.
        [The prepared statement of Mr. Smith follows:]

        [GRAPHIC] [TIFF OMITTED] T7789.043

        [GRAPHIC] [TIFF OMITTED] T7789.044

        [GRAPHIC] [TIFF OMITTED] T7789.045

        [GRAPHIC] [TIFF OMITTED] T7789.046

        [GRAPHIC] [TIFF OMITTED] T7789.047

        [GRAPHIC] [TIFF OMITTED] T7789.048

        [GRAPHIC] [TIFF OMITTED] T7789.049

        [GRAPHIC] [TIFF OMITTED] T7789.050

        [GRAPHIC] [TIFF OMITTED] T7789.051

        [GRAPHIC] [TIFF OMITTED] T7789.052

        Mr. Lynch. Thank you. I now recognize myself for 5 minutes.
        Mayor Fenty, Chairman Gray, I think you have all touched on
    one common point, and especially having Dr. Ghandi and his
    remarks. You spoke of the remaining safeguards and the various
    mechanisms that the District has in place to ensure proper
    financial management and integrity in the budget process.
    However, I do want to point out that even absent the current
    protocol for congressional review, many of the financial
    benchmarks that Dr. Ghandi and others have referred to derive
    directly from the District of Columbia Financial Responsibility
    and Management Assistance Act of 1995, such as the
    reinstitution of a control board. And there are other
    constraints in the event the city might fail to meet its
    financial obligations.
        While I raise that concern, I acknowledge, as the Mayor has
    pointed out, that 14 consecutive budgets have been balanced and
    there is a substantial and admirable record of fiscal
    responsibility. But I just want to be reassured here that, at
    least in my reading of Ms. Holmes Norton's legislation, those
    checks and balances would remain in place, those would continue
    to be adhered to. I just want to make sure that we are on the
    same page. Is that your understanding?
        Mayor Fenty. Yes, Mr. Chairman. And I think it is important
    to note that the people of the District of Columbia really
    enthusiastically support the independent CFO, as we also
    enthusiastically support something else created by the Control
    Board which are the fiscal impact statements. No bill passed by
    the Council of the District of Columbia can move forward even
    for my signature unless the CFO has authorized that the dollars
    are there to go along with the bill. So there are a lot of
    local safeguards that will still remain in addition to the
    Federal safeguards that Mr. Smith just talked about.
        Mr. Lynch. All right.
        Mr. Gray. Mr. Chairman. Chairman Lynch, that is the
    understanding of the Council as well. And I think if you look
    at the controls that exist, those that we have added, it is
    really, I think, a picture of how a municipality ought to be
    run in this instance. For example, just to echo what the Mayor
    said and to build on that, the Council no longer permits a bill
    even to be reported out of a committee until we have a fiscal
    impact statement from the CFO indicating that we have the
    financial wherewithal to be able to effectively implement that
    legislation. There was a time when the Council permitted a bill
    to get to second reading before the fiscal impact statement had
    to be available. But we have eliminated that. And those are the
    kind of controls that we continue to put in place because we
    heartily respect the past and use that as an opportunity to
    continue to build on our controls.
        We, too, strongly support the independent CFO and work very
    closely with them. I think that was never more evident within
    the last year than when we had four instances where there were
    revenue estimates that were lower than the previous one and we
    all worked effectively together to create a balanced budget for
    the District of Columbia, properly in the neighborhood of $600
    or $700 million revenue estimates. But again, at the end of the
    day, we had a balanced budget as a result of that.
        Mr. Lynch. Thank you, Mr. Gray.
        Mr. Ghandi. If I may comment on that, Mr. Chairman? I think
    both the Mayor and the chairman have pointed out so well that
    the institutions of the chief financial officer, the
    independent CFO, have been very well placed now in the conduct
    of the government. It has been institutionalized. Also the
    various features of the CFO--the independence, the 5-year
    balanced budget, making sure that for reoccurring expenditure
    you have reoccurring source--all of that has been properly
    implemented by the CFO. And a budget will not be forwarded to
    the Congress or even to the Mayor and Council unless it is
    properly balanced and certified so by the chief financial
    officer.
        I think the test of the whole office and CFO is in the
    practice. In my 10 years as a CFO, most of those years post-
    Control Board, I have been extremely gratified by the respect
    that the Mayor and the chairman and the Council have shown to
    the office of the CFO.
        Mr. Lynch. Thank you. My time has expired. I now yield 5
    minutes to the ranking member, Mr. Chaffetz of Utah.
        Mr. Chaffetz. Thank you, Mr. Chairman. Thank you all for
    being here. I appreciate it. Our hope and interest is in what
    is in the best interest of the District of Columbia and in the
    United States of America. I happen to believe that a good
    collaborative effort is one that our Framers had envisioned.
    And that as you make the case that the city is working so well
    and is financially prudent and has good budget stopgaps in
    place and checks and balances, I can only wish the Federal
    Government would have some of that same discipline before it
    goes off and puts more and more literally trillions of dollars
    on our kids' future on just the credit card. So I wish we had
    some of the financial controls of discipline that are obviously
    implemented at the city.
        Mr. Chairman, let me ask you first, you said in your
    testimony, ``The District has clearly demonstrated that we have
    earned the right to budget autonomy.'' You obviously are making
    the case that everything is going so well. At the same time you
    also say that ``all other State governments in our Nation have
    this flexibility.'' My concern is that the District of Columbia
    is not a State. It is not a State and it is dealt with
    differently. I guess I take issue with that characterization of
    other States. And perhaps it was just a typo, but for those of
    us that are concerned about that, I truly am concerned about
    that.
        If things are going so well, what sort of grade would you
    give the Mayor?
        Mr. Gray. Well the legislation is not about the Mayor's
    performance but obviously we work well with the Mayor. Over the
    last 3 years we have worked well to try to create a balanced
    budget and I think the evidence is in the audits, the evidence
    is in the fund balance that you see portrayed over there, it is
    evident in how this jurisdiction has been run.
