- DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 2011

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

DEPARTMENTS OF LABOR, HEALTH AND HUMAN
SERVICES, EDUCATION, AND RELATED AGENCIES
APPROPRIATIONS FOR 2011

_______________________________________________________________________

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

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

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full
Committee, and Mr. Lewis, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
David Reich, Nicole Kunko, Stephen Steigleder, Donna Shahbaz,
John Bartrum, Lisa Molyneux, and Mike Friedberg,
Subcommittee Staff
________

PART 5
Page
Department of Labor FY 2011 Budget Overview...................... 1
Department of Education FY 2011 Budget Overview.................. 59
Department of Health and Human Services FY 2011 Budget Overview.. 145
National Institutes of Health FY 2011 Budget Overview............ 279

________
Printed for the use of the Committee on Appropriations
Part 5

DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION,

AND RELATED AGENCIES APPROPRIATIONS FOR 2011
?
?
?

DEPARTMENTS OF LABOR, HEALTH AND HUMAN

SERVICES, EDUCATION, AND RELATED AGENCIES

APPROPRIATIONS FOR 2011

_______________________________________________________________________

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
58-233 WASHINGTON : 2010

COMMITTEE ON APPROPRIATIONS

DAVID R. OBEY, Wisconsin, Chairman

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

Beverly Pheto, Clerk and Staff Director

(ii)

DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED
AGENCIES APPROPRIATIONS FOR 2011

----------

Wednesday, March 10, 2010.

DEPARTMENT OF LABOR, FY2011 BUDGET OVERVIEW

WITNESS

HON. HILDA SOLIS, SECRETARY OF LABOR

Introduction

Mr. Obey. Welcome, Madam Secretary. I am sorry we had to
delay this hearing for an hour because of the special meeting I
was called to today. So, to try to put us somewhat back on
schedule, I am going to forego an opening statement and simply
welcome you here. I know you probably have the toughest job
that any Secretary of Labor has had since the Great Depression.
I wish you luck and anything else that you need to get the job
done.
Mr. Tiahrt.
Mr. Tiahrt. Thank you, Mr. Chairman.
Secretary Solis, welcome back to the Committee. It is
always a privilege to receive testimony from a former
colleague.
During these tough times, it is an extremely important
Cabinet position to hold. Madam Secretary, when I look back
over this past year, I become quite anxious about where we are
today, and even more concerned about where we are headed.
Unemployment continues to hover around 10 percent, twice the
level of structural unemployment. We are seeing record budget
deficits and historic levels of debt, many State budgets are
also deep in red, and households continue to tighten their
belts. They are making very difficult decisions, but necessary,
decisions on spending cuts, which is what they expect their
Government to do.
We have to work our way through this together and do so
responsibly, and that does not mean that we spend our way out
of this recession, as the distinguished Majority Whip said last
month. I fundamentally disagree with that approach. In order to
work towards a vibrant American economy in the 21st century,
Congress needs to take a comprehensive look at policies and
incentives which build solid economic foundation. This will not
be accomplished by Federal funds, but by private capital which
spurs innovation and leads to job growth. Lasting economic
growth comes from the bottom up, and not the top down.
Government does not create wealth. I think that is a
misnomer in Washington today, that Government does create
wealth. It does not. Government does not create wealth; the
private sector does. And jobs are a byproduct of creating
wealth. Our fellow Americans have been the victims of a top-
down approach this past year. The Recovery Act was supposed to
create 3.5 million jobs; yet 3.3 million jobs have been lost
since its passage, including over 25,000 manufacturing jobs in
Kansas. Kansas wants to get back to work. Kansas employers want
to hire them. It is our duty to give them the tools and the
opportunity to do so, not enacting policies that will only lead
to a jobless recovery.

FISCAL RESTRAINT

Yet, these are macro issues, Madam Secretary, and it will
take so much more than the Department of Labor alone to
positively affect them. But it can start here, with this
Committee, and it has to because it has not started with the
Administration. President Obama promised a three-year freeze on
non-defense, non-security domestic spending; yet, his request
for programs under the jurisdiction of this Subcommittee have
increased by $27,000,000,000.
We need to do exactly what the President promised, but has
so far failed to do: apply the scalpel to this budget request
and make the tough, perhaps politically unpopular, decisions.
There was an excellent article in the Wall Street Journal
today about Ireland and how they are going to survive their red
ink. The title of it is Irish Take Bitter Medicine to Survive
the Age of Red Ink.

ETA CARRYOVER

I strongly support many of the programs funded through this
bill; they are important for sustainable economic growth. But
in these difficult times they call for fiscal restraint
responsibility. Case in point--and I know the mere mention of
this term, carryover, will cause many to sit upright, but
consider the Employment and Training Administration. The entity
was responsible for providing employment and training
assistance programs and the administration of unemployment
benefits; $2,500,000,000 of unspent funds was carried into
fiscal year 2010, $700,000,000 more than you had estimated;
$2,500,000,000 appropriated in fiscal year 2009 that was simply
not needed.
We all know the trillion is the new billion, but these are
huge, huge numbers. Just because the practice is permissible by
statute does not make it an appropriate use of taxpayer
dollars. Again, tough but responsible decisions must be made
this year, and we have to own up to them.

CREATION OF GREEN JOBS

Lastly, your budget request is premised on the notion of
creating good jobs, a simple enough concept that we all
support. And as these good jobs are created, I certainly hope
that we do not fall into the same nebulous void as green jobs.
Not only does the definition of a green job seem to be ever-
evolving, but even the process by which we now calculate green
jobs growth is flawed.
Take Vice President Biden's December memo to the President
entitled The Transformation of Clean Energy Economy. In it he
cites that renewable energy investments would create 253,000
jobs and would ``support''--I presume he means save--up to
469,000 more jobs. But he footnotes these numbers saying, ``A
project that employs one person for two years would count as
creating two jobs.'' One person working for two years is two
jobs.
I do not buy this. We could say that one job per month for
two years would be 104 jobs. I think it is just one job and we
need to keep our calculations correct and have an accurate
representation of job growth, because the American people
deserve and need to know the real facts.
So, Madam Secretary, I welcome you back once again, and I
look forward to your testimony today.
Mr. Chairman, thank you for your time.

Opening Statement

Mr. Obey. Madam Secretary, why do you not proceed?
Summarize your statement and proceed to the questions.
Secretary Solis. Thank you, Mr. Chairman, Chairman Obey and
Ranking Member Tiahrt and members of the Subcommittee. It is a
pleasure to be here again this year. Thank you for inviting me
to discuss our fiscal year 2011 budget request, and I ask that
my prepared testimony be entered into the record, as I will
review the highlights with you.
First, it is not possible to discuss next year's budget
without acknowledging the immediate need to put Americans back
to work. I am proud of the work we have done with the Recovery
Act resources, which include providing nearly $50,000,000,000
in UI benefits to unemployed workers and assisting over 190,000
of them to maintain their health care coverage under COBRA;
creating summer job opportunities for nearly 318,000 low-income
youth and over 18,000 wage-paying community service jobs for
low-income seniors; and providing training opportunities for
demand health care jobs and emerging jobs in the new green
economy, renewable energy.
While these efforts are helping, they are clearly not
enough, and at 9.7 percent, unemployment remains persistently
and unacceptably high, and especially for those particular
groups most affected. African Americans are suffering at 15.8
percent, Latinos at 12.4 percent. The situation is dire. And in
the Native American communities it is even higher.
I remain hopeful, however, that Congress will reach
agreement on measures that will allow us to continue to assist
Americans until the labor market fully recovers.
Mr. Chairman, you recognized this need when you added funds
last year for the Senior Community Service Employment Program.
We moved quickly as a result and many low-income seniors did
not need to wait for a jobs package to secure employment. But
there is so much more that needs to be done, and some examples
are:
To further extend the safety net for those displaced and
dislocated workers by extension of the UI and COBRA assistance,
which I believe the House and the Senate are working on; to
commit to $1,200,000,000 to ensure that a robust summer jobs
program can be implemented to put the high number of unemployed
youth to work to receive job training and education exposure;
To jump-start our employment through a $500,000,000
investment through on-the-job training programs that can help
small businesses and hopefully be incentivized to hire and add
on more workers; and
To add $300,000,000 to further support the oversubscribed
Pathways out of Poverty and Energy Training Partnership
programs that include employers in all of those partnerships.
Our budget request will sustain those investments through
programs that give workers the tools they needed to succeed in
this new economy. I want to highlight some of the measures that
will allow us to increase the skills of all segments of our
workforce.
For the first time in over a decade, the budget proposes a
significant increase in funding for the Workforce Investment
Act programs. However, the additional resources are also
closely linked to reform. In keeping with the Administration's
WIA reauthorization goals, a percentage of the funds
appropriated for adults, dislocated workers, and youth will be
reserved for two new WIA Innovation Funds to provide
competitive grants to encourage the workforce system to test or
replicate models that we know work to expand and improve
services and results for their customers, namely, employment in
the private sector.
The budget also requests an increase of $45,000,000 for the
Green Jobs Innovation Fund. And I can tell you from my
experience with the Recovery Act competitions that the demand
for green job training has been enormous, and it has come from
the private sector. We have simply not been able to keep pace
with the record number of applications, submissions that came
into my office; and I believe this unprecedented level of
interest calls for further investment, more resources.
We are committed to linking this training with job creation
efforts in green industries and expect our grantees to work
with employers and other participants to gain those valuable
skills and industry-recognized credentials that will help them
move into better and higher paying jobs.
In addition to the Youth Innovation Fund, the budget
request includes an increase in other services for youth, such
as $17,500,000 in the YouthBuild program that will allow us to
extend this program and serve an estimated 230 competitive
grants to local organizations to serve disadvantaged youth.
We also expect to see benefits from fully integrating the
Job Corps program with other youth programs and returning it
into the ETA program. We are also undertaking a rigorous and
comprehensive review of the Job Corps operations to identify
any needed reforms that we might need to take.
Good jobs for everyone means that other vulnerable
populations must not also be left behind. That is why we are
doing more to target resources to areas of greatest poverty,
and that is why the budget request includes increases in the
Indian and Native American and Migrant and Seasonal Farm Worker
Programs. Two DOL agencies, ETA and the Office of Disability
Employment and Policy, known as ODEP, will also receive
$12,000,000 each to continue their job disability initiative to
increase the capacity at our one-stop system to provide
accessible services to individuals with disability.
We know returning veterans, including those who are
disabled, can contribute greatly to the expansion of our
economy. They are the most under-utilized population. For the
Veterans Employment and Training Service, the budget requests
$262,000,000 and includes increases for homeless veterans
grants and transition assistance programs which are vitally
important for those individuals that are coming back and want
to be reintegrated into our society.
Our Assistant Secretary, Ray Jefferson, will be with you
tomorrow to fill in any items or activities that you require
more information regarding our Vets program. The ETA Assistant
Secretary, Jane Oates, will also be here tomorrow to discuss
any further plans and details you might have regarding
partnerships that include the nursing shortage and also efforts
to help provide assistance to States to pay for a paid leave
program that we are now initiating.
I know you understand that it can be too easy to exploit
workers when jobs are scarce. We need to remain vigilant in
protecting the rights and safety of all of our workers. In
fiscal year 2011 the budget continues that vigilance by hiring
additional enforcement personnel and strengthening our
regulatory efforts. We build upon the resources that you
provided last year to return our worker protection programs to
the 2001 staffing levels or greater, after years of decline.
To do so, the request includes $1,700,000,000 in
discretionary funds for 10,957 FTE for our worker protection
activities. This funding level is $67,000,000, 4 percent, and
177 FTE above last year's level, and the agency-by-agency
details are in my prepared testimony.
In discussing worker protection, I want to point out that
the request also includes increases to support the development
of regulations in areas such as pensions, worker health and
safety. These resources will help reinvigorate the Department's
regulatory program and are critical to the success of our
worker protection agenda.
The budget also includes an important interagency effort to
address the issue of employee misclassification. Workers
wrongly classified as independent contractors are denied access
to critical benefits and protections in the workplace to which
they are entitled, for example, overtime, health care coverage,
worker's compensation, family and medical leave, and
unemployment insurance.
In addition to denying workers these protections and
benefits, misclassification results in billions, billions of
dollars of losses to Government through unpaid taxes. Our
budget includes $25,000,000 to hire additional enforcement
personnel targeted at misclassification to fund competitive
grants to boost States' incentives and capacity to address this
problem.
Restoring our economy requires ensuring the world economy
is also sound and balances. I firmly believe that our
responsibility to promote acceptable conditions of work abroad
is closely linked to our worker protection agenda here at home.
It is with this goal in mind that we are requesting an increase
of $22,000,000 in the ILAB program to increase the monitoring
of labor provisions in trade agreements and to support programs
that use innovative and successful models to improve the labor
rights of workers in our trading partner countries.
Mr. Chairman, it is thanks to your leadership that we have
been able to pursue these approaches, which is based on highly
successful garment industry projects that we have been working
on in Cambodia. By increasing funding, we will be able to
expand our reach of worker rights protections in additional
countries. So I thank you for your previous support.
Before I conclude, I want to say just a few words about our
commitment to ensuring accountability for the resources that
you entrust us with. This is why my testimony links investments
to performance outcomes and why we have new commitment to
program evaluation.
Members of the Subcommittee, I think we all know that too
many Americans are ready and willing to work. But we know that
they cannot find a job. There are six applicants for each job
that is available now. We know the urgency. The budget before
you will help spur new and better job opportunities while
fostering safe workplaces that respect workers' rights. That is
what my goal of Good Jobs For Everyone is, and I look forward
to working with you on making this vision a reality.
I am happy to respond to any questions that the members of
the Subcommittee might have.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T8233A.001

[GRAPHIC] [TIFF OMITTED] T8233A.002

[GRAPHIC] [TIFF OMITTED] T8233A.003

[GRAPHIC] [TIFF OMITTED] T8233A.004

[GRAPHIC] [TIFF OMITTED] T8233A.005

[GRAPHIC] [TIFF OMITTED] T8233A.006

[GRAPHIC] [TIFF OMITTED] T8233A.007

[GRAPHIC] [TIFF OMITTED] T8233A.008

[GRAPHIC] [TIFF OMITTED] T8233A.009

[GRAPHIC] [TIFF OMITTED] T8233A.010

[GRAPHIC] [TIFF OMITTED] T8233A.011

[GRAPHIC] [TIFF OMITTED] T8233A.012

[GRAPHIC] [TIFF OMITTED] T8233A.013

[GRAPHIC] [TIFF OMITTED] T8233A.014

[GRAPHIC] [TIFF OMITTED] T8233A.015

[GRAPHIC] [TIFF OMITTED] T8233A.016

[GRAPHIC] [TIFF OMITTED] T8233A.017

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

GREEN JOBS

Mr. Tiahrt. Thank you, Mr. Chairman.
I want to talk just a little bit, ask you some questions
about the green jobs. In the fiscal year 2011 request for
increased funding for green jobs training, the request is for
$45,000,000 over fiscal year 2010, for a total of $85,000,000,
more than doubling its funding in one year. This would be in
addition to the $500,000,000 provided in the Recovery Act.
However, your latest Recovery Act execution report states
that only $520,000 of the $500,000,000 provided for green jobs
has been spent. These funds were provided 13 months ago. I am
aware the obligation rate is higher, but I think it is
important to focus on what has actually been injected into the
economy.
Money that is merely obligated does not provide the
economic stimulus intended by the Recovery Act, and it
certainly does not help the American worker. Furthermore, I am
concerned about the push to create green jobs, whether they
will actually have a counter effect. There is a Washington Post
article about the smart grid, and that is considered to be one
of the clean energy sector jobs growth. The author, who is the
Director of GE Smart Grid Initiative, suggests that because the
smart grid is premised on automation, more than 28,000 jobs of
meter readers are likely to disappear.
Now, maybe that is just the normal course of technology; we
should accept that. But green jobs is kind of a novel concept.
In the article he says that there are really four categories,
based on what has happened in Europe, for green jobs when it
comes to this smart grid: it is research and development, it is
manufacturing, installation, and then information technology.
Now, we are excited about the manufacturing side of it
because we have to make things in this Country. If we do not
make things, our economy is going to be stagnant. We cannot
exist as a service economy only; we have to make things. So the
manufacturing side of it is very good. In fact, we have a wind
generating manufacturing facility owned by Siemens, a German
company, in Hutchinson, Kansas, not far from my home. But when
you look at the actual jobs that are residual or long-term for
these green jobs, it is a minimal number. So I am concerned
that we are overestimating the impact on our economy by green
jobs.
If you take into consideration the study done by King Juan
Carlos University in Spain, they decided that for every green
job that was created, the resources were taken from the private
sector and actually cost 2.2 jobs in the private sector. So we
had a net loss of 1.2 jobs, according to their estimate, in
Spain for having a single green job. So taking resources out of
the private sector to create these and subsidize these jobs may
not be the best plan to get the economy rolling again.
I am going to go back to this $500,000,000. So if you have
not spent any of the $500,000,000 of the stimulus fund, how can
we assess whether or not unemployed individuals have been able
to obtain work through the so-called green jobs sector?

DECREASE IN JOB LOSSES

Secretary Solis. Thank you, Congressman Tiahrt, for your
question. You bring up a lot of good questions here, and what I
would like to begin with is, frankly, if we can all look back
where we were in January and February of last year. We were
losing well over 700,000 jobs a month at that time.
This last month, one of the roles that I play in the
Department of Labor is to have to issue what that job report
is. I am happy to say that we have seen a very, very dramatic
decrease in job loss; it went down to 32,000 jobs a month.
However, I do want to say that we have a high, high number of
people who continue to be unemployed and have been out of work
for longer than six months.

GREEN JOBS

The green job programs that we have rolled out--and much of
that money was actually released through a competitive process
where we had--in each case, entrepreneurs, partnerships with
different providers that were a compilation of community
colleges, apprenticeship programs, but, more importantly, we
had business involved. These efforts are to help create job
training slots, and the idea is that the results of those
partnerships come about because of the design of the grants'
writers from the local area.
Much of what is coming to us is by way of what the
community sees as a need. So, for example, in a community that
I visited in Tennessee, their interest was in looking at solar
panels, looking at trying to change how work was done in the
Sharp Corporation. They were doing televisions before; now they
are doing solar panels. The owner of that property was telling
me that they would like to see more help so that they can have
a trained workforce to make that kind of transition. This is
where I believe our partnerships will work in a better way to
help focus in terms of what regional sectors are looking for.
I know that there has been much debate about how many jobs
we created, but I know that because of the Recovery Act we have
seen more than 1.5 to at least 2.5 million jobs that have been
created. That also represents people in law enforcement,
teachers, people who are also working in construction and
hopefully now beginning to get involved in those construction
projects that are going to be rolled out through the
infrastructure monies that were made available by the Congress.
Mr. Obey. The gentleman's time has expired.
Mrs. Lowey.
And let me explain. I am going to try to hold each
questioner to five minutes, so if members want long answers
from the witness, they need to ask short questions.

G-20 SUMMIT

Mrs. Lowey. Well, I am delighted, Madam Secretary, to have
you with us, and once again I want to congratulate you on your
effective administration. We really are delighted to see you in
this position.
I know that you were very enthusiastic at the last year's
summit in Pittsburgh when the G-20 leaders called upon you to
host a meeting of employment and labor ministers in early 2010.
The economic crisis that our Country is recovering from has
been felt worldwide. So if you can tell us about this G-20
meeting, how it will help us solve the jobs crisis we face, I
think it would be very helpful.
Secretary Solis. Thank you, Congresswoman Lowey, and it is
a delight and pleasure to be here with you as well. I know how
deeply concerned you are with respect to foreign relations, and
have watched you in action on the floor and always with the
mind-set of how can we build our relationships with our trading
partners; and under that premise the G-20 summit that is going
to be held here in Washington for the first time, I think, is a
very historic moment. To have our Administration actually
present this idea in Pittsburgh and have, then, the buy-in from
the G-20 labor ministers and all those parties to say yes, we
want to come together.
This is a global crisis. The economic crisis of job loss is
hitting everyone, and more severely than our own Country; and I
think this is an opportunity for us to be able to position
ourselves once again to talk about some of the innovative
things that we are doing and listen clearly to what some of the
other countries are doing that may work better.
But, more importantly, making sure that the U.S. can play a
significant role in this effort. And I am very, very
appreciative that we are able to get the support that we did in
the last year's budget to help provide the foundation for the
ILAB division under the auspices of Sandra Polaski. She is
doing a tremendous job to help build upon those relationships
that we saw that may have been very fragile in the last few
years.
And I am very excited about the opportunity, as I travel to
other meetings representing our Country at the G-8 Summit,
talking to other labor ministers there. They are very, very
much engaged to see where our investments are; where that
safety net, where those monies are going to help provide
security for those dislocated workers and what kinds of new
programs are being implemented to keep people on the job.
Germany and other countries have very, very different types
of approaches in how they address keeping workers on the job;
they help to subsidize that salary and they actually give an
incentive to businesses to keep those industries in place,
unlike what we have been doing here. And I say that because
they have had a tremendous manufacturing industry going there
for many years, but they know that that investment cannot be
lost easily, so they make sure that they try to attempt to keep
dollars there. Those are things that we can learn from.
So I am very excited to be able to pull together the labor
ministers here, along with the Administration, to hear about
some good innovative programs, but also bring together business
leaders. So we are also bringing together the different chamber
representatives, the manufacturing representatives, as well as
labor, to talk about the kinds of ideas and what is needed most
now in the world.
So I take this very seriously and I am very pleased that
the Department of Labor can finally play a role here.

BUREAU OF INTERNATIONAL LABOR AFFAIRS

Mrs. Lowey. Thank you. In the couple of minutes I have
left, I know you have been proud of the work that the
International Labor Affairs Bureau has done. Well, we have
given you, I believe, the budget request--I do not know that
the Chair has appropriated it yet--$22,000,000 and an increase
which would be focusing on labor conditions in foreign
countries, reducing child labor, protecting women's rights,
maintaining our education, HIV/AIDS initiatives. Could you
comment on the importance of that increase to accomplish these
goals?
Secretary Solis. I think these are very, very important
investments that we are making. As I said earlier in my
statement, we have been working with other international
partners, including the International Labor Organization, the
ILO, to look at what best practices we can offer to other
countries that are perhaps having some trouble, with trade
enforcement or labor relation protections.
But, more importantly, how to try to bring up the quality
of life for some of our trading partners. I think about the
example in Cambodia, where an effort was made there to look at
the garment industry and to try to bring all those industries
in that part of the world together to set a better standard to
protect their workers, provide better wages for them, and then
allow for our markets and other international markets through
the ILO to also become partners with them. This expands their
economic base, which creates more jobs, and creates
opportunities for the U.S. to import and export those goods
from countries like Cambodia.
We are trying to use that model in other parts of Central
America. In particular, we are exploring discussions with El
Salvador and Nicaragua.
Mr. Obey. Mr. Rehberg.

OSHA ERGONOMICS REGULATION

Mr. Rehberg. Thank you, Mr. Chairman. I was going to ask a
meaningful question, but our staff left to have his picture
taken with Herschel Walker, and I had to decide whether to go
with him. He is out in the hall.
Welcome. Nice to have you back.
Secretary Solis. Thank you.
Mr. Rehberg. The majority put language in the bill last
year to add a column in the 300 log for musculoskeletal
injuries, and some of us kind of think that that is the first
sign towards a movement towards doing something that we
successfully stopped in 2001, and that was the creation of an
ergonomics regulation. Does your Administration intend to
reestablish an ergonomics regulation in the three years that
you have left?
Secretary Solis. Congressman, I do want to tell you that
there is a lot of confusion surrounding this issue, and we have
decided that we want to put this back in terms of gathering
information, because we think it is going to be useful. Many
businesses are required to report any injury anyway, and all we
are saying is that we are going back to the 2001 practice. It
does not mean that we are going to roll out an ergonomics
standard----
Mr. Rehberg. So there is no intent at this time for the
Administration?
Secretary Solis. At this time that is not----
Mr. Rehberg. And you do not anticipate in the future a
movement towards----
Secretary Solis. At this time I can tell you that that is
not the direction that the Department is going in. It is more
of a means and mechanism to help provide information to
businesses so we can prevent injuries. We know worker's
compensation premiums and what have you have gone way up. We
think this is a way to help provide provision information.

WORKER PROTECTION

Mr. Rehberg. Over the course of 2001 forward, Secretary
Chao was very aggressive in, one, enforcement; two, working on
the things she promised to do, and that was create industry-
specific guidelines; and, three, to continue ergonomic
research. Could you report what the Department has done in all
three of those areas? Are you still going to aggressively work
on industry-specific regulations like the nursing home
industry?
Secretary Solis. I think that we are obviously trying to
put the OSHA division back where it was in 2001, so one of our
efforts is to try to make sure that we staff up, that we are
not having to do things that really bog down the system; and we
would like to try to streamline the system and get information
out to businesses, as well as workers, so that we can prevent
injuries. I think we will be taking a look at different
regulations in more detail, and I would be happy to provide you
and your staff that information.
But at this time, we are trying to respond to what Congress
has also made clear to us, that in the past, OSHA and the Wage
and Hour Division have not been as aggressive in terms of going
and seeking and investigating some of these problems that have
been occurring. The GAO is very clear on that; the Congress,
this Congress, has been very clear. So we are attempting to
address those issues that have kind of landed on my lap now as
the Secretary of Labor.
[The information follows:]

There are no specific plans involving ergonomics rulemaking
at this time. OSHA is carefully assessing its best course for
preventing work-related musculoskeletal injuries, which
includes a review of the guidelines that have been published
and the effectiveness of guidelines as a strategy to address
work-related musculoskeletal injuries.
The agency plans to continue to use the general duty
clause, when appropriate, for enforcement when work-related
musculoskeletal injuries occur. OSHA has also launched a
recordkeeping National Emphasis Program (NEP), which will help
ensure that musculoskeletal injuries are being recorded
accurately by employers filling out the OSHA recordkeeping
logs.
A final rule will be issued in FY 2010 to revise the
Occupational Safety and Health Administration's (OSHA)
recordkeeping form to restore a separate column on
musculoskeletal disorders (MSD) that was removed from the form
in the last administration. Restoring this column will improve
the workplace injury and illness data collected by OSHA and the
Bureau of Labor Statistics (BLS). Having more complete and
accurate data will further our understanding of work-related
MSDs, which is certainly beneficial to any ergonomics research,
and also better inform employers about ergonomic hazards in
their workplaces.

OSHA STAFFING

Mr. Rehberg. Well, that is an interesting comment, putting
the agency back. What was done to the agency, was the budget
cut? Are there less employees?
Secretary Solis. I would say to you that the priorities
were much different. And in terms of, again, trying to address
the issues that the Congress has put before us, we thought it
was well worth our efforts to focus in on looking at how we can
reduce the injuries in the workplace; minimize fatalities and
injuries that cost business and our economy an even greater
amount of money.
Mr. Rehberg. Okay, I would like to see the research that
has been done. It was promised that it was being done, and I am
not sure I have ever seen that. Again, was the budget cut or
are there less employees in OSHA that there were at the start
of 2001?
Secretary Solis. Over the course of the last decade, we did
not see the same--how could I put it?--equivalent number of
staffing that should have been kept up to pace. So again, what
I am saying is that we are trying to go back to 2001 levels.
There may have been priorities placed on other divisions and
did not focus in on enforcement and protection, where the
Congress has been stating very clearly for the past few years
that they wanted to see more enforcement occurring. And because
there were a lot of complaints that were made, that is where
our focus has now been directed.
Mr. Rehberg. So if we go back and compare enforcement pre-
2001, we will find there was more enforcement on an individual
basis than there was from 2001 forward?
Secretary Solis. I would say that there was more of a
compliance approach to enforcement, which did not always result
in changes in behavior in terms of prevention on the part of
businesses and industry to make those corrections, to provide
training, and to access new tools so that we could reduce the
number of injuries in the workplace.
Mr. Rehberg. Thank you, Mr. Chairman.
Mr. Obey. The Chair would simply point out that the Chart
shows that there was a decrease of 252 people in OSHA between
2001 and 2008, and within Federal enforcement there was a
decrease of 146 people, or 8.7 percent. The percentage
reduction in the entire agency was 10.2 percent. And for safety
and health standards the reduction was 22 percent.
Ms. Lee.

RACIAL DISPARITIES IN UNEMPLOYMENT

Ms. Lee. Thank you very much, Mr. Chairman.
Good morning again, Madam Secretary. Good to see you. You
are doing a great job. I want to thank you and your staff for
being so accessible and for really tackling the tough issues of
the economy and unemployment. It is very desperate out there,
as you know.
A couple of things. In the committee report in 2009, we had
report language that addressed looking at what the issues were
as it relates to racial disparities in unemployment as it
relates to the structural issues and why this unemployment gap
is so great between the national average and the African
American and Latino communities. So that is one question I
would just like to get an update for the record. And I want to
thank your Assistant Secretary for Policy for working on this
and for keeping me informed on this.

EX-OFFENDER GRANTS

Also, secondly, there was report language, I believe it was
$20,000,000 for ex-offender funding that should have been put
out for competitive grants for communities of color, for
dropout, for ex-offenders, for making sure that these young
people have the requisite skills to become employed; and I do
not believe any of that has been spent yet. So have you issued
guidance on that or what is the status of that $20,000,000? And
that, I believe, was report language in 2009 also.
Secretary Solis. Thank you, Congresswoman Lee. To begin
with, I am also pleased that we now have my Assistant Secretary
for Policy, Mr. Bill Spriggs, who is here behind me. He has
been the individual that has been working on the request for
that report that you issued some time ago. And I apologize that
we have been so late in getting it fully together, but, upon
his arrival, we found that we needed more data sets, more
information so that we could have a more accurate picture of
what is really taking place.
That report had now left my office and has been sent over
to OMB for review. We hope that in a few weeks or perhaps next
month we will be able to issue that report to you. So I am
pleased. And a part of it is, as you know, a staffing issue
because we just were able to get the appropriate staff onboard.
But, believe me, this is an issue that I am greatly concerned
about as well.
With respect to the ex-offender program, I want to go to
that because I know that is of great concern to many members of
this Committee as well.
Ms. Lee. I believe it was the 2009 committee report that
issued the report language for the $20,000,000 that would be
allocated for ex-offenders and dropouts.
Secretary Solis. Well, what we have done for the 2011
request is, to bring together these programs in a more
meaningful way so that we can actually attack the issue of
employment, because the hardest, I think, factor here is while
we are trying to reintegrate folks back into society, the
problem is really the barrier of employment.
Once they are able to achieve employment and get the
services they appropriately need, I think then we are on our
way to recovery; and that is something that really has not been
focused on as heavily in the past, it was actually more of a
focus for younger offenders, which was more in terms of
education, which I do not want to take away from, because we
are going to keep that component, but when we talk about adult
ex-offenders, it is really more about providing assistance so
that they can help stabilize their immediate families that they
return to in many cases, and part of it is making sure that we
can find them jobs or help to subsidize a portion of that.
So we are combining our efforts here and we are really
trying to make it more strategic because we know dollars are
limited.
Ms. Lee. But have you issued the guidance for that
$20,000,000?
Secretary Solis. I think later this month, my staff tells
me, it will be issued.
Ms. Lee. Later this month.
Secretary Solis. So we will work with you to give you that
information, and then if there is any input that you want to--
--
Ms. Lee. Okay. Yes, because that is very important. I mean,
we have it already and all, it is my understanding, we need is
to hear from your office in terms of how to get that out, in
terms of the competitive grants. Okay.
Secretary Solis. Thank you.
Ms. Lee. Thank you very much.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Alexander.

RATIO OF JOB SEEKERS TO JOBS

Mr. Alexander. Thank you, Mr. Chairman.
Madam Secretary, in your opening statement you said
something about six applicants per job opening. How can we
determine that?
Secretary Solis. Congressman, that is the information that
economists have reported, the ratio of job seekers to jobs is
about six to one. I just saw a report earlier this morning on
the news that said it actually went down a bit, to 5.5 to one.
I cannot break that down for you, I am not an economist, but I
can tell you that people out there are very much looking for
jobs.
And as I go across the Country visiting some of our
programs and hear about the kinds of efforts that are being
made for people to try to get into training programs that can
upgrade skills so that they can be ready when the full-blown
economy is back to speed, that is the urgency that I hear, and
from employers. Employers want to know that that gap, the
education gap for training, is slowly closing, because they
cannot find, enough trained personnel ready for some of these
jobs that they would like to hire out for.

NUMBER OF FEDERAL EMPLOYEES

Mr. Alexander. Can you tell us how many new Federal
employees have been hired in the last year?
Secretary Solis. I cannot tell you how many Federal
employees, but I can tell you that through the Recovery Act
monies, through the CBO, we know that there were anywhere from
1.5 to over 2 million jobs that were created; and not all of
them were Federal Government, a lot of them were also in the
State with respect to teachers, police officers, and also other
various industries. And we are trying to do a better job in
terms of the Recovery Act money and how to actually account for
those jobs that are created.

FOREIGN GOVERNMENT SUBSIDIZED EMPLOYMENT

Mr. Alexander. When you were responding to Mrs. Lowey's
question a while ago, you said something about the fact that
you had been to some other nations and in some countries they
actually subsidize employees, unlike we do here. Can you tell
us what that means?
Secretary Solis. Well, just as an example, in Germany I am
aware that they provide substantial subsidies for workers that
are in areas or industries that are going through economic
crisis, the automobile industry as an example.
And what they do is they make a concerted effort then to
allow for that salary to be paid for by the Government. A
portion of that is paid for, maybe two days as opposed to three
days, so they do not lose that talented, skilled, crafted
person. Those are ideas. And it is not just in Germany; there
are other parts in Europe where that model has been used.
Mr. Alexander. Thank you.
Mr. Obey. Mr. Jackson.

DOL BUDGET REQUEST

Mr. Jackson. Thank you, Mr. Chairman. Thank you for the
time.
I want to thank my former Rayburn neighbor, Secretary
Solis, and welcome her back to our Committee, and thank her for
her testimony.
Madam Secretary, during this tough economic period, and
with unemployment hovering just around and under 10 percent,
you have one of the toughest jobs in the Administration:
putting people back to work. I read with great interest your
testimony and I understand that we are under budget constraints
as we write these appropriations bills. However, I find it
incomprehensible that we are quibbling over about
$14,000,000,000 in your discretionary budget. We spend close to
$1,000,000,000,000 bailing out banks that do not lend to us and
got us into our current financial crisis.
My problem with your discretionary budget, at least from my
perspective, is that it is not bold enough. I read the part of
your testimony that provides and seeks to put significant
resources back into employment and training to prepare workers
for the 21st century. However, last week the House voted on a
``jobs bill'' which would provide tax incentives to businesses
to hire more workers. I voted against that bill because I do
not believe that tax incentives are the best way to create
jobs.

ADDRESSING CHRONICALLY UNEMPLOYED

In my district--and I have been here for 15 years--I am
deeply concerned about the chronically unemployed. In my
district, there are three people for every one job, while in
the northwest suburbs, around O'Hare Airport, there are three
jobs for every one person. Just under $1,000,000,000,000 to
bail out the banks, but for a fraction of that number, let us
say $300,000,000,000, my math says that $300,000,000,000 could
employ 7.5 million Americans at about $40,000 a year. 7.5
million Americans put to work at $40,000 a year is about
$300,000,000,000, a fraction of the $1,000,000,000,000 that we
spent to bail out the banks.
Are not sometimes the simplest ideas the best ideas? What
does your budget do to address the chronically unemployed? And
my colleague who asked the question about how many Federal
employees have been hired over the last year, if I had my say,
it would be 7.5 million more Federal employees, doing
everything from painting bridges to cleaning up highways, to
cleaning up vacant lots across this Country. And I
fundamentally believe that the Federal Government has a
responsibility during these tough economic times to shore up
unemployment and put the American people back to work.
Madam Secretary, your budget, what does it do to address
the chronically unemployed?
Secretary Solis. One of the things I would like to respond
to, Congressman Jackson, is that through the Recovery Act
money, we were able to help, set a good foundation to begin
this holistic approach to really trying to assist people that
were out of the workforce, the dislocated workers, the folks
who lost their jobs recently in the automobile industry, the
financial institutions, people who were also highly qualified.
We are talking about people that had different skills sets.
Through our Workforce Investment Act monies, we made grants
available just through the green job approach, the partnerships
that we established, about $500,000,000 went there. And we are
asking for a bump-up there because we think it works and we
know that there is a big interest.
We know that there are people out there that may have lost
their job because the assembly plant or manufacturer is no
longer here, and we are trying to get people identified to get
the appropriate type of counseling and assessment that they
need. We plan to make sure that our one-stops are more
accessible and that these grants that we provide through the
Workforce Investment Act--and that is something that I believe
you will want to be involved in by helping us with the
reauthorization--to really reach down and touch those
neighborhoods and communities like yours that may not have
benefitted in the past from these types of efforts and targeted
funding.
We also make a special attempt through our Pathways Out of
Poverty program to identify high unemployment areas; of 15
percent and higher, that require people to come together,
partners, business, community colleges, apprenticeship
programs, CBOs, and stakeholders that have a better sense of
where these individuals are that could obtain this job skill.
Keep in mind our effort is to make sure that we connect the
business with the job training. I do not actually create the
job. What I do is bring partners together that then say, at the
end of the program, we expect to hire so many people. We fund
those slots. That is really what the Workforce Investment funds
and the partnerships that we have been able to put together are
focused on.
But we try to make the best assessment to make sure that we
are getting the people in, and it is taking a long time because
we have had to change guidelines, we have had to change the way
that we even bring people on to read proposals. Much of that
had not changed in the past 10 years. And I do not have to tell
you communities like yours and others have been left out, quite
frankly, from many of these job training programs.
So our attempt is to, look at green jobs, health care jobs,
as well as careers where we think there will be continual
growth. We have actually seen that is the one spot where we see
that there will be job growth, where we can integrate our local
communities to get into those entry level health careers.
Mr. Obey. The gentleman's time has expired.
Mr. Cole.

JOB SECTORS FACING CONTRACTION

Mr. Cole. Thank you very much.
Madam Secretary, great to see you again. You and your folks
in your Department probably see more data on what is happening
in the labor force than anybody else in the Government. I am
very curious. We know we have lost about 8 million jobs over
the course of the recession, and there are a lot of articles
now beginning to appear to suggest a lot of these jobs ``are
not coming back.'' What are the areas that you think, frankly,
we will not be able to recover in, the particular sectors or
kinds of work that, looking forward, you suspect there will be
considerably less of in the future than we had in the past?
Secretary Solis. Well, thank you, Congressman Cole. That is
a good question. One figure that I continue to see that is not
recovering as quickly is obviously in construction, and a lot
of it has to do with the housing industry and the fact that we
are just not building more houses. We have inventory, in fact,
an overwhelming number of houses that now are in foreclosure.
So that is creating a strain in terms of that workforce.

REBOUNDING JOB SECTORS

I would say also that in manufacturing overall we are just
finally seeing an up-tick. The most recent report, issued in
February, saw about 1,000 jobs added in manufacturing.
What I do see happening, the positive sign, is that
businesses are bringing on temporary workers. But, when you
talk about temporary workers, it is not the clerk; these are
engineers, architects, very highly skilled individuals that are
helping that business come back and hopefully, with the
Recovery Act and all the funds that you all have made
available, and with the credit and capital market changing its
direction, that businesses will feel more confident in bringing
people on.
The health care industry, as I said earlier, helped to
create about, I would say, close to 500,000 or 600,000 jobs
this last cycle. I also see growth in IT technology energy
efficiency, and the renewable energies. That is why I think
other countries are taking full advantage of that and we should
also be heading in that direction.
And I know that there has been a tremendous amount of
investments made by different Cabinet secretaries, Department
of Energy, in our railway system, as well, high speed rail. If
we can get those projects on the ground ready to go--and much
of that money has already now been given to different States--
that is going to create jobs not just for the two-year period
of the Recovery Act, it will go on for ten years because of all
the other jobs that will be created around that rail system.

JOB SECTOR CONTRACTIONS

Mr. Cole. If you could just have somebody from your
Department give me a list of where you really expect the
contractions. We clearly are going to have a lot of very
skilled people that do not have a future that you are going to
want to redirect.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T8233A.018

[GRAPHIC] [TIFF OMITTED] T8233A.019

SHORTAGES IN TRADITIONAL ENERGY INDUSTRY

Let me ask you. You mentioned energy and I had a particular
question about that. I am not one who is critical of the money
going to training on green jobs; I see a lot of wind power
sprouting up in my State. I think there is no question there is
going to be a market there.
But there are also pretty critical shortages now in what I
call the traditional energy industry as well. We are now doing
a lot more natural gas in a lot more places; it is a much
cleaner fossil fuel. I can tell you it is hard to find people
that know how to drill in Western Pennsylvania or New York now,
or that have a lot of knowledge of that particular business.
Plus, we have some shortages in our own industry.
So while you are incentivizing the movement--and I think
appropriately--of people into the so-called green sector, what
are we doing to help the industries that have critical
shortages that produce traditional forms of domestic energy?
Secretary Solis. Congressman Cole, that is an excellent
question. I have actually seen many of our programs training up
again in the area of hard manufacturing, and I am talking about
jobs that you just mentioned, welding as an example.
I have been to some of our programs that we have funded and
find very regularly that the business components out there in
the industry are saying I cannot find a qualified welder. And
the salary levels that they offer are anywhere from $60,000 to
$100,000. If the public were made more fully aware of what the
potential is, I am sure people would not mind relocating to
where those jobs are, because they do pay very good salaries.
And because we are going into, say, renewable energies, I
think there are going to be more opportunities. I know that the
folks that we have been working with in partnership in public
and private entities know that this is where we need to move
our training programs, and I am acutely aware of that and know
that that is an important factor in our recovery.
We have to bring back, also, some steady skill sets, but
also that manufacturing base, and we have to have that
workforce staying here because there are a lot of people that
are retiring from those industries. Same thing in the coal mine
industry; you see a lot of retirees. We are still going to need
people to be trained to go into those mines.
Mr. Cole. I know my time has expired. I would just urge you
to look at these traditional areas too. Green energy is the new
buzz word, but there are going to be a lot of jobs in natural
gas going forward and it is going to be national in scope; we
are going to be way outside of traditional areas where people
will have some new opportunities that have not had them in the
past.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Honda.
Mr. Honda. Thank you, Mr. Chairman.

CONTINUING EDUCATION

Again, welcome, Madam Secretary. It is good to see you. A
couple of things just real quick off the top of my head. I
really appreciated the allocation of $5,000,000 to San Jose
State University, where we will be able to look at health care
and biotechnology training programs, and the vision I think
that you are providing the Department is we are doing a lot of
innovation and a lot of emphasis on green employment and green
careers, but in order to have the workforce there that support
that also, we need to have higher education. Some of these
other institutions are prepared to do that.
One of the things that we did in Santa Clara County was
have an AA program, a pilot program to have folks who were in
the labor industry, laborers, who want to pursue a AA degree in
contract managing. Where, before, those folks were always the
ones who were managed, now they have that background experience
and can take a traditional job that Congressman Cole had talked
about and upgrade them and convert them into other jobs that
are going to be in high demand, especially when we have more
activities in the green industries.
So looking at the AA, hopefully somebody in your Department
might work with the education department to look at how we can
link the AA to a BA into the four-year college, where they can
continue their education and their life skills into something
more productive.

GREEN JOBS

In terms of the green jobs issues, I think that if people
visited Santa Clara County and Silicon Valley, that although we
have companies like Applied Materials that make machines that
allow us to have photovoltaic gadgets or panels or flat
screens, the instruments that are being sold and made by this
company have a ripple need that goes upwards towards folks who
do work like design and do work like creating the machine
parts. There are skilled laborers and skilled artisans out
there that are necessary. So those are traditional jobs that
still exist that need to be continued and supported. So a green
job could support more than five other jobs that are necessary
for them to do that.
I just wanted to have some of our colleagues understand
that there are supportive groups that are out there. Even
Caterpillar. When you have heavy machinery, you just do not
have one kind of worker. So I think that in the green area we
are expanding our vision and making this a better place.
And the term greener and green, I think that that is
probably a good term to use because we have to have every
individual in this Country, and globally, understand that we
all have individual impacts on our carbon footprint, and
collectively we need to be constantly aware of it. So in your
Department I really do appreciate that constant attention to
that, because otherwise, as a Nation, we are not going to be
able to effect any changes in our attitudes.
I have no questions, Madam Secretary, but I just wanted to
feed back some of the things and observations I have had over
the past few months.
Mr. Chairman, closing comments. Folks asked me in my
internet town hall meeting I had last night one of the
interesting questions was that if these things are happening
and we are creating more jobs, why is unemployment looking like
it is getting more.
And I think that those who understand the statistics is
that people who are not in the job market are not coming back
in the job market, so that is going to create a blip in that
unemployment, and then it goes down as they secure jobs. So
folks who would be negative, we need to just respond in kind to
let people know the information, what it really means in real
life and people's jobs and the situation in this Country.
Thank you very much for your work, Madam Secretary.
Mr. Obey. Mr. Moran.

EMPLOYEE READINESS TO ENTER JOB MARKET

Mr. Moran. Thank you very, Mr. Chairman.
Let me just say ditto for all the nice comments that have
been addressed to you, Madam Secretary. We are delighted you
are in this position and we appreciate all your diligent
efforts.
I represent an area that has a preponderance of technology
firms, a lot of jobs. We are in pretty decent shape relative to
the rest of the Country. But we are trying to make the most of
the employment training opportunities that are available for
those who are underemployed or unemployed because we have a lot
of jobs. So we want to bring them in to this knowledge-based
economy.
But the employers tell me that there is a very serious
deficiency in terms of employment training programs that the
Federal and State government operates; that, in fact, they
cannot use the skills that are taught through these training
programs. At best, if they find that somebody shows up every
day, is reliable, that is one of the best indicators that they
can hire them, but they have to hire them at pretty low entry
level skill levels and, thus, compensation levels.
And they tell me the problem in an area like computer
skills, where the jobs are available, is that the trainers are
really not up to speed on the computer skills that are needed;
that in many cases the trainer is teaching what they knew when
they last left the private sector and came in to be a trainer.
And because the computer skills advance at such a rapid pace,
what they know is kind of outdated, and they either do not have
the inclination or do not have the time, really, to bring
themselves up to speed on the latest technology.
Can you address this? Do you think this is an unfair
criticism or is it something that you have observed and are
addressing?
Secretary Solis. Thank you, Congressman Moran. You hit the
nail on the head. In my travels across the Country visiting
different workforces and workplaces, I often hear from the
employer that it is very tough to find someone who is really
prepared that they can hire right way with the set of skills
that they need.
Therefore, the need to have reform with respect to some of
the programs that we operate in the Department of Labor and, we
are proposing in our budget to provide some new and better
methods of trying to make our systemic approach more targeted
so that we really do get at what the business owner needs, and
make sure that those skill sets are really going to lead to a
good job, and are marketable and timely.
So it is going to require, I think, a lot of support on the
part of the Congress, as well, as we look at revamping the
Workforce Investment Act, because we do have some traditional
partners who have been used to doing things for the last decade
a certain way, and many times those folks are not going out as
they were intended to to really talk to the business community,
the entrepreneurs, the new inventors of this new technology
that is coming out not just in the green industry, but just IT
overall.
I think that one of the incentives that we want to use is
reward those programs that can demonstrate that there are some
good methods being used. We want to be able to replicate them
and we want to support innovation. So I am very much interested
in your ideas and would like to learn more about how we can
work together to help craft these kinds of activities so we
make this a more effective program.

EXTENSION OF RETIREMENT AGE

Mr. Moran. Thank you, Madam Secretary. I was not supposed
to ask questions that elicited long answers, but that was a
superb response. I have one other question.
The President is putting together a group of people to
address structural deficit problems and, invariably, they will
look at entitlement programs, Social Security especially, and I
am sure one of the recommendations is going to be that they
extend the retirement age.
Now, in my district, a significant portion of the workforce
is not going to be bothered by that. In fact, I think they
would welcome it, to be able to keep working until 70. The
problem is that we have a cookie-cutter approach in entitlement
programs, and people who work with their back and their legs
and their arms all their life, they cannot keep working until
70. So what are you going to do for those 15 years or so when
the body wears out?
I mean, I really am serious about this. It is not fair to
manual workers to extend that retirement age. But if we could
come up with a more sophisticated retirement system that was
more correlated to the physical, as well as the mental demands
of various workforce classifications, then it would be fairer
to extend the retirement age; people would be more comfortable.
We would have a more productive economy and probably save
substantial sums in our entitlement programs for retirees.
Is there any research, any thought that is being given to
that within the Department of Labor, Madam Secretary, that
might help us in this difficult decision-making arena?
Mr. Obey. The gentleman's time has expired.
Secretary Solis. I would like to get back to you in more
detail about what we are looking at in terms of approaches now
in EBSA and also the PBGC, because we are really talking about
retirement security too, so people do not have to stay longer
in the workforce for those folks that work in very hard
assembly line and very labor-intensive jobs. We are looking at
some creative mechanisms there and I would love to work with
you on that.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T8233A.020

Mr. Moran. Thank you, Madam Secretary.
And thank you for your indulgence, Mr. Chairman.
Mr. Obey. Ms. Roybal-Allard.

PROTECTING MIGRANT FARM WORKER CHILDREN

Ms. Roybal-Allard. As always, welcome, Madam Secretary. Let
me begin by thanking you for hosting a briefing last September
at the Department of Labor on the serious issues confronting
migrant farm worker children.
Last year, as you know, I introduced the CARE Act to give
the estimated 400,000 youth working in agriculture the same
child labor workplace protections that safeguard children in
all other industries; and I know that you have been a champion
for a very long time of child labor rights, and I look forward
to continuing to work with you and your staff on this
legislation as it moves forward.
But in the meantime, children in agriculture are not
equally protected by our child labor laws. They work in the
fields at younger ages for longer hours and under very
dangerous conditions that would not be permitted in any other
industry. For example, a Human Rights Watch study found that
while there are only 8 percent of children in agriculture,
approximately 40 percent of all workplace deaths and nearly
half of all workplace injuries suffered by children occur in
agriculture.
Until the CARE Act is passed into law, these findings
highlight the critical need for oversight and enforcement of
our current laws, which at least provide some protections to
our children. Yet, in 2005, the average civil penalty assessed
by the Department of Labor was only $1,011, or just 9 percent
of the maximum penalty for child labor infractions; and in
2006, of the 1,344 child labor investigations by the
Department, only 28 were in agriculture. This lack of
enforcement obviously gives employers little incentive to
follow the laws that do exist to protect these children.
Now that the Wage and Hour Division staffing has been
restored to the 2001 levels, can we look forward to increased
investigations and meaningful penalties for child labor
violations in agriculture?
Secretary Solis. Thank you, Congresswoman Roybal-Allard,
and I also want to commend you for introducing your
legislation, the CARE Act, and I want to applaud your work and
the work of those that helped to work behind the scenes to
bring this issue before the Congress. It is something that all
of us deeply care about, and I certainly am putting forth as
much effort as possible to see that our Wage and Hour Division,
working in conjunction with the Migrant Seasonal Agricultural
Worker Protection Act, or Field Sanitary Standards in OSHA, are
all working together in a strong effort to focus in on
combating child labor.
The Wage and Hour Division is conducting training right now
with our investigators; they are out in the fields so that we
can detect and get those parties involved in this egregious
behavior to understand that this is not the direction that we
need to be going in.
It is also working with stakeholders, with parents, and
also with the community, and even religious groups and
organizations that can help to provide more information. We are
rolling out a campaign to provide assistance to those most
vulnerable populations, which will include, by and large some
of the farm worker and farm worker children.
It is egregious that this goes on. I was very upset when I
heard about the violations that were occurring in the blueberry
fields up in the northeastern part of our Country, where young
children of ages 5 to 8 were out picking blueberries, and
parents were allowing their children not to attend school
because they needed the money; and they were out there through
contractors who would bring these folks in and kind of move
them around different farms.
Well, when I heard that news, I ask that there would be
immediate action taken by our staff, and I am happy to say that
we have been able to now begin a more robust process, because
we have more field investigators and the staff, and even people
who speak their languages, so we can ascertain actually what is
going on on the ground without intimidating people and them not
being fearful of sharing information, because you know that is
a big barrier that we face also with this population.
But I would tell you that civil penalties, I have a list
and I can give you the details of where we have gone after some
of these egregious cases just in this past year that I think
would be noteworthy for you. And we know we want to work with
you to continue this effort.

EXPOSURE OF CHILDREN TO HAZARDOUS MATERIALS

Ms. Roybal-Allard. Thank you. In May of 2002, the National
Institute for Occupational Safety and Health issued a report
recommending that more than half of the existing regulations
pertaining to children working in hazardous jobs, such as those
exposing them to pesticides and lead, be revised and 17 new
regulations be added; and although the Department of Labor has
taken some steps to amend non-agricultural hazardous odors,
those pertaining to agriculture have yet to be put on the
Department's regulatory agenda for updating.
Given the dangerous conditions, again, that these children
face working in agriculture, what is the Department of Labor's
time line for reviewing and acting on the recommendations for
this specific industry?
Mr. Obey. Very short answer, please.
Secretary Solis. I would love to get back to you on what
our activity and our plan is, because it is something you know
I care very deeply about with respect to pesticide use and
hazards that find their way to our children who are forced to
work in the fields.
Ms. Roybal-Allard. Thank you.
Mr. Obey. Mr. Ryan.
Mr. Ryan. Thank you, Mr. Chairman.
Thank you, Madam Secretary. Let me first thank you and your
staff. We had a visit recently from Assistant Secretary Oates
and just had a tremendous visit. We had some steelworkers who
were having issues with unemployment and she was just terrific,
and it looks like we have fixed some of the issues; and you and
your staff were ahead of the curve, as always. So thank you for
being so great.
I wanted to just mention, one, what Mr. Cole talked about,
natural gas. We sit in Ohio under the Marcellus Shale, which is
a huge natural gas opportunity for all of us, so talking about
the Pickens plan, as far as retrofitting diesel engines and
buses and trucks, I think it is an opportunity for all of us to
say this is a clean fuel, and areas like Northeast Ohio and
Western Pennsylvania have an opportunity to really, I think,
resuscitate some long-term chronic problems that we have had.

LEVERAGING STIMULUS FUNDING

I want to make a comment about the stimulus package, too,
because there has just been so much said about it. You are
someone, and this Administration, I think, believes that we
need to make investments into our communities, and we were able
to take some stimulus money, not just stabilizing police and
fire and a lot of school teachers did not get laid off in my
district because of money that came, but we were able to take
$20,000,000 from the State to do some site prep work, move a
rail line, and it leveraged a $650,000,000 investment from a
French tubing company that does a lot of natural gas tubing.
And I bring this up because I want you to bring back to the
Administration and to your colleagues that you work with in the
Cabinet that there are communities in our Country, as you know,
that just do not have money to make deals go down. So whether
it is training money or community development block grant
money, we need more opportunities to make things happen when
you do not have that local tax base to make deals work for
businesses.
So I just wanted to put a bug in your ear to bring that
back. I know you believe in it, and we need to continue to
recognize that community development block grants and those
kinds of things are very, very important.
I want to thank you for all that you have done for Ohio
with green collar jobs and the training money that you have
sent. We also are benefitting from some high speed rail lines
that are going from Cleveland to Columbus to Cincinnati, and
your money will come in handy to make sure that we have the
workforce available to do that. So the stimulus package has
been good to us. We need more, there is no question, but it has
been good to us.

REEMPLOYMENT OF HIGHLY-SKILLED WORKFORCE

I have one question that hopefully you can touch upon. We
have in our area a distressed auto community. We have lost a
lot of very high-skilled work. A lot of high-skilled workers
are unemployed now. What are we doing within the Department of
Labor or in conjunction with the Department of Labor-Department
of Commerce to take these very high-skilled people, engineers,
people who have made companies like Delphi and General Motors a
lot of money over the years? How do we take these people and
help them start their own business?
And I know that may not be directly related to the
Department of Labor, but they are unemployed workers. I think
there is an enormous amount of opportunity for them to get
creative, especially with the green economy. They have a
history in manufacturing and, as we heard today, five spinoffs
for every one manufacturing job. We have to get back to making
things in this Country. So how do we take these brilliant
engineers from General Motors or Delphi and corporations like
that and help them with business plans and opportunities to
create their own businesses?
Secretary Solis. Well, thank you, Congressman Ryan. It was
very kind of you to mention some of the things that we have
done out in Ohio. I have to give you credit also for having a
great leadership delegation there; everyone working together,
and also your governor. I was down there when we actually
issued the $400,000,000 for that high speed rail, and I can
tell you there were a lot of delighted people there in the room
to see that there is going to be an investment made on the part
of the Federal Government to jump-start a project that will
last into the next decade. Job creation is what we definitely
want to see.
But to your point about how we can try to deal with the
highly qualified workforce that is out there looking for jobs,
you now have the privilege of also working with Dr. Ed
Montgomery on our Department of Labor staff, who is addressing
the whole automobile industry displacement, and what he has
done is brought together the different Cabinet offices--
Department of Energy, Commerce, EPA--to try to put together
plans regionally so that we can start structurally looking at
how we get these dollars out to those most distressed areas;
and yours is one that is on target for us to bring those
resources.
We know that capital still remains a big obstacle, making
sure that there is more credit available. I think the President
is moving in that direction to see that we can provide
incentives for businesses, tax cuts, research and development,
more assistance targeted in a fashion that will help to spur
that innovation so that businesses will not think that they can
just have maybe support for two years, but be able to make a
plan for 15 years.
So I understand clearly where your thought process is and
would want to work with you more to see how we can maybe learn
from some of the things that are happening in your State and
share with other industries. We also have some issues in
California with some of our auto plants that are closing there.
If we can use those best known practices and share them, I
think we can all win in the long run. We have other industries,
for instance aerospace is affected and we would be at a
disadvantage if we do not also do something for these highly
skilled individuals.
Mr. Ryan. Thank you.

TRAINING FOR HIGH-GROWTH INDUSTRIES

Mr. Obey. The gentleman's time has expired.
Let me just ask two questions before we end the hearing.
First of all, as you know, in the Jobs for Main Street Act,
which we passed in the House in October, we provided
$500,000,000 for Workforce Investment Act Youth Activities; we
provided $750,000,000 for job training grants; and I am happy
to see that the Administration has picked up both of those
items in your statement that you made today.
I do have one question about your choice of priorities,
however. Can you explain the Administration's request to fund
additional green jobs or green jobs training grants, when there
is a more immediate need for additional health care
professionals?
And in that context, in the Recovery Act, Congress provided
$250,000,000 for training in high-growth industries with an
emphasis on the health care sector; and my understanding is
that DOL received an overwhelming number of applications for
those grants. Can you tell the Subcommittee what percentage of
the grant proposals you were able to fund for those items and
whether there are additional high-quality applications that
were denied due to a shortage of funding?
Secretary Solis. First of all, Chairman Obey, I do want to
give you credit for your outstanding work in helping us look to
where the high need areas are, and you did that for us last
year in our budget. With respect to the over-subscription of
grants that we received in health care, we received 800
applications, and I would say that a good portion of them, a
large portion, were eligible for funding.
But we did not receive the amount of funding to be able to
go beyond 8 percent of that fully-eligible population of
applicants that came in. We were only able to fund 55 awards.
And I know that this is a very sensitive issue for you, as it
is one for me. I recently visited one of our nursing programs
that we provide assistance to in Sacramento, a community
college program, and to hear the testimony that I heard from
some of the students there that had to wait years just to get
into an entry level position was mind-boggling.
But these were the students that persisted and some, by
accident, were actually able to get enrolled into the program.
Many were already well above 21 years of age; one was even 50
years of age, but felt so compelled because of the need to get
into these careers that pay well that we know we have a
shortage of.
I know that the Department of Health and Human Services has
a more robust budget than I do in nursing, and we want to
collaborate with them to see how we can work on improving and
expanding this effort, because there is a shortage and I think
this is something you and I can talk about and figure out a way
to work together.
Mr. Obey. We are really missing an opportunity if we do not
recognize that possibility.

IMPROVING JOB LOSS PICTURE

Just one other point. With respect to the stimulus package,
I frankly find it quite tiresome to be in an argument about
whether or not the stimulus package ``worked or not.'' This is
a pretty badly hand-drawn chart, but what it shows is that,
beginning in March of 2008, this downward line represents the
average monthly job loss that we were experiencing in the
economy. This line represents zero job loss and, as you can
see, by December of 2008 we were losing 750,000 jobs per month
the last three months of that decline.
Since then, we have had a steadily improving picture in
terms of job loss, so that today, over the last three months,
we have averaged 35,000 job losses each month. That is a 95
percent improvement.
Now, it certainly is not good enough because we still have
not reached positive growth in the economy, but before a ball
can bounce, it has to stop falling, and that is pretty much
what I think we were able to do with the Recovery Act. The bill
was never large enough to plug the entire $3,000,000,000,000
hole in the economy that we were facing, but what it did do is
soften the blow, lessen the pain, reduce the number of people
who were losing jobs. And let us hope that we have enough
imagination, enough luck, and enough help and cooperation
between the public and private sectors to actually turn that
into a positive job growth area in the months ahead.

Conclusion

But I thank you for your testimony here today. Sorry we had
to delay you by an hour, but it is good to see you.
Secretary Solis. It is good to see you. Thank you very
much, Mr. Chairman and members of the Committee.
Mr. Obey. You bet.

[GRAPHIC] [TIFF OMITTED] T8233A.021

[GRAPHIC] [TIFF OMITTED] T8233A.022

[GRAPHIC] [TIFF OMITTED] T8233A.023

[GRAPHIC] [TIFF OMITTED] T8233A.024

[GRAPHIC] [TIFF OMITTED] T8233A.025

[GRAPHIC] [TIFF OMITTED] T8233A.026

[GRAPHIC] [TIFF OMITTED] T8233A.027

[GRAPHIC] [TIFF OMITTED] T8233A.028

[GRAPHIC] [TIFF OMITTED] T8233A.029

[GRAPHIC] [TIFF OMITTED] T8233A.030

[GRAPHIC] [TIFF OMITTED] T8233A.031

Thursday, March 18, 2010.

FY2011 BUDGET OVERVIEW: DEPARTMENT OF EDUCATION

WITNESS

HON. ARNE DUNCAN, SECRETARY OF EDUCATION

Chairman's Opening Remarks

Mr. Obey. Good morning, everybody.
Today we are pleased to have the Secretary of Education,
Arne Duncan, to testify.
Mr. Secretary, don't interpret the lack of Democratic
members here as a lack of interest. We are having a Democratic
Caucus on a new-fangled idea that we have been rushing at
breakneck speed through Congress over the past year, so people
are still having some last-minute thoughts on that, and that is
where they are this morning. I assume they will be by shortly.
But we are here today, of course, to discuss the fiscal
2011 budget. Let me say, Mr. Secretary, that I know you and I
share the same goal of seeing every kid in this country having
access to a school that can provide them with a top-notch
education and produce a good strong skill set. In addition, I
know that we both agree that the funds we provided for
education last year in the Recovery Act were absolutely
imperative and have been essential in keeping our schools from
drowning.
I am not so sure we are on the same page when it comes to
immediate needs and priorities about how to proceed from here.
The work of the Education Department is more critical than
ever. Today we face record high unemployment nationwide, while
State school districts and colleges are in economic crisis.
Educational opportunity, at all levels, is our most powerful
tool in helping the poor and the middle-class climb up the
economic ladder.

AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

The underutilization of our human potential in the United
States imposes heavy consequences on our society: lower
productivity, lower earnings, poorer health, higher rates of
incarceration and less civic involvement. That is why I was
pleased to participate in the efforts to provide an
unprecedented $98 billion investment in education in the
Recovery Act which, among other things, was responsible for
creating more than 300,000 education jobs. But we need to do
more, in my judgment.
According to the Center on Budget and Policy Priorities,
State budget gaps will total $180 billion in fiscal 2011 and
$120 billion in 2012. The consequences of that for our
education system are staggering, and the numbers are daunting.
Twenty-nine States and the District of Columbia have cut K-12
services, even with the Recovery Act funds. In California,
though I am always reluctant to cite that State because of
their wacky budget process, aid to local school districts has
been reduced by billions of dollars. Cuts to early childhood
funding in Illinois will leave 10,000 children ineligible for
services. Mississippi cut its fiscal 2010 K-12 funding by
nearly 5 percent. In New Jersey, more than 11,000 students will
likely lose access to after-school programs. And the list can
go on and on.
In light of all of this, in my judgment, we need to do more
to help States and school districts weather this financial
crisis, and I hope that the Administration will put the full
weight of its efforts behind efforts to do so. We also should
make sure that any emergency financial assistance is broadly
distributed and available for purposes like avoiding teacher
layoffs and keeping the lights on.

SCHOOL REFORM

I know you and the President are very focused on using
Federal aid to promote certain types of school reform. I am
certainly in favor of improving our schools. I voted for No
Child Left Behind, though I had huge misgivings about the
details, because I felt, as I said yesterday, that it was the
President's first initiative out of the box and he deserved the
benefit of the doubt and because I wanted to see reform. I get
just as tired as anybody else of seeing non-performing schools
and dull teachers.
But, nonetheless, we can be for improving schools, but it
seems to me that right now our most immediate problem is that
school districts are drowning in red ink. As I said yesterday,
I like to sail, but when the sailboat is sinking, my top
priority would not be to put a new coat of varnish on the deck.
I would want to protect the hull first.

FY 2011 BUDGET REQUEST FOR EDUCATION

Secondly, in the interest of brevity, let me skip that and
simply say, on your 2011 Budget, that request includes over
$3.5 billion for new and untested initiatives, for which you
will control how the funding is allocated to State school
districts and other providers. In times like this, we need to
worry about our core foundational programs, which go out by
formula and are widely shared across the Nation. A school
district's ability to attract funds should not depend upon its
capacity to write a grant application.

ELEMENTARY AND SECONDARY BUDGET REQUEST

I want to support this Administration in your education
priorities, but not at the expense of reliable and predictable
Federal support that thousands of districts across the country
rely upon.
Perhaps most troubling is the lack of any increase at all
in Title I funds, which are broadly distributed by formula to
all school districts in need. At the same time, the budget
includes an extra $500 million to expand the Innovation Fund,
which makes grants through competitions run by your Department.
Similarly, it seeks to more than double the appropriation for
Teacher Incentive Funds, even though your Department has yet to
complete any rigorous evaluation of this 5-year-old program.
Overall, in the Administration's budget, funding for ESEA,
funding for formula grants go down by almost $700 million,
while narrowly targeted competitive grant programs increase by
$3 billion. It seems to me that is not the correct balance,
particularly during these hard economic times when most school
districts need immediate help.

HIGHER EDUCATION BUDGET

I also want to express reservations about your higher
education budget. I believe that a more educated citizenry is
vitally important to our economy, especially in our changing
economy. But we need to make sure that a student's brain, not
their bank account, is the only determinant on whether they can
get a college degree.
Would you put that chart up, please?
We put this chart up earlier this week, and I want to
emphasize it again. What the chart demonstrates is that a
student who in the 8th grade was in the top 20 percent of
performers in mathematics had a 29 percent chance of graduating
from college if they come from a poor family and a 75 percent
chance of graduating from college if they come from a rich one.
That, in my view, is an indictment of our indifference to the
needs of children who are stuck in low-income families and
stuck in poverty-related schools. And it seems to me our number
one priority needs to be to redress that imbalance.

PELL GRANTS

I would also say that a key tool to increasing access to
higher education for students of modest means is the Pell
Grant. These grants currently help over 8 million students get
the college or technical education they need to qualify for a
decent job. Over the past 5 years, this Congress has worked to
increase the maximum Pell Grant award by $1,500. We are facing
a real challenge in continuing that policy.
The cost of maintaining Pell Grants at that level is
rising. You have large numbers of students going back to school
because they recognize the tightness of the job market, and
they are trying to upgrade their skills. Unfortunately, as we
look for a solution to Pell funding, the administration's
budget leaves me somewhat confused. It proposes to somehow move
Pell Grants over to the entitlement side of the budget. I have
no idea how well that is going to be received by the Congress.
But we understand that if enacted, the Higher Education
Reconciliation Act would provide a portion of the shortfall
that we are facing today.
But even counting that funding, it still leaves a
substantial shortfall, and we need the Administration's help in
finding a solution. It is not just good enough to ask us for
the money, without suggesting how it is going to be paid for.
So, I hope you can explore those issues over the next couple of
hours, Mr. Secretary.

Ranking Members Opening Remarks

Mr. Tiahrt, I would invite you to make whatever comments
you think are appropriate.
Mr. Tiahrt. Thank you, Mr. Chairman.
I want to begin by thanking Secretary Duncan and Mr. Skelly
for showing up today before the committee.
Welcome to the committee.

EDUCATION SPENDING AND BUDGET DEFICIT

We all know that education is critical, and I think we can
all agree it is very important that we give the tools to every
child to achieve their view of the American dream as well as
equipping our economy for the skilled workforce needed to keep
us competitive in a global economy.
To do this, we need a world-class education system that
puts the needs of students, parents and teachers first, while
partnering with our local schools. I know there are differences
on how we intend to accomplish this, particularly when the
Federal Government would continue hemorrhaging red ink under
the President's budget as far as the eye can see.
The deficit this year under the President's budget will
reach $1.5 trillion and never dips below $700 billion over the
next decade, while our national debt would nearly double,
despite an economy that is projected to have recovered and the
war in Iraq ended. Beyond the next 10 years, the current path
is unsustainable, as spending on the big three entitlement
programs will continue to consume all of the available
resources under current law.
So as we look at the Department's budget request, tough
choices will have to be made. We are putting the burden of
today's spending on the kids who will be working tomorrow. So
we have a trade-off: a good education system with frills that
the students have to pay off in the future, or a system that
meets the needs to give them the tools so they can achieve
their dreams without the frills.
While I have questions and concerns about many of the
specifics in the Department's budget proposal, I look forward
to the opportunity to continue discussing with the Secretary
and the members of this subcommittee how we can responsibly
invest in educational excellence, both today and going forward.
Thank you, Mr. Chairman.
Mr. Obey. Thank you.
Mr. Secretary, please proceed. Why don't you take 5 or 10
minutes to summarize your statement. And we will put the full
statement in the record.

Secretary Arne Duncan's Opening Statement

Secretary Duncan. I will be brief. Thank you so much,
Chairman Obey and Ranking Member Tiahrt, for the opportunity to
appear before the entire committee today.
I want to begin by thanking you for what you have done to
keep America's teachers in the classroom and to keep America's
children learning. The Recovery Act saved nearly 325,000
education-related jobs and another 75,000 non-education jobs at
the State level, and that is just through our Department. This
funding not only helped stabilize the economy and avoid a
depression, but it absolutely averted an educational
catastrophe.
And, Chairman Obey, I want to personally thank you for all
your leadership in making that happen.
All told, we have obligated over $70 billion from the
Recovery Act. We have $25 billion left, most of which will be
out the door over the next few months. That money will help
States balance budgets, help young people pay for college, and
help drive the change we need in our classrooms to prepare our
children for the jobs of the future.

DEPARTMENT OF EDUCATION FY 2011 BUDGET REQUEST

Let me turn to our proposed 2011 education budget. As you
know, while most Federal spending is frozen, President Obama is
proposing an historic increase in education funding. He
understands that education is the key to our economic security,
and even in these challenging times, he remains deeply
committed to this issue.

DISCRETIONARY FUNDING REQUEST

The President is requesting a 7.5 percent increase in
discretionary spending, from $46.2 billion to $49.7 billion. It
supports our cradle-to-career agenda, from preschool through
college. Our K-12 budget is focused on six areas, all of them
about supporting students and teachers.

COLLEGE AND CAREER READINESS

``College and Career Ready Students'' is our new proposed
name for the Title I formula grant program, which we continue
to fund at historic levels. The Title I program will also
receive substantial Recovery Act dollars next year.
We also propose more funding for School Turnarounds, from
$546 million to $900 million, so we can continue to focus on
the lowest-performing 5 percent of each State's schools.

PROMOTING WELL-ROUNDED EDUCATION

Second, because students need a well-rounded education, we
propose a $100 million increase for learning programs beyond
tested subjects like reading, writing, math and science, that
is, for programs such as technology, the arts, foreign
languages, history and other subjects. All told, we will
request more than $1 billion next year to promote a well-
rounded education.

ENSURING PROPER LEARNING ENVIRONMENTS

Third, student supports are needed to ensure a proper
learning environment. Our budget proposes a $245 million
increase over 2010 for a total of $1.8 billion to improve
school climate, student health, student safety, parental
engagement and community involvement. This includes continued
support for the 21st Century Community Learning Centers
program. We also want to work with the Congress to refine this
program so that it lifts student outcomes and incorporates
enrichment activities through community partnerships.

PROMISE NEIGHBORHOODS

We are also proposing a major investment in a new program
modeled on the Harlem Children's Zone. It is called Promise
Neighborhoods, and it seeks to transform whole communities with
schools as neighborhood anchors. It provides wrap-around social
services from birth through college for students and families
at risk.

RESOURCES FOR DIVERSE LEARNERS

The fourth area of reform we are calling Diverse Learners.
This includes students with disabilities who will benefit from
a requested $250 million boost to the IDEA formula grant
program. Like Title I, substantial IDEA Recovery Act dollars
will continue to be available this year.
Other diverse learning populations include English-language
learners, which will get a $50 million boost under our
proposal, and we are maintaining dedicated funding for migrant
students, homeless students, rural students and Native American
students.

EFFECTIVE TEACHERS AND SCHOOL LEADERS

The fifth area of reform is called Teachers and Leaders. No
one is more essential to educational success than the person in
front of the class and the person who is running that school
building. This proposed budget seeks $3.9 billion, a $350
million increase, to elevate the teaching profession and get
effective teachers and leaders into the schools that need them
the most.
We are also requesting a large investment in teacher and
principal leadership programs so States and districts can
recruit and train the very best people possible.
We further support both traditional and nontraditional
pathways into teaching so people from all walks of life can
bring their experience and knowledge into the classroom. And
our budget invests in programs to reward educators for raising
achievement and working in hard-to-staff schools and subjects.

COMPREHENSIVE CHANGE NEEDED

The final area falls under the category of innovation. We
are proposing almost $2.5 billion to increase high-quality
charter and magnet schools and other autonomous public schools
and to continue the Race to the Top and the Investing in
Innovation programs. With so many children at risk of failure,
America cannot accept the status quo. We have to be bold.
The facts are both startling and disturbing. Today, 27
percent of America's young people drop out of high school. That
means 1.5 million teenagers are leaving our schools for the
streets. And this is a national problem, urban, suburban and
rural. Our 15-year-olds rank 24th out of 29 countries in math.
In science, 15-year-olds rank 17th. And just 40 percent of
young people earn a 2-year or 4-year college degree, and the
U.S. now ranks 10th in the world in the rate of college
completion. We used to lead the world. We have flatlined. Many
other countries have passed us by.
We must embrace new approaches to learning and expand upon
proven models of success. We must hold everyone accountable for
results, and we must aim higher.
Our States recognize the problem, and that is why 48 of
them are working together to raise standards, and 40 of them,
along with Washington, D.C., have developed bold reform plans
in their bid for Race to the Top funding. And everyone who
applied is a winner. Those good, courageous, tough
conversations are happening around the country, and we are
seeing huge progress.

FY 2011 BUDGET AND ESEA REAUTHORIZATION

We are also seeing considerable bipartisan interest--both
in the States and here in Congress--in our reauthorization
proposal.
I would like to briefly touch on some of the key elements
which are organized around three main goals: first, raising
standards so the students truly graduate from high school ready
for college or the world of work; second, rewarding excellence
and growth; and, third, increasing local control and
flexibility while maintaining the focus on equity and closing
those stubborn achievement gaps.
We believe that States do not need a prescription for
success. States and districts need a common definition of
success. And we need a better system of accountability.
As you know, No Child Left Behind greatly expanded the
Federal role in holding schools accountable. It required
States, districts and schools to report test scores
disaggregated by student subgroups, bringing much-needed
transparency around achievement gaps. NCLB was right to create
a system based on results for students, not just on inputs.
But there are far too many perverse incentives, and we must
fix that. NCLB's accountability system actually encouraged
States to lower standards. It doesn't measure growth or reward
excellence. It prescribes the same one-size-fits-all
interventions for schools with very different needs.
It also led to a narrowing of the curriculum and excessive
focus on test preparation. And it labels too many schools as
failing, regardless of the progress they are making.
Our proposal will use student academic growth and gain as
the measure of whether schools, districts and States are making
progress. It is a fairer, more honest and much more useful
indicator. Most educators say they want to be evaluated on
growth, not proficiency.
As I said before, our proposal supports a well-rounded
education, not only by requesting more than $1 billion for the
arts, science, history, languages and other subjects, but by
allowing, not mandating, States to use these subjects in their
accountability systems.
Under our plan, we will reward schools that are making the
most progress, and we will be tough-minded with our lowest
performing schools and schools with large achievement gaps that
aren't closing. All other schools will be given flexibility to
meet performance targets working under their State and local
accountability systems.

SUPPORT FOR RURAL DISTRICTS COMPETING FOR FUNDS

Now, we understand there are concerns that small rural
districts cannot compete with large urban districts for grants,
so here is what we will do: First, we will continue funding the
Rural Education Achievement Program, also known as REAP. In our
budget, it has not been consolidated with any other programs or
funding streams.
Second, we will look at competitive priorities for rural
districts where it makes sense and is needed, and we welcome
that discussion with you. We recently did exactly that with the
Investing in Innovation Fund, the $650 million I-3 fund.
Finally, we are also identifying foundations and nonprofit
organizations to partner with rural districts. I have traveled
to many rural areas in the past year and seen firsthand both
the challenges they face as well as their capacity to address
them. And I am confident that our Department can support rural
school districts as they work to improve--and compete.
So those are some of the highlights. I encourage you and
your staff to review the blueprint for reauthorization which is
now available online.

PROGRAM CONSOLIDATIONS AND SAVINGS

I want to make one additional point about efficiency and
our obligation to taxpayers. In our proposed 2011 budget, we
list $340 million in savings by cutting ineffective programs
and eliminating earmarks. We also consolidated 38 programs down
to 11 funding streams to reduce red tape and paperwork for
local educators, and they have been very appreciative of that.
The bottom line is that, between our budget and our
blueprint, we have a coherent and comprehensive vision for
education in the 21st century that builds on core values shared
by Congress and by the Administration: high standards and
better assessments, rewarding excellence with real incentives
based on student growth, and a smarter, more limited Federal
role that supports rather than directs State and local
educators.

STATE OF EDUCATION BUDGETS NATIONWIDE

Let me just close by voicing my concern for education
budgets around the country. Even with the remaining Recovery
Act dollars, States are facing teacher layoffs, cutting school
days and furloughing teachers to balance their budgets. For
many States, that funding cliff arrives this July.
I want to thank the House for supporting an education jobs
bill. I appreciate that there is growing concern that the
Federal Government cannot continue funding States indefinitely.
But America cannot neglect its obligation to children now.
Somehow, we must find a way to continue to support our teachers
and principals, parents and students, so that we emerge from
this difficult economic period stronger and better prepared for
tomorrow.
Thank you so much. I am happy to take your questions.

PREPARED STATEMENT OF SECRETARY DUNCAN

[The statement follows:]

[GRAPHIC] [TIFF OMITTED] T8233A.032

[GRAPHIC] [TIFF OMITTED] T8233A.033

[GRAPHIC] [TIFF OMITTED] T8233A.034

[GRAPHIC] [TIFF OMITTED] T8233A.035

[GRAPHIC] [TIFF OMITTED] T8233A.036

[GRAPHIC] [TIFF OMITTED] T8233A.037

[GRAPHIC] [TIFF OMITTED] T8233A.038

[GRAPHIC] [TIFF OMITTED] T8233A.039

[GRAPHIC] [TIFF OMITTED] T8233A.040

Mr. Obey. Thank you.
Mr. Tiahrt.
Mr. Tiahrt. Thank you, Mr. Chairman.