        Mr. Chaffetz. I appreciate it. I have such little time. I
    appreciate it. I guess what I was hoping to hear, and I did
    hear, is the spirit of cooperation.
        Mr. Gray. Exactly right. Cooperation.
        Mr. Chaffetz. That same sort of cooperation I think can
    happen between the city and the Congress. One of the statistics
    that jumps out along the way is how infrequently the Congress
    actually does inject itself into some very volatile issues. But
    I do think it is that sort of check and balance within the
    constitutional framework that is important to us going forward.
        Mayor, if I can go to you because, again, my time is so
    short? I want to talk for just a moment if I could about the
    Opportunity Scholarship Program. Do you support the
    reauthorization of the Opportunity Scholarship Program in the
    District of Columbia, including entry for new students?
        Mayor Fenty. As contained in the three sector approach
    which has been a part of the submission from the President in
    both the past administration and the current, yes.
        Mr. Chaffetz. And I need to jump quickly. Taking that same
    kind of concept of autonomy, one of the issues that has come up
    is about the same sex marriage law. As you are here supporting
    greater autonomy for the District of Columbia, would you extend
    that principle to the local voters in the form of referendum on
    same sex marriage law as has been done in 31 States?
        Mayor Fenty. The short answer is no. The longer answer is I
    believe the people of the District of Columbia have elected a
    fabulous Council of the District of Columbia who has all the
    tools necessary to make the type of decisions on what laws
    should and should not be passed.
        Mr. Chaffetz. Chairman, did you want to address that?
        Mr. Gray. My answer is no as well, Congressman Chaffetz. We
    were elected to represent the people. I think the Council of
    the District of Columbia has done that extremely well. We
    tackle very difficult issues every day. When you look at school
    governance, that certainly was an issue.
        Mr. Chaffetz. I want to stick to this issue.
        Mr. Gray. Well, I am trying to give you an example of how
    we have decided issues as a Council that I think are analogous.
    I think school governance, building a----
        Mr. Chaffetz. My time is so short. I am disappointed that
    the people are not given an opportunity to vote on this issue.
    And if there is confidence in the Council and others that this
    would pass, then allow the vote. But I think we have seen in 31
    States, again different than the District of Columbia, it has
    passed 31 times in a row in opposition of the same-sex
    marriage.
        Last question. The administration is pushing to take over,
    at least there is a suggestion that it should take over the
    safety components dealing with mass transit, specifically like
    the Metro and whatnot. What is your reaction to that? Should
    that be something of greater autonomy to the city? And I
    recognize it goes into other States and whatnot. But is the
    administration moving in the right direction?
        Mr. Gray. From what I understand, the administration is
    looking at it on a national level. I have not done the proper
    level of inquiry. Once we do, we would be glad to present you
    with the full views of the local government.
        Mr. Chaffetz. Thank you, Mr. Chairman.
        Mr. Lynch. I thank the gentleman. The Chair now recognizes
    the gentle lady from the District of Columbia, Ms. Eleanor
    Holmes Norton for 5 minutes.
        Ms. Norton. Thank you, Mr. Chairman. Let me quickly ask Mr.
    Gandhi this. For years, I believe you said--you noted this, of
    course, this is a recession year--that the District had what I
    recall was the greatest surplus in the United States; was that
    the case? It is surplus, which, of course, it is now having to
    use because of the recession. But is it not the case that for
    many years the District surplus outranked that of any State in
    the Union or any city?
        Mr. Gandhi. We were among the States, or I should say
    cities that have enjoyed substantial surpluses. Ms. Norton, I
    was in Chicago just 2 weeks ago meeting with the chief
    financial officers of other cities such as Chicago, Los
    Angeles, New Orleans, Denver, etc. Of all those places, our
    city has done extraordinarily well comparatively in terms of
    our ability to enjoy the surpluses.
        Ms. Norton. The notion that the District would and did pile
    surpluses, did not spend it, and has fared better than many
    cities during this recession is a source of pride to the city
    and a pride in the work that all of you have done.
        Chairman Gray, I know this is a ballpark number but given
    how you have testified you have to jump through hoops just to
    get legislation into effect until we say it is OK or take no
    action, how much of your time, what ballpark figure of your
    time is spent on passing redundant laws or seeing that laws do
    not go out of effect while you are waiting for the Congress
    layover period to recede?
        Mr. Gray. Probably, Ms. Norton, in excess of 50 percent.
        Ms. Norton. In excess of?
        Mr. Gray. Of the time.
        Ms. Norton. Of 50 percent, did you say?
        Mr. Gray. Yes. As I indicated in my testimony, two-thirds
    of the laws that we have passed since 1997 in the Council have
    been laws that deal with emergencies and temporaries, all of
    which is an artifact of this system that we operate under.
    There is no question that some of those emergencies would have
    to be adopted in any event because of the exigent need.
    However, when you ferret out those that are associated with the
    process that we have to operate under here with the Congress,
    all the temporaries are associated with this process so it is
    probably looking at two-thirds of the legislation being in that
    category. Pulling out the legitimate emergencies that exist
    within the city, it is probably 50 percent of our legislative
    time.
        Ms. Norton. So here we have half the Council's time spent
    redundantly when--it is a big, complicated city--when it needs
    to get to the business, and it does so very well. But I think
    it makes the point about inefficiency.
        My last question really goes to a point that is seldom
    mentioned but it is really a cardinal point in all of this. I
    mentioned it in passing, the June 30th fiscal year. I would
    like the comments of the panel on this. Perhaps I will use an
    example. Mayor Fenty has done something very important in the
    District of Columbia, with the cooperation of Chairman Gray who
    deserves a lot of credit for hurrying the whole Council to do
    what very few States and cities have done, to say Mayor Fenty,
    you are in charge of the schools of the District of Columbia.
    They have given him everything except the ability to make sure
    schools have the same efficient start time. Of course he
    started them on time as every other jurisdiction, our neighbors
    in Virginia, for example, ready to go July 1st unless something
    untold happens.
        I would like you to describe using the schools perhaps as
    an example, perhaps you have other examples--this is for anyone
    on the panel, Mr. Smith is a former corporation counsel which
    we now call Attorney General; Ms. Rivlin and Mr. Gandhi are
    equally familiar with this--but I would like to know what
    difference it would make, what this bill would mean, for
    example, if you could decide--of course you might decide
    whatever--but you could decide that instead of September 30th
    when school has already started as the beginning of your fiscal
    year, that, for example, like most States July 1st could be the
    beginning of your fiscal year. I would like you to describe
    what that would mean as far as all of you are concerned.
        Mayor Fenty. Two quick things, Congresswoman. This year
    after the budget was passed, just because of the revenue
    forecast, the school system already was looking at less revenue
    of about $20 million going into the new school year. If the
    budget projections are closer to the time it is passed, you are
    not going to have that type of deficit. On a global
    perspective, we have already had, I think, two or three
    meetings with all of our cabinet heads--and it is only
    November--in preparation for the budget that will not be passed
    and ready until next October 1st. So we are almost meeting to
    prepare for next year's budget before the current year's budget
    is even passed.
        Ms. Norton. Chairman Gray.
        Mr. Gray. I think for the Council, I think for the public
    schools, public education is an excellent example because what
    we have now is a situation in which the planning for a
    particular school year spans 2 fiscal years. We have part of
    that budget that begins--the latter part, if you will--in the
    current year, for example, and spans the period from August
    until the end of September. Then we have the other part of the
    school year in the next fiscal year. It makes for very
    difficult planning. And the schools, again, are an excellent
    example. If we could change the fiscal year to July 1st, the
    entire school year would be included in one fiscal year.
        Mr. Gandhi. If I might echo that comment? I would agree
    about the schools. Further, the fundamental problem that we
    face here is that we provide a revenue estimate to the Mayor
    and the Council in February. The budget is submitted to the
    Hill in June. The Congress does not act until October 1st in
    terms of its continuing resolution if there were no agreement.
    So there is a long delay between when we provide revenue
    estimates and when the budget is enacted. And the local
    government, we do not have a chance to adjust, to readjust our
    budgeting in light of changing financial conditions.
        Ms. Rivlin. I have very little to add to this except to
    stress that all agencies are inconvenienced by this long delay.
    But it is the schools, DCPS and the charter schools and the
    universities that have to get started without knowing exactly
    what the budget is going to be.
        Mr. Smith. The only thing I would add, Ms. Norton, is that
    having tried to run a District agency when I was at Corporation
    Council's Office, not knowing what you can do and how much you
    can spend and when puts significant limitations on efficiency
    within the District.
        Mr. Lynch. OK, thank you. The gentle lady's time has
    expired. I yield myself just 30 seconds.
        My own experience with budgeting is that your revenue
    projections drive your budget. What you are being forced to do
    is to come up with a budget prior to getting your revenue
    projections. You have a considerable amount of lag time here
    where over the course of time those projections that you do
    have can be completely destroyed by the passage of time. So
    there are a couple of things going on there that put you at a
    severe disadvantage. I understand that.
        The Chair now recognizes the gentleman from--I am sorry, I
    did not see Mr. Bilbray come in. I recognize Mr. Bilbray, the
    gentleman from California, for 5 minutes. Welcome.
        Mr. Bilbray. If I want to be treated like this, I can go
    home Mr. Chairman.
        First of all, let me clarify. Mr. Mayor and Mr. Chairman, I
    was a mayor in my 20's in a young, small little working class
    community on the border in California. I also served, like the
    gentleman from Virginia, as the chairman of a county of 3
    million.
        This is my chance to say something about this. I was
    absolutely appalled when I came here in the 1990's and saw what
    appeared to be the gross abuses of local control by the local
    community. Freeways were not allowed to go through because of
    Ward politics. Maybe it is because I am a Californian that I
    can't comprehend the ability of politics to stop a freeway dead
    in its tracks, not just once but twice. Though, I have seen it
    happen.
        The other thing I have just got to tell you is, Mr. Smith,
    that this District was created for a special reason. This
    little area between the Anacostia and the Potomac called Turkey
    Buzzard Point was chosen to be a no man's land from political
    influences from the outside or from within, much like we do
    with our military reservations, too.
        But I see the effect of the lack of appropriate control of
    the jurisdiction. I have staffers who resign and go home
    because they have been attacked, they have been threatened, or
    they have almost been murdered.
        I am constantly reminded as a former local government
    official that the Constitution does give us the ability to
    authorize jurisdiction but not responsibility. The Constitution
    still lays that right in our lap. This is one of those things
    that Congress can't say is out of its jurisdiction. The big
    difference is that the same Constitution that gives States that
    jurisdiction--and the States are the ones that give cities
    their local control, not the Constitution. The Constitution
    does not take away that local control from other cities. It did
    in this one, in this city.
        So there is an issue here of the appropriateness of
    authorizing jurisdiction and thinking we can walk away from the
    ultimate responsibility of young ladies being attacked, roads
    not being completed, the congestion, and everything else that
    is our responsibility.
        I would just like to ask this down the line. Mr. Gandhi,
    you seem to appear to have done great things working with the
    local government when it comes to the budget process. I want to
    give credit on that. After all of that trashing, I want to say
    you guys have come a long way in a lot of ways. I still don't
    understand why you put traffic lights in traffic circles. It
    violates every traffic engineering thing I have learned, but
    that is a different issue. Why would we walk away from a
    successful program? Are we so sure that we will never go back
    to where we were? Your success is something I think we should
    build on and not abandon.
        Mr. Gandhi. Sir, I would give great credit to the Mayor,
    the chairman, and the Council. They are the elected leaders and
    they do the heavy lifting. Of course, there are institutions of
    an independent chief financial officer and all these good ideas
    have been built into that. But at the end of the day, it is the
    elected leaders who deserve a great deal of credit.
        I think all we are talking about and all I am going to
    comment about is the budget autonomy. That will make things
    easier for them, for me, and for the District's citizens. So I
    think you want to keep that in proper perspective, sir.
        Mr. Bilbray. Mayor, I understand the culture of politics in
    Washington that you inherited. What I feel is the undue
    influence of public employees where basically government exists
    for employees and not for serving the public and everything
    else. I appreciate you have made some big changes there.