PELL GRANT PROGRAM COSTS

Mr. Secretary, there is a huge rise in cost in Pell Grants
since fiscal year 2007. The maximum Pell Grant award under the
House-reported Labor-HHS bill was $4,150 per student at a total
cost to taxpayers of about $13 billion. That represented an
increase of $100 in the maximum award over the previous year.
Since then, Congress has increased the maximum award to $5,550,
the bulk of which is this committee's responsibility. Your
request for that amount is an increase to $5,710, for a total
cost of $36 billion. When you consider the increase for the
amount coupled with the number of students, which in the last 4
years has gone up by about 50 percent, it is a lot of money
that we are setting aside.
How has the cost of this important program skyrocketed so
much in just 4 years?
Secretary Duncan. What we are trying to do is make sure--
and I think Chairman Obey's slide is very compelling. There are
so many students around this country who want to go to college
who, due to difficult financial circumstances, simply can't
afford it. And we want to make sure that those dreams don't die
young.
I don't worry just about our seniors and juniors. I worry
about those 9- and 10-year-olds around the country whose mom or
dad loses their job or takes a huge pay cut, and they start to
think that college isn't for them. We have to continue to
invest. We have to educate our way to a better economy.
If we simply stop subsidizing banks and put those savings
behind Pell Grants, we can close that shortfall in the Higher
Education Act. And the bill, I appreciate Chairman Obey and
Chairman Miller for their leadership on that. If we choose to
invest in education and stop subsidizing banks, we can do the
right thing by the country.
Mr. Tiahrt. And we are very proud of our institutions in
Kansas, and especially around March Madness, I have seen some
brackets where the finals is KU versus K-State.
Secretary Duncan. I am picking Kansas.
Mr. Obey. What are they playing, badminton?

RISING TUITIONS AND COST TO STUDENTS

Mr. Tiahrt. My concern is that, as we put more money and
dollars in the system, it seems like the universities just bump
up their tuition costs, and we end up with the kids in the same
problem. By putting more money in the system, doesn't
necessarily open the doors for them; as a matter of fact, it
may be more difficult for them, because they don't get enough,
they start borrowing money, and by the time they get through
their 4-year program, they owe $100,000.
Secretary Duncan. It is a great question. I share that
concern. And it is really interesting. If you look across a
couple thousand higher education institutions, you see folks
doing different things. You see some with absolutely runaway
costs, way above the rate of inflation. You see other
universities going to 3-year programs, going to no-frills
campuses, doing some very creative things.
And I think our students and families are very, very smart,
and they are going to vote with their feet. They are going to
do their homework, and where the costs are out of control and
the value is not there, folks are going to stop going. You have
seen a number of universities start to go in the other
direction, reducing costs even in tough times, going to 3-year
programs, no-frills campuses.
So I think our students and parents through the marketplace
are going to help drive more universities to go where they need
to. But where schools have runaway costs, I think you are going
to see students and parents choose to go in a different
direction.

FINANCING PELL GRANTS AND DIRECT LENDING PROPOSAL

Mr. Tiahrt. Well, we are going from $13 billion in fiscal
year 2007 to now a total cost of more than $36 billion. That is
almost three times the increase. My concern is, these kids are
going to end up paying for this because it is borrowed money.
It is money we don't have.
Secretary Duncan. Again, this is money we can invest in
students without going back to taxpayers for another dime. We
simply stop subsidizing banks. So this is a real chance for
America, I think, to get its priorities right. I think we have
to stop subsidizing banks. If we can do that, we can invest
unprecedented resources to make college more accessible and
affordable for our Nation's young people.

DIRECT LENDING PROPOSAL--TERMINATING LENDER SUBSIDIES

The President has drawn a line in the sand. He says, by
2020, we want to again lead the world in college graduation
rates. We have to educate our way to a better economy. Again,
we used to lead the world. We have flatlined. Many other
countries have passed us by. And making college more accessible
and affordable is very important.
There is a piece of that legislation that is something else
called income-based repayment, IBR. Again, simply by stopping
those subsidies to banks, we could reduce those loans and repay
them at the back end.
Mr. Tiahrt. Mr. Secretary, we just had Secretary Geithner
here a couple days ago, and he is very proud of subsidizing the
banks. And I don't think he is going to stop.
It doesn't prevent our kids from having to pay back this
borrowed money. I think you are absolutely right; we have to
quit bailing out the buddies on Wall Street.
It is tragic that our kids that are in school today, the
kids that are going to qualify for these Pell Grants, are
saddled with the burden of paying back not only the money that
is being allocated for education now, higher education Pell
Grants, but also what we paid to bail out the banks.
We are overdrawn by $655 billion this year alone. We are
going to have to start making some tough choices, and it seems
like this is a dramatic increase.
Secretary Duncan. Again, I think we are trying to make some
tough choices. I agree with you. We are trying to make a tough
choice to stop subsidizing banks and put that money behind
young people.
Mr. Obey. The gentleman's time has expired.
Ms. Lowey.
Mrs. Lowey. Thank you, Mr. Chairman.

21ST CENTURY COMMUNITY LEARNING CENTERS

And thank you, Mr. Secretary, for your leadership and
creativity. However, I want to ask you a couple of questions
about the after-school programs. This has been very important
to me and to many of our communities.
The budget request includes $1.6 billion for the 21st
Century Community Learning Centers program. So this appears to
be the same as fiscal year 2010, but after I look closely, I
realize that $10 million of the request would fund full-service
community schools, and $3 million would stay at the Department
to run a national competition. So it is actually a $13 million
cut.
Now, we know that after-school programs serve more children
than 5 years ago. There are more children, however,
unsupervised each afternoon. The demand for programs is higher
than ever. In fact, parents of 18.5 million children not
currently participating in after-school programs say they would
enroll their children if one were available.
Now, my constituents say that reducing funds for after-
school programs is like pulling the rug out from under working
families who are struggling right now. So I am not opposed to
extending the school day, but it is important to delineate
between extended day and after-school programs.
The vast majority of after-school programs last until 5 to
7 p.m., whereas extended-day programs often run only until 4
p.m. After-school programs just keep children safe longer,
giving them enrichment and education activities until their
working parents get home.

IMPACT OF ECONOMY ON AFTER-SCHOOL PROGRAMS

There was a survey conducted by the Afterschool Alliance
that looked at how the economy is affecting after-school
programs. It found that 95 percent of after-school programs
report that the recession is affecting their community.
Approximately 6 in 10 programs report a loss in funding due to
the recession; 86 percent say more kids in their community need
after-school programs; and 83 percent report that funding for
their program is less than secure for the next 3 to 5 years.
So the gap between the proposed funding level and the
authorized level of $2.5 billion leaves as many as 1.5 million
children behind and many States unable to make new grants, and
that prevents new programs from getting off the ground and
turning away established programs looking to renew grants.

AFTER-SCHOOL PROGRAMS

So I would like to ask you three questions: One, why is the
Department proposing to effectively reduce after-school funding
by using these funds for other purposes, as good as they may
be, besides funding 21st Century Community Learning Centers?
How does extending the school day fill the gap between what
would otherwise be accomplished through after-school programs?
And given the obvious need for more after-school programs,
did the Department consider increasing funding for the program?
You have asked for an overall increase in the budget. So I
would say, why didn't you increase these programs when the need
is so obvious?
I want to make it clear, I am not against extended-day, but
I don't think it takes the place of the after-school programs.
Could you respond?
Secretary Duncan. Sure. Those are really powerful
questions. Let me just say I got my start in education in my
mother's after-school program. I was raised as part of that and
ran my own after-school program for 6 years before I went to
join the Chicago public schools. So, throughout my life, I have
seen the extraordinary benefits.
Our streets often aren't as safe as we want them to be. As
you know, we have more and more children on their own after
school, and whether it is two-parent working families or a
single-mom working two or three jobs, those hours, I would say,
not just 3 o'clock to 5 o'clock, but 3 o'clock to 7 o'clock, 8
o'clock, are times of high anxiety for parents. And we have to
find ways to address that. Let me start talking in bold strokes
and then answer your question specifically.
We talk about what our priorities are. One of the six
buckets is student supports, and the total pot there is $1.8
billion. That is a 16 percent increase. That is for after-
school and extended-day. It is trying to create safe and
healthy students, and it is this idea of creating more--
replicating the ideas behind Jeffrey Canada's Harlem Children's
Zone to make sure we have entire communities that are
supporting students, enabling them to----
Mrs. Lowey. Kid's Day does a great job, too. We have that
in New York as well.
Secretary Duncan. It does a great job. I will also tell you
the President has requested an additional $1 billion if the
reauthorization passes, and we want to put a large chunk of
that money into after-school programs. So if that passes with
Congress's support this year, there is another huge funding
source.
We are not looking to cut funding. We are challenging
grantees to tackle both of those two things.
Mrs. Lowey. Wait. You are not looking to cut it, but you
are, for something else that is good.
Secretary Duncan. Again, we are going to challenge grantees
to do these things. I don't see these two ideas as in conflict.
I think folks can work on these things together.
Mrs. Lowey. How?
Secretary Duncan. Community schools can integrate after-
school programs.
Mrs. Lowey. Where are they going to get the money?
Secretary Duncan. Again, these are through the grants we
are going to put out. So there is a chance here for folks who
are being creative to add time. We couldn't agree with you
more; we want to add more time after school.
Mrs. Lowey. Okay, let me just say this: I think your
extended-day, your other programs are all great and all
wonderful, but in the meantime, there are over 1 million kids
who will not be able to get services of after school.
So what I would just say, and I am hoping we can work
together on the budget, is, I might adjust those figures,
because I think it is important to address the after-school
program. And we are certainly willing to support your
creativity and extended-day, and I am familiar with CIPS and
all the others. So I hope we can work together on that.
Secretary Duncan. Thank you so much for your
thoughtfulness.
Mr. Obey. Mr. Rehberg.
Mr. Rehberg. Thank you.
I want to thank minority staff for sticking around for my
questioning this time.

COMPETITIVE GRANT PROGRAMS AND RURAL DISTRICTS

Welcome. Nice to have you. And if you haven't checked my
biography, I am from Montana. I represent 147,000 square miles.
And we wish we would be rural education, but we are not; 85
percent of my kids are either rural or frontier.
I had lots of problems with the No Child Left Behind as
well, but I always found the Administration and the Secretary
of Education to be fairly amenable to changes, flexibility.
So if I could make some suggestions: Moving to the grant
program does not necessarily work for a State like Montana,
because we just don't have the economy of scale. There aren't
grant writers in these schools. They are so small, that we
especially see it in other areas like fire grants. There are
other grant programs within the Federal Government, and we have
struggled. We have tried to do education programs to help them
learn how to write grants. We even offered in my office to help
them write grants.
And to expect us to try to make up $12 million for our
schools in Montana through grant writing is practically
impossible. And I plead with you, don't move so quickly in that
direction.

TURNING AROUND LOW-PERFORMANCE SCHOOLS

The second area is the Race to the Top. Once again, the
four model categories you have created are nice, but the
difficulty is they don't really reflect our kind of schools. It
is not that easy for us to get rid of a principal, fire half
our teachers, restructure the way you have done it.
I guess if you could give me some assurances of your desire
or willingness to be flexible, and can you work with the Rural
Education Caucus that we have here in Congress to address some
of the lack of flexibility in the creation of the models in the
first place?
Secretary Duncan. Absolutely. I had a wonderful visit to
Montana and learned a tremendous amount.
Mr. Rehberg. Did you fly, or drive around?
Secretary Duncan. We flew in, and we drove around. So we
got a good sense of the issues. We traveled with the Governor
and spent some time with the State school superintendent. I
went to Northern Cheyenne country as well. It was a fascinating
day, and I got a lot from it.
Mr. Rehberg. As you know, we did not, our Office of the
Public Instruction did not compete for the grants.
Secretary Duncan. They can come in, in the second round. To
be clear, we are not looking for fancy grant proposals. We want
to go where the need is, and we have been very, very clear
about that. We are looking for folks who have a heart, who want
to get dramatically better, who want to raise the bar for all
children, close achievement gaps. Again, we are not interested
in fancy grant proposals or consultants or anything like that.
We just encourage everyone to put their best ideas forward. And
please rest assured, we want to go where the greatest need is.

SCHOOL IMPROVEMENT INTERVENTION MODELS

In our proposals, I think you are talking about the school
Turnaround model, the Transformational Model doesn't require
you to move staff out. We can continue to have the conversation
and be flexible with that model put in place. We thought about
it to make sure in those rural communities where you----
Mr. Rehberg. Can those other models be added? You are not
dead set on those four?
Secretary Duncan. We can have that conversation. We had
lots of conversations with rural superintendents about that
model. We didn't just sort of come up with these models--which
also include the Restart and School Closure Models--in a
vacuum. There were a number of conversations there. Frankly,
there was pretty good support. But if we missed something, we
are happy to continue those conversations.
Mr. Rehberg. That is probably the thing I hear most from
the school administrators: It is not practical or does not
work. Maybe you are hearing from other areas of the country
that it does, but my rural administrators----
Secretary Duncan. Okay. We will continue to vet it. I will
absolutely commit to you to continue those conversations. I
have tried to travel throughout the country, so whether it is
Montana, whether it is West Virginia, whether it is Wyoming----

HELPING STRUGGLING POPULATIONS

Mr. Rehberg. Let me switch gears rather quickly because the
one thing I liked about No Child Left Behind was the testing,
but the problem was we didn't do anything once we had the test
done. We know it is our Native American schools in Montana.
Clearly, we knew it before we went in that is what it was going
to show. But the money didn't follow the tribes, didn't go into
the reservations. Now we are seeing the consolidation of those
accounts within your budget proposal as well.
How do you hope to address them specifically when you slip
them in with the African American districts and all the other
districts that are identified as some of the trouble spots?
Secretary Duncan. Again, our budget proposes the largest
increase in spending for education ever. And so we want to put
resources everywhere. At the time when the President is level-
funding most other domestic spending, this is a major
investment. And that is how we see it, as an investment. There
is huge unmet need around the country in every community,
urban, rural, suburban, frontier, and we want to work as hard
as we can to meet that need.
Mr. Rehberg. Thank you, Mr. Chairman.
Mr. Obey. Mr. Kennedy.
Mr. Kennedy. Thank you, Mr. Chairman.
Welcome, Mr. Secretary.

CHARTER SCHOOLS IN RHODE ISLAND

I wanted to just reiterate, my State being a small State,
we have about the same size school district, if you will, as a
major city like Dallas, about 160,000 kids. We have full
implementation of charter school laws in our State. It has
really been a partnership with the Speaker, leadership, and our
superintendent, both in our biggest city and also our smallest
community. All of the partners are signed on.
We have an approach where we fully fund and hold
accountable both our public schools and our charter schools,
and we are prepared to defund both charters and public if they
don't perform. We actually have criteria-based hiring for
teachers, and we are putting teacher quality and evaluation
into the system already.
For that reason, we get a ``green'' just among the National
Council for Teacher Quality, green for those that should be
proceeding forward with the Race to the Top measurement. I just
wanted to highlight that, just in case you are deciding who to
give the money to.

ADULT LITERACY

I want to bring to your attention the notion that the
collaboration, if you can just elaborate for us, the
collaboration with the Department of Labor on literacy.
We have in this country a growing challenge in terms of
adult literacy. And you can't divorce a parent's literacy and
the fact that that impacts their child's challenges in terms of
learning. So I would like to ask you, in terms of your
Innovation Fund whether you couldn't explain--I mean, a lot of
these families, the parent can't get into college if they don't
first have the basic skills.

PELL GRANTS AND COLLEGE TUITION

I want to echo what Mr. Tiahrt said in terms of the
increase in Pell Grants. Frankly, I know this is politically
not even good politics, but we ought to be spending this money
on public universities and community colleges to make it go the
furthest. The notion that we are spending it on Ivy League
colleges that have no cap on expenditures and do not make the
most of their dollars in terms of access to the average middle-
class family to me is another challenge I think for the
Administration to make the most of those educational dollars.
If they really want to take on the status quo, that would be
the way to do it. Because I have kids waiting for classes to
get into the Community College of Rhode Island, and they can't
do it because there is not enough money. And yet we are
spending Pell Grants to go to the Ivy Leagues like Brown and
other places, albeit they are great universities. But frankly,
I want to see more kids go to higher education, get access to
basic skills and higher education than spend this money on a
bunch of Ivy League universities that don't need it.

ADULT LITERACY AND TRAINING

So if you could talk about the adult literacy challenges
that we have and how you are going to work with the Department
of Labor and Secretary Solis on literacy issues.
Secretary Duncan. Thank you. It is a huge issue for us as a
nation, and we think we have about 90 million American adults
who need to go back to school to get basic training, to be able
to take that next step. So we have had a very, very good
collaboration so far with the Department of Labor. Secretary
Solis has been a wonderful partner.
I have as my Under Secretary a former community college
president, a visionary, Martha Kanter, the first time in the
history of the Department that a community college president
has been in that position. We want to make a significant
increase in community colleges.
We think they are this unrecognized gem along the education
continuum. And whether it is 18-year-olds or 38-year-olds or
58-year-olds going back to school to retrain and retool, in
green jobs, community jobs, tech jobs, health care jobs, we
think as families get back on their feet, the country is going
to get back on its feet, and we think community colleges can
drive a lot of that.
We also recruited, who happens to be from your State, just
an absolute superstar who works with Martha, Brenda Dann-
Messier, who is a phenomenal leader, passionate, has devoted
her life to this issue of getting adults the skills they need
and the basic skills to be retrained.
So a lot of hard work is ahead of us. But I want you to
know we are absolutely committed. We have a laser-like focus on
community colleges, and Brenda is just an absolute champion for
adult literacy.
Mr. Kennedy. Well, what are you doing to partner with the
technology sector to provide these technology boards, if you
will, so there is no stigma to people who may have literacy
issues, they can learn both literacy for their job, but also
basic literacy skills without people having a sense of maybe
what the challenges are?
Secretary Duncan. We have had great relationships with the
community. Then we have conversations. Folks want to be part of
the solution, so we are not seeing resistance. We are not
seeing silos. We are not seeing egos, and I think we have a
chance to get dramatically better.
Mr. Kennedy. If I could suggest, if we could bring all of
the technology CEOs to the White House, tell them let's get a
cut rate and just get a bunch of these technology boards access
to people so they can learn at their own pace and be able to
get both the skills and literacy without people having a sense
as to where they are, because there is huge stigma to literacy,
I just encourage that. I also encourage Rhode Island in the
Race to the Top.
Thank you very much.
Mr. Obey. Mr. Alexander.
Mr. Alexander. Thank you, Mr. Chairman.
Good morning, Mr. Secretary.

STUDENT LOAN INTEREST RATES

So it doesn't look like we just hate banks more than we
love children, let's talk about the student loan program a
little bit. What is the average interest rate today that banks
would charge?
Secretary Duncan. That banks can charge?
Mr. Alexander. Yes.
Mr. Skelly. For students, for subsidized loans, this year
the interest rate students will get charged is 6 percent this
year. It will be 5.4 percent as of July. It goes down for a
couple more years. For unsubsidized loans, the rate is 6.8
percent.
Mr. Alexander. So if we take it away from the banks and
handle it in your Department, what will the interest rates be?
Mr. Skelly. Under current law, the rates would be the same.
The interest rates are the same for the Direct Loan Program and
for the Guaranteed Student Loan Program.
Mr. Alexander. So the students will be paying the same
thing. So what we are doing is just taking it away from the
banks because we dislike banks and we are going to put it in
you, is that right?
Secretary Duncan. It is a little more complicated than
that. We have basically been subsidizing banks, and we bear all
the risk. And the banks have had a very, very good deal for a
long time. And they have, because they have had a good deal,
right now, and this is a matter of public record, they are
spending millions of dollars on lobbyists who are running
around town. They are running ads in a variety of places. And
we think, again, when there is so much unmet need out there,
when middle-class, working-class families are struggling to go
to college, for us to continue to put money into banks when we
can put money into students----
Mr. Alexander. But if we are not going to let them have the
loan at a cheaper rate, how are we benefiting the student?
Secretary Duncan. Because of those savings by not
subsidizing banks, we can put billions of dollars in
increased----
Mr. Alexander. Is that what we are going to do?
Secretary Duncan. Yes, sir.
Mr. Skelly. In the SAFRA legislation, the legislation will
be incorporated into the Reconciliation Act . . .
Mr. Alexander. And we know that that money won't be spent
in other places?
Mr. Skelly. I was just going to say that the rates will
revert to a variable rate under a lot of the proposals under
consideration. There would be a drop in the student loan
interest rate under current laws.

EVEN START PROGRAM--FAMILY AND ADULT LITERACY

Mr. Alexander. Okay. Let's go back and talk about something
Mr. Kennedy was talking about. I, too, am concerned about adult
literacy.
I have been a proponent of Even Start, Head Start, those
programs, and it is very moving to go into a setting and see an
adult learn to read and write along with their children. I am
afraid if you mix all of those programs in and put them under
competitive bidding, that that program, Even Start, is going to
get lost in the mix.
Can you ease my concerns?
Secretary Duncan. I will try to. I appreciate your
leadership there so much. I am a huge fan of family literacy.
Again, if we are trying to change children's lives, you have to
change parents' lives. Again, this is something I learned
growing up as part of my mother's program, that she makes
parents come in and read with their kids, and helps them if
they don't know how to read to their kids. And if you are
really trying to change that child's life trajectory, you have
to change what is going on inside that home.
So I am a huge, huge proponent of family literacy. We
increased the funding for literacy by about 9 percent, so we
are putting more money there. Even Start programs, family
literacy programs generally can absolutely have a chance not to
just maintain funding, but potentially increase their funding.
Mr. Alexander. Good. Thank you.
Mr. Obey. Ms. Lee.
Ms. Lee. Thank you, Mr. Chairman.
Good morning, Mr. Secretary.

TEACHER SUPPORT AND CHRONIC LOW-ACHIEVING SCHOOLS

Let me first say I recognize change is hard, and this is an
entirely new approach to our educational system, which is
sorely needed, but I have a lot of questions about this new
direction.
First, I may as well say, probably one of the votes that I
regret most is voting for No Child Left Behind, and I don't say
that about many of my votes. Of course, I wanted to see it
repealed, but it looks like you all are trying to fix it. But
let me ask you a couple of things, because I am not so sure
that the issue of teacher support--and I cite the example in
Rhode Island where all teachers were fired. Historically,
teachers have not had the resources. They have not had the
support. And I look at your budget for counselors, you know; I
look at all of the supports that need to be in the school,
especially in low-achieving schools, schools in urban and rural
areas where you have low-income students, the supports have not
been there historically for teachers.
So for schools now to have to race to try to help teachers
teach and then have the punitive measures that you all have
decided upon, such as what happened in Rhode Island, if they
hadn't been able to teach the way we want them to teach, to me
just seems wrong.
Teachers should be the highest-paid profession in the
world. Really. They are securing our future. We have
historically had a problem with low teacher salaries, and that
is an issue that needs addressing.
We haven't had the type of counseling at our public schools
that teachers need, nor the curriculum, nor the supplies, nor
the computers, the technology.
In my area, in Oakland, an entry level teacher is paid
$37,000, but yet in a higher-income area, a teacher gets
$45,000. Both salaries are much, much too low. It doesn't make
any sense to put the onus on teachers, I don't believe.
Teachers have families. They have children.
So to say we are going to lay off or fire teachers if they
don't perform is a bit shortsighted, rather than do what we
need to do to support teachers in terms of classes. You know
what all we need to do.
Had your budget been in place before the firing of teachers
in Rhode Island, what do you think would have happened?
Secretary Duncan. Let us be just very clear on that
situation. We have actually worked very hard, and the union and
the district are going through mediation and working together.
So this story isn't finished yet, and we have been very
encouraged by that.
You never want teachers to get fired. That is not what
anyone wants. And these guys are going to continue to talk and
work through this. It is a tough situation. It is a tough
conversation. But we are very happy they are back bargaining,
and we are hopeful for a good resolution there. These
conversations are never easy at a school like that.
Reading rates have gone up, but in math I think 7 percent
of students are at math proficiency levels. So 93 of students
aren't. A dropout rate of 52 percent----
Ms. Lee. Sure. In my district, we have schools that are
very similar.

HOLDING SCHOOLS, DISTRICTS AND STATES ACCOUNTABLE

Secretary Duncan. So we need to work together.
I think your point is very well taken. The partnership with
teachers is hugely important. One of the many things I thought
was broken about NCLB is to put all the onus onto teachers, and
we are trying to say this is a shared responsibility. So for
the first time we are going to hold not just schools but
districts and States accountable. We are going to have a laser-
like focus on equity.
To your point, often--and Congressman Jackson knows this--
often, the poorest communities get the least resources. There
are huge funding inequities----
Ms. Lee. That is all the time.

FUNDING FOR LOW-ACHIEVING SCHOOLS

Secretary Duncan. I lived on the poor side of the tracks
for a long time. In Chicago public schools that were 90 percent
minority, 85 percent living below the poverty line, we received
less than half the money of wealthier districts, less than half
of districts 5 miles north of us. And think about the
compounded difference that makes over 12, 13 years of
education. It makes no sense whatsoever.
What we want to do is we want to be very, very creative.
The School Improvement Grants, which haven't gotten much
discussion, you know, Race to the Top is $4 billion and, School
Improvement Grants is $3.5 billion. We have put all that
funding on the table just for that bottom 5 percent of schools.

SUPPORT FOR TEACHERS

So teachers need more time to collaborate. They need more
support. We want to fund that. I think we should be paying--
this is controversial--math and science teachers more. We have
got a shortage of math and science teachers; and I think we
need to reward them to work in disadvantaged communities, rural
or inner-city, urban.

INCREASED RESOURCES, SHARED RESPONSIBILITY

So we are going to put unprecedented resources out there,
and what we are going to do is say, with these resources, we
have to challenge the status quo. Where we have dropout
factories where 50, 60, 70 percent of students aren't
graduating, we have to collectively do something better.
So we are trying to make a huge investment there, but it
has to be a shared responsibility. I absolutely agree. Teachers
can't begin to do this alone. I always say, if children aren't
fed, they can't learn. If children aren't safe, they can't
learn. If children can't see the blackboard, they can't learn.
So this idea of the student supports emphasis, trying to
create the climate in school and in the communities, the
Geoffrey Canada work around schools to give students a chance
to concentrate and think about algebra, trig, and biology. We
have to do all those things, and I promise you we are committed
to doing that.
Mr. Obey. Mr. Cole.
Mr. Cole. Thank you, Mr. Chairman.

PROGRAMS FLAT-LINED IN FY 2011 BUDGET

Mr. Secretary, thank you for being here; and thank you for
what you are trying to do. I think you have got really one of
the toughest jobs in government, and you do it well.
But, like everybody else, I have concerns; and I think I
share the chairman's concern about not funding programs that we
think work or flat-lining them and moving toward the
competitive grant system. Because I think it is very difficult.
You need certainty in education, and you need to have some sort
of timeframe, and if every year you are sort of up for a grant
you have got a lot of problems and a lot of concerns.
But I want to ask you about some specific areas where you
flat-lined programs that, frankly, are of great interest to me.
There is no increase in TRIO funding, and one of the major
aims appropriately is to try to help disadvantaged kids get
through school. There is no increase in GEAR UP funding, which
helps kids get to college in the first place, again, usually
disadvantaged. These are programs I see in my district and in
my State and I think work exceptionally well.
I am concerned frankly--I remember your testimony vividly
last year, and you talked about going to reservation schools
and seeing the real needs and the real challenges there. But we
are flat-funding tribally controlled, postsecondary career and
tech institutions, and we are flat-funding Indian student
education programs again. So if these are areas of real need--
and they are, and I know you recognize that--why are we flat-
funding in all these areas and moving toward grants--which
again I share some of the concerns voiced by several of the
members on the panel. Quite often, these are institutions or
student groups that are going to find it very difficult in
competing at that sort of thing.
Secretary Duncan. Again, just to be very, very clear, in
the big picture, almost three-fourths of our budget is
continuing to be formula based. So the overwhelming majority of
our money will be formula based. We are moving some money in
the competitive direction, and we want that money to go where
the greatest need is. So part of what we wanted in the higher
education bill was a college Access and Completion Fund so GEAR
UP and TRIO and other programs like that would have a chance to
grow and expand where they are doing a good job.
We think we want to continue to go where the need is.
Again, we are not looking at fancy presentations, not looking
at fancy Powerpoints but where there is significant need and a
real desire to get better. Those are the kinds of places where
we want to invest. And we think we have to get dramatically
better and address those dropout rates. If we just keep doing
the same thing, I don't know if we are going to get the better
results we need. That is the balance we are trying to strike.
Mr. Cole. That is a fair point, Mr. Secretary. Although you
could make an argument--particularly in the four cases I have
mentioned--we are not doing better because those programs
aren't anywhere near completely funded. It is not like every
kid eligible for TRIO is in TRIO or every Indian kid who could
be educated is getting that.
So maybe we actually--sometimes we do need to do more of
the same thing. We just haven't done enough. And it is very
difficult, I think, when you show up and everybody wants to do
something new and exciting and everybody wants to do something
innovative and there are lots of good ideas, but there tends--
particularly in tough economic times----
And you are better off than most. As you say, the President
has clearly made a decision here to try to give additional
resources. I would have thought maybe in some areas at least
this was an opportunity to catch up and to fund places that
haven't been funded. These programs really do work extremely
well, and they didn't get any increases last year. I guess $20
million for TRIO, which the chairman made available, that
wouldn't happen. That wasn't in the President's Budget.

INDIAN EDUCATION

And, again, there is nothing here to reward or build on a
program that is pretty good; and there is nothing directed
again toward Indian kids, which are the most disadvantaged,
lowest completion rate in high school, fewest--lowest
percentage in college, lowest number of college grads of any
ethnic group or racial group.
I think those programs really need a whole lot more in them
before we sort of start trying something new.

INCREASED FUNDING IN CONSOLIDATIONS

Secretary Duncan. And those programs that, you know, have a
demonstrated track record of effectiveness, that are doing a
great job, will absolutely have an opportunity to receive more
funding. So that chance is still there.
And in all of these areas often, you know, when agencies
consolidate budgets, they use it as an excuse to cut. We
actually increased funding in every single one of our buckets.
So that opportunity is there for them.
Mr. Cole. Well, I am somewhat skeptical, but we will talk
about this more.
Thank you, Mr. Chairman.
Secretary Duncan. I appreciate your thoughts.
Mr. Obey. Mr. Moran.
Mr. Moran. Thank you, Mr. Chairman.

GRADUATION RATES OF NCAA ATHLETES

I am just reading an article here relevant to March
Madness, which starts today. And I want to applaud the
Secretary for pushing a proposal that if the NCAA teams are
going to participate in post-season play, they ought to
graduate at least 40 percent of their athletes. It doesn't seem
to be a particularly high bar, and I am disappointed to see
that Kentucky would fail, the number one seed, but it is
disgraceful to only graduate less than a third of their
players. And, likewise, Maryland at 8 percent; California at 20
percent; Washington, 29; Tennessee, 30.
And the most disturbing thing is that only 20 teams
graduated at least 70 percent of their African American
players.
I appreciate the fact that you are addressing this. We turn
our back on these issues because we enjoy the entertainment of
competitive basketball, but we are not doing any favors to
these athletes.
I don't know that you need to comment on it. You can if you
want.

REAL ESTATE MARKET IMPACT ON SCHOOL FUNDING

The other thing, though, that I am very much concerned
about, Mr. Secretary, is that we have a disfunctionality in the
way in which we fund elementary and secondary education in this
country. It really relegates the Federal Government to little
more than gap filling or capacity building, as you know. It is
going to be particularly exacerbated, given the real estate
market.
We were told by our three principal economists this week
real estate values are going to continue to decline. The
principal way we fund elementary and secondary education is
through property values, and the people who pay the most in
property taxes are the least likely to send their children to
public schools. They are the least likely to have school-age
children, and if they do, they send them to private schools.
Here you are with all of these initiatives, but you are
bringing them out at a time when real estate values are not
going to recover, where, despite what you are tying to do, the
likelihood is that schools are going to have to continue to
eliminate teacher positions, administrators, and the like
because we don't fund public education in a manner that would
give us a national workforce that is capable of competing
globally. And you may want to discuss that.
Unfortunately, the decline in real estate values is going
to be particularly exacerbated next year because the stimulus
bill runs out. So do you want to comment on that, Mr.
Secretary?

EDUCATION FUNDING AS INVESTMENT IN NATION

Secretary Duncan. I will comment on both of your points,
and I couldn't agree more and just appreciate your moral
leadership on this.
As a country, we dramatically underinvest in education; and
we do it at our own peril. And, again, I don't see this as an
expense, I see this as an investment. You could take the
poorest child from the toughest community with the toughest
home situation and you put that child in a great early
childhood program and send him to a great elementary school and
put him in a serious high school, and that child is going to be
very, very successful.
There is a school that we started in the heart of the
toughest community in Southside. Inglewood High School used to
have a 60 percent dropout rate. It just made the national news.
Started a new school, all young men, 141 graduates--I think 107
graduates all going to 4-year universities.
You give students from tough communities great opportunity,
and they can do well. Other countries simply invest more than
we do, and we are paying the price for that.
So what we want to do is continue to push as hard as we can
to make sure that scarce resources are going to education; and
the more we can demonstrate success and that we are getting
better, the more I hope people will see this is the right
investment to make. But we have to educate our way to a better
economy.

DISPARITIES IN NCAA GRADUATION RATES

Quickly, on the NCAA, it is not just the graduation rates
but, to your point, the huge disparities between white ball
players and African American ballplayers. I grew up with too
many players who got used by the universities, made millions of
dollars off of them. No one cared about their education; and
when the ball stopped bouncing for them, they had very, very
tough lives. So that is something that scarred me from the time
I was a little guy, and to be in a position now to try to speak
out against that----
What is interesting is so many universities do the right
thing. There was an article in the New York Times on Xavier
University that has a phenomenal 77-year-old nun who is in
charge of academic affairs, and they graduate 100 percent of
their players and have for decades.
This is all about effort. It is all about culture. And you
have other places that simply want players to entertain and to
make them money, and they care nothing about their lives beyond
that. And that is what we have to challenge.
Mr. Moran. Good for you. Good point.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Bonner.
Mr. Bonner. Thank you, Mr. Chairman.
Mr. Secretary, I agree with really all of my colleagues and
especially Mr. Cole. You have got one of the toughest jobs in
government, and we wish you success.

NATIONAL EDUCATION POLICY DISCUSSIONS

This is not the right place to make this request, but, Mr.
Chairman, I would really like for us to think about one day if
we could impose on the Secretary's demanding schedule allowing
us to have a conversation where we could talk about local
issues. Because we are all mentioning--or most of us are
mentioning--things that we know from our congressional district
that are important to us, and I am going to do that in just a
second, but also where we could talk about national policy.
Because it would make for an interesting debate if we could
just focus on national policy versus things that are near and
dear to our hearts.
But, again, I won't make that request at this point. I
would just throw it out for your consideration.
But let me bring a local matter to my State to your
attention and just ask for your input.
I did not vote for the stimulus bill, although I have
admitted multiple times that one of the good things that it did
was it helped save thousands of jobs, tens of thousands of
teachers' jobs throughout the country, including in my
district; and I have told teachers in my district that that was
one of the things--I don't know that it has created any new
jobs in any district, but it certainly has saved some jobs.

FORMULA-DRIVEN STIMULUS BILL FUNDS

But one of the areas of concern in Alabama is we have three
schools, a school for deaf and blind citizens, we have a school
for math and science, and we have a school for the fine arts.
The fine arts school is in Birmingham. The deaf and blind
school is in Taladega. Those are not in my district. The school
for math and science is in my district.
Unfortunately, because they are not subject to the annual
formula of our State legislature but through direct
appropriations of the legislature, they did not receive any
assistance from the stimulus bill. And knowing firsthand about
the school for deaf and blind and also the school for math and
science, these are good schools, residential campuses that
serve the entire State of Alabama. Is there anything that we
can do to try to make sure that they are included and not
excluded from these formulas?

HELPING SCHOOLS NOT IN FORMULA CALCULATIONS

Secretary Duncan. I think there is. Your State of Alabama
received $1.16 billion, and I have had a great working
relationship with your Governor, and I think we have saved a
very significant number of education jobs in a State that has
been critically important.
I was in Selma, Alabama, 2 weeks ago.
Mr. Bonner. That is where I was born.
Secretary Duncan. It was a very moving experience and one
of those amazing days.
Tom Skelly can walk you through--I think we can help.
Tom, why don't you walk him through what is possible here?

STATE FISCAL STABILIZATION FUND

Mr. Skelly. Mr. Bonner, I know there were some questions
about the schools there in Alabama, and we looked into it for
your office earlier in the week. It turns out that you can use
the government services portion of the State Fiscal
Stabilization Fund. It is just the education portion that is
restricted to programs that Alabama funds at the local level
that are elementary and secondary education programs. The
school for the deaf, the school for the blind, the fine arts
school, those still could be funded through the government
services portion.
Mr. Bonner. And, unfortunately, my State is like 46 or 47
other States. I think Oklahoma and North Dakota are the only
two States that I know of that actually aren't facing severe
economic crises. So I am afraid that our State has already
tapped into the fund, Mr. Skelly, that was available. But that
is our problem, not yours. And I certainly acknowledge that,
and I appreciate that.

TAX CREDIT FOR PRIVATELY SCHOOLED STUDENTS

Let me throw a crazy idea out from left field just for your
opinion.
The chairman said in his opening comments--and he is
right--our schools are drowning in red ink, but our Federal
Government is drowning in red ink as well. And would it be
totally off the wall to consider--and I know this would be a
tax issue, which doesn't come before our committee. But just
your personal thoughts, Mr. Secretary, as a leader in education
reform--for us to consider putting on the table a tax credit
for families who send their kids to private schools or
parochial schools or who home school? Because these kids are
getting an education through a different means, but their
families continue to support public education with their taxes.
How crazy an idea is that?
Secretary Duncan. I guess my primary concern is the vast
majority of students in our country go to traditional public
schools and I worry about how desperately underfunded our
current public schools are. So my honest answer is my first
priority is we need to do a much better job of supporting and
investing--holding accountable for results, but investing in
those public schools that serve the overwhelming majority of
our country.
Mr. Bonner. Thank you.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Jackson.
Mr. Jackson. Thank you, Mr. Chairman.

FISCAL CONSTRAINTS ON NATION'S SCHOOL DISTRICTS

Mr. Secretary, welcome back to our committee. It is good to
see you. I have a couple of global questions, and then I want
to ask a couple of specific questions in the time that has been
allotted me.
We really have two processes here in the Congress. Today,
you are here before our committee presenting your fiscal year
2011 budget, which represents substantial increases in
education. You have correctly stated that it is the most
aggressive investment in education in recent memory. But the
context for which you seek to change public schools and our
Nation's education system is obviously in the context of the
worst economic recession since the Great Depression.
Detroit public schools are in near collapse. They are
expecting to close almost 40 schools this summer.
The Chicago public school system, Ron Huberman said in
yesterday's paper, I believe it was, that 37 students per class
will not be an unusual size if these budget negotiations don't
go well. But the expectations are that they will not go well,
that the pension obligations, the local property tax issues,
the inability of local taxpayers to shoulder the burden suggest
major changes in the Chicago public school system.
There are two processes. There is one process that shows
your very aggressive budget that seeks to change the Nation's
education system in the current economic context, but the other
process is the supplemental process that ushers truly the
Nation's priorities, whether they be for Afghanistan and
Pakistan.