        But the concept, as a Californian, of not allowing voters
    to vote specifically on vary controversial issues is something
    that as a Californian, I don't accept. We specifically allow
    overriding of legislative intent. How do I go back and say to
    my constituents that as the State legislature of the city, let
    us just say it that way, I deny them the constitutional rights
    that we have in California of direct oversight on these very
    controversial issues?
        Mayor Fenty. Well, California is very unique when it comes
    to the referendum process. I think what you can say is that the
    people of the District of Columbia, just like the other 50
    independent jurisdictions in this country, have a different set
    of laws. Our laws have been made for some time and they work a
    certain way.
        If you look into our referendum and initiative processes, I
    think there is ample opportunity for citizens to actually take
    things to the ballot. There is also just as much opportunity
    for the Council of the District of Columbia to pass laws. I
    think it works. It is a very healthy balance in my opinion.
    That doesn't mean that what happens in California or in any
    other jurisdiction isn't healthy as well. It is up to the
    particular State.
        Let me just say one other thing. This is a very narrow law,
    as Dr. Gandhi just said. What we think we have proposed in
    support of Congresswoman Norton's law is that all of the fiscal
    restraints, fiscal safeguards, both Federal and local will be
    protected. But by passing this law what you will allow is my
    administration and successive administrations to run the
    government better while maintaining all of the Federal and
    local fiscal restraints that currently exist.
        Mr. Bilbray. I appreciate that. Just in closing, I
    appreciate the fact that the District is defending a republican
    form of government as opposed to a democratic initiative
    process. That constitutionality was a big issue in California,
    the fact that the Constitution does defend the republican form
    of government as opposed to democratic direct governance.
        I yield back, Mr. Chairman.
        Mr. Lynch. I thank the gentleman. The Chair recognizes Mr.
    Connolly, the gentleman from Virginia, for 5 minutes.
        Mr. Connolly. I thank the chairman and I thank my colleague
    from Ohio for yielding.
        By the way, I appreciate what my friend from California
    said but it is a very arguable point how well recall
    referendums and initiatives have worked in California. One
    wants to read a cogent critique of that. David Broder of the
    Washington Post wrote a book a few years ago that really lays
    out how special interest influences essentially coopted what
    was once seen as a reform at the turn of the 20th century. So
    there is another side to that.
        Mr. Smith, you are an attorney. You are familiar with the
    provision in the U.S. Constitution granting Congress in Article
    1, Section 8, Clause 17 exclusive legislation in all cases
    whatsoever pertaining to the District of Columbia?
        Mr. Smith. I am, yes.
        Mr. Connolly. When that provision was written in 1787, how
    many people lived in the District of Columbia?
        Mr. Smith. Very few.
        Mr. Connolly. In 1800 when the President of the United
    States, John Adams, was the first occupant to move into the
    White House, do you know how many people lived in the District
    of Columbia?
        Mr. Smith. It was still very few.
        Mr. Connolly. When the writers of the U.S. Constitution
    wrote this provision, is there any evidence that they
    envisioned the District of Columbia would eventually evolve
    into a vibrant metropolis with hundreds of thousands of
    residents?
        Mr. Smith. They were a prescient group but I doubt if they
    saw all of that, Mr. Congressman.
        Mr. Connolly. Anybody else on the panel want to take a stab
    at that one?
        [No response.]
        Mr. Connolly. Given that fact, is there any other city you
    can think of, Chairman Gray, where Congress interprets this and
    exercises the kind of oversight and control we do in the
    District of Columbia? For example, is there any other city in
    the United States where we condition voting representation to
    the competence of the local government?
        Mr. Gray. I am not aware of any, Congressman.
        Mr. Connolly. Is there any city or county you can think of
    where we condition voting representation here in the U.S.
    Congress on the quality and performance of the school system?
        Mr. Gray. Not to my knowledge.
        Mr. Connolly. Is there any city or county you can think of
    in the United States that, again, where we condition voting
    representation here in the U.S. Congress based on how high or
    low the crime rate might be?
        Mr. Gray. Not to my knowledge.
        Mr. Connolly. Disfunctionality or functionality of various
    municipal agencies?
        Mr. Gray. No.
        Mr. Connolly. Ability to balance a budget?
        Mr. Gray. No.
        Mr. Connolly. Really? Now, I would be interested in your
    thoughts and yours, Mayor Fenty. What would be the logic of
    this Congress using this clause of the Constitution, which
    clearly was intended for a Federal enclave that met
    periodically during the year and then pretty much shut down? It
    was never envisioned that D.C. would become a city with
    hundreds of thousands of citizens and then be denied the
    franchise, at least not as I read the Constitution or the
    history of the writing of the Constitution. What is your view
    about the exercise of this provision, our oversight
    responsibilities, and our conditionality of voting
    representation in the Congress based on that?
        Mr. Gray. I think it is clear to us that we have 600,000
    people who live in the District of Columbia who are
    disenfranchised. We have worked hard to try to get a vote for
    our Representative in this Congress, Ms. Norton. This issue
    around budget autonomy and legislative autonomy I think echo
    the point.
        We pay Federal taxes just like everyone else. We pay $3.5
    billion to $3.6 billion a year. Our sons and daughters and our
    family members go off to fight wars like everyone else. We do
    the same things that other citizens of the United States do,
    yet we do not enjoy the same rights, and that is the right of
    self determination. Frankly, being able to make decisions about
    our budget and being able to make decisions about our
    legislation, especially to move this city forward in a timely
    fashion, are part of full citizenship in this Nation.
        Frankly, if we had not crafted an emergency and temporary
    legislative process, we would have had experiences in the
    District of Columbia that would have slowed down the ability to
    make decisions which probably would have been criticized by
    this Congress and others because of our inability to move. Yet
    it is the process that we have been required to operate under
    that would have delayed those decisions that needed to be made,
    decisions that we knew needed to be made, Mr. Connolly.
        Mr. Connolly. An inability, if I can interject, created or
    generated by Congress because of our dithering over our
    oversight responsibilities. Is that correct?
        Mr. Gray. You said it very well.
        Mr. Connolly. Mr. Chairman, my time is up. But as a
    courtesy, if you would not object, I want to give the Mayor the
    opportunity to comment similarly.
        Mayor Fenty. Well again, just to sum up, Congressman, I
    think there are people who would take your view that the ``no
    taxation without representation'' clause of the Constitution is
    the one that needs to be paid more attention to and used to
    give us our full voting rights and representation. Those are
    issues for probably a broader debate on a different day.
        Today, in focusing on the clause that gives Congress
    jurisdiction over the District of Columbia, it seems that the
    law that has been crafted by Congresswoman Norton both gives
    the local officials the ability to spend our dollars more
    wisely and efficiently but doesn't abridge that particular
    clause. So it seems like what you rarely get in legislatures,
    having served on one for 6 years, is a win-win.
        Mr. Connolly. I thank you, and I thank the Chair.
        Mr. Lynch. I thank the gentleman. The Chair now recognizes
    the gentleman from Ohio, Mr. Kucinich, for 5 minutes.
        Mr. Kucinich. Thank you very much, Mr. Chairman. I want to
    welcome the witnesses. I speak in support of my colleague, Ms.
    Holmes Norton, for her commitment to equality in the District
    of Columbia.
        In some ways it seems like this discussion is almost
    surreal in that we could have a city in America that is still
    struggling for self determination while, as Ms. Rivlin stated
    in her testimony, we want to export democracy all over the
    world. Something about this really doesn't compute.
        We understand what the Constitution says. Ms. Holmes Norton
    has come up with, I think, a reasonable approach that would
    modify the cumbersome congressional oversight review process.
    It is a very reasonable approach that you have taken, Ms.
    Holmes Norton. And I think that the Congress certainly should
    be supportive of that.
        But when you look at it in a broader context, it is really
    ridiculous that the District of Columbia doesn't have true
    autonomy. Is someone afraid they are going to take over the
    United States of America? It almost seems like a riff on
    Leonard Wibberley's ``A Mouse That Roared''--declare war on the
    United States and be pacified and wealthy beyond your wildest
    dreams. I don't think that is going to be what the District of
    Columbia is about as it moves toward greater autonomy.
        We need to, as my colleague, Mr. Connolly, has suggested,
    look at the historical context here and look at the context of
    our Constitution. If there was ever a call for changing the
    Constitution and updating it, it is our relationship with the
    District of Columbia.
        We show a capacity for evolution in this Nation. There was
    a time when people who didn't own property could not vote, a
    time when women couldn't vote, a time when people of color
    couldn't vote, and a time when people under 21 could not vote.
    America has seen this capacity for evolution. So we change the
    Constitution. Each time we understood. But because of the
    popular support for those changes, it was a little bit easier.
        D.C. is here as an advocate on behalf of the people in the
    District. We need to help people all over America understand
    that this truly and should be a concern of all Americans. We
    shouldn't take out of our understanding the potential to change
    the Constitution in this regard.
        And while Ms. Holmes Norton certainly has been peerless in
    her advocacy of equality for the District of Columbia, it is
    important for your colleagues, Ms. Holmes Norton, to be heard
    from and to support your efforts in the boldest way possible.
    Because this really is a fundamental question: Whether you have
    the right for self governance.
        As a former mayor, I understand how important it is to be
    able to make decisions without having other people continue to
    try to re-cut your decisions. The essence of home rule in our
    city in Cleveland, home rule is modeled after the Federal plan
    of Government, with the mayor being the chief executive and
    three branches of government. The council in Cleveland is a co-
    equal branch of government, but the mayor is the chief
    executive. That is the way to make government work for people.
        There is one correction I want to add to what Ms. Rivlin
    said. Cleveland's financial crisis in 1978 was a manufactured
    one where the banks tried to dictate to the city the sale of a
    municipal electric system as a precondition for the city
    getting credit. I mention that because that is a home rule
    issue, too, whether the city had the right to make its own
    decision to keep an electric system without banks saying you
    better get rid of that system or we are going to not give you
    credit.
        So the principle of home rule is joined to democratic
    theory. It is joined to the spirit and letter of our
    Constitution. Just because we haven't yet worked out that one
    provision doesn't mean that we can't find a way, with the
    wisdom of Ms. Holmes Norton, to adapt to where we are right
    now, give the District some additional flexibility, and then at
    the same time work with those of like mind who see that we
    really need to change the Constitution to make the District of
    Columbia a place that people can truly call their own through
    being able to have direct election of officials at every level.
        So I thank you, Mayor Fenty, for the work that you do, and
    all members of the panel for their forthright presentation of
    the needs of the people of the District. Thank you.
        Thank you, Mr. Chairman.
        Mr. Lynch. Thank you. Let me just ask, I don't know if
    everybody has more questions, but I have one.
        There is a certain aspect of this that Congress has a
    Constitutional responsibility. We are not suggesting abdicating
    that responsibility. What we are suggesting here, I think, is
    that in many cases Congress delegates the authority that is
    given to us through the Constitution. The question here that we
    are grappling with, and with which Ms. Eleanor Holmes Norton
    has grappled most intently, is that the way in which we
    delegate that responsibility has a whole lot to do with how
    efficiently that authority is implemented.
        We have done it in a way, I think, so far. It was improved
    upon back in 1973 with the Home Rule piece. But I think there
    are still some encumbrances on the city government in trying to
    do the job that we hope you would do. It is most clearly
    illustrated, I think, in the budget process where we ask you to
    comply with a budget requirement in a way that is virtually
    impossible. So I certainly understand the budgetary autonomy
    piece of this and how that could be worked out. I can envision
    a solution there.
        The one reservation I have is over issues that are
    inherently driven by Congress's presence here in the capital.
    That is the security of the District because of what we bring.
    We made you a target on 9/11. But for the fact that Congress
    and the seat of national Government is here, you would not have
    been a target. So there is a heightened level of security that
    is necessary because Congress is present here. I think that we
    need to make sure that job gets done in a very businesslike and
    appropriate fashion. We have great reservations, I should say
    on behalf of Congress, about delegating that authority to the
    degree that we don't have immediate responsibility and control.