FEDERAL VS. LOCAL SHARE IN EDUCATION FUNDING

The supplemental process bailed out our Nation's financial
institutions, as carefully articulated by the President. I am
wondering, in light of the fact that the Nation's top 50 school
systems are experiencing shortfalls in revenue and, as the
chairman indicated, drowning in red ink, why there is no
emergency supplemental request by the Department of Education
to provide relief for the major school systems that are near
collapse by summertime. There will be no other process between
now and the election, now and next year, to avoid many of these
local disasters, and I am wondering why no supplemental
request.
Secretary Duncan. Obviously, Congressman, as you know,
education in our country is primarily a local issue; and we are
trying to help in every way we can. We provide usually 8, 9, 10
percent of funding. Most of the money comes from the State and
the local level.
It breaks my heart to see some of the decisions that folks
are having to make out there; and, as you know, those are my
colleagues and peers. Those are folks I work closely with.
Situations are different in different places. A place like
Detroit has seen declining enrollment for a long time, hasn't
had strong leadership, has put off tough decisions. I am
actually very hopeful about where Detroit is going. They have a
phenomenal leader there I think now who is doing a great job,
who is getting their fiscal house in order. You had tremendous
mismanagement there, adults using the system for their own
benefit, not for students. And I have said repeatedly, Detroit,
you know, may be ground zero; and we are going to do everything
we can to support what they are doing and where they are going
financially. Robert Bobb is financially----
Mr. Jackson. I understand Mr. Secretary. No disagreement
there.
I don't meant to cut you off. My time is obviously limited.
But why no supplemental request from the Administration,
which is now prioritizing education, to address the red-ink
issues in the top 50 school systems just as we are looking at
the red-ink issues for the banking sector?
Secretary Duncan. I hear the thought. I hear the concern.
And it gives me something to think about.
Mr. Jackson. It is hard to imagine that it is a priority if
we are not looking at the only vehicle that is leaving the
station from the Administration. I have been watching the news
the last couple of days that, while Congress is bogged down in
a health care debate, which hopefully will end soon, the
Administration seems to have already moved to education; and
yet the vehicles that are leaving the station to address these
areas are very, very serious; and they have enormous
ramifications at the local level. And I am sure that and I hope
that you will take my concerns seriously.

ADDRESSING LOW GRADUATION RATES OF NCAA ATHLETES

I also want to ask a law, rules, and regulations question
that followed what Mr. Moran indicated about the number of
athletes that are graduating from NCAA schools. I am seriously
hoping that you would use your good offices to seek a meeting
with the NCAA and demand from them rules and regulations that
provide the necessary tutoring and the necessary academic
support for athletes not as a goodwill gesture or some hope
that they will, but with some teeth.
We have been discussing this too long, and the millions of
dollars that basketball players make for many of these March
Madness schools and the fact that they have shameful graduation
rates, you would think that some of that money would go towards
providing them with tutors, with mentors, with people to help
them graduate and understand the significance of graduation.
But it just seems to me the Secretary of Education's office
should be honcho'ing with the NCAA such rules and regulations.
Your thoughts on that, Mr. Secretary.
Secretary Duncan. I spoke before the entire NCAA commission
2 months ago--I mean, the entire NCAA delegation, a couple
thousand people, 2 months ago and said exactly the same things.
We do plan to meet with the President, and Ben Jealous has
joined me in this. When so many schools do it in the right way,
it is inexcusable to me why we allow a few renegades to
continue to operate the way they do. The vast majority of
schools do this very well, but we have a couple bad apples and
the fact that we tolerate that is mind boggling.
Mr. Obey. Ms. McCollum.
Ms. McCollum. Thank you, Mr. Chairman.

NATIVE AMERICAN AND ALASKA NATIVE STUDENT EDUCATION

Mr. Secretary, I want to thank you for being here today. I
do want to thank you for your efforts to make sure that all
children, including Native American children and Alaska Native
children, have an opportunity to----
Mr. Obey. Is your mike on?
Ms. McCollum. I guess I need to go to the school of
technology. Thank you, Mr. Chair.
But when we talk about Native American children and Alaska
Native American children and the work that you have done, we
have to be mindful that they are included in two different
budgets, the budget of the Bureau of Indian Affairs and the
budget that you have before you today that you are discussing
with the committee. So, Mr. Chair, I really think in order to
talk about doing what is in the best interest of our Native
American children and Alaska Native children at some point if
we could maybe figure out a way to have both the Bureau of
Indian Affairs and the Department of Education in here at the
same time, that would be very helpful for us to move forward.

COMMON COURSE STANDARDS

Last week, 48 States announced their proposal for common
course standards and I applaud their efforts, and I strongly
support moving forward on the national standards reform. But I
am concerned that two States, Alaska and, importantly, Texas,
have not participated.

TEXAS PROPOSED TEXTBOOK CHANGES

I am even more alarmed about decisions made on social
studies education by the Texas Board of Education last Friday.
Ten out of 15 elected people in one State have effectively
manipulated academic materials based on their personal
ideology.
I have here an article from the Washington Post, and it
says, ``Historians criticize proposed textbooks changes as
partisan.'' In the article, the Post goes on to say that the
Texas Board of Education is imposing a partisan, factually
incorrect version of history on Texas students, in effect,
students across America because of the way textbooks are
purchased.
It is outrageous and unacceptable, that a group of 15
people should be allowed to influence the education of all of
America's school children. And I don't want this decision in
any way to influence textbooks in Minnesota. So I want to be
clear. I don't want the Federal Government to write curriculum,
but I don't want the Texas Board of Education to be writing
curriculum for an entire country either.
So, Mr. Secretary, one of my questions to you at the end
will be are you concerned and should our Nation's school
districts be concerned about this blatant manipulation of
history?

48 STATES WORKING TOWARD COMMON STANDARDS

Secretary Duncan. Obviously, as you said, the Federal
Government does not and should not write curriculum. That is
best done on the local level. But I share your hope in the way
that 48 States are going together. And this is happening at the
local level. If these are Federal standards, our national
standard system dies. Because you have 48 governors, 48 school
chiefs working together, you have the heads of both national
unions working together on this, avidly supporting it, the
business community has been crying out for this. This is a game
changer. This is a game changer. We are still early. There is,
you know, still a lot of hard work to go, but they have done
phenomenal work. The leadership is exactly where it should be
at the local level, and I think that is where we should focus
our energy, and we should continue to move the country in the
right direction.
Ms. McCollum. Thank you for alleviating some of my
concerns. So we have it in front of us, and we know what we are
doing. I am going to remain guardedly optimistic.

ESEA REAUTHORIZATION

Your blueprint for the reauthorization of the Elementary
and Secondary Education Act puts, in my opinion, primarily all
the responsibility for success with teachers. But, as you
pointed out and as was mentioned in an earlier question, it is
a shared responsibility.
In full disclosure, people should know I have been a
classroom teacher. I know that the success of my student
depended upon many factors, the ability of myself to teach but
many outside classroom factors. Are the students having a bad
test because they went to bed hungry the night before, because
they don't have proper vision, because their parents have not
been involved in making sure that homework was done, because a
family is losing their house to foreclosure? All of these
factors, including violence in the home, affects a student's
ability to perform.
Now, sometimes a student's lack of performance will be a
teacher, but it is not always. So if you could reiterate for me
in a second a little bit more about that.

SHEPHERD PROGRAM--POVERTY AND HUMAN CAPABILITY

And then we have focused primarily on K-12, but I want to
talk to you more at some point about the Shepherd Program that
provides a great interdisciplinary study focus on poverty and
human capacity through the Shepherd Consortium in colleges and
universities that I think will go to the heart of addressing
disadvantaged youth and moving America forward.
So, with that Mr. Chair, I will remain silent so you can
answer.

EFFECTIVE TEACHERS AND LEADERS FUNDING

Secretary Duncan. I am just thrilled that we have a former
teacher on this committee. We need more educators in the rooms,
and you have lived this. You have lived the challenges that
students face every single day, and I appreciate your
commitment so much.
Again, a couple fundamental changes we are making from No
Child Left Behind is all the accountability was on teachers
before and, for the first time, we are saying this is a shared
responsibility among schools, districts, and States. That is a
fundamental change that I think folks haven't quite appreciated
yet.
Secondly, we are trying to do everything we can to support
teachers. A huge increase in funding to almost $4 billion,
$3.86 billion, to create better mentoring programs, more time
for collaboration, better pipelines, master teachers, giving
teachers the time they need to work together and be successful.
And to your point about students, you know, not arriving to
school in a vacuum, this idea of student support. A 16 percent
increase to create communities whose schools give students a
chance to be academically successful--schools with safe
climates where students' physical and emotional needs, and
psychological needs are being met.
There is so much we can do there, and we are trying to make
an unprecedented investment to give teachers an opportunity to
actually teach and give students a chance to actually
concentrate on their academic study and think about their long-
term futures.
Ms. McCollum. Thank you, Mr. Chairman.
Mr. Obey. Mr. Honda.
Mr. Honda. Thank you, Mr. Chairman; and welcome, Secretary.

EDUCATIONAL OPPORTUNITY EQUITY COMMISSION

These past few weeks I have enjoyed our past discussions
about establishing equity among our schools. This subcommittee
included language in the fiscal year 2010 Consolidated
Appropriation Act directing the Department to establish an
Educational Opportunity Equity Commission to conduct hearings
and community engagement meetings about how the Federal
Government could improve education and eliminate disparities. I
am glad to hear from my staff that your Department has been to
work on this effort, and I look forward to working with you on
this moving forward.
I notice that your Blueprint for Reform released the other
day prominently features the words ``equity'' and
``opportunity'' on the cover and includes equity and
opportunity for all students as a key goal. Can you outline for
me the approaches you are proposing both in the Blueprint for
Reform proposal for the Elementary and Secondary Education Act
reauthorization and your fiscal year 2011 budget proposal that
will help to meet the educational needs for each student,
foster the maximum development potential for each student, and
to ensure that each student has the knowledge and skills needed
to participate effectively in community life?
And in particular can you discuss a few items like what
role do your proposals envision for the Federal Government in
ensuring that States maintain levels of educational service to
provide each student an equitable and sound basic education
during times of declining State and local revenues? How you
propose to assess the needs of each student, the effectiveness
of schools in meeting the standards of an equitable and sound
education for each student? How does the Administration propose
to address and rectify the deep, abiding inequality that exists
in public education in this country?
And you will notice that instead of saying ``all''
students, I really emphasize ``each'' student, because I think
that terminology will drive policy and the expression of
policy. What are your thoughts on these questions?

ENSURING EDUCATIONAL EQUITY

Secretary Duncan. First of all, Congressman, I just want to
thank you for your leadership on this issue. This is one that I
think is hugely important for the country. What I have said
repeatedly is if we are serious about trying to close the
achievement gap, we have to close what I call the opportunity
gap. And I am convinced that children from, again, poor
neighborhoods, poor communities, tough families, if they have
the opportunities they can do very, very well.
As you know, I have brought in Russlynn Ali to lead the
Office for Civil Rights. She is an absolute superstar. She has
an absolute passion for this.
We want to reinvigorate that office. We want to step up our
enforcement of civil rights on behalf of students, and we will
be working hard to make sure the rights of all students are
protected.
We are going to specifically focus on schools with large
achievement gaps and ask them to implement data-driven
decisions to close that gap, and we are going to hold districts
accountable for closing the gap within districts.

TEACHER AND PRINCIPAL EQUITY

We want to have a reinvigorated focus on teacher and
principal equity. We have to do a much better job of supporting
States and districts to ensure that the highest need schools
have effective teachers and principals, and we are going to ask
districts to show that the resources that they provide to high
poverty schools are truly comparable to those they provide to
low poverty schools.
And, finally, we have in our proposed budget approximately
$900 million in school improvement grants to make sure those
students who have been historically underserved have an
opportunity to get a dramatically better education, and we do
this with a sense of urgency.
So, a lot of hard work ahead of us. I look forward to the
collaboration with you, and I think we have a chance to do some
very important work as we move forward.

SCHOOLS AS A REFLECTION OF COMMUNITY

Mr. Honda. The civil rights of youngsters--as you have said
before, education is a civil right, and I agree with you. This
country has attempted to correct that in terms of our efforts
in desegregation. We are seeing resegregation in different ways
now.
Looking at the bigger picture of how schools are created, I
think what we have learned from the desegregation effort is
that a school reflects the community that it is in. Will there
be a role in this effort where we will work with local entities
in the zoning efforts? Because the zoning determines the
community, and the community is from which the students are
coming from.
Looking at redevelopment projects where entire
neighborhoods are gone and new ones are brought up without any
consideration to its impact on schools, if we have
environmental impact reports, should not the social impact of a
neighborhood on children also be part of the consideration? If
you have any thoughts on that.
Secretary Duncan. Again, schools don't exist as islands;
and how we create communities to support those schools, how we
fund schools equitably, all those things help to give students
a chance to be successful. I think we can be much more creative
and much more thoughtful on how we do that. And it troubles me
that far too often the children who need the most help, the
most resources, the best teachers, the best principals, the
best facilities don't receive them.
Mr. Honda. So it seems to me that we have to be looking at
our cities and counties and our States in how they develop land
use rules and regulations and know that schools are part of the
infrastructure of a new community.
Thank you, Mr. Chairman.

PROMISE NEIGHBORHOODS

Secretary Duncan. Critically, one of the big investments we
want to make is in this Promise Neighborhoods initiative, again
to create communities around schools to give those schools a
chance to really help students learn.
Mr. Obey. Ms. Roybal-Allard.

SHIFT TOWARD COMPETITIVE PROGRAMS AND CONSOLIDATIONS

Ms. Roybal-Allard. Welcome, Secretary Duncan.
First, let me associate myself with Chairman Obey's
comments about funding new and untested competitive grant
programs while districts struggle to provide children the
education they need and deserve in the wake of devastating
budget cuts.
The Los Angeles Unified School District is a perfect
example. With a $620 million deficit, it has been forced to
issue 5,200 pink slips and shorten the school year by 5 days.
LAUSD and districts like that desperately need funding from
reliable tested programs like Title I to retain teachers and to
keep classrooms open, and I want to thank the chairman for
raising the issue, and I hope you will be giving it very
serious consideration.

EDUCATIONAL TECHNOLOGY STATE GRANT PROGRAMS

Mr. Secretary, the Administration has proposed the
consolidation of many education programs that provide badly
needed services. I find this to be very troubling because, from
my experience, consolidation can and often results in the
elimination of a program regardless of how great the need.

EDUCATIONAL TECHNOLOGY STATE GRANT PROGRAMS

I am particularly concerned about consolidating the
educational technology State grant programs which complements
our $30 billion investment in broadband Internet access and
other technology for our Nation's classrooms. These grants have
been essential to our State and local school districts' efforts
to coordinate the purchase of technology and the training of
educators on how to use it.
For example, the State grant funding received by the Los
Angeles Unified School District is used to hire technology
coaches who train teachers at its 680 campuses on the use of
technology. Without a dedicated funding for this purpose, how
will the district coordinate their technology programs and
ensure that educators can effectively use the technology made
available to them?
Secretary Duncan. I appreciate your concerns. Obviously, we
think technology is a hugely valuable tool going forward to
accelerate learning and to help students who haven't had those
opportunities before; and we will work with Congress on
reauthorization of technology activities. There has been no
decision yet on whether nationally it will be formally
competitive, so we look forward to working with you on these
issues.
Ms. Roybal-Allard. So this is not going to become a
competitive----
Secretary Duncan. No decision yet has been made. But we
look forward to working with you on this issue.
Ms. Roybal-Allard. That is great to hear.
Secretary Duncan. And note, just big picture, we think that
technology is a huge piece of the answer going forward; and we
want to find ways to integrate it into everything we do.
Ms. Roybal-Allard. Right. Because it makes no sense that we
have spent already $30 billion if teachers don't know how to
use that technology.

INCOME-BASED REPAYMENT OF STUDENT LOANS

When the Higher Education Opportunity Act was signed into
law in August of 2008, a loan forgiveness program was
authorized for service in areas of national need, including
health care professions. In light of the critical and the
growing demand for nurses, I find it surprising that this
program has yet to be funded. Why did the Department not
include the loan forgiveness for service in areas of the
national need program in your budget proposal?
Secretary Duncan. That is actually part of the higher
education bill that is before Congress and before the Senate.
So the IBR, Income-Based Repayment, we are a huge fan of. It
significantly reduces loan repayments on the back end and
brings folks into the public sector, great talent, and we will
forgive that debt after 10 years.
So that is something that we think is very, very important;
and we continue to advocate for right now, we have already
reduced it to 15 percent of income in terms of loan repayments;
and we want to take that down to be 10 percent and after 10
years of public service have all those loans forgiven. So
whether it is nurses, whether it is folks working in medical
clinics, or legal clinics, or teachers, folks going into the
public sector, we want to create much better avenues so they
are not handicapped by staggering debt that prohibits them from
following their heart and helping out in the community.

TRIO, GEAR-UP, HEP AND CAMP PROGRAM REQUESTS

Ms. Roybal-Allard. In the few seconds that I have left, I
also want to express my concern about the flat-funding for the
TRIO, GEAR UP, and the High School Equivalency and College
Assistance Migrant Programs, especially when the President has
this goal of, by 2020, having the United States to be first in
the world in the percentage of citizens with college degrees.
These are, again, proven college preparation and support
programs that have successfully helped low-income students
achieve; and particularly when we are having experts telling us
that the education of poor and minority children is absolutely
key to our Nation's future economic success, I just find it
incredibly surprising that the Department again is only level-
funding these programs which could truly help us to reach the
President's goal of 2020.

COLLEGE ACCESS AND COMPLETION FUND

Secretary Duncan. I appreciate that; and, again, I am a big
fan of those programs. They have done a great job, and we have
proposed a College Access and Completion Fund that would enable
those and other programs to actually significantly increase
their funding based upon their ability to demonstrate exactly
your point, that they are making a difference in student's
lives.
Mr. Obey. Mr. Ryan.
Mr. Ryan. Thank you, Mr. Chairman.
Thank you, Mr. Secretary. You are doing a great job. I
really appreciate everything you are doing and using your bully
pulpit to reach out to different areas like the NCAA issue. I
really appreciate that.

SOCIAL AND EMOTIONAL LEARNING PROGRAMS

Last year, in our report language we put some--this
committee put some language in regarding social and emotional
learning, and I have talked to you about this a few times. The
committee believes that addressing the social and emotional
development of students through evidence-based social and
emotional learning programs is a highly effective way to
promote safe and drug-free schools and to promote higher
student achievement and attainment. The committee urges Federal
support for the implementation of evidence-based social and
emotional learning standards and programming. Can you just kind
of comment on what you guys have done recently?
Secretary Duncan. And what we will continue to do.
In this budget, we are proposing $1.8 billion for a range
of student supports, including social and emotional learning.
That would be a $245 million increase, a 16 percent increase.
So we are trying to put our money where our mouth is and say
that we have to create climates again where students have a
chance to be academically successful. And if we are not
addressing those social and emotional needs, quite frankly, we
are kidding ourselves.
Mr. Ryan. I agree.

SOCIAL, EMOTIONAL DEVELOPMENT AND DECISION MAKING ABILITY

I want to bring to your attention--Representative Kildee
and I are sponsoring the Academic Social and Emotional Learning
Act to provide technical assistance to schools to try to
implement these social and emotional learning programs and hope
we could get your support and hopefully get that passed and get
some money into that as well.
One of the recent studies I wanted to share with you, a
casel meta-analysis of more than 700 positive youth
development, SEL character education, and prevention
interventions has shown that SEL programs improved students'
achievement test scores from 11 to 17 percentile points. And,
as we see, the brain science, you know, more and more backs up
that we have got to teach these kids how to regulate their
emotions. We now know that the part of their brain that has to
handle the emotional situations that these kids are dealing
with also deals with their short-term memory, their decision-
making ability. So all of these issues that we have talked
about these kids making bad decisions, whether it is teen
pregnancy, whether it is alcohol abuse, regardless, I think
teaching these kids these skills is unbelievably effective.
I have been to schools in Cleveland. We are starting a
pilot program in three of the schools in my district. So I
would just encourage you to stay focused on SEL. We are
throwing a lot of money around, and I think this--which in many
instances is needed--but I think this is a very, very
effective, cost-effective way of doing business.
Secretary Duncan. I appreciate your leadership so much, and
you hit the nail on the head that these are learned skills. So
children can have huge challenges, but if you help them learn
how to handle those and deal with them, then you have a chance.
When you don't, they can't get past those challenges and can't
begin to think about what is going on in class. But these are
absolutely teachable, learned skills; and the more we can do
that--and I think children today have probably never had more
challenges--huge pressures, huge temptations, stresses at
home--and if we are not addressing this, we are not in the
game.
So thanks so much for your leadership----

TEACHING STUDENTS TO UNDERSTAND EMOTIONS

Mr. Ryan. You have got it. There are a lot of good programs
out there that really break it down in the curriculum, where
they are teaching about the brain, they are teaching about the
amygdala and the prefrontal cortex to first and second graders
so that they understand what is happening to them when they get
pushed on the playground or when they have a domestic issue at
home. They know what is going on.
And I think that level of awareness that the student has
about what is happening to them is critically important for
them to be able to then figure out how to not respond in a bad
way.

EARLY COLLEGE ENROLLMENT AND DUAL ENROLLMENT PROGRAMS

One other question. We have a great early college
enrollment program in Youngstown, Youngstown city schools. We
also have one in Akron as well in my district. One of the
issues I wanted to bring up, because of budget constraints,
Youngstown State University, they have cancelled the program.
So what I wanted to ask you about is making Pell grants
eligible for kids who are going into early college.
I don't think it is going to cost us any more money. I
think in the end it will actually save us money, because we are
front-loading the money. So paying for these kids to go to
college with Pell grants their last 2 years of high school and
so we are going to avoid the latter years of the cost of living
or the increase in education costs had they waited 2 more
years.
So can you help us with that and comment on it, about
creating that pipeline?
Secretary Duncan. Our Administration is hugely supportive
of early college and dual enrollment. What is interesting to me
is so often historically this is seen as a thing for the
advanced juniors and seniors to do. What I often see in
different contexts, it is actually a dropout prevention
program.
For students who may not be the highest performing but are
in the middle of the pack, when they start to take a college
class and get college credit and start to think, man, I can
really function and be successful in this environment, it
changes their whole perspective on life. So it is a very
interesting range of students who can benefit from this.

COLLEGE PATHWAYS

We have proposed in our budget $100 million for College
Pathways, an accelerated learning program that would expand
access to college, dual-enrollment, AP classes, the
international baccalaureate program as well. So $100 million
there.

PELL GRANTS AND EARLY COLLEGE PROGRAMS

On the Pell grant issue specifically we have talked about,
it is an intriguing idea. I think it has been considered in the
past, and there are some challenges associated with expanding
Pell grant eligibility to students during high school, but it
is an idea worth kicking around, and I would be happy to look
into this and other options. At the end of the day, your goal
of significantly expanding access to early college programs, I
don't think we can do enough of this, and we have to be very
creative in how we think about this.
Mr. Ryan. I mean, we are going to spend this money on the
Pell grant one way or the other--I mean, if they go to college,
you know--and let's spend it early and make sure they get into
college, like you said, even the people in the middle of the
pack.
Thank you, Mr. Chairman.
Mr. Obey. Thank you.
Ms. DeLauro.
Ms. DeLauro. Thank you very much, Mr. Chairman.

DISPROPORTIONALITY IN SPECIAL EDUCATION

Good morning, Mr. Secretary. It is great to see you.
Just very quickly a point, I am going to send a letter to
you about an important issue in my district regarding
significant disproportionality in IDEA. I don't want to take
your time this morning.
Secretary Duncan. Give it to me when we are done.
Ms. DeLauro. I will get it to you, and hopefully we can
take a look at this.
Secretary Duncan. I will have Alexa Posny take a very close
look at it for you.
Ms. DeLauro. Great. Thank you.

EARLY LEARNING CHALLENGE FUND

Mr. Secretary, I have been a long-time and a strong
supporter of early childhood education and the resources for
critical programs like Head Start, Childcare Development Grant,
others. I was excited to see the Administration's focus on
early childhood through the initiative in the Early Learning
Challenge Fund. I was proud to vote for this in the education
bill that now will be part of reconciliation.
But, let me ask you, if we are not successful in including
the Challenge Fund in reconciliation, what is the
administration's backup plan to make this important
initiative a reality?
Secretary Duncan. It is hugely important. And,
Congresswoman, I would agree with you that probably the best
investment we could make, the best return is in early childhood
education. And what we all talk about is we are constantly
playing catch-up. I keep saying we have to get out of the
catch-up business, and the best way to get out of the catch-up
business is to make sure that our 5-year-olds hit kindergarten
ready to learn and ready to read.
We have far too many children who--it is not just 3- and 4-
year-olds, but what are we doing zero to 5 to make sure that we
are leveling the playing field? I am convinced that if we did
that well, so many of these challenges we face long-term,
dropout rates and other things, would be dramatically lower.
So, you know, we desperately want that Early Learning
Challenge Fund to be in there. If it is not, we need to work
through a different vehicle or do something.
But this President, this Administration, is absolutely
committed here. You know, we are asking for almost $10 billion
over the next 10 years. We have had some questions about
collaboration. We have had a wonderful, wonderful partnership
with HHS and Secretary Sebelius; and we all are working
together. This is a huge opportunity for the country to break
through, and we hope it goes through. If it doesn't, we need to
work together----
Ms. DeLauro. I, for one, will push to be a part of that
effort. I think if it is not, we must really work together and
collaborate to make sure that that happens.

EVEN START

Let me ask a question about Even Start. That is something
that I have talked about before.
Last year's House report reflects the priorities of this
subcommittee and the members and, I might add, certainly of the
chairman. And just very briefly, the committee strongly
recommends $66 million for Even Start, which is the same amount
as the fiscal year 2009 funding level. It provides grants to
States, family literacy, integrating early childhood education,
adult education, parenting education for low-income families
and their children from birth to 7 years old.
The committee goes on and says it does not agree with the
Administration's program to eliminate Even Start, and the view
on that was that--the elimination, which our view is that it
was based on results of flawed evaluation studies, studies that
were not representative of Even Start participants and programs
based on small samples, et cetera.
I have to ask you this: Why have you come back again with a
proposal to eliminate this program? This is a program that
serves 50,000 families nationwide. It is the only Federal
education program that focuses specifically on parents and
their children and the literacy learning skills that they can
work on together. So I am having trouble understanding why
you--why the Administration insists on ending this program.
Secretary Duncan. We talked about it earlier, and I am a
huge fan and supporter of family literacy. Growing up, as part
of my mother's after-school program, she spent a lot of time
not just working with children but working with parents and
trying to make sure that she was changing what was going on
inside the household and really making sure parents had the
skills to function and to support their own children.
So this is one that we are passionate about. Family
literacy is something that is part of the literacy program in
the proposed ESEA authority on a well-rounded education. We
actually propose a 10 percent increase in funding. Even Start
projects can absolutely apply--compete to do that. Brenda Dann-
Messier, who is leading our adult ed work, is a passionate
advocate and did phenomenal work in adult literacy.
So this is something we are going to work very, very hard
on, going forward. So it is part of an overall literacy
package. We don't have a line just for Even Start.
Ms. DeLauro. Well, you know, I can't be a predictor of
where this committee will come out, but I can say for myself
that I would be one and I suspect that there are others that
are going to want to see that this program continues.
Secretary Duncan. We are happy to have that conversation.
Ms. DeLauro. Thank you very much, Mr. Secretary.
Thank you, Mr. Chairman.
Mr. Obey. Thank you.

EDUCATION JOBS SAVED BY RECOVERY ACT

Mr. Secretary, you indicated and witnesses did yesterday
that about 325,000 teachers' jobs were saved by the Recovery
Act. We roughly filled about 40 percent of the hole in State
budgets last year. This year that is going to drop about 20
percent. This program is meant to be temporary. Some people
object to it; and they say, well, this is going to wind down.
What good did you do?

EDUCATION JOBS BILL

And the whole point of the program was to simply get us
through the next 2, 2\1/2\ years until the private sector could
recover and pick up the slack again. To do that, last December
the House passed a second jobs bill, which contained $23
billion in additional assistance to education because we don't
want to see 50 percent of the teachers whose jobs were saved
last year lose those jobs in the coming year.
So let me ask what will happen at the local school district
level to their ability to retain those teachers if we do not
pass that bill or something similar to it that provides at
least a similar amount of assistance to States and local school
districts.
Secretary Duncan. Chairman, I appreciate your huge
leadership on this. I share your concern. I am very, very
concerned.
As I travel around the country, everywhere I go,
everywhere, no one is immune from this. Folks are hurting. And
we are not just cutting through fat. We are beneath bone now.
And to hear about skyrocketing class sizes, to hear about--I
keep arguing for more time, Mr. Chairman. We see students going
to 4-day work weeks. Those are huge challenges, and we need to
do something. We need to do something.
Mr. Obey. What will happen if we do nothing?
Secretary Duncan. You will see some devastating cuts around
this country. And folks that are making these cuts, fiscally
responsible superintendents, school boards for the fall are
planning budgets now, March and April. So this is not something
that is going to play out in August. These things are happening
in real time.
Mr. Obey. And won't it also put additional upward pressure
on local property taxes?
Secretary Duncan. Sure. Sure. Absolutely.

TITLE I, ESEA FUNDS FOR HIGH-POVERTY SCHOOLS

Mr. Obey. I referred to this chart earlier, and what it
shows is that, among students who scored in the top quarter--I
said 20 percent earlier. I should have said top quarter--on
eighth grade math tests, the child of a wealthy family
graduated from college 74 percent of the time, while a child
that came from a poor family graduated only 29 percent of the
time, even though they demonstrated the same ability.
I would point out a similar relationship exists between
that eighth grade performance and the decision to even enter
college. What is the one program for elementary and secondary
education which we have relied upon for years to try to
equalize that poverty situation?
Secretary Duncan. Title I.
Mr. Obey. Right. How do we correct that if we don't provide
significant increases in Title I?

SCHOOL IMPROVEMENT GRANTS

Secretary Duncan. A couple ways. One is, as you know, the
school improvement grants are going to be directed to those
low-performing, high-poverty schools. So we are trying to make
a very, very significant investment there. We have $3.5 billion
that we want to put out to those schools now.
We have to focus--and there aren't simple answers here. You
have to focus on getting great talent into those historically
underperforming schools, and we want to work hard on that as
well.
And I would argue that Pell grants, making sure students
have access to resources to go--we have so many families--you
probably saw the same survey I saw a couple weeks ago. A lot of
American families just don't think college is for them.

TITLE I FUNDING

Mr. Obey. I understand about Pell grants, and I will get to
that. But the fact is that if you want to provide assistance to
all poor kids around the country, you don't need to go through
a targeted program that gets to a few school districts. Because
there are many, many poverty districts around the country who
will never get the grants that you are talking about.

ADDRESSING INEQUALITY IN EDUCATION

Which leads me to the same question that I was asking
before and several others have been asking. Why if we want to
close that gap would we not concentrate on Title I? I mean, I
was elected in 1969. That was at a time when the Federal
Government had just started programs like Title I, and I
sponsored Wisconsin's first State version of Title I. I still
remember the bill number, 51-A. That was a tiny little
initiative at that time, $5 million for the entire State. That
went a lot further in those days than it does now.
But I mean I have been trying and so have most people on
this panel been trying ever since to meet the needs of Title I
by providing for more full funding. We have never come anywhere
near close to where we should be in funding Title I.
So, I don't understand why I should be all that interested
in focusing what meager additional resources there are in the
education budget this year on a new program when we know that
the basic program is there to deal with poverty stricken kids
all over the country.
Secretary Duncan. I think obviously what you and I
absolutely share in common is a passionate desire to help
disadvantaged children be successful, and Title I is a huge
piece of that.
But I would argue that everything we are trying to do is
trying to address those inequalities. So trying to put money to
attract great teachers into poor communities we think is hugely
important. Trying to make sure that students have a well-
rounded education, where so often it is narrowed, is very, very
important.
Chairman Obey. I think that is important, too, but, to me,
there are lots of ways we can provide incentives to put better
teachers in some of those schools. But I question such a heavy
focus on teachers. Yes, I want quality teachers, but let me
give you an example: Me.
When I was in 7th grade, I skipped school 2 days a week,
and that is how I learned to play the harmonica. I was hiding
out in the woods.
Secretary Duncan. We need more music in school.
Chairman Obey. But I finally got turned around essentially
by two teachers. Now, if I hadn't gotten turned around, should
those teachers have been blamed for my failure?
Secretary Duncan. No. No, of course not. Nobody is
suggesting that. No, of course not. Of course not.
But great teachers turn around children, you and many
others included. We all remember those teachers that changed
our lives. And all we want to do is we want to shine a
spotlight on excellence. What I will tell you is there have
been very few incentives for those great teachers to go to
historically underserved communities, very few rewards to do
that, and we want to make sure the children who need the most
help are getting it.
Mr. Obey. I understand, and you are focusing on heavily
underserved communities.

RACE TO THE TOP APPLICATION PROCESS

But let me make a point. In your Race to the Top package, I
am told by my State education people and by my Governor that
when your Department considered their application, that all of
the points that they would have earned in your evaluation
system were roughly related only to six counties in the State--
Milwaukee, Kenosha, Racine, Madison, Green Bay, and I have
forgotten the other one.
Secretary Duncan. I don't know the specifics of your
proposal, but I will say what we were trying to reward is
States that had comprehensive plans--urban, rural, suburban,
every child.
Mr. Obey. All I can tell you is that my State people think
that the focus of your attention was almost exclusively on
those six urban counties.

FOCUSING INCREASED RESOURCES ON INEQUALITY

The point I would make is simply that we have got 72
counties in the State, and there are a lot of them outside of
that area that are low income and have lots of poverty kids. I
just do not understand why we do not--very frankly, I am a
Democrat, as you know, and so are you. I do not understand why,
when we finally have a shot at it, we are not greatly
emphasizing Title I before we do others.
I am all interested in reform, but, as Richard Nixon said,
timing is everything in politics. And as I see it, I will be a
whole lot more interested in putting additional money in reform
efforts 2 years from now when the economy is through this
recession than I am right now when everybody is sucking for
air. I don't understand why we do not have a greater emphasis
on trying to help those school districts.
Secretary Duncan. Obviously, I think we would agree we need
to do both. We need to help stabilize schools under huge
stress, and we need to get dramatically better, and we are
trying to find that balance.

HISTORY AND CIVICS EDUCATION

Mr. Obey. Let me ask an additional question. I asked this
yesterday of the panel, too.
We seem to be fixated on improving performance for math and
science, but I, frankly, am concerned that we are going to be
producing a generation of societal and political illiterates.
Because I think you see as the testing focuses on math and
science, for instance, or math and reading, it isn't just the
arts that get squeezed aside, it is history, it is civics.
As I said yesterday, I was in one class a few months ago
where the kids couldn't tell the difference between a State
legislator and a third baseman for the Chicago Cubs. They were
absolutely illiterate in terms of the things they would need to
know to function as citizens in a democracy.
How do you feel about this emphasis on math and science and
how do we produce a much more well-rounded approach to
education? Because, otherwise, we can set utilitarian goals,
but it is not going to meet our other societal needs.

BUDGET INCREASE TO PROMOTE WELL-ROUNDED EDUCATION

Secretary Duncan. I will tell you, I was in 37 States last
year--rural, urban, suburban. Everyone--teachers, parents,
students--all expressed their huge concern about what we are
seeing in this country, which is a narrowing of the curriculum.
I couldn't agree with you more.
So yes, reading and math are important, but, again, one of
our six big buckets is a well-rounded education for history,
for arts, for financial literacy, which we haven't talked
about, which is a big one, for foreign languages----
Mr. Obey. Financial literacy, we could start with Wall
Street bankers.
Secretary Duncan. And we ought to produce a next generation
of students who do better than what we have seen today. I mean
that very seriously.
For all those things, civics education, history, social
studies, we propose a 17 percent increase, $265 million.
So the need for a well-rounded education--let me just say
one more thing about it, Mr. Chairman. It is hugely important.
It is not just important at the high school level, which is
often what people think. I think that for first graders, second
graders, and third graders, we have to give students a chance
to find their passion--music for you, art for someone else,
drama for someone else. We have to provide those opportunities;
and if we don't do that, we really put a ceiling, a limit on
what students can accomplish.
So math, reading, science, are very important. So is
foreign language, literature, arts, PE. We need to get back to
those things, and we are trying to do everything we can to
encourage that. A well-rounded education is critically,
critically important.
Mr. Obey. Mr. Tiahrt, why don't we give everybody a shot at
one last question or so before we shut down the hearing. Take a
couple minutes yourself, if you want.

CIVIL RIGHTS

Mr. Tiahrt. Thank you, Mr. Chairman.
I have been hearing several times that education is a civil
right. So I don't recall it being in the 14th amendment or the
Civil Rights Act of 1964. I checked the White House Web site.
It is not included there under civil rights. It is not in
Wikipedia. I don't think it is a civil right. I think it is
very important, but I don't think it has the status of a civil
right, and I think it diminishes those who are protected by our
laws for civil rights by trying to broaden it.

PROPOSAL FOR DIRECT LENDING FOR STUDENT LOANS

I have a question more directly about student loans and the
government taking over the process of administering student
loans. As I see it, we have these two avenues: One is where the
government takes over student loans and takes money that we
don't have, so we have to go borrow money to loan to students.
So the students end up going through school and then have to
pay back not only the student loans but then the money that the
Federal Government borrowed to provide the student loan. When
you compare that to banks, banks already have money to lend. We
don't have to go borrow from the Chinese. So the student just
has to get his education and pay back the student loan.
One can make the argument that the Federal Government is
subsidizing the money and will have to borrow money to
subsidize the interest. And I would say it is much cheaper to
borrow just for the interest, rather than for the loan and
interest, and I think you would agree that math is correct.
So why are we doing this? Is it for control? Is it to limit
what institutions can receive money or limit some curriculums?
What is the purpose for borrowing money for student loans when
we don't have it?

PROPOSAL TO INCREASE PELL GRANT FUNDING

Secretary Duncan. It is very, very simple. Taxpayers are
already spending this money. Taxpayers are subsidizing banks
today. This is not a new expense.
Mr. Tiahrt. This program will continue, but we are not
going to continue to subsidize banks.
Secretary Duncan. Let me just finish. So we think we should
stop subsidizing those banks; and we think we should invest
scarce resources, taxpayer resources, yours and mine, into
students.
To be clear, what we want to dramatically increase is
access to Pell grants. That chart that Chairman Obey put up
there haunts me, and the lack of financial resources for poor
families to go to college is a huge impediment and a huge
killer of dreams.
Mr. Tiahrt. Since my time is limited----
Secretary Duncan. Let me finish. These are Pell grants.
Students don't have to pay these back. These are grants.
Mr. Tiahrt. I am talking about student loans, the student
loan program that the government is trying to take over.
Secretary Duncan. This is Pell grants that we are trying to
increase.

STUDENT LOAN REFORM

Mr. Tiahrt. I am talking about student loans. The
government is trying to take over student loans, correct?
Secretary Duncan. We are trying to stop subsidizing. We are
trying, rather than have the private sector initiate those, we
would initiate those.
Mr. Tiahrt. The bank I received my student loan from is
still in business today, and it did not receive any subsidized
funds, even in the latest go-around.
Secretary Duncan. I would beg to differ on that one, and I
am happy to look at that specific situation.
But we can dramatically increase Pell grants to students,
we can invest in community colleges, we can lower loan
repayments at the back end, the income-based repayment, simply
by stopping subsidizing banks.
Mr. Tiahrt. Well, there are students that will get access
to college through student loans, do you agree?
Secretary Duncan. Sure.
Mr. Tiahrt. Okay. So why is the government taking over
student loans? Why don't we continue to pursue that through the
private lending institutions, like I did when I got my college
student loans?
Secretary Duncan. Because we can save tens of billions of
dollars by initiating the loans ourselves. The servicing of the
loans will all be done by the private sector.
Mr. Tiahrt. How can we save money when we have to borrow
money for the student loans and for the interest?
Secretary Duncan. We are going around in circles here. We
can save money because of subsidizing banks, and the----
Mr. Tiahrt. The bank that I got my student loan from is not
subsidized. Which bank is subsidized that is providing student
loans today?
Secretary Duncan. This is across the country. The servicing
of these loans would all be done by the private sector. It is
not our sweet spot. We would do none of that. Good actors would
get a lot more business. We have more and more people going
back to college in this country, which is a good thing. Bad
actors would lose business. The free market would play.
Mr. Tiahrt. I think it is out of line for us to get into
the student loan business, because we don't have the money to
start with. And it doesn't save us money. It costs us money to
do this. Private banks have the money available. So I think it
goes beyond just the financial side. I think there is some
control issue here, and I want to know what it is.
Secretary Duncan. There is zero control issue.
Mr. Tiahrt. What requirements would we put on student
loans? Mr. Kennedy advocates cutting them out for Ivy colleges,
and I think he makes a good argument for that.
Secretary Duncan. Let me finish. The private market, before
we have done anything, as you know, has been collapsing. This
thing has been on life support. And before we got here, we have
seen a huge migration of universities to direct lending, from
about 1,000 universities to 2,300 before we got to town. So
this is something that has happened without us doing anything
because the private market wasn't working.
Mr. Tiahrt. I would say if private institutions want to
pursue that path, they should be open to doing it. I just think
there is something beyond this, and it is in the element of
control, and I think it is a bad path.
The other thing I want to mention before my time runs out--
--
Secretary Duncan. I just want--for the record, I want to
say we have zero interest in that. We simply want to stop
subsidizing banks and put scarce resources behind students.

INDIVIDUALS WITH DISABILITIES--GRANTS TO STATES

Mr. Tiahrt. I want to join with Congresswoman DeLauro about
my concerns on IDEA as well. I want that for the record, that
we need to get to our proportionate share, and it needs to be
equitable.
Secretary Duncan. We have a $250 million increase for IDEA
grants to States. I hear that concern.
Mr. Obey. Ms. DeLauro.

TEACHER RECRUITMENT AND RETENTION

Ms. DeLauro. Let me just echo something that the chairman
said, and I guess many of my colleagues, because I arrived
late, and that is it was Randi Weingarten who said a child's
education should not be based upon how well adults write grant
applications. I couldn't agree more.
When States start to lay off teachers--I just want to make
this statement because it has been discussed here--they
undermine our economy further, not to mention increasing class
sizes.
I know you believe that we have to have reform in a good
and a bad economy, but I think what is key to all of us at the
moment or at our core here is the timing and making this shift
in education funding and the effect that it is going to have in
terms of worsening the economy; and instead of providing that
opportunity, a better education opportunity, we will be
curtailing that. So I just want to add my voice to that.
But let me ask about the Teacher Incentive Fund, if I can.
Teachers, you know, we have said are the most critical factors
in improving student achievement. We are doing everything that
we can to make sure we can recruit and retain the best
teachers. But we know from the research that the financial
incentives are of limited value to attracting teachers to low-
performing schools.
A survey by Scholastic, Inc., and the Bill and Melinda
Gates Foundation show that non-monetary rewards are the most
important things in obtaining good teachers. I believe only 8
percent responded that pay-for-performance plans are key.
What initiatives do you propose in your budget to attract
the best and the brightest to serve the neediest kids,
especially once the schools are labeled as the State's worst
schools?

TEACHER INCENTIVE FUND

In a related question, how can we justify an increase of
$800 million in the Teacher Incentive Fund, a program that 2
years ago was only $97 million and also a program that received
$200 million in the Recovery Act and I believe that the funding
has not gone out yet?
Secretary Duncan. Many, many factors go into attracting
great talent to underserved communities. I absolutely agree.
Increased financial rewards is a small piece of that.
A couple of things have to happen. You have to have a great
principal. Teachers will follow a great principal to the end of
the Earth. Great principals make a huge difference. Bad
principals run off good teachers. That is part of the problem.
Principal leadership is hugely important, and we have to invest
there, and we are looking for a five-fold increase there.

PROMISE NEIGHBORHOODS

You need a community to rally behind a school. So all the
work we are trying to do around Promise Neighborhoods tries to
create that community of support behind those troubled schools.
Ms. DeLauro. That is the Comer Model, and I am very
familiar with the Comer Model in schools, Jim Comer.
Secretary Duncan. And when you put it in place, great
teachers want to go to those tough communities. They want to
have a chance to succeed. And if we can put in place the
structure, more time for them, more time to collaborate, better
resources, better data, we put those in place, I promise you
great teachers will want to go to underserved communities.
Mr. Obey. Mr. Cole.
Mr. Cole. Thank you, Mr. Chairman.

MOVE TOWARD MORE CONSOLIDATION AND COMPETITIVE PROGRAMS

Just an observation and a couple questions.
I think what you are running into, Mr. Secretary, is there
is a lot of confidence in you, quite frankly, but I don't know
who the next Secretary is going to be. And I worry about just
the centralization of power and the grant approach that brings,
the pickers of winners and losers, who is going to do it, how
it is going to work, and how you are going to have any
certainty at the receiving end of this process. I think you do
need certainty over a period of time if you are going to make
the kind of investments that are necessary.

ASSESSMENT OF NO CHILD LEFT BEHIND

But let me ask a historical question, because I am
struggling with trying to understand what we have done right
and where we need to change, get better, and what you want to
do.
Under No Child Left Behind, which is now, of course, much
maligned but actually had a couple of great virtues, one of
which was actually bipartisan, which I think to move ahead here
you need to be bipartisan; and, second, that it really did put
a lot of focus on the consumer here, i.e., the kids, as opposed
to anyplace else in the bureaucracy and how are we doing with
them and are we really particularly looking, by breaking
students out, at kids that are the most disadvantaged, the most
challenged, and trying to target resources there.
I am happy we are going through reauthorization, because
that is why we have it. So what have we learned? What do we
need to do different?
Looking first at No Child Left Behind, could you tell me,
did scores for kids broadly--and I mean very broadly--go up?
Did we narrow differences, which is what we all wanted to do on
both sides of the aisle?
Secondly, going forward, could you just explain for me the
differences in where you propose to go? And I actually look on
this as building on. I don't see this as antithetical efforts
necessarily. But where are the differences, the course
corrections you are making, in contrast to where we would have
been had we just simply stayed on line, which never is a very
good idea?
Secretary Duncan. I appreciate that, and I want to assure
you that we will only do this and want to do this in a
bipartisan way. I consider that education has to be the one
thing that rises above politics and ideology. We all have
common interests. I have been so impressed here. The leadership
of the House, the Senate, Republicans, Democrats, everybody is
working hard on this together.

DROPOUT RATE AND COLLEGE COMPLETION

My sense of urgency is--I go back--we have a 27 percent
dropout rate. That hasn't moved. We used to lead the world in
the percentage of college graduates 2\1/2\ decades ago. We have
flat-lined. Everybody else has passed us by. You want to know
why we are in a tough economic position now? I think that
explains a lot of it. So we need to get dramatically better,
and we need to get better as fast as we can.

FOCUS ON ACHIEVEMENT GAPS

What I will always give the previous Administration credit
for was focusing on achievement gaps. We used to like to sweep
that under a rug as a country, and it forced us to have those
tough conversations. We need to continue to have them and the
idea of disaggregating data, really looking at what is going on
there. That is something we will never, never walk away from.
And we have to have focus on achievement gaps.

ASSESSMENT OF NO CHILD LEFT BEHIND

Having said that, I wasn't here. I don't know the history.
There were a number of consequences intended, unintended I
don't know about, challenges that I have heard repeatedly
around the country as I have traveled. The law was far too
punitive. The law was very prescriptive. And this is well-
documented. It actually lowered the bar. Due to political
pressure, States lowered standards, which is absolutely the
wrong thing to do, wrong thing educationally, wrong thing
economically. But due to political pressure, the standards got
lowered in many cases; and, to Chairman Obey's point, we saw a
narrowing of the curriculum.

FOCUS ON GROWTH, GAIN; REWARD SUCCESS, EXCELLENCE

So what do we need to fix? We need to raise the bar, have
meaningful standards, a high bar for every child. We need to
reward excellence and success.
Again, I want to look at growth and gain, how much are
students improving each year.
Let me give you one example I use. Let's say you are a
sixth-grade teacher, and I come to you, and I am three grade
levels behind. I am reading at a third-grade level. I leave
your class, I am one grade level behind. Under No Child Left
Behind, you are a failure. You are a failure. Your school is a
failure. Your State is a failure.
I think not only are you not a failure, you are not just a
good teacher, you are a great teacher. I had 2 years' growth
for a year's instruction, and we should be recognizing that
excellence. We should be learning from it. We should be
encouraging it. We should get more of those teachers into
underserved communities.
So that is a huge problem we have to fix. I think by
focusing on growth and gain, that is the right way to do it. So
reward excellence and success, more local flexibility,
essentially how you want to manage.

FLEXIBILITY AND ACCOUNTABILITY

No Child Left Behind was very loose on goals: 50 different
goalposts, 50 different standards, many got dummied down, very
prescriptive, very tight on how you get there. We want to flip
it on its head: tight on its goals, high bar for the country,
college- and career-ready standards. But give much more local
flexibility, hold folks accountable for the results, let them
move to get there. And then, finally, and we are trying to
invest heavily here, our students need a well-rounded
education.
Mr. Cole. Thank you, Mr. Chairman.
Mr. Obey. Ms. McCollum.
Ms. McCollum. Mr. Secretary, you talked about holding, and
so I want to give you an example of why I think you need to do
that.
The State of Minnesota, for balancing its budget a couple
decades ago, decided it would delay payments to school
districts, not make them on time. School districts had to go
out on the market and borrow money and pay interest. That money
wasn't going to children.
That was one of the last actions I took. We corrected that
before I ran for Congress. And now Governor Pawlenty is right
back. That was the demand that he had in balancing the budget,
that the school districts have to go borrow money in order to
make their day-to-day payroll obligations so the State of
Minnesota didn't have to. That is wrong, and I hope you hold
States accountable.

PROPOSAL TO MOVE TO STUDENT LOANS DIRECT LENDING

I would like to give you an opportunity to walk through
what we are doing with the Direct Student Loan program. It used
to be, if I understand, the U.S. had the money, we gave it to
the banks that then distributed it to the schools, and
everybody took their cut on it, and we took the full risk. But
now we are lending directly to the schools where the financial
counselors and the students are sitting together.
Would you walk through that for me?
Secretary Duncan. You summarized it perfectly. We have
subsidized banks where we have all the risk, and if we can just
cut out the middleman there and do direct loans across the
country--again, we are seeing a huge migration towards this
anyway before we did anything because the private market was
drying up. We saved tens of billions of dollars.
I understand banks' resistance to this. They have had a
very good deal; and because of those subsidies--and this is all
a matter of public record--they have been able to hire and
spend millions of dollars on lobbyists to oppose this. They are
running ads in States opposing this. And I understand it, from
their perspective, it is a hard thing to give up.
But if we can take tens of billions of dollars at a time of
tremendous economic crisis and make college much more
accessible and affordable for hard-working Americans, middle-
class, working-class Americans, I don't see how in good
conscience we can stay on the sidelines.
Ms. McCollum. Mr. Chair, I don't see how we are taking over
anything except an opportunity for more children to have a
chance at college. Thank you.
Mr. Obey. Mr. Ryan.
Mr. Ryan. I appreciate you doing that, too, Mr. Secretary.
I mean, subsidizing the banks where they had no risk at all
and, if someone bailed, we picked up the tab. I appreciate how
you are doing that.

ROBOTICS COMPETITIONS

Two things. One, the issue of math and science. We have
some programs in Ohio, robotics programs, they had the first
competition and whatnot, just unbelievable, where you see kids
get so excited and passionate about using their hands and
conceptualizing what they are going to create. And the first
competition is probably the most prominent competition around
the country.
When I think about robotics, I think about the old shop
classes and how this is kind of like 2.0 in the shop classes.
Secretary Duncan. The new shop.
Mr. Ryan. Yes, exactly. Is there anything in this budget
that would help local schools? Now a lot of schools can't even
afford the start-up to get the kit and to pay the supplemental
for the teacher.
Secretary Duncan. Yes, I am a big fan. We talk about well-
rounded education. I am actually going to go to the national
championships, the national finals of the first competition. I
am a big fan. And we talk about a well-rounded education. It is
those kinds of opportunities again, whether it is robotics,
debate, academic decathlon, music. So I worry in tough times
that those extra curricula are often the first things to get
cut. Those are things that keep students engaged and keep them
motivated. So we want to continue to encourage a well-rounded
education. I love those robotics competitions.

INCENTIVES AND PUBLIC-PRIVATE PARTNERSHIPS

Mr. Ryan. How can we create incentives? In Warren, Ohio, we
have a great program at Warren Harding High School, and it is
with non-traditional kids. They are not playing hoops, they are
not on the football team, whatever. The reason they have been
so successful is Delphi was a local corporation who was very
involved in the start-up of the robotics program at the high
school.
So how do we create incentives for local manufacturers or
local corporations to help contribute to these programs?
Secretary Duncan. That is the thing. I think the start-up
costs for the robotics competition are actually minimal, and it
is easy. Again, that is where we can think about it at the
Federal level. But I think that that is, at the local level,
just going out to those businesses and saying, for a small
amount of money, you create this huge life-changing, life-
transforming opportunity for students.
Those kinds of sponsoring partnerships are out there.
Obviously, business is struggling now, and there are maybe
fewer available dollars. But this is a low-cost, high-impact,
high-visibility activity, where students from very non-
traditional backgrounds are getting interested in science and
engineering and thinking about a whole set of careers that they
never would have thought about without this competition. So
there is a huge amount of space for folks to be creative and
innovative and build those public-private partnerships.
Mr. Ryan. Most of these programs, you see these kids, they
have like a 98 percent graduation rate, a placement rate in
college, the military, something when they get out.

PARTNERING OF SCHOOL DISTRICTS TO SHARE SERVICES

One last question before we have to run, I am not for
consolidating school districts or schools. I believe in the
neighborhood school. I think that is very important. But there
are a lot of services that I think school districts can share--
buying the food, buying computers.
Secretary Duncan. Textbooks.
Mr. Ryan. Textbooks, those kinds of things. Is there
anything in here to create an incentive for school districts to
partner with each other on those services?
Secretary Duncan. When times are tough, what would you
rather do, increase your purchasing power or lay off a bunch of
teachers? I would much rather increase my purchasing power and
keep those desperately needed adults in the building. So where
folks are doing all these things--HR, buses, food, textbooks--
where they are doing it on an individual basis, that to me is
just an absolute waste of money at a time of desperate need.
Mr. Ryan. Are there any incentives in here?
Secretary Duncan. We can think about it. I think this is
one that is common sense.
Mr. Ryan. Well, if we are relying on common sense--thank
you, Mr. Chairman.
Mr. Obey. Thank you.
Mr. Secretary, let me simply summarize by asking two
questions and then making a point.

PELL GRANTS

With respect to Pell grants, lest anybody think that we are
being overly generous with them, when they were first
instituted, the maximum Pell grant covered over 70 percent of
the cost of going to a 4-year university. Today, despite the
increases that we have had that has taken it from 32 percent
upwards somewhat, we are still riding at about 37 percent. So
we have hardly been overly generous.

SAVINGS FROM DIRECT LENDING

Secondly, with respect to student loans, I just want to
read something that appeared in Roll Call last week. I want to
quote two sentences.
``The legislation deserves GOP backing first and foremost
because it eliminates government waste and saves billions. The
choice is simple. Do we help Citibank make millions of dollars
in profits from zero-risk student loans or find other ways to
use the up to $87,000,000,000 in savings?''
That savings number comes from the nonpartisan
Congressional Budget Office.
The article was written by Dr. Susan B. Neuman, former
Assistant Secretary of Elementary and Secondary Education under
former President George W. Bush.

IG AUDIT OF READING FIRST

Let me also ask this question: I am sure that you are
familiar with the Inspector General's alarming audit of the
Reading First Initiative under the previous administration. The
investigation concluded that Federal officials violated
conflict of interest rules when awarding grants to States under
the reading program and steered contracts to favored textbook
publishers. The IG's report found that the program was awash
with conflict of interest and woeful mismanagement.
It also suggested that the Department of Education violated
the law by attempting to dictate which curriculum schools must
use. The report states that program review panels were stacked
with people who shared the Reading First director's views and
that only favored publishers or reading curricula could obtain
program funding.

ELIMINATING CONFLICT OF INTEREST IN COMPETITIVE AWARDS

What is your Department doing to ensure that conflict of
interest does not exist in competitive grant programs under
your leadership? What kinds of measures have been put in place
to prevent an outcome along the lines of the Reading First
initiative?
Secretary Duncan. First and foremost, we don't think we
should be involved in curricula decisions. This has always been
down at the local level and should not be driven at the
national level. So we have no opinion, no stance, no interest,
no investment, and are absolutely dispassionate on it. So in
that spot you can't have a conflict of interest.
We have tried to recruit people with the highest integrity
and to do things the right way. We absolutely hope to be and
should be and will be held accountable for that. All we want to
do is invest in great ideas that are coming from the local
level.
But we have no agenda here, no interest in textbook
publishers, and we don't think we should be playing in the
curricula field whatsoever.

ACTIONS TO PREVENT CONFLICTS OF INTEREST

Mr. Obey. I am concerned not just about that narrow
approach but across the board in the agency. If you can get us
some more information for the record, that would be helpful.
Secretary Duncan. I will.
[The information follows:]

Actions To Prevent Conflicts of Interest

The Department has taken significant actions to prevent conflicts
of interest in the implementation of our programs. On December 4, 2007,
after the release of the Office of Inspector General reports on the
Reading First program, the Department issued an internal directive,
``Improving Administration and Management of Department Programs.'' The
directive provided all employees with program implementation guidance
on a number of topics, including identifying a conflict of interest,
prohibitions against controlling and directing curriculum and
instruction, controls for the proper use of peer-review processes, and
early and ongoing consultation with the Office of the General Counsel.
The Department requires all employees to participate in annual training
to ensure that they follow the policies described in the directive.
The policies and procedures used in the Race to the Top competition
provide a recent example of the emphasis that the Department places on
ensuring that grant competitions meet the highest standard of
integrity. The Department has taken several actions to ensure that the
Race to the Top competition peer review process is conducted in an
objective manner free from conflicts of interest. A document that
describes the steps the Department took to identify potential, direct,
and indirect conflicts of interest, as well as the appearance of a
conflict of interest, is available on the Department's Web site at
http://www2.ed.gov/programs/racetothetop/application-review.html.

ORIGINS OF U.S. DEFICIT

Mr. Obey. Let me say, lastly, with respect to the education
budget, I hope that you will give no ground--I would ask you to
put chart number one up.
I would ask that you give no ground when people are
suggesting that somehow the deficit is impacted in a major way
by what we are doing in education.
As that chart shows, if you take a look at the deficit
which was inherited this year by the Obama Administration, $5.1
billion of that--I mean $5.1--I can't read my own writing----
Secretary Duncan. I think it is trillion.
Mr. Obey. Yes, it is $5.1 trillion. I read better with my
glasses off. These are new glasses, and they are not worth you
know what.
But $5.1 trillion of the 2009-2019 deficits were caused by
tax cuts which were paid for with borrowed money and $1.8
trillion paid for by our entry into two wars, as I said
yesterday, one I believe justified and one not. Then the
economic collapse contributed $3 trillion to that deficit over
that same period. Meanwhile, the Recovery Act--the entire
American Recovery and Reinvestment Act, not just the education
piece--the entire Recovery Act accounts for $1.1 trillion.
I would simply suggest I don't offer that chart to critique
Administration performances, because you are not done yet. But
what I do do is to offer it to simply suggest that, in judging
whether debt is useful or not and whether deficits are useful
or not, we have to differentiate between what the money was
used for.
If the money was invested in items that simply add to
economic consumption and immediate gratification, we have done
ourselves no favor by borrowing that money. But if that money
is used to invest in the long-term efforts to make this country
independent from foreign oil, so we aren't shipping $400
billion a year to the Middle East to pay for our lack of
foresight in energy; if we are investing in infrastructure that
makes it cheaper to deliver products to market; if we are
investing in education, which increases the competitiveness of
our workforce and the quality of our individual lives, then
those are investments worth making, provided that over time
when the economy resumes its full level of performance, that we
begin to pay that money back.
To me, that is the way to look at it; and I would urge the
Administration to give no quarter in setting the record
straight on that.

CHAIRMAN'S CLOSING REMARKS

With that, thank you for coming.
Secretary Duncan. Thank you for the opportunity. Thank you
so much for your leadership and hard work.
[The following questions were submitted to be answered for
the record of the hearing:]

[GRAPHIC] [TIFF OMITTED] T8233A.041

[GRAPHIC] [TIFF OMITTED] T8233A.042

[GRAPHIC] [TIFF OMITTED] T8233A.043

[GRAPHIC] [TIFF OMITTED] T8233A.044

[GRAPHIC] [TIFF OMITTED] T8233A.045

[GRAPHIC] [TIFF OMITTED] T8233A.046

[GRAPHIC] [TIFF OMITTED] T8233A.047

[GRAPHIC] [TIFF OMITTED] T8233A.048

[GRAPHIC] [TIFF OMITTED] T8233A.049

[GRAPHIC] [TIFF OMITTED] T8233A.050

[GRAPHIC] [TIFF OMITTED] T8233A.051

[GRAPHIC] [TIFF OMITTED] T8233A.052

[GRAPHIC] [TIFF OMITTED] T8233A.053

[GRAPHIC] [TIFF OMITTED] T8233A.054

[GRAPHIC] [TIFF OMITTED] T8233A.055

[GRAPHIC] [TIFF OMITTED] T8233A.056

[GRAPHIC] [TIFF OMITTED] T8233A.057

[GRAPHIC] [TIFF OMITTED] T8233A.058

[GRAPHIC] [TIFF OMITTED] T8233A.059

[GRAPHIC] [TIFF OMITTED] T8233A.060

[GRAPHIC] [TIFF OMITTED] T8233A.061

[GRAPHIC] [TIFF OMITTED] T8233A.062

[GRAPHIC] [TIFF OMITTED] T8233A.063

[GRAPHIC] [TIFF OMITTED] T8233A.064

Wednesday, April 21, 2010.

FY 2011 BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND HUMAN SERVICES

WITNESS

HON. KATHLEEN SEBELIUS, SECRETARY

Opening Statement by Congressman Obey

Mr. Obey. Well, good morning, Madam Secretary. Sorry to be
late. I don't really have any good excuse. I just got involved
in some things.
Secretary Sebelius. I don't think the chairman is ever
late, sir.
Mr. Obey. Well, I think so. I detest being late.
Anyway, let me welcome you here today. It is good to have
you at a historic time, as you and your department begin to
implement the health reform legislation we just passed. That
debate has been going on a long time, and the Congress and the
President have finally made some decisions. And, to me, the job
at hand now is to try to implement it, make it work, see
whether adjustments need to be made down the line, and make
certain that it develops in a way which is beneficial to the
American people.
In this subcommittee, we have been doing a number of things
to make health care more accessible, more affordable, and more
effective. In the Recovery Act, for instance, we accelerated
those efforts. For example, we have been expanding education
and training programs to address the shortage of nurses,
primary care doctors, and other health professionals and to
encourage more practitioners to go into primary care and to
practice in places where they are most needed. As far as I am
concerned, that means especially rural areas.
Our regular appropriation bills have increased funding for
health professional programs by 35 percent over the past 4
years, and the Recovery Act included another $500,000,000 for
that purpose.
Another focus has been on prevention. We have provided a
billion dollars for prevention and wellness activities to jump-
start new efforts in this area. I should add at this point that
one of my special concerns is the area of hospital infections.
It just seems to me that that has to be at the top of our list,
in terms of priorities. We don't do people any favors if we
give 30,000,000 people additional access to health care and
then they wind up dying because of something that they caught
in a hospital. That happens at a disgracefully high level
lately, and I think we need to be very aggressive in doing
something about it.
Our subcommittee has also emphasized medical research. That
includes basic and applied research supported by the National
Institutes of Health. It includes patient-centered health
research to help practitioners decide which treatment works
most effectively for their patients and thereby improves
outcomes. The Recovery Act added $1,100,000,000 to support a
major expansion of patient-centered research.
Yet another priority has been to encourage a more
widespread use of information technology and electronic health
records to reduce medical errors and to make health-care
delivery more efficient. In the 21st century, piles of paper
are not the way we ought to be managing records that are vital
to patient care. And, as you know, the Recovery Act included
$19,000,000,000 to launch a major push for adoption of those
technologies.
Finally, we have the need to combat fraud and abuse in
health programs. We increased discretionary funding for this
purpose by 57 percent last year to support a wide range of
activities, from reviewing Medicare claims to prevent improper
payments to conducting criminal investigations. We held a
separate hearing on that issue several weeks ago.
While these and other health-care priorities are at center
stage, HHS also has many other responsibilities. Its human
services programs help families with access to child care, help
low-income people pay their winter heating bills, and assist
older Americans through programs like Meals on Wheels, to give
just a few examples. The need for these services has grown
during the current recession, and we have given the Department
resources to respond in both the Recovery Act and our regular
appropriations bills.
The President's budget request provides further increases
in some high-priority areas, including biomedical research at
NIH, child care, Head Start, mental health and substance abuse
programs, and health fraud and abuse control.
On the other hand, I am not at all thrilled at the proposed
35 percent cut to LIHEAP, and I am also concerned that we are
not yet well prepared to deal with public health emergencies
like a flu pandemic or bioterrorism.
I should also mention again that the administration has put
us in a box--not you, but, frankly, the White House has--by one
aspect of their budget submission because they have left a very
large hole to fill with respect to Pell grants. And if we are
going to meet our obligations in that area, we need to have
that problem addressed, or a lot of people's priorities,
including the administration's, will suffer greatly.
So, with that, let me welcome you. I look forward to
hearing from you. But first let me call on Mr. Tiahrt for
whatever comments he might have.
Mr. Tiahrt. Thank you, Mr. Chairman.
As always, it is good to have Secretary Sebelius, the
former Governor of Kansas, before the committee today. I have a
great many questions for the Secretary, so, in the interest of
time and the hope that we will get to at least two rounds of
questions, I am going to be brief.
Like many Americans, I have some very serious concerns
about the recently enacted government takeover of health care
in this country, what many refer to as ``Obama-care.'' I have
concerns about what it will do to the quality of care people in
this country currently receive, what it will do to small
businesses and the people who work for them. And I have
concerns about what it will do to our already-hemorrhaging
Treasury.
The level of spending authorized under this new law is
breathtaking, not to mention the audacity of the Federal
Government under this new law telling individual American
citizens what they must do in regard to health insurance. Many
of us opposed the new law and have serious concerns about what
it means both in terms of the cost as well as the role of the
government in health-care decisions.
Over the last 2 years, the President has made a number of
promises regarding this new health-care law. On June 15th,
2009, the President said, ``If you like your doctor, you will
be able to keep your doctor, period. If you like your health-
care plan, you will be able to keep your health-care plan,
period. No one will take it away, no matter what.'' Well, with
$130,000,000,000 in cuts to the Medicare Advantage plans, it
sure seems like 11,000,000 seniors will be in jeopardy of
losing their plan.
The President also said, on March 25th of this year, that
if you already have insurance, this reform will make it more
secure and more affordable. Apparently, that is true unless you
are one of the millions of Americans who buy an individual
policy that you like and want to keep.
I am also concerned about the pressure that the host of
newly authorized programs will force on other important
programs in this bill. There are at least $100,000,000,000 in
specific authorizations that Congress will be expected to fund
and countless billions in programs with wide, open-ended
authorizations. We have no idea how high those costs will be.
I could go on, but the bottom line for me is: What was
promised isn't what was delivered. I look forward to the
opportunity to ask a few questions.
And I thank the chairman and yield back.
Mr. Obey. Mr. Lewis.
Mr. Lewis. Mr. Chairman, I would prefer to wait and listen
to the Secretary and then ask questions.
Mr. Obey. All right. Thank you.
Ms. Secretary, please proceed.

Secretary Sebelius Opening Statement

Secretary Sebelius. Well, thank you, Mr. Chairman. It is
good to be here in the subcommittee with you, with Congressman
Tiahrt, and other members of the subcommittee.
I want to thank you, first, for inviting me here today to
talk about the 2011 budget, and I look forward to the
opportunity to respond to questions. But I want to spend just a
couple of minutes framing our budget, which I think advances
the Department's central goals: improving the health of all
Americans; expanding access to high-quality health care; and
providing children, families, and seniors with the critical
health services that give them a chance to thrive.
To do that, we have tried to make prudent investments that
actually echo the goals that the members of this subcommittee
have championed for years: attacking health-care fraud with new
tools and more resources; a new focus on preventing chronic
disease and promoting wellness; emphasizing a reduction in
medical errors and improving the overall quality of care; and
strengthening our public health system so that we will be
better prepared for new threats that come at us.
At a time when so many American families are trying to
balance their own household budgets, we think it is appropriate
that we not let taxpayer dollars go to waste. So the budget
reflects the difficult, time-consuming work we have done over
the last year to try to eliminate waste and fraud and focus our
resources so they can make the biggest impact on Americans'
lives.
Last month, you heard from our department's Deputy
Secretary, Bill Corr, about some of the expanded efforts to
identify, prosecute, and prevent health-care fraud as part of
the new partnership with the Justice Department known as HEAT.
And this budget, Mr. Chairman, builds on that progress. It adds
new fraud-fighting funds to help us expand proven strategies,
like putting Medicare fraud strike forces in cities that we
know are hubs for fraudulent activities, and invests in
promising new approaches like the systems that will help us
analyze claims for suspicious activity in real time. When the
budget takes effect, it is going to be a lot harder for
criminals to get rich stealing from seniors and from the
health-care system. And, over time, we believe the anti-fraud
efforts will pay for themselves many times over.
The budget also takes aim at medical errors. We know that
the quality of health care in America varies widely, and, most
tragically, in the case of tens of thousands of Americans who
die every year from health-care associated infections, many of
which are preventable. Chairman Obey, you have been a national
leader for eliminating these unnecessary deaths, and our budget
is aimed at helping to do that by doubling the size of the CDC
National Healthcare Safety Network to 5,000 hospitals.
You also mentioned the need to be ready for immunizations,
and I want to thank you for your support of the CDC Section 317
immunization program, which we have asked to receive additional
funds to make sure that all Americans have access to vaccines
that are the best protection against some of our most dangerous
diseases.
Investments like these will help make sure that Americans
get the best possible care when they are sick, but we also have
to do a much better job keeping Americans healthy in the first
place. So this budget builds on the Recovery Act's significant
investment in health information technology, which moves us
closer to nationwide interoperability and helps providers make
health IT part of their daily routine.
We try to build on the historic investment in prevention
and wellness that Congress made last year in the Recovery Act
with new efforts that will reduce the harmful effects of
chronic disease in our cities and create a new health
prevention corps and aim at preventing unintended pregnancies.
And because minorities and low-income Americans are likely
to be sick and less likely to get the care they need, our
fiscal year 2011 budget makes critical investments in areas
like community health centers and HIV/AIDS prevention and
treatment so we can address the disparities that have plagued
our health system and our country for far too long.
HHS has spent our Recovery Act funds responsibly, balancing
the need for getting these dollars into the economy with
assuring the proper stewardship of taxpayer dollars. By January
2010, HHS Recovery Act recipients reported having created at
least 30,000 new jobs and saving millions of jobs. The April
report period has not yet concluded, but we fully expect those
numbers to rise. By the end of September, we fully expect to
obligate the remaining $6,800,000,000 in Recovery Act
discretionary dollars available for fiscal year 2010.
So these are just a few ways that our department will work
to build a healthier America. At the same time, we will
continue our work, which is already under way, to effectively
implement many of the provisions in the historic health
insurance reform legislation that Congress passed last month.
The Affordable Care Act enshrines the principle that every
American should have access to the health care they need. It
also begins the transformation of our health-care system, with
a wide range of new programs and incentives to promote the kind
of coordinated, patient-centered, evidence-based care that has
been shown to generate far better health outcomes.
These changes, along with the investments in our fiscal
year 2011 budget, will mean that Americans getting access to
care as part of the Affordable Care Act will be joining a
health-care system that is more consumer-friendly, provides
more security, and, more importantly, does a better job at
keeping them healthy.
Those are the goals, but we cannot accomplish any of them
alone. We rely on partners across the Federal Government and
States and communities across the country. And no one has a
more important role than those of you in the United States
Congress.
So I want to thank you again for the opportunity to be here
today, and I would be happy to respond to the questions.
[Prepared statement of Secretary Kathleen Sebelius
follows:]

[GRAPHIC] [TIFF OMITTED] T8233B.001

[GRAPHIC] [TIFF OMITTED] T8233B.002

[GRAPHIC] [TIFF OMITTED] T8233B.003

[GRAPHIC] [TIFF OMITTED] T8233B.004

[GRAPHIC] [TIFF OMITTED] T8233B.005

[GRAPHIC] [TIFF OMITTED] T8233B.006

[GRAPHIC] [TIFF OMITTED] T8233B.007

[GRAPHIC] [TIFF OMITTED] T8233B.008

[GRAPHIC] [TIFF OMITTED] T8233B.009

[GRAPHIC] [TIFF OMITTED] T8233B.010

[GRAPHIC] [TIFF OMITTED] T8233B.011

[GRAPHIC] [TIFF OMITTED] T8233B.012

Mr. Obey. Thank you.
Mr. Tiahrt.

HEALTH CARE REFORM

Mr. Tiahrt. Thank you, Mr. Chairman.
A while back, I found the comments made by our Speaker of
the House, Ms. Pelosi, quite interesting. Specifically, she
said on March 9th before the legislative conference of the
National Association of Counties that--and I quote--``we have
to pass the bill so that you can find out what is in it.'' My
preference is that the American people know what was in the
bill before it is passed, but I suppose that is just a
philosophical difference.
I was even more interested in a recent Rasmussen poll that
shows that 56 percent of Americans believe that we should
repeal Obama-care. In Kansas, it is over 70 percent, probably
because four out of five jobs are small-business jobs, and
there is a great deal of concern about what it will do to small
employers. To be honest, I am not particularly surprised by
that number, and I expect it will grow, since the American
people are only now beginning to find out what has been done in
the bill.
This bill is widely unpopular. What is the most difficult
part for the administration to sell to the American people?
Secretary Sebelius. That is----
Mr. Tiahrt. Yeah, which part of this bill will be the most
difficult to convince the American people that it is going to
be good for them?
Secretary Sebelius. Well, Congressman, I think there has
been an extraordinary amount of misinformation about what the
law is and what it isn't. And one of the jobs that we have, I
think, moving forward and that I look forward to, frankly, is
telling people what is in the bill.
For instance, for small-business owners, there is a lot of
misinformation about mandates that currently are not part of
the law, and were never part of the law. So any employer who
has less than 50 employees has not only no mandate but may be
eligible for tax breaks that begin this year at 35 percent,
helping to secure employee coverage, and, eventually, in 2014,
will have access to a new market.
You and I know in Kansas that small employers are often
squeezed out of the marketplace, priced out of the marketplace,
don't have the leverage, whether they are a farm family or a
small-business owner, that the large employers have. They don't
have negotiating power. And they will have----

COST OF INSURANCE PREMIUMS

Mr. Tiahrt. Bringing up the costs----
Secretary Sebelius [continuing]. Opportunity through a
State-based exchange.
Mr. Tiahrt. I am sorry. I have limited time.
Because of the cost, there was an article in the New York
Times that talks about the effects the new law will have on
insurance premiums that are routinely paid by ordinary Kansans,
as you mentioned. Specifically, the article focuses on mandates
contained in the new law that have been in place in New York,
in Massachusetts, and a few other States.
The article concludes that people who buy their own
insurance--and that includes the self-employed, people who work
for small businesses, and early retirees, those who do not yet
qualify for Social Security--will have to pay, on average, an
additional $2,100 for their health insurance.
How does the administration justify forcing Americans who
form the backbone of our economy, specifically those associated
with small businesses, to pay an additional $2,100 for their
insurance? Did we learn anything from Massachusetts, New York,
and other States that have been doing some of these things that
are contained in this new law, or is the New York Times wrong?
Secretary Sebelius. Well, I would suggest that the New York
Times may be pricing a policy in Massachusetts but is not
pricing what will eventually be a State-based exchange in
Kansas.
The law is set up in a way that Kansas will have an
opportunity, if they choose, to put together a State-based
exchange to have the policies and programs be State-based. It
doesn't import the mandates from Massachusetts and impose them
on Kansas. It really is the law of the State of Kansas.
So I haven't read the article, but the State-based
exchanges, I would suggest, will make it much more affordable
for those in the individual market or the small-group market to
have affordable care, because they currently don't have the
bargaining power and they are squeezed out or priced out of the
market.
Mr. Tiahrt. I will submit that article for the record, Mr.
Chairman, if it is okay with you.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T8233B.013

[GRAPHIC] [TIFF OMITTED] T8233B.014

[GRAPHIC] [TIFF OMITTED] T8233B.015

[GRAPHIC] [TIFF OMITTED] T8233B.016

INDIVIDUAL MANDATES

Mr. Tiahrt. While I am not a lawyer, I am aware----
Secretary Sebelius. I am not either.
Mr. Tiahrt [continuing]. That the Supreme Court has
declared unconstitutional many Federal laws that contain
individual mandates. However, the new health-care law contains
a provision that appears to mandate that every individual in
the United States must have some form of health-care insurance.
Regardless of the lessons we have learned in Massachusetts
and New York with respect to individual mandates, what makes
this administration think that it can constitutionally mandate
that every American must buy health insurance?
And I ask specifically because there appears to be a fairly
large segment of the American population that chooses, for one
reason or another, not to buy health insurance even though they
can afford it. This is a basic issue of liberty for me, not
unlike deciding to purchase a house or rather to rent.
So what is it about the mandate that we think we can impose
on the American people? And do you think it will survive a
constitutional test?
Secretary Sebelius. Well, Congressman, I am also not a
lawyer, but I have discussed the constitutional challenges with
both our legal team and the legal team at the Justice
Department, who feel that the Commerce Clause gives strong
constitutional basis for the personal responsibility section of
this bill.
As you know, when Governor Romney signed the Massachusetts
law, he felt that a critical piece of expanding health coverage
was personal responsibility, that those who could afford,
actually, to purchase coverage would do so; and if they needed
assistance, that the State, in that instance--and, in our
instance, the Federal Government--would provide that
assistance, and there would be a waiver for those who couldn't
afford it.
It is the framework that we used to put together the
Affordable Care Act, and I think at least the lawyers will
debate this in the courtroom, but I am convinced that it does
stand on the strong constitutional grounds.
Mr. Tiahrt. Thank you, Mr. Chairman.
Mr. Obey. Mrs. Lowey.

MEDICAL LOSS RATIO

Mrs. Lowey. Thank you, Mr. Chairman.
And welcome, Madam Secretary.
Throughout the health-care debate, one of my highest
priorities was to enable the Federal Government to better track
and prevent premium increases for consumers. One of the
provisions in the new law involves medical loss ratio,
requiring insurance to spend at least 80 percent of premiums on
health-care services. This will a great benefit to those who
cannot continue to pay skyrocketing premiums. The law includes
a host of other cost-control measures, including allowing
exchanges to bar access to insurers with unreasonable premium
increases.
By the way, I found in my district--I had countless
meetings with large employers, small employers, individuals,
hospitals, doctors, and I cannot tell you how many people
talked about their rates being doubled in the last 5 years. So
we have to do something about this in this bill.
And if you could share with us, how does the budget request
enable HHS to police insurers and protect consumers from
abusive practices? And, more generally, are there any changes
to the budget request that are necessary now that health-care
reform has been signed into law?
First, let's talk specifically about the medical loss
ratio, and then whatever time is remaining, I would appreciate
it.
Secretary Sebelius. Well, the medical loss ratio,
Congresswoman, as you suggest, is part of the Affordable Care
Act. I am a former insurance commissioner, and I am familiar
with looking at the kind of data that is currently going to be
requested. So we have already reached out to the National
Association of Insurance Commissioners to, as suggested by the
law, have them help to frame the definitions that are used as
part of the formula for the loss ratio.
I have actually reached out, also, to my former colleagues,
Governors across the country to remind them--and in some States
there is the full range of rate review authority, and in other
States they are really missing big pieces of it, like
California and others who found themselves in a situation where
they do not have prior approval of rate increases--to remind
them that that may be a good thing to address in their
legislative session.
So we are aggressively putting together the framework for a
review of medical loss ratios and working in very close
connection with the State insurance commissioners and the
Governors to do just that.
I think that our budget, what we have done, Congresswoman,
as part of the implementation of the Affordable Care Act is to
stand up a new Office of Consumer Information and Insurance
Oversight that is going to be charged with not only
implementing the medical loss ratio standards but a whole host
of the market conduct standards for insurance companies and
working very closely with the State offices.