        The other piece, obviously, is I think up to 40 percent of
    the real property in the District is controlled by the Federal
    Government as part of our ability to do our jobs that are
    Federal. Again, for that 40 percent of the property that is
    covered by the Federal Government, we need to have that same
    type of immediate impact through Congress's decisions.
        Outside of those two very real and different and immediate
    needs, Mayor, how do you think we can work this out in terms of
    giving you that flexibility that you need but keeping close for
    Congress our ability to impact those things that are inherently
    Federal in conducting our day-to-day business?
        Mayor Fenty. That is a great question, Mr. Chairman. From
    the way I read the legislation, I do not see how the laws that
    are already passed in the Council's normal course of business--
    and I think it has been put on the record that they go through
    at almost 100 percent approval by the U.S. Congress--would
    change anything about the relationship between the Federal
    Government and the local government, expressly when it doesn't
    change the District laws which give the Congress the power to
    come back in at any point and make a statement about a
    particular law or particular budget that we pass. It is really
    just about the operations and efficiency of government.
        I would put on the record that 1 day we will have the
    bigger discussion about whether the District of Columbia gets
    full sovereignty and what you do with the more Federal parts of
    the government. But I don't think this legislation gets
    anywhere close to that since it merely just talks about the
    process and the time by which our laws become final.
        I would say that both in the past administration and in the
    current one, whether it is an inauguration or whether it is the
    many and varied and myriad threats that do come upon the city
    that we all call home, there is unbelievable cooperation
    between our first responders and the Homeland Security agencies
    and Federal law enforcement where you all have the privilege of
    overseeing their budgets.
        No matter what our structure, and certainly with the
    passage of this law, there has to be good management. The city
    is well prepared and I think the Federal Government is as well
    to continue that.
        Mr. Lynch. Thank you. Mr. Chairman, do you want to comment
    on that?
        Mr. Gray. Just to echo what has been a theme throughout
    this hearing, that is there is nothing about this legislation
    that changes Article 1, Section 8. That continues to vest in
    this Congress the authority to intervene where it may consider
    it appropriate to intervene. It simply gives us the ability to
    more flexibly and rapidly manage our affairs in the District of
    Columbia, especially around the passage of legislation and
    especially around the issue of budget.
        In my testimony I cited an example, and I chose it in
    particular, that it took 9 months for the District of Columbia
    to be able to change the term ``handicap'' to ``disability'' in
    our laws because of the requirement for congressional review. I
    can't imagine that anybody in the Congress would, first of all,
    object to such a change because it is far more dignified, or
    even more importantly, want to be involved in that kind of
    change at the local level in the District of Columbia.
        I go back also, Mr. Chairman, to the reality that in 35
    years we have had these disapproval resolutions used three
    times, the last time 19 years ago. I think that is a prima
    facie case for the ability of this city firstly, to manage
    itself, especially through difficult times; and second, the
    collaborative relationship that we have crafted with this
    Congress.
        Mr. Lynch. I thank you. The Chair now recognizes the
    gentleman from Utah, Mr. Chaffetz, for 5 minutes.
        Mr. Chaffetz. Thank you. Again, I appreciate everybody and
    their dialog. I think this is a healthy part of the process. I
    would hate to think that you would like to come here less
    often. [Laughter.]
        I do believe that the District of Columbia holds a special
    place in the hearts and minds of all the American people. There
    is only one capital of the United States of America. Our
    Constitution recognizes that.
        I think the gentleman from Ohio, a good friend, brings up
    an important point. If there is a discussion or an effort to
    change the Constitution, perhaps that is a separate discussion.
    I happen to disagree with it. I think it is divinely inspired.
    I think it says literally what it means. But as he brought up
    at the end of his comments an effort to perhaps change the
    Constitution, maybe we ought to have that discussion. It is
    certainly his right and prerogative to bring that up. I would
    oppose that just at first blush.
        But until it is changed, I have a hard time with the
    direction that these two pieces of legislation go. I have the
    greatest respect for what you do and how you do it and what the
    Representative brings to the table and her perspective. I have
    nothing but the utmost respect. But at the same time, those of
    us that believe wholeheartedly in the Constitution literally as
    it says, shouldn't be met with the vehemence that you sometimes
    get in standing tall on the Constitution.
        I would also take exception to the characterization that
    the budget process is some impossible feat given that chart
    that you are so willingly able to put up there. In fact, as I
    look back over the history--and I am still studying it and
    continuing to understand it--it was actually an enactment of
    Congress that created the independent CFO position that helped
    change the direction and consequently created a positive
    result.
        At the same time, there have been a host of challenges.
    There have been a number of things where maybe the changing of
    the word is something just innocuous and we don't need to deal
    with that. But I do believe that there is a role and
    responsibility for Congress to help make that determination
    because there have been very contentious subjects such as
    needle exchange, the second amendment issues, the Hyde
    amendment, budget scandals, and all sorts of things that have
    happened. You could argue that those would happen in other
    cities, too. But this is the unique provision set up by our
    Founders in our Constitution.
        I don't know if you would like to address that. It is not a
    direct question but it is just an approach. Mayor, I will give
    you the first stab at this. But that is where we are coming
    from, or at least where I am coming from.
        I want to applaud you for the success you have had but I
    want to hold your feet to the fire for the things that aren't
    going well. And that system of checks and balances and
    accountability and having to come up here to the Hill is a very
    healthy process. Yes, it is different than every other city in
    the United States of America. That is OK. That is good. That is
    the way our framers set it up.
        Mayor Fenty. Well, I think in any legislative debate there
    comes a point where you agree to disagree. I actually don't
    think we are at that point with this bill. I think if you are a
    Member of Congress and you have a particular personal position
    that is different than what has been voted out by the Council
    of the District of Columbia, after the passage of these two
    bills, it seems like you still have a vehicle to make your
    personal opinion known and to introduce some type of amendment.