STATE INSURANCE COMMISSIONERS

Mrs. Lowey. Before we get to the next question, from your
experience--and you interacted, I know, with other State
commissioners before you took on these responsibilities--are
there any States that are actually monitoring this issue
effectively now? And I appreciate the fact that you said you
had been meeting with the State commissioners of insurance. Are
there any States that do it effectively?
Secretary Sebelius. I think there are. There are some
models out there that we look at very closely.
Again, the State laws vary. So some States have what they
call ``prior approval.'' Before a company can actually impose a
rate increase, they have to submit actuarial data to the
Department, have it reviewed, look at administrative costs,
overhead costs, CEO salaries, and what portion of the premiums
they are actually paying out in health benefits. Others have
what they call ``file and use,'' where the company actually
notices you that you have a rate increase and just files it
with the Department. And some don't even have that. So there is
a wide range of oversight.
We are very hopeful that we can--this isn't, as you know, a
Federal takeover of anything. It really is a State-based
insurance regulatory system that stays a State-based insurance
regulatory system. But we are working very hard with the States
to remind them that this responsibility is theirs.
We have asked--I actually went to the health insurers and
asked that companies submit to our office at a minimum their
actuarial information of what their overhead costs are, and
what their benefit payouts are, so we can at least make it
transparent to the American public. So far, we haven't had a
terribly robust response, but I am hoping that we will.
Mrs. Lowey. I look forward to your keeping us up to date on
this. Because, from my perspective and many of my colleagues',
we were moved to pass this legislation because, frankly,
everybody, from small business to large small business, was
just getting rate increases.
And my time is up. And I look forward to continuing to hear
from you and getting this information.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Lewis.

SINGLE-PAYOR SYSTEM

Mr. Lewis. Thank you, Mr. Chairman.
Welcome, Madam Secretary. I don't envy you the challenge
you have before you. All of us face the same thing, but you are
in a very special hot seat.
In general, I would like to talk about medical errors a bit
and a bit about Medicare. But before getting to that, as we
have gone through this debate over the last year, it has become
very apparent to any observer who has looked closely that the
key players on the majority side--the President; the Speaker;
the Speaker's closest advisor, Mr. Miller of Oakland; indeed,
Henry Waxman--have been supportive of a single-payor system.
Now, I know that is not the bill that we produced, but it
lays the foundation for exchanges to become a lot more than
State-based but, rather, Federal-dominated. And it concerns me
an awful lot that we ignore that.
Would you respond to you and your office's view of a
single-payor system at the Federal level?
Secretary Sebelius. Certainly, Congressman. I would be glad
to.
I think, from the outset of this discussion, there were
certainly those in the House and the Senate who favored a
single-payor system and felt that that was by far the
preferable option. From the beginning, the President made it
very clear that he did not, in spite of the fact that he had,
in years in the legislature and even when he came to the United
States Senate, talked about that as an option that would be
ideal. The more he looked at the situation, with 180,000,000
Americans having insurance coverage that was preferable to them
and that they liked, he felt that what we needed to do was
build on the current system. And that is really the structure
that the bill took from the outset, in spite of, I think, the
disappointment of some in the caucuses who would have preferred
to really dismantle the third-party-payor system.
So this really starts at the States. States put together
exchanges either as a single State or in a multi-State area, if
that is what they choose. We provide technical assistance to
the States to do that. And even though the timetable for
exchanges doesn't begin until 2014, we intend, starting next
year, to begin very robust discussions so that we don't wait
until the last minute and have States in a situation where they
can't do this.
We have already had lots of positive discussions, and
States are very eager to do this. And I think it will very much
be a State-based program. And particularly, Congressman, it is
not to dismantle what is in place right now. It is really to
replace the market for self-employed Americans, many of whom
cannot find affordable coverage, don't have any leverage, a lot
of small-business owners who find themselves in the same
situation.

MEDICAL ERROR RATES

Mr. Lewis. Madam Secretary, if I could take you to medical
errors----
Secretary Sebelius. Yes. Yes.
Mr. Lewis [continuing]. You suggest that, within the
Department, you want to at least model some evaluation of
medical errors to see how we can improve on that pattern within
the health-care delivery system. Might I suggest that one of
the major Federal medical health-care delivery systems lies
within our military. There is plenty of evidence that there is
rampant across this system an error-based system of delivery.
I would suggest that you might start there and help us,
with you, to evaluate what is going on in that medical health-
care delivery system that supposedly is serving the most
important servants we have in our society, the men and women
who have fought for this country.
Huge problem there. I would be interested in your reaction.
Secretary Sebelius. I am sorry. I want to understand what
you are saying, Congressman. We have begun, certainly,
discussions with not only the VA but the Department of Defense
on their system. But you are suggesting that there are rampant
medical errors within the health-care system for----
Mr. Lewis. That is correct. There is evidence at the
highest levels that system deliveries are, at best, producing
an awful lot more errors than the norm. And we might start that
examination right there.
Secretary Sebelius. Well, I think that is a good point, and
I will follow up on that. Thank you.

MEDICARE ADVANTAGE

Mr. Lewis. One of the President's major promises was that,
if you like your health care, you can keep it. And yet, to pay
for the new health-care plan, the law, it appears, would cut in
a major way Medicare Advantage by more than $130,000,000,000. I
have 50,000-plus seniors in my district who enjoy Medicare,
and, indeed, they are concerned about what these proposed cuts
might do to that service and existing delivery.
What can my seniors expect relative to implementing this
program?
Secretary Sebelius. Well, I think that there is a
provision, as you know, as part of the law that, over a decade,
a portion of the overpayment to the Medicare Advantage plans
will gradually be phased out. There are about 400 companies
right now offering about 1,100 plans throughout the country.
About 11,500,000 seniors taking advantage of those plans.
We have just actually put out the 2011 Medicare Advantage
updates, which will have the same rate payments for 2011 as
they did for 2010, and noticed plans across the country. There
will be a robust array of choices for Medicare recipients, as
there are right now.
I don't think there is any question that we are going to
begin to pay more attention and collect more data, and the CMS,
on medical outcomes, will be looking at not only the fee-for-
service side of Medicare but also the Medicare Advantage side
of Medicare to make sure that, if enhanced payments are going
out the door, it is really for higher-quality health outcomes.
And we know bundled care produces that, medical home models
produce that. And there are a number of Medicare Advantage
plans who are very eager to engage in that.
But I think that the misinformation to seniors about the
fact that Medicare Advantage is somehow not going to be a
choice is just wrong. We anticipate that there will be no
shortage of choices of Medicare Advantage plans throughout the
country.
Mr. Lewis. Thank you, Mr. Chairman.
I must say, Mr. Chairman, that what she just mentioned is a
major stumbling block. But if I were going to point to the
greatest stumbling block, it is when the average family, let's
say 25 to 45, suddenly finds a mandate, with the IRS looking
over their shoulder, that they must start putting money into a
pool for some future service delivery.
Thank you.
Mr. Obey. Well, I would say the greatest stumbling block is
when people with insurance have to pay $1,000 a year to
subsidize people who don't have it because we didn't have,
until now, a program like this.
Ms. Lee.

DIVERSITY IN HEALTH PROFESSIONALS

Ms. Lee. Thank you very much, Mr. Chairman.
Good to see you, Madam Secretary.
First of all, let me just thank you so much for your
leadership in helping to move the historic health-care reform
bill forward, for your steady leadership and your choice and
your experience.
And also, for those of us who were adamant about a public
option in terms of keeping costs down and holding the insurance
companies accountable, we are counting on you to make sure that
that happens, short of having a public option. And so, thank
you very much for understanding how important that is.
Myself, Congressman Honda, Congresswoman Roybal-Allard, the
Tri-Caucus was lockstep, very adamant, on addressing racial and
health disparities as part of the health reform bill. And I
would like for you to elaborate on how this budget actually
supports the goal of diversity in the health professions
through recruitment and training; how you increase diversity at
NIH institutions and researchers, ensuring that the racial and
ethic minorities benefit from any new, innovative health
research at NIH; also, in terms of the direct support for our
Nation's minority medical colleges, the targeted support to
help eliminate these disparities within communities where we
see them the most.
And so, in this budget, I just want to see how you are
shaping this. I know that this year the Office of Minority
Health, through I think it is called the National Partnership
for Action to End Health Disparities, has produced a draft
report, a national plan of action on disparities. So I just
want to get a sense of where you are on that.
Secondly--and I will ask all my questions right away, and
then you can respond. Secondly, national AIDS strategy: Current
budget allocation? Who is going to lead the implementation of
the national AIDS strategy? And what part of the current budget
allocation--I think it is $70,000,000--that is going to HRSA
and CDC will be dedicated to the national HIV-AIDS strategy?
Thirdly, let me ask you about nursing, because I had a long
conversation with the dean of the Samuel Merritt Nursing School
in Oakland, and she indicated that just in the Bay Area alone,
40 percent of all new nursing graduates since October 2008 have
yet to find a job. Yet I thought there was a nurses shortage in
our country.
I spend a lot of time, as I say to many, I spend a lot of
time in hospitals. My mother is 85 years old. My sister has
multiple sclerosis. And these are very good nurses, but we are
always being treated by traveling nurses, nurses who have
retired and who come to the hospitals to work because, I am
told, that there is a shortage. And yet now the dean of the
nursing school says nurses cannot find a job.
So I would like to, kind of, get some sense of what you
think is going on out there and what we can do to ensure that
qualified nurses are being hired.
And if I have any more time, I will ask some more
questions, but go on and respond to those.
Thank you again, Madam Secretary, and good to see you.
Secretary Sebelius. Well, thank you, Congresswoman. I will
try to hit the high points on the issues you raised.
First, health disparities is, I think, a glaring failure of
the health delivery system over years. And while our department
I think has done a fairly decent job documenting health
disparities, there has not been a very good strategy to
actually reduce or eliminate health disparities.
So the National Action Plan that you refer to is really the
first time since 1985 that there will be a secretarial-level
plan addressing health disparities. And it is one that I take
very seriously. It is in draft form right now. We look forward
to having a chance to preview it with you and to work on it.
I don't think there is any question that passage of the
Affordable Care Act is one of the most important steps we can
make toward closing the gap. Over and over again, it has been
identified that the lack of insurance, the lack of access to
affordable health care is one of the underlying causes of
health disparities. So a big step was made.
Our budget, actually, will build on that effort in a number
of ways. Not only will the Office of Minority Health focus with
a strategic roadmap on this National Plan--and we see it not
only within our department, but an across-government-agency
effort, where health is impacted by neighborhoods, by food
availability, and by the air you breathe. There are a lot of
things that actually add or subtract from people's health. So
we see this as a government-wide effort.
We do have additional resources in the 2011 budget that
look at recruitment of health providers from minority
communities to make sure that we have not only people serving
in underserved areas, but actually minority providers--nurses,
doctors, health technicians, mental health professionals.
As you know, the Affordable Care Act also made the Center
for Minority Health and Health Disparities into an Institute at
the National Institutes of Health which raises it to a level
where it will have serious strategic focus and attention. So
there are a whole host of assets coming together in a way that
really hasn't been organized in our department.
And, again, we look forward--I know this has been not only
a cause that you have taken very seriously but your fellow Tri-
Caucus members have been focused on for years, and I really
look forward to working with you as we address these gaps and
these underlying health causes.
I would suggest, also, that the increased footprint for the
Community Health Centers, which actually started in the
Recovery Act and are, again, targeted to the underserved areas,
as well as the efforts in wellness and prevention grants, will
also help to close this gap.
I can't respond very well to the nursing job shortage
situation that you talked about because that is the first time
I have ever heard of nurses not being snapped up immediately to
be hired. I hear the other side of the story over and over
again, that people need more nurses in the pipeline. And that
is exactly what we have been doing, is trying to fill that
workforce pipeline with more scholarships being paid off, more
increases to the National Health Service Corps, more people in
underserved areas. So I need to follow up on that.
And then, finally, in the AIDS area, there is a national
AIDS plan that is currently being formulated. It is not
finalized at this point. As you know, President Obama has
identified the fact that, while we had a very robust
international HIV-AIDS strategy, we had kind of lost the
attention and focus at the national level.
We have already launched, under CDC, an outreach program on
testing and particularly identified some of the most vulnerable
communities that we are beginning to interact with, using
social networking.
But we look forward to the strategic plan, which will be
led by the White House Office of National AIDS Policy and
others who are focused on AIDS. There is a new AIDS Council,
which will have a national and international focus. And we are
going to be very intimately working with them.
Mr. Obey. Mr. Rehberg.

HIGH RISK POOLS

Mr. Rehberg. Thank you, Mr. Chairman.
Temporary high-risk pools in Montana--I understand you have
been in contact with our auditor already about it. But I
noticed in the appropriations $5,000,000,000 was taken out of
the general fund to pay for the high-risk pools around the
country, but CMS is suggesting that the money will run out in
2011 and 2012. And, of course, they don't have to be in place
until 2014.
Why the shortfall? Well, why the anticipated shortfall? And
are there other areas that you see it is already coming in
over-budget?
Secretary Sebelius. Congressman, we don't know exactly how
many people will be able to be enrolled in the high-risk pool.
A lot of States offer high-risk pools right now. I think
Montana--
Mr. Rehberg. Which is one of the reasons we wondered why we
did this in the first place. If we already had the high-risk
pool in place, why supplant it with something created by the
Federal Government to do something that we already had in
place?
Secretary Sebelius. Again, this is a totally voluntary
program, first of all. Secondly, it won't be created by the
Federal Government. If Montana chooses to set up what is a
parallel pool, the money that is allocated in the Affordable
Care Act is to subsidize rates so----
Mr. Rehberg. The point is----
Secretary Sebeli [continuing]. They don't rise above 100
percent in Montana.
Mr. Rehberg. Correct.
Secretary Sebelius. They are well over 100 percent of the
market right now, and it makes it very unaffordable for lots of
folks.
Mr. Rehberg. But my question is, you asked for
$5,000,000,000, you got $5,000,000,000, and CMS is already
anticipating it will not last through 2011 or 2012. And the
high-risk pools are not to be in place by 2014. A shortage, a
shortfall, an overexpenditure. How are you going to deal with
it? Are you going to limit access?
Secretary Sebelius. Again, sir, this is not a Federal
program. If Montana chooses to participate, they will have an
allocated set of resources, which helps subsidize care for
Montanans who currently are uninsured and uninsurable.
Mr. Rehberg. Madam Secretary, you----
Secretary Sebelius. If they choose not to participate, that
is a choice that the State will make.
Mr. Rehberg. Let's go back to the question. The question
was, the legislation created high-risk pools, or the
opportunity to create a high-risk pool----
Secretary Sebelius. That is correct.
Mr. Rehberg [continuing]. By 2014.
Secretary Sebelius. No, sir. Right now. This is the bridge
strategy to a new market----
Mr. Rehberg. Correct.
Secretary Sebelius [continuing]. In 2014. Not by 2014.
Mr. Rehberg. That is correct. But, by 2014, an alternative
structure needs to be in place.
Secretary Sebelius. The exchanges.
Mr. Rehberg. Correct. But if the exchanges are in place in
2014 but you are using Montana and the other States' temporary
pool, and if you appropriated $5,000,000,000 and it is not
going to make it to 2014, you are going to have to come back to
this Appropriations Committee and ask for more money.
You have already anticipated that it is going to cost more
than you told us it was going to, in asking that the
legislation be passed in the first place.
Secretary Sebelius. Sir, currently, the Federal Government
pays a fraction of a State's high-risk pool. It puts about
$50,000,000 into an overall plan. This is an attempt to provide
a safety-net coverage if the money actually is going to have a
shortfall.
Mr. Rehberg. Madam Secretary, with all due respect, that
doesn't answer the question of the shortfall. I understand the
bridge. I understand that you are going to cooperate or
participate or help the States. But you said it was going to
cost $5,000,000,000, your anticipated expenditure, and it is
not.
Secretary Sebelius. Well, we don't know what it is going to
cost, and I would----
Mr. Rehberg. So you disagree with CMS?
Secretary Sebelius. We don't even know how many States want
to participate in the program at this point. We put out a
letter to Governors. I talked to my former colleagues
yesterday. We will, by April 30th, have some idea. I mean, we
really don't know, at this point, sir.

PROHIBITION ON LOBBYING WITH FEDERAL FUNDS

Mr. Rehberg. Okay.
The second line of questioning that I would like to go down
the path--in the stimulus package, the law certainly says you
can't lobby.
Secretary Sebelius. Correct.
Mr. Rehberg. You know, a bastion of information from CNN.
State of New York, obesity, educate leaders and decision-makers
about trans fat--this is a $3,000,000 grant award. Santa Clara,
California, advocating for an increased statewide tobacco tax.
The city of Chicago, tax increase at the city, county, and
State levels. Iowa Department of Public Health, $3,300,000,000,
inform local policymakers about evidence- and practice-based
pricing.
That sounds like lobbying.
Secretary Sebelius. Congressman, I read the same
information from the same news source. I can assure you that we
will follow to the letter of the law the Federal law which
prohibits Federal funds and has, not just in the Recovery Act
but consistently, prohibited lobbying with Federal dollars. We
will track that very carefully. We have already notified a
whole host of folks that that is the law of the land. That was
part of the grant application and will continue to be part of
the monitoring.
Federal funds will not be used for lobbying.
Mr. Rehberg. Okay. Because those were all quotes from the
grant application in the first place.
Secretary Sebelius. A lot of the applicants have a whole
host of strategies that they employ, have employed
historically, and will continue to employ. We are funding
programs that are not lobbying programs. They are actual
prevention----
Mr. Rehberg. But your oversight missed it in the initial
grant application.
Secretary Sebelius. Pardon me?
Mr. Rehberg. Your oversight missed it in the initial grant
application. The grant application had those exact quotes in
it.
Secretary Sebelius. They have been notified that there is
an absolute prohibition for using any Federal funding for
lobbying. And we will follow up on that very carefully.
Mr. Rehberg. Thank you.
Thank you, Mr. Chairman.
Mr. Obey. Ms. Roybal-Allard.
Ms. Roybal-Allard. Welcome, Madam Secretary.

PREVENTION AND WELLNESS FUNDING

Last year, the American Recovery and Reinvestment Act made
$650,000,000 in prevention and wellness funding available for
chronic disease prevention and management. And this year, when
Congress passed the Affordable Care Act, it included a
$15,000,000,000 Prevention and Public Health Fund, of which
$500,000,000 is, I believe, available this year. And, as I
understand it, these new funds are not restricted to chronic
diseases but are meant to fund the entire spectrum of public
health efforts.
I have been told that your office is currently working on a
system to distribute the funds this year. However, there seems
to be significant concern in the infectious disease community
that, in an effort to obligate the $500,000,000 by September
30th of this year, the Department will fund only existing grant
applications for the ARRA of chronic prevention grants and that
infectious disease programs will once again receive no funding.
Can you please outline how you plan to allocate these funds
and whether you will include new applications for prevention
funds to target infectious diseases such as HIV-AIDS, viral
hepatitis, sexually transmitted diseases, tuberculosis, many of
which are at crisis levels in many communities? And what
strategies is your department undertaking to address these
infectious-disease disparities in our minority communities?
Secretary Sebelius. Congresswoman, I would suggest that, at
this point, as you have identified, conversations are going on
with Members of the House and the Senate about the strategies
for allocating these funds. So no decisions have been made, at
this point, about either using traditional applications or not.
But we absolutely want that kind of input and, you know, look
forward to working with you on a plan.
I think that the effort will be to actually build on--as
you know, the investment in the ARRA funds was really a first-
time-ever investment in wellness and prevention and
strategically focused, at least in the community grant
applications, on two underlying causes of chronic disease,
which were tobacco cessation and obesity.
This is likely to be a broader area. There are lots of
ideas and good strategies about how to use this. We are looking
carefully at the scientific data, at the evidence-based
programs. I can guarantee you that what actually has been
demonstrated to work will be one of the guiding lights.
But I would say that discussion is very much under way, and
we would appreciate your input.
Ms. Roybal-Allard. So they are still open with regard to
funding infectious disease?
Secretary Sebelius. Yes.

REDUCING CESAREAN BIRTHS

Ms. Roybal-Allard. Okay.
As you are aware, the United States spends more on
maternity care than any other country in the world. However, we
rank 41st in the world in maternal mortality and rank 30th in
infant mortality.
While we know there is an extensive body of research
regarding best evidenced-based practices in maternity care, our
health-care providers seem not to be following that research.
For example, despite Healthy People 2010 goals of reducing
Cesarean births to 15 percent, the United States continues to
have a 31.8 percent Cesarean section rate.
Given the risks that are associated with medically
unnecessary Cesareans and the extraordinary costs associated
with Cesarean births, is the administration doing anything to
refine our care system to support the best and most cost-
effective, evidence-based care to reduce the rate of C-
sections?
Secretary Sebelius. Congresswoman, I am not sure I can
speak with any specificity about what actions are currently
being taken in dialogue with providers about the C-section rate
beyond just publishing the data and highlighting the data.
I can tell you that our Office of Women's Health is very
focused on maternal and child health issues and, frankly, what
are pretty dismal health results, as you suggest--high
expenditure and not terrifically good results.
I, again, think that the Affordable Care Act makes a big
step in the direction of getting affordable prenatal care to
pregnant women. That will be a major step forward----

INCREASING BIRTHING CENTERS

Ms. Roybal-Allard. I am sorry to interrupt, because I see
my time is up, but I did want to know whether or not, since the
new law requires Medicare to cover care provided in all free-
standing birth centers at a cost of $6,000 less, is there any
consideration in the initiatives to increase the availability
of licensed birthing centers across the country?
Mr. Obey. Very brief answer.
Ms. Roybal-Allard. Is that being looked at?
Secretary Sebelius. I can't answer that, but I will look
into it.
[The information follows:]

Increasing Birthing Centers

Thank you for your interest in the Medicaid program and the
availability of licensed, free-standing birthing centers. As you know,
section 2301 of the Patient Protection and Affordable Care Act of 2010
(the Affordable Care Act) requires the States to cover services
provided by freestanding birth centers as a mandatory service under
Medicaid. Currently, we are focused on implementing and providing
technical assistance to the States on this provision. We expect that
States with licensed, freestanding birthing centers will build a
foundation for expanding these services to the Medicaid population and
that their experience will be instructive to other States considering
expanding the availability of such centers.

Ms. Roybal-Allard. Okay. Thank you.
Mr. Obey. Mr. Alexander.

FMAP FORMULA

Mr. Alexander. Thank you, Mr. Chairman.
Madam Secretary, I have two questions. One is about FMAP.
Congressman Cao and all of the Louisiana delegation, as
cosponsors, are supporting a piece of legislation to address
Medicaid reimbursements or Medicaid costs. Governor Jindal is
supporting the legislation, as well as Secretary Levine from
the Louisiana Department of Hospitals. They are in a
legislative session today dealing with the shortfall there of a
half a billion dollars.
My question is, what is being done to prevent States like
Louisiana, who were unfairly, when you look at the FMAP
formula--because we got a lot of money, as the State of
Louisiana was recovering from the hurricanes. Louisiana was
looked at as being a State that was financially better off than
they really are.
So what are we doing to prevent Louisiana or any other
State, like yours, that received financial help from appearing
to be wealthier than they really are and, therefore, suffering
because of the Medicaid?
Secretary Sebelius. Congressman, we have spent a good deal
of time with not only your State health officials, your
Medicaid director, the mayor-elect of New Orleans, and others,
Senator Landrieu, on this situation. Frankly, one of the
reasons I think that there is now a legislative discussion is
because the law is pretty clear that we don't have
administrative flexibility to change the calendar years for
which the income level is calculated; and that is really the
situation, is when the count began what the income level is and
how it was calculated. But we are working very closely with
them, well aware of the anomaly that income appeared to go very
high because half the population was, frankly, gone and not
counted and probably inaccurately reflects what is the true
medical count.
And if we can have a legislative fix, we will try to move
it very, very quickly. But we have our hands tied in terms of
what administratively we can do for this situation. But I think
it is really worth looking at.
As you suggested, it is not only Louisiana but what happens
post-disaster in an area where Federal funding may come in as
an aid after the fact, but then the result is a calculation
that isn't a very accurate picture of what the financial
wherewithal is.

HEALTH CARE FRAUD

Mr. Alexander. Thank you.
Chairman Obey a little earlier said something about a
meeting that we had a few weeks ago about fraud. During that
meeting, we heard all kind of reports about the number of
physicians and other health care providers that were using
sometimes information obtained from the inside to defraud the
taxpayers. I asked the question about the number of individuals
from the inside that might have been found doing something
wrong.
Again, I am not pointing fingers, but I just find it almost
impossible to believe that there are numbers of individuals on
the outside committing fraud at the numbers that we are hearing
about without getting some help from the inside.
When we talk about organized crime--and that term was
mentioned--organized means at least two. You can't have
organized crime with one. So I asked the question. I have not
gotten an answer. I have had staff members to try to find out
if in fact there are any individuals on the inside of any of
the departments at all levels who have been found guilty of
helping those on the outside. Can't get an answer. There is no
answer or either they won't give it to us.
Secretary Sebelius. Congressman, I can tell you I am not
aware--and I will make sure we get this data and get it right
back to you--I am not aware of if you are talking about State
and Federal employees who have been charged and found guilty. I
do know if ``inside'' means providers and not necessarily just
doctors but so-called equipment providers and home health
providers, there are dozens and dozens of insiders in that
instance who have been charged and prosecuted, which is really
the only way that we would be able to document if they have
actually been found in some case. But I can get that
information to you.
That is the kind of thing that I think the new fraud effort
is attempting to crack down on, people who pretend to be
providers, if you will, set up sham operations, bill. But they
are not necessarily part of organized crime. They are just
operating as insiders but really conducting fraudulent
activities. But we will circle back right away and get you that
information.
[The information follows:]

Health Care Fraud

The HHS Office of Inspector General's (OIG) Office of
Investigations (OI) has one known case where an employee was complicit
in a health care fraud scheme. In the Los Angeles Region, two Centers
for Medicare & Medicaid contractors admitted to receiving money,
$15,000 and $5,000 respectively, from an outside source to process
provider applications. One individual received 3 years probation and
was fined $1,000, while the other received 2 years probation and was
fined $5,000.
Because many of the providers who had applications expedited are
subjects of on-going investigations, the total loss to the Medicare
program has not been fully determined. However, it was determined that
one provider involved in this scheme, caused a $3.2 million loss to the
government. Additionally, it is believed that at least one entity
bribing the employees in this case is connected to an organized
criminal enterprise, and there may be additional employees identified
in this scheme.
Instance of ``insider'' fraud within the Department or involving
its employees are extremely rare, and when identified, are taken very
seriously and investigated to the fullest extent by our law enforcement
partners.

Mr. Alexander. Thank you.
Mr. Obey. Ms. McCollum.

MEDICARE REIMBURSEMENT

Ms. McCollum. Thank you, Mr. Chair.
To the gentleman's question, I know the Department,
unfortunately, I have to report, in Minnesota found two
internal problems with fraud. So you do do internal audits, and
I am sad to report that there were people in Minnesota involved
in it. I am happy that they got caught.
I would like first, though, however, to commend Chairman
Obey for his ongoing instrumental leadership in fighting for
the best value and quality in health care. That just leads to a
lot of hearings that you have had before and the hearing we are
having today.
I would like to congratulate you on the passage of the
health reform bill. Your work and the work of the
administration were key to ensuring that health care reform
became a reality. I believe that the current Medicare payment
system is deeply flawed and too many hospitals and providers
shoulder the burden of unfair Medicare reimbursement for high-
quality, low-cost care that they deliver, my State being one of
them. I look forward to working with you as you convene the
National Summit on Geographic Variation, Cost, Access, and
Value in Health Care this year. And on this issue and the
timing implications for some of the fact finding that you are
looking at and for the implementation of change, I am going to
submit some of those questions for the record.

HOSPITAL ACQUIRED INFECTIONS

Ms. McCollum. So I would like to spend my remaining time
talking about hospital-acquired infections. We are here today
to learn how to work more effectively with you to improve the
quality of our health care system for all Americans. Hospital-
acquired infections contributed to almost a hundred thousand
deaths. In a recent report, HHS concluded that hospital
infections merited urgent action. We know that hospital
infections add $28 to $33 billion to our national health care
costs. This is a serious public health care concern, because
are we not only paying the cost, there are patients paying for
these mistakes with their lives.
HHS has set out a goal to reduce hospital-acquired
infections by 10 to 20 percent in 2 years, and 50 percent
within 10. But we are far from reaching that goal. We know that
most of these infections are preventable through low-cost
techniques. There is a New York Times article that even talks
about how we have had remarkable progress in reducing infection
rates but how many of the hospitals have not yet worked to
overcome these infection rates because they are in an
entrenched medical culture which is not changing.
My State has worked to lower infections, and I know others
are doing that as well. You have examples at your Department on
how we can reduce infection rates. But the report also points
out that infection rates have gone up 8 percent.
So here are my questions:
Is the 8 percent increase because of better reporting,
whether it is voluntary or mandatory? Because you can't address
a problem until you know and you face the fact that the problem
exists. What are some of the obstacles to addressing this
issue? Does the agency need this committee or the policy
committee to work more closely with you to address this public
health care concern moving forward?
Secretary Sebelius. First of all, Congresswoman, I think
your targeted concern is one that is a huge issue, and it is
not only a huge cost issue, it is a huge safety issue. I know
the Chairman has been working with you and sort of focused like
a laser beam on this. The notion that we have a hundred
thousand deaths a year from what happens to people when they
are in the hospital, not what brought them in the first place,
is, frankly, totally unacceptable. And hundreds of thousands
more in just high-cost, longer-care strategies and lingering
diseases. So it is a very serious issue.
We know what works. It has been demonstrated and proven. It
has never been taken to scale.
So I think a couple of things are happening simultaneously.
First of all, the notion of increases, I would say, is a part
of better reporting. It also is a snapshot of the past. We are
hopeful that more current data gives more encouraging signs.
This focus by the Department, by this Committee, through the
Recovery Act, through the Affordable Care Act, and through our
budgets, I think is relatively recent.
Secondly, there is no question that it is a question of
focus by hospitals. You have required as part of the Affordable
Care Act that all hospitals now have to report, which is a big
step forward, and that reporting will be much more transparent
to consumers and others, which is, again, a big step forward.
Third, we are putting real resources both to States for
more frequent inspections and to hospital systems to encourage
the adoption of the strategies that we know work.
Fourth is the electronic medical records. I was in a
hospital in Cincinnati 2 weeks ago, in Children's Hospital,
which does some of the most complicated surgeries on infants
and even prenatally that I have ever seen. They have embedded
into their electronic records system the checklist that we know
works to reduce hospital infections. They have gone a thousand
days without any safety concern. It is a great example of what
meaningful use in an electronic records system can do, which is
embed the kind of safety checklist, make sure it is done time
and time again. If you can do it in that type of environment,
we can do it everywhere.
So I think there are some resources coming together, but I
can tell you that it is something that we take very, very
seriously. And I think it is not only huge costs, but we are
killing people by our health care system.
Mr. Obey. Mr. Cole.

MEDICARE REIMBURSEMENT RATES

Mr. Cole. Thank you, Mr. Chairman.
Madam Secretary, thank you for being here today.
As I talk to hospitals in my district, and it is a pretty
rural district, a lot of small town, lot of Medicare- and
Medicaid-intensive facilities, most of them are expecting, and
this is not through your actions or through the health care
bill, the Medicare reimbursement rates are being cut. They are
going down. They look on the Medicaid new population that they
will be getting under the health care bill as largely a break-
even deal for them. They are really not making money off of
that. They are very worried about what is going to happen to
the private provider part of reimbursement.
Because the point has been made here earlier, private
insurance subsidizes the uninsured, but it also subsidizes
Medicare and Medicare to a large degree, because those programs
don't break even on costs. So they are looking at their future,
and they are wondering where the dollars will come from for
them to literally keep their doors open. And then the people in
the larger cities wonder what happened to those smaller
hospitals that closed and that population base is moved into
their facilities.
So I would like you to just walk through how you see
hospital reimbursement rate developing over the course as you
phase in the new health care bill.
Secretary Sebelius. Congressman, I think that is a great
question. Whether it is in rural areas in your district or in a
State like Kansas, or in urban areas, I think every hospital
administrator who I have talked to in the last 10 years has
seen their uncompensated care rate rise. So there is currently
a population with no payment stream at all and then
insufficient payment streams and then private-payer streams.
So I think one of the features of the Affordable Care Act
is to actually have a payment stream arguably under every
patient who comes through the door. It is one of the reasons
that a lot of the hospital systems worked carefully with us on
the framework of health reform.
I do think that there also is an effort where the kind of
bundled care strategies--again, hospital providers are very
eager to have a payment system which actually looks at ways
that they can be more appropriately compensated for keeping
people out of the hospital. Right now, the only way they
actually get compensated is if somebody actually comes back
into the hospital.
And the sorts of embedded directional changes in the
delivery system for health homes and bundled care and
accountable care organizations actually have, I think, some
huge advantages for hospital systems to have a more appropriate
reimbursement system and actually keep people healthier in the
long term. I would say the third piece of the puzzle is a lot
of hospitals right now, particularly through emergency rooms,
are delivering care which could much more effectively be
delivered in a primary care setting, in a community health
center, in a variety of areas. They have begun to work on
strategies to kind of triage that care so they don't have to
have this robust sort of preventive care, and that I think is
also part of the new structure.
Mr. Cole. A lot of, again, my facilities are concerned
with, again, on the private end of it is where they make the
money to, frankly, reinvest in technology and facilities. They
don't make that off Medicare. They don't make it off Medicaid.
So they are really worried, are we going to crowd out the
private market here and they won't have the money they need to
give patients the best service that they possibly can give.
Secretary Sebelius. Well, I think with the exchange
opportunities, the private market, I would suggest, may be
stronger. What is happening right now, and has happened over
the last 5 years certainly, is more and more small employers
have dropped their private coverage because they can't any
longer pay the premium. A lot of individuals lost insurance
when they lost their jobs, but I think the restabilization of a
marketplace, of a private marketplace with larger purchasing
pools but then stabilizing that coverage that people have is
actually going to be good news.
Mr. Cole. I hope so. I think that is a point worth making,
though. Because a lot of my friends who favor the public option
think, forget where the money comes from that actually allows
health care to be delivered. It is very heavily from the
private sector. You overpay, quite frankly, if you are on
private insurance already. We know that problem was alluded to
earlier. But that also supports Medicare, Medicaid, and,
frankly, the new health care insurance bill as well. So I would
be very careful about killing the goose that has actually
provided the eggs for everybody else.
Secretary Sebelius. Well, as you may know, of the 32
million or so estimated new enrollees in a health insurance
system, the majority of those individuals will be in the
private market, will not be in the public market.
Mr. Cole. Thank you, Mr. Chairman.
Mr. Obey. Mr. Honda.

HEALTH INSURANCE COSTS

Mr. Honda. Thank you very much.
Welcome, Madam Secretary.
Just to pick up with your last comment, the additional 32
million that will be added to the population, would that tend
to drive the costs down across the board in terms of insurance
premiums if we have the other things in place like the
antitrust provision and a public option?
Secretary Sebelius. Congressman, what I think is
anticipated to cost less is--first of all, the market right now
is pretty fragmented. So if you are an individual buying your
own coverage, or a small business owner, one health incident,
one cancer survivor, one heart attack puts you in a very
expensive category. Pooling that risk into an exchange, a much
bigger purchasing pool, I think helps balance the costs
overall. I think it is one of the reasons that costs will come
down. Hopefully, a number of the underlying features that
actually lower the overall health care costs also are impactful
in terms of the health insurance costs.
Mr. Honda. It seems to me that that is something that we
can work towards and anticipate. We do know, though, if we
don't do anything, we have 47 million people without insurance
and the costs continue to rise. In the last 18 months, at least
in California, the premiums have gone from 30 percent one year,
38 percent this past year, in terms of premiums increase, in
light of the debate we had already. So I am not sure the word
is arrogant, but it sure is pretty bold to do that while we are
having a debate on the high cost of insurance.
I want to thank you for taking on this job. It is a massive
job; and I think it is a very complicated, complex job that you
have. But I am looking forward to working with you on this.
I would note that the State you do come from is a very
active State and very vigorous folks. I was pleased to see that
a Congressperson did vote for the bill.
I think that in my own district, District 15, which is
Silicon Valley, which has probably the highest per capita post-
graduate folks, probably the highest average income in this
country, I had something like 70,000 folks who were uninsured.
That is almost 10 percent of my population. It doesn't mean
that they were unemployed, but they were uninsured.
A fellow who ran against me for office when I first ran, a
young man, a good friend of mine, said that in the current
situation he would not be able to go into business for himself
because his child has a pre-existing condition. My past
opponent and friend said, go for it. It is important for our
country.
What is important for our country also is that we know that
we have a viral hepatitis issue in America and globally, and we
know that more Americans have chronic viral hepatitis. There is
more of an incidence of that than HIV/AIDS, and the disease is
100 times more infections than HIV. While I am grateful to the
President for requesting an increase for the division in your
2011 appropriation budget, I am glad that Assistant Secretary
Koh, with whom we had met, had begun two major interagency
tasks forces on this issue. We are very appreciative of that
activity.

PREVENTION AND PUBLIC HEALTH FUND

I am also aware that there is about $500 million for
prevention and wellness funds that is made available through
this bill. But there is nothing that says how it is going to be
spent. Do you have any idea how your Department will be looking
at that and how it will be spent?
Secretary Sebelius. Congressman, I think that we are still
seeking guidance from Members in the House and the Senate about
that 2010 appropriation for the prevention funds. We did invest
in prevention in 2009 and 2010 as part of the Recovery Act, and
we see this as an opportunity to amplify and maybe look in some
other directions, but those conversations are under way, and we
would appreciate your feedback.
Mr. Honda. We certainly will be willing to do that.
Mr. Obey. The gentleman's time has expired.
Mr. Ryan.

PREVENTION AND MINDFULNESS

Mr. Ryan. Thank you, Mr. Chairman.
I want to personally thank you for all your leadership with
regard to the health care reform efforts in trying to push it
through. I think history will judge us well, bringing a level
of social justice to this country that we haven't seen.
One of the things I mentioned before when you were here
that I have been dealing with and working with for the past few
months and years is the issue of stress in our society. I think
as we talk about health care reform and the technology and
everything else that there is a growing body of evidence, not
just in the area of health care, of mindfulness and
contemplative practices and their benefits on reducing stress
levels and allowing our body to heal itself.
So as we are moving 30 million more people into the system,
there is inevitably going to be more costs, and I think we have
dealt with that. And it will reduce costs, and I think we have
dealt with that.
But we need to, I think, pursue--and Mr. Honda just
mentioned prevention. I know there is going to be a panel to
evaluate what preventive measures actually work. So if you can
just talk about that.
But I would also like to encourage you that on that panel
should be somebody who has been in the field, working in the
field of mindfulness-based stress reduction. I think it is the
most cost-effective way to drive down health care costs. It is
about individual responsibility. It is about teaching people to
manage their own health right in line with everything else we
are talking about. So I want to encourage you to do that.
It is not just in the area of health. The Defense
Department is now doing this for pre-deployment for soldiers
who are going over, allowing them to--and hopefully prevent a
lot of the post-traumatic stress that goes on when these kids
go into battle. So I want to encourage you to do that.
If you can talk for just a second about the panel that is
going to be created to evaluate adequate preventive measures in
the health care reform bill.
Secretary Sebelius. First, Congressman, I am all for
looking at any strategy we can find that is successfully
reducing stress. I am at the front of that line. I would be
grateful for that evidence. I think that whether it is in this
instance or the framework for the services, with the exchanges
or others, certainly we will put together a very broad-based
group of experts and look at what the evidence says. And in
this area I think there are a number of cost-effective sort of
patient-centered strategies that really do work. And so I look
forward to getting the information from you and making sure
that is part of the discussion.
Mr. Ryan. I will get it to you.
I was at a conference this past week and there was someone
from Ms. McCollum's district at the University of Minnesota.
They are offering basically a stress reduction class for
incoming freshman. There is a 50-person wait list. So this is
something that is throughout our society. So I think your
leadership on this could be critical.

PRIMARY CARE PHYSICIAN SHORTAGE

Another question I have, and it is something one of my
colleagues mentioned, the shortage of nurses, is the issue with
primary care physicians. If you can touch upon that and how we
are going to try to bridge our way through that.
Secretary Sebelius. I think there is no question we need
more health care providers altogether, but we also need more of
the providers to choose primary care, gerontology, family
practice. So a couple of strategies simultaneously. One is
using more of our loan repayment and scholarship funds to
attract people to those fields at the outset and pay off more
of the debt for health care provider training in the areas that
we see the biggest needs.
As you know, the Affordable Care Act had a feature which
actually, again, moves primary care providers for a couple of
years with 100 percent Federal funding from Medicaid rates to
Medicare rates, which I think is, again, a big step forward to
more adequately compensating the kind of work they are doing.
Mr. Ryan. How about the bridge between those kids that they
are going into school now maybe and they are saying, yeah, it
looks like primary care is going to be an opportunity for me.
But in 2014 they will be just getting their bachelor's degree
or their BS degree and moving on.
Secretary Sebelius. We are changing the Medicare pay rates,
also. I think payment of debt once you get your medical degree
is also a pathway to a much more robust primary care system.
That is what I hear from medical students all the time, that
they are in a real financial box in terms of not being able to
pay off their loans and being inadequately compensated once
they become providers. So we are looking at both ends of that
puzzle.
Mr. Ryan. So you think they will move over immediately.
Secretary Sebelius. I do. Actually, we have seen an
increase already this year in primary care choices made by
first-year residents. It is up about 20 percent.
Mr. Ryan. Great. Thank you.
Mr. Obey. Ms. DeLauro.

HEALTH REFORM COMPLIANCE AND ENFORCEMENT

Ms. DeLauro. Thank you, Mr. Chairman.
Welcome, Madam Secretary. Thank you for your efforts in
helping us to pass what is historic legislation.
I know that your Department is working overtime to make
sure that we begin the implementation of this legislation and
that the people of this country can really experience the
benefits as quickly as possible, whether they are small
business owners or seniors or young adults or parents or people
who have a pre-existing condition.
We have already seen a couple of instances where insurance
companies seem to be changing their behavior in response to the
bill.
On the positive side, we have seen several companies who
plan to move ahead of schedule to let adult children stay on
their parents' plan until age 26.
But there are instances in which we will need to watch
insurance companies closely to make sure they are following the
new rules that have been laid out. For example, some reports,
including the Senate Commerce Committee, indicates that
insurers may be manipulating their medical loss ratios,
reclassifying certain expenses to make it look like they are
spending at a higher percentage of the premium dollar on
medical care in order to meet the standards in the law. The
Affordable Care Act included rate review provisions, including
grant funding to assist States carrying out rate reviews to
stop insurance from hiking those premiums to unacceptable
levels. This law now bans a host of insurance company abuses:
rescissions, denials of coverage for pre-existing conditions,
gender rating, and health status rating.
Let me just lay out the three pieces of this question, and
I will let you go.
What resources and tools does HHS and the Department of
Labor need for enforcement of health reform and holding
insurance companies accountable?
With regard to medical loss ratio, how are you going to
work with the National Association of Insurance Commissioners
to ensure that terms like clinical services, activities to
improve quality are defined appropriately, that do not include
more routine activities that are more typically classified as
administration expenses?
Today, in the New York Times, there is an article that
says, Senate bill sets a plan to regulate premiums. The Federal
Government could regulate rates in States where State officials
do not have sufficient authority and capability to do so. Let
me ask you to comment on that.
So if you could address those three pieces, I would
appreciate it.
Secretary Sebelius. In terms of the resources and tools,
Congresswoman, we are working very closely with both Labor and
with Treasury that has a sort of piece of some of these puzzles
on the initial regulations. That has gone pretty well. We have
put together our Office on Consumer Information and Insurance
Oversight. It is going to be led by a former insurance
commissioner who also has worked in many States around the
country on regulatory oversight.
We are working very, very closely with my former colleagues
at the National Association of Insurance Commissioners because
this has got to be, frankly, a State-led, on-the-ground
program. They are the ones who have this ability and
information.
I think there is a very robust discussion. They are in the
midst of identifying the terminology and definition for the
medical loss ratio. We are looking at some laws that are in
place and work very well and what the actuaries can actually
take a look at. So it is something we are going to take very
seriously.
In terms of the rate review, the original Senate bill had a
provision that Senator Feinstein was promulgating of a rate
authority that would actually be the interim strategy between
the time the bill passed this year and the time that the new
exchanges were in place. That rate authority was not part of
the reconciliation measure and I think would set up a framework
where, absent State review authority, there would be a fallback
review authority.
So I think that debate is likely to go on and may be an
important piece of this puzzle, because, right now, unless a
State changes the laws and takes on this responsibility, there
really is not fallback, other than highlighting what rating is
under way. But there is no rating authority right now with the
Department of Health and Human Services, and we are encouraging
States to do just that.
Ms. DeLauro. I am really pleased to hear that.
As you know, I come from the State of Connecticut. We
probably are the insurance capital of the country. Over and
over again, as my other colleagues have experienced, the
insurance companies, we have lived in their world a very long
time. It is now time for them to live in our world.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Moran.

PREVENTION ISSUES

Mr. Moran. Thank you very much, Mr. Chairman.
Let me join the chorus of gratitude for your leadership,
Madam Secretary. But it does seem as though you are paddling
upstream against the current. When you look at your budget,
about 85 percent of it is really not under your control. It is
reimbursement after people have gotten sick, and it is to the
elderly. Medicare and most of Medicaid is still nursing home
care for seniors.
But something dramatic is happening in the health care of
this current generation of young people that bodes ill for the
future costs of care. Asthma rates have tripled in this past
generation. One in every six American children now has a
developmental disorder--attention deficit disorder, mental
retardation, dyslexia. One in every 59 boys is diagnosed with
autism today. After accidents, cancer is the leading cause of
death among children. Primary brain cancer has gone up about 50
percent. Childhood obesity has quadrupled in the last 10 years.
Diabetes is out of control, about 25 million people now. In
fact, they now say one in two minority children will develop
diabetes during their lifetime. That is unbelievable.
So it would seem that somehow we have got to get a handle
on prevention. What is causing all this? Because it really is a
dramatic change in the last generation. The First Lady's
emphasis upon obesity, upon what people eat, is critically
important. I would like to know how you are integrating that in
terms of your program priorities.
It also may have something to do with the chemicals in the
air we breathe or the water we drink or the food we eat. In
fact, there was an analysis of umbilical cord blood in 2007 and
2008 that showed that the average infant had 232 industrial
compounds present in the umbilical cord blood. So many people
think there may be an endocrine-disrupting effect on health
care that is contributing to this massive increase in certain
diseases.
I ask you because you have responsibility for the National
Institute of Environmental Health Sciences. I know they have
some indication this may be what is behind these massive
changes in childhood illnesses. I am wondering if you have any
plans to enable them to take a more robust, aggressive approach
in terms of the environment's effect as well as what you are
doing in coordinating with the First Lady's initiative on
obesity.
Secretary Sebelius. Thank you, Congressman.
The statistics you recite are alarming and, unfortunately,
very real and ones that we have to take incredibly seriously.
The shorthand is that we spend more, live sicker, and die
younger than most developed countries; and there is something
fundamentally wrong with that picture.
The First Lady's initiative, as you know, is not only
focused on what you eat. That is a piece of the puzzle. But I
think it is a strategy that really looks across the areas and
understands that the health of kids is impacted by what they
eat in and outside their houses, what goes on in school, how
much exercise they get, whether there is a safe place to play
and walk, a whole host of strategies that I think provide a
template for the kind of thing that you are talking about.
I don't think there is any question that, first, reporting
is better in this generation. Some of what you are talking
about is probably highlighted by better monitoring, better
reporting. But that doesn't nearly compensate for the
incredible increases. Some of it is preventable in terms of
what we are doing to ourselves, and some of it is likely to
have environmental impact.
My Assistant Secretary for Health, Dr. Koh, has reengaged
our Department in a very robust fashion in working with the
Environmental Protection Agency and others in looking at the
health impact of environmental issues. HHS had kind of
withdrawn from that space for a while, and we are very much
back at the table. So whether it is looking at carbon content
or water-based diseases or air quality, which has a huge impact
on asthma, there are huge health impacts from environmental
issues. And I would suggest also that the Food and Drug
Administration is taking very seriously a whole host of
investigations in terms of chemical content, which may well
impact people not in terms what they are eating, but the kind
of cans, the bottling, a whole host of other areas.
So this is all something that I think we are reengaging in
a very active way and share your alarm and what the current
health profile is for this country.
Mr. Moran. Thank you, Madam Secretary.
Mr. Obey. Madam Secretary, I have a number of questions
that I would like you to answer for the record, one on health
professions workforce, another on pandemic flu, a third on
LIHEAP, one on health-care associated infections, oral health,
health information technology, and several others.

HEALTH CARE REFORM

Mr. Obey. But let me ask a couple of questions about the
bill that we just passed.
Mr. Tiahrt and I are friends, but we often disagree. We are
not disagreeable friends, but we are disagreeing friends very
often. But in light of his characterization of the health care
bill as a government takeover, let me ask a few questions. Is
the VA a government agency?
Secretary Sebelius. Yes, sir.
Mr. Obey. Is Medicare a government program?
Secretary Sebelius. Yes, sir.
Mr. Obey. Is Medicaid a government program?
Secretary Sebelius. Yes.
Mr. Obey. I thought so, too. Is this health care bill like
Canada or Britain, or is it more based on a private-sector
system?
Secretary Sebelius. The system is based on building out a
private-sector strategy with new health exchanges.
Mr. Obey. Will the doctors under the system work for the
government?
Secretary Sebelius. Not unless they do right now. Some do
for the VA, as you know, and for the Department of Defense.
But, no.
Mr. Obey. What about the nurses? Are we adding millions of
nurses to the Federal payroll?
Secretary Sebelius. No, sir.
Mr. Obey. What are these things called insurance companies?
Are they public entities or are they private?
Secretary Sebelius. Private-sector companies.
Mr. Obey. Are they usually profit-making private entities?
Secretary Sebelius. From everything I can tell, yes, sir.
Mr. Obey. I thought so, too.
What does the health reform bill do for the fiscal solvency
of the Medicare program?
Secretary Sebelius. Well, the estimate that was made when
the reconciliation bill was proposed was that it added a
minimum of 10 years to the life of the Medicare trust fund.
Mr. Obey. What does it do to change the payment system from
one based on frequency of procedures to one based on quality of
medical outcomes?
Secretary Sebelius. Congressman, it sets a direction for
Medicare to become, I would say, a quality-based purchaser as
opposed to the current strategy of fee-for-service, which is
more about content than about quality.
Mr. Obey. I agree with all of that.
Let me just tell you a story, because we have had such
controversy and such points of disagreement about the details
of this plan.
Between 1930 and 1938, a fellow by the name of Gerry
Boileau represented my congressional district. He was the last
of the LaFollette Progressive Republicans. When Fiorello
LaGuardia became mayor of New York, he succeeded LaGuardia as
the spokesman for the Progressive Republicans in the House; and
then he was beaten in 1938.
My dad ran a supper club when I was much younger. Gerry
came home and became a local judge. He came into our place one
evening, and we started talking, and I finally asked him,
Gerry, what beat you in 1938?
He said, senior citizens. He said, I was strongly for
Social Security and in my district the seniors were against it.
I said, what on Earth are you talking about? How can
seniors possibly be against Social Security? Not the seniors I
know today.
He said, in those days, it was different. He said, in those
days, we had Social Security as one alternative, which is a
contributory program. And then we had the Townsend plan, old
Doc Townsend from California, who didn't want a contributory
plan. He just wanted, I think, a hundred-dollar-a-month welfare
payment to every senior. And he said, we all knew that couldn't
survive very long because the country doesn't like welfare. So
he said, I strongly supported Social Security. And old Doc
Townsend came into my district and helped organize Townsend
clubs; and he said, they beat me.
The point of the story is this: We look today, shortly
after the health reform bill is passed, and we see all of these
little fights that we had--regional, ideological,
philosophical--but I think 20 or 25 years from now we are going
to look back at the bill and say, what on Earth was that fight
all about? How on Earth could we ever have functioned without
this program? I think all of these little fights that were so
important to people as we were going through them, none of them
are going to be remembered. What will be remembered is that we
finally put this country in the rank of civilized societies
that do not require people with very little money to beg in
order to get health care. That, to me, is basically the lesson
of Gerry Boileau's story.
I mean, I lost a whole lot more fights than I won on the
health reform bill. I favored public option. I have no
objection to single payer. I, frankly, didn't care as long as
we got two things, as long as we covered as many people as
possible and as long as we changed the rules of the game so
that little people weren't squeezed by corporate giants called
insurance companies. That is basically all I wanted. Everything
else is candy.
I just want to thank you for the work that you did on this
package and to thank everybody who voted for it and to thank
those who opposed it and raised constructive questions along
the way. Because, to me, regardless of all these little debates
that we had, the obligation that all of us have now is to
simply try to make it work and to think through whether there
have to be adjustments down the line, make certain we have got
plenty of oversight, and especially make certain we have got a
huge expansion of our efforts to go after waste, fraud, and
abuse. Because you have got lots of jerks in this society who
will try to take advantage of this and rip off the taxpayer and
rip off customers. If we believe in expanding these services,
we just can't let that nonsense happen.
Secretary Sebelius. Well, I appreciate that, Mr. Chairman.
I spent Easter weekend with my father, who turned 89 on the
22nd of March. He served in the United States Congress on the
Energy and Commerce Committee 45 years ago when Medicare was
passed. He told me a number of stories about how ferocious that
battle was, how ferociously a number of people opposed
Medicare's passage, and how differently it looked then than it
does now, where he is now a pleased beneficiary, and reminded
me that over 45 years there have been changes, there have been
a number of improvements, but the basic tenet that, once you
turn 65 in this country, that you have health security, was a
promise made then and a promise that we intend to keep now. It
was interesting having his historic perspective on the
beginning of this new chapter in American health security.
Mr. Obey. Thank you. I am going to have to go over to the
House for action on a bill that is going to be pending shortly.
And so if I have to leave before the hearing is done, it is
nothing you said. I just have to get over there.
Secretary Sebelius. I am pleased to hear that.
Mr. Obey. I will ask Ms. DeLauro to take over if we are not
done. Meanwhile, I would like to run a second round for about 3
minutes apiece.
Mr. Tiahrt.

UNFUNDED PROGRAMS IN HEALTH REFORM

Mr. Tiahrt. Thank you, Mr. Chairman. I want to remind you
the hearing isn't done, so maybe there will be something come
up that won't make you want to leave early.
One of the things that concerns me greatly is about the
cost of this. Because, quite frankly, we have overspent this
year by more than $800 billion this fiscal year. We know that
there are at least 80 programs that are in the bill that
require discretionary appropriations, and we have about $110
billion for these 80 programs. There are also 36 programs, at
least--three dozen programs--that are open-ended.
I have asked the Congressional Budget Office to give us
some estimate as to what they are going to cost. They don't
sound like very cheap programs. Of the 36, community health
insurance option, design and implementation of regional systems
for emergency care, trauma care centers and service
availability, oral health care prevention activity, programs
relating to congenital hart disease, multi-State qualified
health plans, community-based collaborative care networks, to
name a few.
So, in addition, it is my understanding the CBO has
estimated that CMS and the IRS will need an additional $20
billion in order to set up the systems just to implement
ObamaCare. So has your Department developed a cost estimate for
all these new programs that are not in the President's budget,
and when will you be sending an addendum to the President's
budget for next year to cover these costs, and where will the
money come from?
Secretary Sebelius. Well, Congressman, you have our 2011
budget presentations; and there is not an intent to send an
addendum to the budget.
Mr. Tiahrt. How will you cover the cost of these programs
that are not in the budget? It says in the law such sums as
required. Where are such sums going to come from?
Secretary Sebelius. Well, my understanding is, the way that
process works, if there isn't authorization in the bill itself,
this will be a discussion that you and your colleagues will
have here in Congress.
Mr. Tiahrt. So we are going to have to come up for the
funding for these programs?
Secretary Sebelius. If the priorities are to move ahead on
those programs, I assume they will be funded. But you have our
2011 budget submission before you.
Mr. Tiahrt. So the 302(a) allocation that we have and the
302(b) allocation for your Department right now doesn't have a
request from the President for such sums as required on these
36 programs.
Secretary Sebelius. That is correct.
Mr. Tiahrt. So, Mr. Chairman, where are we going to get the
money for these programs that we don't have any budget for and
we won't have any allocation for?
I guess he is involved in another conversation.
My concern is that we don't have the funding for this and
we have no idea how much it is going to cost and, again, we
don't know where the money is coming from. China is not lending
us money on long-term Treasury bills now. The Fed has loaned
money to the United States. They already owe us--or we owe them
$5.5 trillion as taxpayers. Where is the money going to come
from?
Secretary Sebelius. Congressman, again, I think that the
programs are likely not to exist unless they are funded by
Congress. That is not currently part of the authorized bill. I
think the very good news for the American public is that,
unlike the last major health initiative move forward, the
prescription drug benefit, this bill is paid for. It is paid
for over time. In fact, the Congressional Budget Office has
estimated an $100 billion decrease in the deficit in the first
10 years and closer to a trillion dollars decrease over the
next 10 years. This is fully paid for over the life of the
program.
Mr. Tiahrt. You can't count Medicare dollars twice. We are
taking money out of Medicare and adding them to the program
that you are going to administer. Where is the money for the
$500 billion for Medicare? There are a lot of programs, Mr.
Chairman, that don't have funding. They are not in the
President's budget. We won't get the allocation for them. I am
just wondering how we are going to fund them.
Mr. Obey. First of all, the gentleman's time has expired.
But let me simply answer the gentleman's question by saying
there is a big difference between programs that are authorized
and programs that are mandatory. These are not mandatory
programs, to my understanding.
Mr. Tiahrt. Are we not going to fund the community health
insurance option, the oral health care prevention activities?
Mr. Obey. Given the fact that we have a good $17 billion
hole in the budget on Pell Grants, I have no idea what we are
going to be funding on anything.
Mr. Tiahrt. Thank you, Mr. Chairman.
Mr. Obey. I don't think anybody else does, either.
Who is next? Ms. Roybal-Allard.

UNDERAGE DRINKING

Ms. Roybal-Allard. Secretary Sebelius, Congresswoman
DeLauro and I have been working together for over 10 years to
reduce the dangerous incidence of underage drinking in this
country, and we were very pleased that your administration
recommended an increase to the STOP grants this year to enable
more communities to address the critical problem. We have
heard, however, that the HHS is looking to further expand its
efforts in underage drinking prevention.
The questions that I have are, first of all, CDC and NIH
are recognized leaders in developing evidence-based strategies
on underage drinking. So what are you doing to ensure that the
rest of HHS uses their guidance and guidelines in implementing
programs directed at preventing and reducing underage drinking?
How will you ensure that the State public health agencies with
their own rich experience in tobacco control and other public
health insurance are fully engaged in collaboration with State
substance abuse agencies? And what will be the roles and
resources available to the various HHS agencies to ensure that
all of this happens?
Secretary Sebelius. Congresswoman, as you say, we do have a
recommended budget increase for the STOP Act. I think that is a
step of directing more resources.
We also have a talented new leader in the agency as my
Assistant Secretary of Substance Abuse and Mental Health
Services, Pam Hyde, who not only has run State systems but has
worked in the private sector and run medical systems and is
very tuned into this issue and is very much at the table
looking at collaborative strategies.
So we have the Substance Abuse and Mental Health Services
Administration at the table. We have our scientific-based
evidence from CDC and the strategies that work on the ground,
and we are working in collaboration with State and local
partners to make sure what we know is effective actually is
drilled down. So this is an effort.
One of the things that the President made clear to all of
his Cabinet officers is that he wants us to leverage our assets
not only across departments but within our own agencies. So we
have a number of cross-agency collaborations, and this is one
of them.

SECTION 317 VACCINATION PROGRAM

Ms. Roybal-Allard. That is great to hear.
In fact, you mentioned in an earlier statement, the 317
vaccination program. This program historically has been used
for vaccinating children. However, each year, hundreds of
thousands of American adults are hospitalized and tens of
thousands die from diseases that could have been prevented
through vaccination.
It is estimated that the cost of the health burden to
society from vaccination-preventable diseases is approximately
$10 billion annually. How will HHS use existing funding streams
to address the issue of increasing adolescent and adult
vaccinations, and has the Department considered developing an
adult immunization strategy? And, in particular, what could be
done to increase vaccination rates among health care workers?
Mr. Obey. If we could have a fairly short response, please.
Secretary Sebelius. We are working on this. I was just at
the 44th annual vaccination week-long conference. We learned a
lot of lessons from H1N1 that we intend to apply across the
board, and one of them is how to deal more effectively with not
only minority communities but with health care workers.
Ms. Roybal-Allard. Hopefully, we can follow up on this.
Mr. Obey. Mr. Cole.
Mr. Cole. Thank you, Mr. Chairman.
I was listening to that wonderful story about Gerry
Boileau. And I must say, the moral I drew was that progressive
Republicans always get beat by liberal Democrats that say they
love them. So it is kind of a warning story there for me.
On a more serious note, I share Mr. Tiarht's----
Mr. Obey. But he got beat by another Republican.

PROJECTED COVERAGE RATES

Mr. Cole [continuing]. I share Mr. Tiahrt's concern about
some of the financial bases of the bill, the one he
particularly highlighted about the transfer of Medicare funds
out for, really, a new entitlement program at a point when we
have a baby-boom generation hitting Medicare age. I just don't
think it is going to hold.
Let me ask you about another part of it that concerns me
greatly, Madam Secretary. Right now we assume that there is--
and I think you said the majority of people moving into the
system would be insured by private insurance. I am not 100
percent sure that is accurate, because the numbers I saw
suggested about half were going to be, actually, Medicaid
patients. So, at best, it is pretty close as to whether they
are going to be purchasing insurance.
And, as I understand the bill, frankly, those younger
people are going to have an option--well, it is, quote,
``mandatory.'' They can pay a penalty as opposed to just buy
insurance. The penalty that I have seen is cheaper than the
insurance. And I would suggest a lot of them are going to do
what most people in their 20s and early 30s do, and that is
take the cheaper road out. Whether that is wise or not is
debatable, but I think that is true.
So how confident are you that the new people showing up to
be insured, given the fact that many of them are Medicaid and
given the fact that many of them have a way out when they are
young and healthy, are actually going to provide the revenue
stream that the bill envisions?
Secretary Sebelius. Well, Congressman, the experience in
Massachusetts, which is one that we looked to--and there are
other States who have--Wisconsin, again, has a pretty near-
universal insurance avenue. But in Massachusetts, a fairly
similar structure--an individual mandate with a relatively low
penalty for failing to buy insurance, plus a hardship waiver--
has produced 97, 98 percent insurance coverage.
The experience that they have found is that people really
wanted insurance; they just felt that there were too many
financial barriers or health barriers, frankly, to get into the
marketplace.
So, at least in the instance that that fairly similar
structure has been tried, there actually was a very robust
take-up in spite of some skeptics who thought that people would
opt out if they were younger and healthier.

PHYSICIAN-OWNED HOSPITALS

Mr. Cole. Let me ask you--my time is about to run out, and
it is a totally unrelated question. But one of the provisions
of the bill that really concerned me, the treatment of
physician-owned hospitals--and I realize there is a
philosophical divergence in Congress over that particular
issue. In my State, they are some of the highest-performing
hospitals that we have. By every rating they provide excellent
care, and we have been very pleased with them.
What is the general attitude of the administration toward
physician-owned hospitals, looking forward?
Secretary Sebelius. I can honestly tell you I haven't ever
been involved in a, sort of, philosophical discussion. There
isn't any directional discussion. I think it has more come from
Congress, frankly, and the alarm in certain areas of the
country of the proliferation to what some have seen as the
disadvantage of community hospitals trying to run emergency
rooms and contributing to graduate medical education and then
being cherry-picked by provider-based hospitals.
But I don't think the Department, itself, has a directional
strategy. It really is looking at high-quality, cost-effective
health-care delivery. And, as you say, some are in physician-
owned hospitals and others are sometimes in community
hospitals. But that is really our goal.
Mr. Cole. I would just say in closing on that, just so you
know, in our State most of the physician-owned hospitals
operate emergency rooms, they take Medicare patients. So they
really stack up pretty favorably. And I would just commend you
to consider that as one of the models, going forward. I am glad
to hear that there is not an administration position per se.
Thank you.
Mr. Obey. Mr. Honda.

CHILDREN'S HEALTH TASK FORCE

Mr. Honda. Thank you, Mr. Chairman.
The health reform issues are also going to be including our
concerns of children's health issues. And children probably
compromise 50 percent of our Medicaid rolls. Will there be any
thought about establishing a children's health task force?
And leading up to that, my county of Santa Clara County
recently has had the third-highest rate of TB in California,
and it has really grown from almost an elimination of TB in our
county to being third in the State of California.
Given that rise and given the work that you are going to be
required to do, as far as travelling and everything else like
that, I was just concerned that you had sufficient resources to
be able to do the kind of travel and create the kind of
presence that is going to be expected when you are going around
the country to make the negotiations and be an advocate for
this program.
Those two questions, if I could have a quick response.
Secretary Sebelius. Congressman, I think in terms of the
travel and presence responsibility, cloning would come in very
handy in this instance, because I do think there is a lot of
confusion and concern and also a lot of eagerness about people
wanting to know about the bill, how it is going to work, how it
is going to be implemented. And I can assure you, I am going to
do my best, as are lots of members of our department, to be out
and about everywhere.
The Children's Health Insurance Program, which you all
extended in 2009 prior to the passage of the Affordable Care
Act, I think is a great focus on making sure that children have
appropriate intensive care, particularly at the youngest ages.
And we are undergoing a very aggressive outreach effort in
conjunction with faith-based and neighborhood groups, with
health-care providers, with State and local partners, to
identify and enroll the approximately 5,000,000 children who
are eligible but currently not enrolled. It continues to be a
challenge.
The good news is, even last year in very difficult budget
times, States and local governments signed up an additional
2,500,000 American children. We would like to see that continue
to rise. And I think that, as you know, the SCHIP program
continues during the life of the Affordable Care Act. And I
think that is going to focus that kind of attention and
services on the children's population and one that we take very
seriously.
Mr. Obey. Mr. Ryan.

FORUM HEALTH BANKRUPTCY

Mr. Ryan. Thank you, Mr. Chairman.
Madam Secretary, you know Ohio well. I represent a district
in Youngstown and Akron. And in the city of Youngstown, we have
two health-care systems. One of them is Forum Health, which
employs approximately 4,000 people in the region, and it is now
trying to emerge from bankruptcy. Youngstown has about a 15 or
16 percent unemployment rate. The city of Warren has one very
similar.
In adding 30,000,000 new people to the system and many in
Ohio and western PA, I don't think now is a good time to see a
hospital close down. And I was wondering if there is anything
in your sights or from the administration that could help
address this issue.
Secretary Sebelius. Well, my understanding is we solved one
of the problems, in terms of a payment stream that will
continue during the discussion, which I think is important.
And, again, I think that the framework of having a payment
system under the individuals who will seek hospital care in the
future is a big step forward. And hospitals have really
struggled.
I also think that there were huge improvements made in the
bill over the course of the discussion dealing with
disproportionate share allocation, where originally there was a
thought that it could disappear entirely, and I think that was
recalculated appropriately based on the fact that there are
huge disparities in terms of the patient load that is likely to
hit various hospitals.
But I think you are absolutely right that we need a robust
health-care delivery system. And it is something that we are
going to be working with local communities, looking at ways we
can provide resources in this kind of bridge strategy to make
sure they continue to provide services.
Mr. Ryan. Well, in the meantime, until 2014 when everyone
comes in, I mean, hospitals like this could potentially close
down. And I think in the Department of Agriculture there are
some loan guarantees. And maybe we can come up with some ways
to help these hospitals refinance. Because, you know, between
now and then, a lot could happen, and the other hospital in
town can't handle the influx that they could potentially
receive.
Secretary Sebelius. With the Community Development Block
Grant money, I think which is in HUD, and some other funding
streams, I think we have to be more creative about bringing
other agencies in. HHS really doesn't have either operational
money or construction money, with regard to hospitals. But I
think having that dialogue with my Cabinet colleagues is
something that I am going to pursue, because it has come up in
a number of areas, and it is a very critical piece of the
health-care system. I think just like closing a school in a
small town, you can't close a hospital, or people won't stay in
the community.
Mr. Ryan. Right. So I look forward to working with you on
that, because it is urban development, it is health, it is
education, it is everything. So I appreciate that.
Mr. Obey. Ms. DeLauro.

FOOD SAFETY

Ms. DeLauro. Thank you, Mr. Chairman.
Madam Secretary, let me just ask a food safety question of
you. The volume of FDA-regulated imports has increased
substantially over the past decade. The statistics say that FDA
recorded 8,200,000 imported food lines in 2007; fewer than
2,800,000 entry lines a decade earlier.
You have just over 1 percent of these lines that were
physically examined and/or tested. It is often reported that,
even with increased funding that the Congress has provided to
the agency in these past 3 fiscal years, the FDA will still
inspect less than 2 percent of import lines in 2011.
This is mainly because the FDA relies on a very weak border
inspection system. I also might add that there are indications
that there potentially will be more inspectors but we could
have fewer inspections.
Again, can you tell us how do you think the FDA can improve
in this area? There is the FDA food safety bill pending before
the Congress in the Senate. How can that help to change this
equation? And how do we deal with improving the inspection
ratios in the next 5 years?
Secretary Sebelius. Well, Congresswoman, first of all,
thank you for your long-time leadership and expertise and
interest in this area. And it is one that has changed
dramatically over time. We no longer have an American-based
food system, and I think that the regulatory framework is 20th-
century at best and the system is global and increasingly
global. Half our fruits and vegetables come from outside our
borders; about two-thirds of the seafood comes from outside our
borders, just to name a couple of products.
No question that the new framework passed by the House and
pending in the Senate is a huge step forward and has a lot of
the expertise of this committee's stamp on it--not this
committee, but your expertise as part of moving that ahead.
I do think that part of the strategy also is the FDA
establishing a much more robust footprint in other parts of the
world. So there are now four new offices in China, there are
offices in Mexico, there are offices elsewhere, to not wait
until products actually come across the borders, but look at
the origins of those products.
Secondly, I think it is critical that we have a much more
robust and a different relationship with the private sector.
The food industry often takes the hit. At a time of a recall,
they have enormous financial risk, but have been, I think, not
as engaged and involved in self-reporting, identification,
quick recalls. The FDA needs some additional subpoena power and
automated recall power, but also engagement of the industry at
a much earlier stage, which, again, is part of the framework
moving forward.
Ms. DeLauro. Mr. Chairman, just one final comment.
I just would say this to you, Madam Secretary. For years
and years and years, the whole issue has been that trade in
this area of food safety has trumped public health. I will be
vigilant--I am hopeful, but vigilant that that will continue
not to occur, that trade will get in the way of what we can do
with regard to the public health as it regards food safety.
Thank you.
Thank you, Mr. Chairman.
Mr. Obey. Thank you.
Madam Secretary, thank you for being here. We kept you a
few minutes over, but not much. Good luck to you.
Secretary Sebelius. I appreciate it. Thank you so much.

[GRAPHIC] [TIFF OMITTED] T8233B.017

[GRAPHIC] [TIFF OMITTED] T8233B.018

[GRAPHIC] [TIFF OMITTED] T8233B.019

[GRAPHIC] [TIFF OMITTED] T8233B.020

[GRAPHIC] [TIFF OMITTED] T8233B.021

[GRAPHIC] [TIFF OMITTED] T8233B.022

[GRAPHIC] [TIFF OMITTED] T8233B.023

[GRAPHIC] [TIFF OMITTED] T8233B.024

[GRAPHIC] [TIFF OMITTED] T8233B.025

[GRAPHIC] [TIFF OMITTED] T8233B.026

[GRAPHIC] [TIFF OMITTED] T8233B.027

[GRAPHIC] [TIFF OMITTED] T8233B.028

[GRAPHIC] [TIFF OMITTED] T8233B.029

[GRAPHIC] [TIFF OMITTED] T8233B.030

[GRAPHIC] [TIFF OMITTED] T8233B.031

[GRAPHIC] [TIFF OMITTED] T8233B.032

[GRAPHIC] [TIFF OMITTED] T8233B.033

[GRAPHIC] [TIFF OMITTED] T8233B.034

[GRAPHIC] [TIFF OMITTED] T8233B.035

[GRAPHIC] [TIFF OMITTED] T8233B.036

[GRAPHIC] [TIFF OMITTED] T8233B.037

[GRAPHIC] [TIFF OMITTED] T8233B.038

[GRAPHIC] [TIFF OMITTED] T8233B.039

[GRAPHIC] [TIFF OMITTED] T8233B.040

[GRAPHIC] [TIFF OMITTED] T8233B.041

[GRAPHIC] [TIFF OMITTED] T8233B.042

[GRAPHIC] [TIFF OMITTED] T8233B.043

[GRAPHIC] [TIFF OMITTED] T8233B.044

[GRAPHIC] [TIFF OMITTED] T8233B.045

[GRAPHIC] [TIFF OMITTED] T8233B.046

[GRAPHIC] [TIFF OMITTED] T8233B.047

[GRAPHIC] [TIFF OMITTED] T8233B.048

[GRAPHIC] [TIFF OMITTED] T8233B.049

[GRAPHIC] [TIFF OMITTED] T8233B.050

[GRAPHIC] [TIFF OMITTED] T8233B.051

[GRAPHIC] [TIFF OMITTED] T8233B.052

[GRAPHIC] [TIFF OMITTED] T8233B.053

[GRAPHIC] [TIFF OMITTED] T8233B.054

[GRAPHIC] [TIFF OMITTED] T8233B.055

[GRAPHIC] [TIFF OMITTED] T8233B.056

[GRAPHIC] [TIFF OMITTED] T8233B.057

[GRAPHIC] [TIFF OMITTED] T8233B.058

[GRAPHIC] [TIFF OMITTED] T8233B.059

[GRAPHIC] [TIFF OMITTED] T8233B.060

[GRAPHIC] [TIFF OMITTED] T8233B.061

[GRAPHIC] [TIFF OMITTED] T8233B.062

[GRAPHIC] [TIFF OMITTED] T8233B.063

[GRAPHIC] [TIFF OMITTED] T8233B.064

[GRAPHIC] [TIFF OMITTED] T8233B.065

[GRAPHIC] [TIFF OMITTED] T8233B.066

[GRAPHIC] [TIFF OMITTED] T8233B.067

[GRAPHIC] [TIFF OMITTED] T8233B.068

[GRAPHIC] [TIFF OMITTED] T8233B.069

[GRAPHIC] [TIFF OMITTED] T8233B.070

[GRAPHIC] [TIFF OMITTED] T8233B.071

[GRAPHIC] [TIFF OMITTED] T8233B.072

[GRAPHIC] [TIFF OMITTED] T8233B.073

[GRAPHIC] [TIFF OMITTED] T8233B.074

[GRAPHIC] [TIFF OMITTED] T8233B.075

[GRAPHIC] [TIFF OMITTED] T8233B.076

[GRAPHIC] [TIFF OMITTED] T8233B.077

[GRAPHIC] [TIFF OMITTED] T8233B.078

[GRAPHIC] [TIFF OMITTED] T8233B.079

[GRAPHIC] [TIFF OMITTED] T8233B.080

[GRAPHIC] [TIFF OMITTED] T8233B.081

[GRAPHIC] [TIFF OMITTED] T8233B.082

[GRAPHIC] [TIFF OMITTED] T8233B.083

[GRAPHIC] [TIFF OMITTED] T8233B.084

[GRAPHIC] [TIFF OMITTED] T8233B.085

[GRAPHIC] [TIFF OMITTED] T8233B.086

[GRAPHIC] [TIFF OMITTED] T8233B.087

[GRAPHIC] [TIFF OMITTED] T8233B.088

[GRAPHIC] [TIFF OMITTED] T8233B.089

[GRAPHIC] [TIFF OMITTED] T8233B.090

[GRAPHIC] [TIFF OMITTED] T8233B.091

[GRAPHIC] [TIFF OMITTED] T8233B.092

[GRAPHIC] [TIFF OMITTED] T8233B.093

[GRAPHIC] [TIFF OMITTED] T8233B.094

Wednesday, April 28, 2010.

FY 2011 BUDGET OVERVIEW: NATIONAL INSTITUTES OF HEALTH

WITNESSES

FRANCIS S. COLLINS, M.D., PH.D., DIRECTOR, NATIONAL INSTITUTES OF
HEALTH
ANTHONY S. FAUCI, M.D., DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND
INFECTIOUS DISEASES
THOMAS R. INSEL, M.D., DIRECTOR, NATIONAL INSTITUTE OF MENTAL HEALTH
GRIFFIN P. RODGERS, M.D., DIRECTOR, NATIONAL INSTITUTE OF DIABETES AND
DIGESTIVE AND KIDNEY DISEASES

Chairman Obey Opening Statement

Mr. Obey. Good morning, everybody.
Today we will hear from a variety of witnesses on the
President's request for the National Institutes of Health. We
will have as a principal witness Dr. Francis Collins, who has
been here many times in his former role as the Director of the
National Human Genome Research Institute at the National
Institutes of Health (NIH). This is his first appearance before
the Subcommittee in his new capacity as the Director of NIH.
Accompanying Dr. Collins is Dr. Tony Fauci, Director of the
National Institute of Allergy and Infectious Diseases; Dr. Tom
Insel, Director of the National Institute of Mental Health; and
Dr. Griffin Rodgers, Director of the National Institute of
Diabetes and Digestive and Kidney Diseases.
I think it is fair to say that supporting the work of NIH
has been a priority of this Subcommittee, certainly for as long
as I have been in the Congress, and I am pleased that the
President has, in the context of a tight budget situation,
still provided a request for a $1,000,000,000 increase proposed
for NIH overall.
Depending upon how you measure it, NIH has either had a
meaningful increase in spending over the past 30 years or it
has had a spectacular increase in funding. NIH was spending
$1,800,000,000 when I joined the Subcommittee in 1973. The
current fiscal year budget provided NIH with $31,000,000,000,
so that is 16 times what it was spending when I joined the
Committee, which sounds awfully big except that it is not
adjusted for inflation. When you adjust it for inflation, we
have not quite doubled in real dollar terms funding for NIH
over that period.
We have had, I think it is fair to say, a mixed bag with
respect to success against various diseases. With some,
childhood leukemia, we have had significant gains. We certainly
have had gains in holding at bay, somewhat, AIDS in comparison
to what we feared when the Subcommittee first started talking
about it. And yet there are other areas where very little
progress has been made; example, pancreatic cancer, esophageal
cancer, and a variety of other maladies.
So today we want to hear from these witnesses about not
only what they intend to do with their money, but what their
observations are in terms of how we can develop a better track
record in the future in attacking diseases that have not been
the subject of much progress over the past two decades.
And I have to say one thing before I ask Mr. Tiahrt for his
comments. I have always been rather disappointed that, in my
many conversations with people in the medical field, with
providers in the field, that the discussion, when it turns to
health care, so often is focused simply on issues such as
reimbursement rates, what are hospitals going to get by way of
compensation, what are doctors going to get paid.
And that is all very legitimate, but I have personally been
struck by the lack of comment or curiosity or, for that matter,
the lack of visible political support for added medical
research which, after all, lays the foundation for the product
that the practitioners in the health care area have to offer
their patients and their customers.
So I think while there are many activists who have, for
years, been pushing for additional funding for National
Institutes of Health, I think in some ways I have been
disappointed by the lack of aggressive activism on the part of
so many professionals in the field. And I am not quite sure
what to do about that, but I know since Dr. Collins is a very
smart fellow, he will have an answer to that and everything
else.
The other thing I want to say, Doctor, I want to express my
personal appreciation for the fact I think you have, by your
public statements, made it quite clear that one does not have
to believe--I am saying it backwards. You have made it quite
clear that there is not necessarily any inconsistency between
pursuit of science and the belief in religion. To me, I have
never understood why people think that the two are at
loggerheads; that has never been my conclusion either
intellectually or emotionally. So I appreciate the role that
you have played in driving that point home as well.
With that, let me simply turn to Mr. Tiahrt to see what
comments he might have.
Mr. Tiahrt. Thank you, Mr. Chairman. It is always a
mystery, what I am going to say, is it not?
I am very pleased to see you gentlemen here today. Thank
you for coming; appreciate your time. Dr. Collins, I am
enjoying the Language of Life. The first chapter caught my
attention when you say we are not in Kansas anymore. Being from
Kansas, you do not know how many times I have thought that here
in the District of Columbia.
I think you do present genetics at a level that can be
understood, and I think that is very important for our culture
today. But certainly DNA research is proceeding at a very fast
pace, and one of the concerns that I have is what we call the
valley of death, the gap between our basic research and
clinical development.
We seem to have this void in the middle where we cannot get
it into action sometimes, and you are coming across very
critical research, and we want to find mechanisms to get it
into the clinic and get it into applying; I guess because I
feel like basic research will not do us any good unless we get
it in a practical application for those of us out here. And
that is why we make the investment, so that we can get it into
the clinics and into the cures.
I am pleased to see that there are initiatives that are
relatively new in your budget request, particularly the
Therapeutics for Rare and Neglected Diseases, or TRND. I think
that is exactly the type of effort we need to focus NIH's
resources so that we can get across this valley of death and
start funding cures.
So I look forward to your testimony and I have some
questions once we get through it.
Thank you, Mr. Chairman.
Mr. Obey. Mr. Lewis.
Mr. Lewis. Thank you very much, Mr. Chairman. I will wait
to ask questions after we have heard from the witnesses. I
appreciate being recognized.
Mr. Obey. All right. Dr. Collins, please proceed. Take as
much time as you want, within reason. [Laughter.]