        I think what this bill speaks to is more the running of the
    government. I think the case has been put there just by the
    sheer numbers of bills that come through here that don't raise
    any concerns for you. Having those go through an additional 6
    to 9 months, it does cost the District of Columbia time,
    energy, and resources. Could we manage our affairs otherwise?
    Sure. We are not going to say that we can't. But could we
    manage them better if the law were passed? I think we have put
    a good case before you that we could.
        Mr. Chaffetz. Mr. Chairman, my time has expired. I
    appreciate those comments. I still think we have the very best
    form of government and I think that check and balance, as
    expensive as it may be in dollars and time, is a worthwhile
    process. With that, I yield back my overtime. Thank you, Mr.
    Chairman.
        Mr. Lynch. Thank the gentleman. I want to recognize the
    gentleman from Missouri, Mr. Clay, for 5 minutes.
        Mr. Clay. Thank you so much, Mr. Chairman.
        Mrs. Norton. Could I ask the gentleman to yield? Could I
    ask my good friend, the gentleman from Missouri, if he would
    yield for a moment. I am due in the Senate at 12.
        Mr. Clay. Oh, sure.
        Mrs. Norton. I don't want to ask a question. I just want to
    say for the record because of Mr. Chaffetz's concern that even
    with needle exchange, which has cost lives and serious illness
    in the District of Columbia, all the plenary power of the
    Congress would remain to interfere with or, in your view,
    correct what the District is doing. And the proof of that is
    this Congress has already delegated partial home rule, home
    rule on everything but budget and legislation finality. So just
    do what you already have done in 1973.
        The only real concern, it seems to me, has been raised by
    the chairman. Is there any interference with the national
    Government's concern? That is a legitimate concern, Mr.
    Chairman. Of the three times in which the District laws have
    used the disapproval resolution, two of the three had to do
    with mistakes by the District. It had passed laws that
    interfered with the Federal presence.
        The budget and legislative autonomy bills before us deal
    with local laws, having nothing whatsoever to do with national
    concerns. Even so, you could intervene to overturn any of those
    laws. The only difference is the inconvenience of having us
    wait for months for our budget and months for our bills would
    no longer be there. You would have to move a bit more quickly.
        The chairman mentioned property in the District of
    Columbia, the Federal property. This property remains the sole
    jurisdiction and under the sole control of the Government.
        Finally, as a Member of the Homeland Security Committee,
    the chairman has raised an important point. What about the
    security of the Nation's Capital? For 10 years we have
    operated, almost 10 years now since 9/11, under a regime of
    partnership with the Federal Government to protect the security
    of the Nation's Capital. The truth is, Mr. Chairman, that they
    can't do it without our police force and without our resources.
    So they are joined at the hip when it comes to homeland
    security.
        And let us remember Federal supremacy. Even the D.C.
    National Guard is not controlled by the Mayor, as in other
    States. The D.C. National Guard is under the direct control
    already, and always Federalized, of the Federal Government. So
    Congress has taken care of its own security. And should there
    be any problem, under its plenary authority it could simply
    take over the whole city for security reasons. So thank you for
    raising that, Mr. Chairman.
        Mr. Lynch. I thank the gentle lady. Mr. Mayor, I know you
    had a time constraint and I don't want to delay you any
    further. So if you need to scoot, you can. I thank you very
    much for your time.
        Mr. Clay. Mr. Chairman, I did have some questions.
        Mr. Lynch. No, no. It is just the Mayor had a conflict and
    I am just giving him the courtesy of departing if he has to. I
    now recognize the gentleman from California.
        Mr. Bilbray. I would just like to give the Mayor the chance
    to clarify because I don't think he wants to leave here leaving
    the impression of a statement he made. I think he misspoke and
    you don't want to read about it later. You made a reference to
    ``no taxation without representation'' being in the
    Constitution. Do you want to clarify that you did not mean that
    clause is in the Constitution?
        Mayor Fenty. Well, as you are well aware, Congressman, our
    country was founded upon the principle that citizens of the
    country would not be taxed without having----
        Mr. Bilbray. Mr. Mayor, I just wanted you to clarify the
    record that you didn't mean the Constitution.
        Mayor Fenty. Point well taken.
        Mr. Bilbray. You meant it was basically a----
        Mayor Fenty. Point well-taken.
        Mr. Bilbray. OK. Thank you. I just wanted to make sure we
    get on that so you don't----
        Mr. Lynch. The gentleman is still recognized for 5 minutes.
        Mr. Bilbray. Thank you. I appreciate that.
        Mr. Chairman, it is too bad my colleague from Fairfax isn't
    here because he was talking about what cities don't get to have
    self governance. Quantico is one of them because it is on a
    Federal reservation. For a Virginian to forget that there are
    cities that are actually encompassed in Federal jurisdictions
    that we sort of drive by every day and don't think about the
    fact the citizens of Quantico don't elect a mayor, don't have
    direct representation because the Federal Government preempts
    it.
        I have a question, Mayor, regarding the issue of the
    scholarship program in D.C. Let me tell you, this is near and
    dear, especially in a city like this. Should the program allow
    new students into the program at the present and the future as
    we have in the past?
        Mayor Fenty. Yes. Our administration supports both the
    three sector approach and then we have a statement which has
    been crafted which would allow the continued operations of the
    program and the same numbers of people in the program. There
    are some people who would want less, some people who would want
    more. You could classify that as more kids into the program
    because they are new kids or you could just classify it as the
    same number of slots. We have supported the same number of
    slots.
        Mr. Bilbray. So in other words, you support maintaining
    this into the foreseeable future where if you don't allow new
    kids in, you are basically designing the demise of the option
    for the inner city?
        Mayor Fenty. No. That would be one of the extremes. Our
    administration has adopted a position that is a little bit more
    in the middle which would support the same number of slots.
    That would allow new kids in to a certain degree but not any
    growth in the program.
        The quick explanation is the Chancellor believes that
    within a short period of time, probably more in the 5 or 6 year
    range, we will have our school system at a level that it will
    be a much more solid option for all the kids in the city.
        Mr. Bilbray. Mr. Mayor, that is very delicate for me. I
    owned a place in D.C. and, sadly, my wife was emphatic that we
    leave the District because of the lack of educational
    opportunities here.
        The other issue that is kind of interesting in this city is
    that I don't own a place here but I have a friend like Bob
    Filner where the District now has created a tax penalty for
    people that are required by Federal law not to be residents of
    D.C. but live here and work here. The District is taxing them
    basically because they are not residents, i.e, Members of
    Congress. We legally cannot be a resident, a voting resident in
    D.C. But Bob's tax is more than his partner's because he is a
    Congressman and not allowed to do that under Federal law. Has
    anybody even discussed that catch-22? I know it is small, but
    this is the kind of situation that exists in a Federal city--
    the Nation's Capital--that doesn't exist in other cities.
        Mayor Fenty. If I have been briefed on that, I don't
    recall. I yield to Dr. Gandhi.
        Let me just say in reference to the schools as I yield. As
    we both support the type of school reform that Chancellor Rhee
    has been pushing over the past 2 years, I do believe that the
    bill before us will allow her to move even faster by having a
    greater understanding of what her ability to spend dollars is.
        Dr. Gandhi, I don't know if you have any information about
    the bill.
        Mr. Gandhi. I do, Mr. Mayor. I think the Mayor spoke quite
    well on that.
        Mr. Bilbray. OK. I would just like to give him a choice
    rather than having to pack up and leave like a lot of people
    have done, sadly. And a lot of people who don't have the
    financial ability to pack up and leave like I did and give my
    children those options, those that are in D.C. that don't have
    that financial ability should be able to have the same
    opportunities that my children had even though their parents
    don't make the money that a Congressman makes. I appreciate
    your chance.
        Mr. Lynch. I thank the gentleman. I now recognize the
    distinguished gentleman from Missouri, Mr. Clay, for 5 minutes.
        Mr. Clay. Thank you, Mr. Chairman. Let me also point out to
    my friend from California that it was discovered that some of
    our colleagues who own residences in the District of Columbia
    were also taking homestead credits. So just to let him know
    that it cuts both ways.
        Let me ask Dr. Gandhi about the bill. This bill removes
    many of the steps that the District currently goes through to
    outline spending and project the District's future fiscal
    responsibilities. In the absence of these additional steps,
    what safeguards will come into effect if the District begins to
    spend into deficit spending? What safeguards will be in place?
        Mr. Gandhi. Sir, the institution of the independent chief
    financial officer will assure the Mayor, the Council Chair and
    the Council, the Congress, and the citizens that we will not
    have a budget that is not balanced. I am obligated to certify a
    balanced budget before it moves to the Congress. And if we are
    given budget autonomy, then we will make sure in our offices
    that the budget that is put forward by the Mayor to the Council
    is properly certified as balanced and that we will have not
    only a 1-year balanced budget but a 5-year balanced budget. So
    I think this requirement on the part of the independent chief
    financial officer in itself is enough to assure the Mayor and
    the Council, and of course the Congress, that the District will
    not have unbalanced budgets.
        Mr. Clay. In your testimony you cite the specific
    benchmarks, the act details to ensure astute financial
    management. Can you elaborate a little bit on those benchmarks?
    Is that the 5-year projected budget and the balanced budget?
    Are those the benchmarks?
        Mr. Gandhi. We are by law and by practice requiring a 5-
    year plan. The reason for that is that we want to make sure
    that revenues and expenditures are not moved across the years
    so that we would balance in 1 year but not in the next year. At
    the end of the day, if there is a recurring expenditure there
    has to be a recurring source. So you balance the budget this
    year but also make sure that does not create an unbalanced
    budget next year.
        Mr. Clay. Thank you for that response.
        Mr. Mayor and Mr. Gray, in 2007 at the start of the school
    Chancellor Michelle Rhee's tenure a warehouse was discovered
    with new, unopened textbooks that have yet to be distributed.
    How will the District's autonomy be structured to ensure that
    an instance like this does not occur again, costing the
    taxpayers in the District unnecessary funds?
        Mayor Fenty. That is a great question, Congressman. There
    probably are a couple different things that having faster
    moving laws and faster moving budget will do to allow
    inspectors to review where spending is going to allow us to get
    at waste. But I would say as the top manager for the city, that
    one is inexcusable given any set of laws. That is a management
    failure in not knowing where your dollars are being spent and
    wasted. I give the Chancellor a tremendous amount of credit in
    her first months for being able to find wasted resources like
    that and then direct them to the classroom.
        Mr. Clay. Thank you for your response. Mr. Gray, anything
    to add?
        Mr. Gray. Congressman Clay, I, too, think that what we are
    discussing today in terms of budget autonomy and legislative
    autonomy is less likely to address that. I think that is a
    management issue.
        If you look at some of the additional controls that the
    District has put in place over, let us say, the last decade, we
    have an Inspector General now to whom complaints like this
    about the operation of services would go. We have an auditor
    who works with the D.C. Council who looks at complaints around
    the delivery of services. So when you look at the degree to
    which we have introduced new controls, those kind of management
    failings are more likely to be ferreted out now than perhaps
    they would have been 15 or 20 years ago or certainly 35 years
    ago when limited home rule was accorded to the District of
    Columbia.
        Mr. Clay. Thank you. I thank the panel for their response.
    I yield back.
        Mr. Lynch. I understand we are going to have votes on the
    floor momentarily. I think this panel has suffered enough.
    [Laughter.]
        I appreciate the generosity of your time and also the
    quality of your testimony. I think you have helped us
    enormously in grappling with this issue. I trust this will be
    an ongoing dialog between this subcommittee and all of you on
    behalf of the District. I want to thank you for your
    willingness to come before this subcommittee and help us with
    our work.
        Without objection, the subcommittee now stands adjourned.
        [Whereupon, at 12 p.m., the subcommittee was adjourned.]
        [Additional information submitted for the hearing record
    follows:]

    [GRAPHIC] [TIFF OMITTED] T7789.053

    [GRAPHIC] [TIFF OMITTED] T7789.054