Dr. Collins Opening Statement

Dr. Collins. Well, thank you, and good morning, Mr.
Chairman and distinguished members of this Subcommittee. It is
a great honor to appear before you for the first time in my
role as the Director of the NIH and to present the fiscal year
2011 budget, but especially to discuss my vision for the future
of biomedical research.
I would like for my written testimony to be included in the
record. I am going to deviate from it quite a bit in my remarks
this morning.
So I would like to thank each of you for your steadfast
support of NIH's mission, which, as you can see--and I am going
to show a few visuals on these screens--is a dual one: to
support the discovery of fundamental knowledge about the nature
and behavior of living systems, but to be sure that we are then
applying that to extend healthy life and reduce the burdens of
disability and premature illness and death.
I want to thank the Committee for the support in fiscal
year 2010 of $31 billion, as well as the $10.4 billion that was
provided through the American Recovery and Reinvestment Act.
And I have been very grateful, over 15 years leading the Human
Genome Project, for the support of this Committee. As you know,
that project finished ahead of schedule and under budget, and
was supported strongly by this Congress and by this Committee
even at times when there were controversies about it.
But now, as steward of the entire portfolio of NIH, I
believe that opportunities to turn discovery into health have
never been greater. I am honored to have with me this morning
three distinguished leaders from NIH that the Chairman has
already introduced, Dr. Rodgers, Dr. Insel, and Dr. Fauci, and
I am sure they will be happy to also engage you in the
questions.
But I also want to introduce you to some other folks today,
just a few of the millions of Americans who have been helped by
NIH-funded research. And let us begin with Kate Robbins. So let
us hear from Kate.
[Video shown.]
Kate Robbins. The message I got is make your plans, get
your life in order, and enjoy the next few months; and I was
enraged.
[End of videotape.]
Dr. Collins. So eight years ago, at the age of 44, this
non-smoking mother of two was diagnosed with lung cancer and
given a diagnosis essentially of terminal disease. She had non-
small cell lung cancer that had already metastasized to her
brain. And it continued to spread, after surgery, radiation,
and chemotherapy, to her liver, her pancreas. But she enrolled
in a clinical trial of a new drug called Iressa, or gefitinib,
which is a new genome-based drug for cancer. And after Kate
started the drug, dramatic things happened: most of her
metastases vanished.
As you can see in these CT scans of her liver before and
after Iressa--this is before, six months later, and then today,
seven and a half years later, those metastases shrank and
disappeared and have not returned. There is no sign of cancer
in her liver, her lungs, her pancreas. Her brain metastases are
small and manageable; and, as you saw in the video, she is
doing extremely well.
So why does not Iressa work in all cases? Well, we
understand that. The response depends on whether or not the
tumor has a specific mutation in a gene called EGFR. And we now
understand that, which demonstrates the potential of
personalized medicine. This drug is a god-send for that subset
of individuals with those mutations, but it is unlikely to work
if that mutation is not present.
We need a lot more stories like Kate's, so NIH-funded
researchers are now busy with projects like the Cancer Genome
Atlas, mapping genomic changes in many types of cancer,
including, Mr. Chairman, pancreatic cancer, which I agree is
one where we desperately need new solutions.
Next, I would like you to meet nine-year-old Corey Haas;
his parents, Nancy and Ethan, shown up here in this photo.
Corey was born with a disease which has quite a mouthful,
Leber's congenital amaurosis, and it is a cause of blindness;
it gradually robs young people of their sight. It is caused by
mutations in a gene called RPE65.
Now, by age seven Corey was legally blind; he needed a cane
to get around, had to use a special computer screen. But that
all changed in 2008, when Corey enrolled in a gene therapy
trial at the University of Pennsylvania, which involved
injecting normal copies of this RPE65 gene into his left eye.
Researchers shot this video, then, of Corey navigating an
obstacle course, and let me explain here. I am going to show
you a video that is in the lower left here.
Basically, Corey is being asked to walk a maze pattern.
There are arrows painted in the floor. In this image they have
covered up his treated eye, so he is only able to navigate
based upon the untreated eye; and you will see that he is very,
very limited in his eyesight.
[Video shown.]
Unidentified Speaker. You do not see any lines on the floor
that tell you which direction?
Corey Haas. No. No, I do not.
Unidentified Speaker. Do you want a clue?
Corey Haas. I cannot even see anything.
Unidentified Speaker. Okay.
[Video paused.]
Dr. Collins. Now see what happens when they repeated the
trial, same day, but now covering up his untreated eye and
allowing him to use the eye that has received the gene therapy
to find his way around.
[Video resumed.]
Unidentified Speaker. Okay, perfect. All right. And you can
start whenever you are ready.
Wow. Wow.
[Applause.]
[End of videotape.]
Dr. Collins. Pretty amazing, though Corey is probably even
more amazed he can ride a bike now and read the chalkboard like
any other kid.
Now finally meet Leslie Cook, a wonderful example of
prevention-oriented research. Leslie smoked for 25 years, half
of her life, a habit that put her at increased risk for heart
attack, cancer, and many other diseases.
[Video shown.]
Leslie Cook. I felt as though the drug nicotine was
actually controlling me, I was not controlling it, and I just
wanted control over my life again.
[End of videotape.]
Dr. Collins. So this high-powered real estate lawyer tried
to kick the habit many times; she used the gum, the patch. You
name it, she had tried it. Nothing worked. And then in 2006 she
enrolled in a phase 2 clinical trial of an anti-nicotine
vaccine called NicVAX. This vaccine actually stimulates the
immune system to produce antibodies against nicotine. Those
antibodies bind to the nicotine and keep it from entering the
brain, therefore reducing the pleasure associated with smoking.
NicVAX apparently did the trick for Leslie; she has not
smoked in three and a half years.
Now, hopefully her experience will soon be repeated on a
much larger scale. A clinical trial of NicVAX involving about
1,000 smokers was recently launched. About $10 million in NIH
Recovery Act funds are being used to support that effort, which
is rooted in research-funded at NIH, and it is the first ever
phase 3 trial of a smoking cessation vaccine.
So I would like to thank Leslie, Corey, and Kate for
allowing me to share their stories. I think their experiences
show that science is not a 100-yard dash, it is a marathon.
Each of those built upon years of research getting to that
clinical advance. But thanks to discoveries you have funded
through NIH appropriations, we have covered a lot of ground in
this marathon.
Let me tell you how NIH plans to meet that continuing
challenge, because there is still a ways to go.
So one of my first actions upon being named NIH Director
was to scan the landscape of biomedical research for areas that
were ripe for major advances that could yield substantial
benefits downstream, because this is a unique time. While the
list of specific projects could go on forever, I have
identified five areas of exceptional opportunity I want to very
briefly tell you about, and they are in a paper that you have
at your place published in Science Magazine on January 1st.
The first of those opportunities is to use the high
throughput technologies that have recently been invented to
understand fundamental biology and how disease occurs. This
includes genomics, nanotechnology, imaging approaches,
computational biology, and a host of other new technologies
that are truly powerful to understand the causes and the means
to treat or prevent cancer, autism, infectious diseases, and a
long list.
A second opportunity--and this ties very much into what Mr.
Tiahrt was asking about--is the effort to take these basic
science discoveries that are pouring out of research
laboratories and accelerate the translation of this into new
and better treatments. This is not an easy process, as the
picture shows you; there can be a difficult passageway between
basic research and drugs. We need to build a bridge--by the
way, that is San Francisco, in case the first picture was not
so clear--and we are doing that with programs like TRND, which
stands for Therapeutics for Rare and Neglected Diseases.
And in the health care reform bill the cures Acceleration
Network, which is a new provision that would give NIH
additional flexibility to push this translational agenda even
more robustly and in a more innovative way. And this includes
cell therapy as well, the effort to use stem cells for
therapeutics. If you noticed in this morning's Washington Post,
we have now approved another set of stem cell lines, bringing
the total to 64 that are available for use by federally funded
researchers.
The third opportunity here, shown by these various banners
representing programs that NIH has supported particularly to
try to get information out there about the public health, is to
put science to work for the benefit of health care. We, after
all, need evidence to support the transformation of the
practice of medicine that we all agree is necessary. Some of
that is comparative effectiveness research, personalized
medicine, the study and the attempt to solve health
disparities, the efforts to focus on behavioral medicine; and
even on health care economics, to understand what are the
factors that play into better outcomes at lower cost.
The fourth area, global health. Clearly we have a great
opportunity now because science has moved forward rapidly in
uncovering the nature of many pathogens that we previously did
not understand that affect hundreds of millions of people in
the developing world. We have the chance to push that agenda
forward, building upon what NIH has done already in the past
and focusing now not only on infectious diseases, but also on
noncommunicable diseases like depression, which also become, in
the developing world, major public health problems. It is the
noncommunicable diseases that represent the most rapidly
growing area of morbidity and mortality.
And, finally, and fifth, we need to reinvigorate and
empower our biomedical research community, our most important
resource. That means we need to focus on innovation, making
sure that we are giving ideas that are a little wacky and out
of the box a chance to get supported. We need to be sure that
we are supporting early-stage investigators, giving them the
confidence that there is a place for them in our research
community, even at times when budgets are tight. And we need to
focus on training the next generation, and particularly
reaching out to diverse communities that are not adequately
represented right now in our workforce.
Those are the five themes that I have focused on. You also
have at your place a new document that has just come out from
NIH that talks more about these, and also the many advances
that have occurred because of NIH research over the last few
years.
So, to summarize, if our Nation is bold enough to act today
upon these unprecedented opportunities in medical research, I
think we will be amazed at what tomorrow can bring. In the
world I envision just a few decades from now, the one-size-
fits-all approach to medicine will be a thing of the past. We
will use genetic information to personalize our health care. We
will use stem cells to repair spinal cord injuries;
bioengineered bones and cartilage to replace worn out joints;
nanotechnology to deliver therapies with exquisite precision.
We will preempt heart disease with minimally-invasive image-
guided procedures and use an artificial pancreas or other new
technologies to manage diabetes better.
As for infectious diseases, I look forward to having a
universal vaccine with the power to protect against both
seasonal and pandemic flu. I also hope, and that hope is based
upon progress, for an AIDS vaccine and a malaria vaccine, which
together would save millions of lives around the globe every
year.
And I dream of a day where, in ways yet to be discovered,
we will be able to prevent Alzheimer's disease, Parkinson's
disease, and many others that rob us much too soon of family
and friends.
Just imagine what that future could mean for our Nation,
our economy, for all humankind. This is what keeps NIH in the
research marathon and why we are asking you to go the distance
with us. The fiscal year 2011 request for NIH from this
Committee is $32 billion, an increase of $1 billion, or 3.2
percent above the fiscal year 2010 level. Those funds will
enable the nationwide biomedical research community to pursue a
whole number of substantial opportunities for major scientific
and health advances.
So thank you, Mr. Chairman and members of the Subcommittee.
I would be pleased to respond to any questions you may have.
[Written statement by Francis S. Collins, MD, PhD,
follows:]

[GRAPHIC] [TIFF OMITTED] T8233B.095

[GRAPHIC] [TIFF OMITTED] T8233B.096

[GRAPHIC] [TIFF OMITTED] T8233B.097

[GRAPHIC] [TIFF OMITTED] T8233B.098

[GRAPHIC] [TIFF OMITTED] T8233B.099

[GRAPHIC] [TIFF OMITTED] T8233B.100

[GRAPHIC] [TIFF OMITTED] T8233B.101

[GRAPHIC] [TIFF OMITTED] T8233B.102

[GRAPHIC] [TIFF OMITTED] T8233B.103

[GRAPHIC] [TIFF OMITTED] T8233B.104

[GRAPHIC] [TIFF OMITTED] T8233B.105

[GRAPHIC] [TIFF OMITTED] T8233B.106

[GRAPHIC] [TIFF OMITTED] T8233B.107

[GRAPHIC] [TIFF OMITTED] T8233B.108

[GRAPHIC] [TIFF OMITTED] T8233B.109

[GRAPHIC] [TIFF OMITTED] T8233B.110

[GRAPHIC] [TIFF OMITTED] T8233B.111

[GRAPHIC] [TIFF OMITTED] T8233B.112

[GRAPHIC] [TIFF OMITTED] T8233B.113

[GRAPHIC] [TIFF OMITTED] T8233B.114

[GRAPHIC] [TIFF OMITTED] T8233B.115

[GRAPHIC] [TIFF OMITTED] T8233B.116

[GRAPHIC] [TIFF OMITTED] T8233B.117

Mr. Obey. Thank you.
Mr. Tiahrt.

COMPARATIVE EFFECTIVENESS RESEARCH

Mr. Tiahrt. Thank you, Mr. Chairman.
Just reading on personalized medicine in this new
publication here. I think one of the concerns I have had with
the comparative effectiveness money that we have invested is
that the good side of comparative effectiveness is we see what
works and we communicate it well to physicians and clinics and
hospitals and treatment centers. The part that concerns me is
that when we start placing a dollar value on comparative
effectiveness, that at some point we start making decisions
based on costs that start rationing some care, rationing some
treatments.
And I think, during this health care debate that we have
had over this past year and a half, that that has been part of
the topic. Can you kind of give me some confidence that what we
are doing at NIH now through comparative effectiveness research
is not going to lead to rationing in the future.
Dr. Collins. So, Mr. Tiahrt, I understand the concern. I
think when we look at the kinds of research that NIH has done
in the past and are planning to do now, the goal really is here
to identify interventions that may be more effective and others
that are less so, because evidence has to be valuable in making
decisions about how we are going to put together a health care
system that actually works.
I might even ask my colleague, Dr. Rodgers, to tell you
briefly about the Diabetes Prevention Program, the DPP, as an
example of a comparative effectiveness research study that
taught us something really important about how to prevent
diabetes and which is now being implemented across the Country
in a new and exciting way by United Healthcare.
So, Griff, do you want to say a word about the DPP?
Dr. Rodgers. Be very happy to.
The Diabetes Prevention Program was a landmark study that
was started over 10 years ago involving the NIH, the Centers
for Disease Control and Prevention (CDC), and multiple
institutes within the NIH, to identify those patients who are
at high risk of developing diabetes. In this country, at the
moment, there are about 24 million Americans who suffer with
diabetes, but there are 57 million Americans who are at high
risk of developing diabetes based upon family history, racial
and ethnic groups, the fact that they may be overweight or
obese. And clearly we are understanding now that a lot of this
has to do with the susceptibility genes for diabetes.
This intervention, which was a comparative effectiveness
study, involved patients being treated with just general
instructions, a so-called placebo group; a second group with a
standard therapy for diabetes, Metformin; and a third group
with an intensive lifestyle modification. In these over 3,000
patients that were studied, there was about a 58 percent
reduction in the risk of patients who are at high risk for
developing diabetes who underwent this intensive lifestyle
modification over the period of time.
That study was published in 2002, but just last year a
follow-up study to that DPP, called the Outcome Study, was
published which shows that there is an ongoing effect, even as
long as 10 years. Patients who were randomized in this
intensive lifestyle still maintain the ability to prevent or
delay the onset of diabetes.
Now, in a clinical research study, of course, we required
one-on-one counseling with these individuals, but it was clear
that in order for this to be effective, we had to figure out a
way to make it more reasonable and cost-effective. So we turned
to the YMCA to do a translational study to determine whether--
because, of course, YMCAs exist in all communities. We have
estimated that most individuals in the U.S. live within a five-
mile radius of the YMCA, and we wondered whether, rather than
doing this on a one-on-one basis, if we do it in a group basis,
whether we can cut the cost. In fact, we did. The cost for
implementing this intensive lifestyle was reduced from the
thousands down to $300 with the same effect.
Mr. Tiahrt. Is that the dues at the YMCA?
Dr. Rodgers. I am sorry? Yes. That is right. I have to say
that this study was so effective, our colleagues at CDC got
involved, expanded beyond the Indiana center that we initially
funded, and just two weeks ago United Healthcare have, for the
first time, decided to provide coverage for the use of this
intervention at Ys and similar places to all of its members.
Initially in six cities around the Country, but in fiscal year
2011 they plan to roll this out nationwide.
Mr. Tiahrt. That is good, because diabetes is one of the
leading causes for many things--amputation, blindness, heart
disease.
Dr. Rodgers. Absolutely.

ADULT AND EMBRYONIC STEM CELLS

Mr. Tiahrt. One last question here, because my time is
short. There are basically two kinds of stem cells--there is
the adult and the embryonic--and you have come up with a third
from skin cells that you can engineer. Can you tell me what the
results have been as far as research? Which category has
yielded the most results as far as getting cures available for
people?
Dr. Collins. Well, we are very interested in the research
on stem cells and, of course, that is a very much discussed
topic. Adult stem cells, as they are called, have been around
longer and certainly bone marrow transplants, for instance,
depend upon the idea that there are stem cells in the bone
marrow that can expand and repopulate when needed. So we have
the greatest clinical experience because that kind of study has
been around for quite a while.
Human embryonic stem cells have only been around for about
10 years, and because of the concerns about safety and also
some limitations in terms of who had the authority to work with
those cells, we are not yet in a position of really knowing
what their therapeutic potential might be, although many people
are quite excited about that potential based on animal studies.
There is so far only one Food and Drug Administration (FDA)
approved trial for human embryonic stem cells, and that is for
spinal cord injury, and it is too soon, by far, to know how
that is going to turn out.
The most recent type, as you mentioned, derive from skin
cells, the so called induced pluripotent stem cells, or iPS
cells, are even much newer on the scene. Only about three years
ago Shinya Yamanaka came up with this amazing observation that
with just four genes you could take a skin cell and convince it
to be pluripotent.
The potential here is enormous, because that would mean
these cells came from the individual, so they could potentially
be used therapeutically without rejection by the immune system.
But there are many concerns about safety, because pluripotent
cells are also capable of growing when you do not want them to,
and can even cause tumors. So we have to work that safety issue
out very carefully before even beginning to propose a clinical
trial. But I think there is a lot of excitement about getting
there.
I have just recently initiated an Intramural iPS Cell
Center at NIH to try to accelerate our study of these cells and
the way in which they could be used in therapeutics.
Mr. Tiahrt. Thank you.
Thank you, Mr. Chairman.
Mr. Obey. Ms. Lee.

SICKLE CELL

Ms. Lee. Thank you very much, Mr. Chairman.
Let me first thank you all for being here again and just
say how important we all recognize and know that your work is
at NIH. Following up on the issue that we have discussed, I
think most of you were here on the A1C diabetes public
awareness campaign. I wanted to see, Dr. Rodgers, if you had
any kind of results, feedback from what took place.
Just a bit of background. We learned--and I learned and we
brought it to this Committee--and thank you for following up on
this--that people who have the sickle cell trait, oftentimes
the A1C test for diabetes gives or could give a false result, a
false positive, false negative. So we developed a public
awareness campaign to let physicians, labs, and what have you,
and community clinics know that there are other tests.
So I just want to see how that public awareness campaign
developed, what were the results, and also could you clarify
the whole issue around sickle cell testing? Is sickle cell
testing required at birth? I know it is no longer required when
people apply for a marriage license, for what that is worth. So
how do we make sure that people are aware that they have the
trait or, well, the disease or prone or susceptible to the
disease?
Dr. Rodgers. Thank you. Let me answer your second question
first, and that is related to is it required to test for sickle
cell disease. These are really done on a State-by-State basis,
and it is my understanding that most States do now test at
birth for the presence of the sickle cell protein. It can be
done very easily, using blood samples to detect either sickle
cell trait or sickle cell disease. When there are problems, the
infant is called back and confirmatory tests are done. It is my
understanding that most States currently do testing, but I
would have to----
[The information follows:]

Sickle Cell Testing

Sickle cell (SC) disease testing is now universally required.
Because of the testing used, ``carrier status'' is determined. While
all states do report our carrier status to the responsible physician,
where it goes from there (if anywhere) is highly variable, depending
upon state and physician practice. In reality, it is likely a
relatively small proportion of parents who are actually informed if
their child is an SC carrier.

Ms. Lee. And how are adults reminded of that test result
when they become adults? How do they know that? How does that
follow the adult in terms of their medical records?
Dr. Rodgers. Right. Well, that is something that is
certainly, with electronic health records and the ability to
follow that as patients move from doctor to doctor and clinic
to clinic would be very important. I would have to get
information on how that is followed comprehensively. I am sort
of aware of this from a limited number of experiences that I
have, and I can certainly provide that information to you with
our sister organization, the National Heart, Lung, and Blood
Institute.
[The information follows:]

Sickle Cell Results

There is at present no system in place that ensures the orderly
transition of health care information for an individual throughout his
or her lifespan. Individuals diagnosed with sickle cell disease would
ordinarily be aware of their diagnosis and in late adolescence the
ongoing care of the child would be transferred from a pediatrician to
either an internist or adult hematologist.
The maintenance of information on being a carrier of sickle cell
disease is a responsibility shared by an individual, his or her family
members, and the team of health care providers.

But back to your first question, and that relates to
hemoglobin A1C. That is a very vital test that shows what the
average level of blood sugar control is over the preceding
three months. When we testified several years ago, you raised
our attention to the fact that many patients are receiving this
test done in the office and they may have sickle cell trait,
and that is a confounding variable, and, as a result of that,
we did develop this public awareness campaign, and in no small
part due to that most of the tests that are done are now in
compliance with the understanding that there is interference of
the sickle cell and other genes that can cause a problem.
So essentially all of the commercially available testing
for A1C is done using systems that can--that having an abnormal
hemoglobin is no longer problematic.
Ms. Lee. Thank you very much.
Mr. Chairman, let me just say to the Committee that this
was very important because so many people I know--family
members, friends, people in especially communities of color--
there were a lot of people who had false positives because of
the fact that they had been tested with the wrong test, and did
not even know they had the sickle cell trait. So this was a
very important effort that started in this Committee, and I
just wanted to thank you all for that.
And I am glad to hear now that they have changed the
testing now is clear in what to do and look forward to your
report back on the sickle cell trait, because I know a lot of
people who I just talk to and say, look, do you have the sickle
cell trait, and they say we do not know, and will ask their
doctor to test them and, lo and behold, they have the trait,
which, of course, means certain kinds of medical tests would
not be valid or they need to do certain things in terms of
their health.
But unless you follow from birth in the States that do do
the testing and somehow people know as an adult they have the
trait, they get in a lot of trouble. So we need to really
figure out how to make sure that that happens, because most
people I know, especially most African-Americans, do not ask
their doctor to test them for the sickle cell trait.
Thank you.
Mr. Obey. Mr. Lewis.

FISCAL YEAR 2011 FUNDING

Mr. Lewis. Thank you very much, Mr. Chairman.
Gentlemen, very much appreciate your presence here today.
The Chairman has appropriately outlined the pattern of funding
for NIH over time. There is a piece of that that concerns me.
You know, beauty lies in the eyes of the genuflector, and with
NIH funding we had a very significant increase in the 2009
fiscal year as a result of the stimulus package. I have some
questions about that, but, most importantly, I am concerned
that even though the President's budget has a $1,000,000,000
adjustment, if you take where we were in 2009 and that dollar
amount, one could argue that there is an $8,000,000,000
reduction, if real value came from that stimulus funding.
So I would like to have some commentary regarding that and
how you have budgeted to try to deal with that adjustment, if
it remains as a part of our pattern, and very much be
interested in knowing--maybe Dr. Fauci would like to respond to
this piece of it.
There has been consistent adjustment also for Labor, Health
and Human Services across the board, with a similar big
adjustment in 2009. If I were looking at those adjustments and
readjusting budgets, I would make sure that continuing funding
flowing to NIH would have very high priority in those
considerations. There is a broadly based nonpartisan support
for research, applied research as well as the basic research.
Lots of discussion that is healthy, pushing you to get more in
the direction of the applied research, but, nonetheless, we
need to preserve this nonpartisan environment in this Committee
and otherwise.
So if you would start with that, Dr. Collins, I would
appreciate it.
Dr. Collins. Mr. Lewis, I appreciate the question and I do
appreciate the strong bipartisan support for medical research
that has characterized the actions of this Subcommittee for
many years. The diagram that you see on the screen there shows
you what the total funding allocated for NIH has been over the
course of the past decade, and, as you can see, after a period
of flat funding from 2003 to 2008, with only modest increases,
then, as shown in red, the Recovery Act dollars, $10.4 billion,
were given to NIH, but obviously as a two-year enterprise, so
roughly $5 billion each year.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T8233B.118

And the budget is here shown for fiscal year 2011, and I
think you can see the delta there, and, in fact, this is the
cliff that people are talking about, because effectively in
fiscal year 2010, if you include the Recovery Act dollars, the
total funding that NIH has had available is $36 billion. What
is proposed in the President's budget is $32 billion.
Now, let me say that given the very difficult economic
times, the President's support of science and the willingness
to put forward a $1 billion increase for NIH is reflective of
the Administration's strong support for research and what it
can do, and we are deeply grateful for that, because certainly
it could have been justified, at a time of growing deficits, to
be even more conservative here in terms of providing support
for this.
So the $1 billion is certainly something we are delighted
to see come forward, although it is a dollar figure which
basically matches the inflationary index for biomedical
research, just about 3.2 percent.
We were aware that this might be an outcome. What we have
tried to do--although I would not tell you that we are going to
be completely successful in reducing the consequences of this
cliff--certainly some of the money funded by Recovery Act has
been for one-time expenditures, special equipment needs, for
instance, that universities across this Country have been
clamoring for years during the flat funding; construction
grants also to help those universities and institutes build up
their physical plant or to do some renovations that are badly
needed.
We have tried to fund special projects that we thought
could get done in two years. The Cancer Genome Atlas, which
went from a pilot phase into a full-bore assault on
understanding cancer, and which, with that accelerated funding,
will tell us in two years the basic landscape of cancer for the
20 most common cancers at the DNA level, a dramatic series of
advances.
But we also funded a lot of innovative grants. We invited
investigators out there to come forward with their best ideas,
and they came forward in great numbers with exciting,
innovative stuff. When I arrived at NIH in August, one of my
first tasks in those first few weeks was to read a lot of these
grants that came forward asking for support from the Recovery
Act, and these were really exciting, innovative, many from
investigators that had not previously come forward to NIH.
But science is, as I said in my opening statement, not a
100-yard dash, it is a marathon, and two-year cycles are really
not the way that advances occur. So we are going to face a
crunch in fiscal year 2011. We will be, I think, gracious to
investigators who were funded during the Recovery Act for two
years and who asked could they please have a no-cost extension
for a third year. We will probably, with good justification, be
willing to do that in order to try to smooth this out a bit.
But there is no question that if you measure what happens
in terms of success rates, that is, what is the chance that an
investigator who sends a grant in to NIH is actually going to
get funded, that is going to be a tough number in fiscal year
2011. That number used to be, back in the course of the last 30
years, around 25 to 35 percent. That was the success rate for
grantees. It has trickled down more recently to 20 percent.
Our predictions are that in fiscal year 2011, with this
budget number, it will be more like 15 percent, one grant out
of every.
Mr. Lewis. Dr. Collins, your response has taken up my time,
but----
Dr. Collins. I am terribly sorry.
Mr. Lewis [continuing]. In the meantime, I would hope, as
you see some of those vacuums or difficulties, that you and
your people, Dr. Fauci, would keep very much in touch with this
Committee so that we can try to be responsive in ways that will
accelerate those opportunities.
Dr. Collins. Will do.
Mr. Obey. Ms. Roybal-Allard.

PANCREATIC CANCER

Ms. Roybal-Allard. First of all, let me thank you all for
being here and for the really important work that you do.
However, I have had some concerns with regards to NIH's lack of
responsiveness to this Committee on two particular issues.
As you are aware, pancreatic cancer is the fourth most
deadly type of cancer, with survival rates that have remained
largely unchanged for the last 40 years. Yet, despite its
lethal prognosis, only about 2 percent of the Federal cancer
research budget continues to be devoted to pancreatic cancer.
Recognizing the seriousness of pancreatic cancer, this
Subcommittee requested, in fiscal year 2009, in the
appropriations report, that the National Cancer Institute give
a detailed account of what it would do to increase research and
training on pancreatic cancer.
When that request was completely ignored, the Subcommittee,
in fiscal year 2010, again made the request for a plan to
address pancreatic cancer. The NCI once again ignored the
request and has no plan, and we are being told now that there
is going to be a meeting held in the future to address
pancreatic cancer.
Since the Subcommittee has always chosen to respect the
integrity of the scientific community by not directing funds or
micromanaging NIH's activities, short of doing that, what does
the Subcommittee have to do to get NIH to respect the requests
of this Subcommittee and respond to an issue as important as
pancreatic cancer?
Dr. Collins. Congresswoman, I was unaware, until this
moment, of this lack of responsiveness to that specific request
about pancreatic cancer, and I would promise to give it my
personal attention. Pancreatic cancer is a particularly lethal
and very devastating type of cancer about which, as you point
out, progress has been rather limited.
We do have some, I think, exciting opportunities on the
horizon, particularly trying to understand at the detailed
molecular level what are the first steps that cause pancreatic
cells to begin to grow into a cancer and what might we do in
terms of developing early detection methods based upon that,
because that is obviously much of the problem, is not detecting
this disease until it is already far advanced; but, most
importantly, to develop new treatments that are targeted
towards those specific pathways that seem to drive this cancer.
Again, the Cancer Genome Atlas will provide that kind of
information for our 20 most common cancers, and that includes
pancreatic. But I am distressed that you feel that this
Committee has not been answered in the requests you have made
about this, and I will personally look into that. I will tell
you that in the relatively near future we anticipate that a new
Director of the National Cancer Institute will be named by the
President, and I will be certain, if that happens, that this
concern of yours is conveyed.

CLASS B DEALERS

Ms. Roybal-Allard. I would appreciate that. Thank you.
One other area of concern has been the use of Class B
random source cats and dogs for NIH-funded research. We were
pleased when NIH stopped purchasing dogs from Class B dealers
for use in intramural research, but remain concerned that the
practice still continues in some of the extramurally funded NIH
research. So last year, once again, this Committee, in their
report, asked NIH to submit a detailed plan for phasing out
random source cats and dogs and extramurally-funded research.
Again, NIH has ignored this Subcommittee's request and we have
seen no plan.
So my question to you is how much progress has been made
towards phasing out this practice and has NIH identified all
current NIH-supported extramural projects using Class B dogs
and cats? And, if so, how many? Also, does NIH have a plan that
we have not seen for implementing a phase-out of the use of
dealers by its grant recipients?
Dr. Collins. Congresswoman, again, I am sorry that this
response has not been forthcoming in a timely fashion. I know
it was due on April 1st. I can tell you that it is very close
to being finalized; we wanted to be sure that we had answers to
all of those questions. I can tell you the substance of the
response will be that, yes, NIH is making a plan to phase out
the use of Class B dealers for animals.
It is not possible to do that overnight because the needs
for animals that currently have been coming from Class B
dealers for cardiovascular research and transplant research
would be injured rather badly if we did this in a precipitous
way. But we will transition over the period of roughly three to
four years into a circumstance where we no longer depend upon
Class B dealers for animals, and we arrange to have the
breeding Class A suppliers fill that need.
Again, that report should be coming forward to you very
soon.
Ms. Roybal-Allard. Thank you. Appreciate that.
Mr. Obey. Mr. Rehberg.

BREAST CANCER MAMMOGRAPHY GUIDELINES

Mr. Rehberg. Thank you, Mr. Chairman.
Welcome. I always feel like apologizing to somebody with
your talent and credentials. And you have entered into the
political realm of our world, so I guess my questions probably
will be a little more political from the perspective of the
comparative effectiveness research that we were talking about
before.
While this organization is not necessarily under your
purview, the U.S. Preventive Services Task Force, they have
certainly created perhaps a firestorm within the breast cancer
community, and I would like you to talk a little bit about your
own concept of personalized medicine as it relates, then, to
some of the comparative analysis that you are going to be doing
within your research, because I will just use breast cancer as
an example.
This was in the New York Times, an influential group, the
one I referred to, provides guidance to doctors, insurance
companies, and policy makers, and they have now made the
recommendation that mammograms do not need to occur until 50,
as opposed to 40; and that was wildly hailed as a step forward
by the National Cancer Institute, National Breast Cancer
Coalition, Breast Cancer Action, National Women's Health
Network welcomed the new guidelines, and, of course, the
insurance companies will take that as, well, I guess we do not
have to cover that until they are 50. Unfortunately, on the
other side are the American Cancer Society and the American
College of Radiology.
So a fight has been created that will probably rage on for
quite some time. How are you working or how do you intend to
keep those kinds of food fights out of NIH? Because it has the
potential of creating a lot of politics for you in an arena
that research and science should not have politics.
This is just one example, and it is the most recent example
of something that is going to occur as a result of something
similar to the comparative effectiveness research that is going
on.
Dr. Collins. Well, Congressman, I appreciate the question
and this certainly is an example where those recommendations
from the USPSTF on mammography created quite a firestorm of
controversy. Specifically, NIH is not in the business of
establishing practice guidelines, for the most part, and in
that instance the National Cancer Institute stayed out of the
fray, basically. Our role is to provide the kind of data that
might allow the establishment of guidelines that improve
outcomes, and that is something that we are very determined to
do.
When it comes to the mammography guidelines, I think you
brought up the issue of personalized medicine. Perhaps the path
forward here is for us to be more clear about how to utilize
individualized information to make better predictions, because
while there may be women who are not going to be benefitted by
a mammogram in their 40s because they are at very low risk,
there are others who are at higher risk for whom that is a
highly appropriate procedure.
The Task Force recommendations touched on that, but we did
not have enough data to actually be able to say how do you
factor that in. That would be one of the things that NIH very
much wants to work on.

FUNDING FOR COMPARATIVE EFFECTIVENESS RESEARCH

Mr. Rehberg. I feel very comfortable with your credentials.
You are probably the right person at the helm of NIH at a time
when we are spending a lot of money on this kind of comparative
research. But the problem is--or not necessarily a problem--I
do not want to create a problem--have you created an objective
conclusion for the various research? You are spending
$400,000,000 on this kind of research, but if it does not come
to a conclusion, all it does in this kind of a case is create
more confusion in the minds of the patient, the poor 41-year-
old woman who does not know what to do now.
And again I go back to this is an influential group that is
now making a recommendation that provides guidance to doctors,
insurance companies, and policy makers. So are you going to
have $400,000,000 worth of confusion created at NIH similar to
this, which is what this has done?
Dr. Collins. Well, we certainly do not want that outcome,
Congressman, and, again, the mammography circumstance had data
that fed into it from a variety of perspectives, much of it not
supported by NIH.
If you look at our comparative effectiveness research
portfolio, what you see are things like the Diabetes Prevention
Program that Dr. Rodgers described. Now, there is an example
where we learned by rigorous data analysis that in fact an
intervention to prevent diabetes--which many people were not
that convinced was going to work--worked spectacularly, and it
worked better than the alternatives that are commonly used in
practice, and that is now----
Mr. Rehberg. Okay, so you will stay out of this controversy
and anything else that is controversial?
Dr. Collins. No. No, not at all. No, I am not trying to say
that.
Mr. Rehberg. Well, then what would be your conclusion here?
Are you going to back the----
Dr. Collins. My conclusion is that NIH's role is to do
research that generates rigorous evidence that can guide
conclusions that are based upon data, and we will do everything
we can to provide that kind of data to guide those
organizations outside of us that are going to try to decide
what is right for the individual as far as their health care.
Mr. Rehberg. So you are going to pick a fight.
Dr. Collins. We are going to try to----
Mr. Rehberg. Because you are going to provide data to both
sides and then step back and watch them duke it out.
Dr. Collins. I think we believe that data that is based on
evidence and reason is a good thing to add to any discussion,
and we hope to be the providers of that.
Mr. Rehberg. Thank you, Mr. Chairman.
Mr. Obey. Ms. McCollum.

PRIVATE SECTOR INNOVATIONS FROM NIH INVESTMENTS

Ms. McCollum. Thank you, Mr. Chair.
I think what I heard clearly you said is that more research
needed to be done so that people could make a better informed
decision between doctor and patient, and that is your goal and
your focus.
Dr. Collins. Well said.
Ms. McCollum. Thank you for that.
Mr. Chairman, members of the Committee, I see NIH as a
public good. Like highways and clean waters, NIH is a benefit
to our entire society. Those benefits are widespread, long
lasting, and not always immediately profitable, where we see
immediate return. That is why private business does not do and
cannot often make the investments that NIH makes. So funding
for the public good is one of the most important functions that
the Federal Government has, and I think you gave us some
excellent examples in the three patients that you provided, and
I know you have hours and thousands, tens of thousands of
success stories.
So the investment that this Committee is getting ready to
make in the NIH are not only critical to the health of our
citizens, but they also contribute to the growth of our
economy.
Dr. Collins, I am going to take a little different track in
some of the questions I am going to ask you and the panel here
today. In your testimony, you state that every $1 of NIH
funding directly results in more than $2 in economic output.
The indirect and long-term benefits from NIH investments are
greater, and I would like you to talk a little bit about that
this morning.
So could you please tell us how investments in NIH lead to
private sector innovation, both directly and indirectly? Where
would the drug industry, the medical device sector, or any of
the other major aspects of the U.S. health care sector be
without the basic research that is supported by NIH?
Thank you.
Dr. Collins. Thank you for the question. And we do believe
that by medical research investments at NIH are, besides being
a wonderful stimulus of advances in health care, also a
wonderful stimulus of the economy, and the evidence is very
compelling for that.
Economists agree that American economic growth since World
War II, more than half of that has been driven by science and
technology. And if we are looking for an occasion to try to get
our economy back on track, this sort of economic investment
makes a lot of sense.
You quoted the direct effects of NIH investment, this more
than twofold multiplier effect in one year. But if you look at
the indirect effects in terms of our interactions with the
private sector, if you look, for instance, at the development
of new drugs, roughly 60 percent of new molecular entities that
are put forward by pharmaceutical companies for FDA approval
cite an NIH publication or an NIH patent as being fundamental
to how that came forward.
And if you look at the jobs in the biopharmaceutical sector
that are directly, therefore, related to things that NIH has
supported, that is 3.2 million jobs at the present time; and
these are high-quality, high-paying jobs that we do not want to
see go overseas instead of having them exist here.
If you look at the way in which investments are being made
by the pharmaceutical companies in research, again, much of
that based upon the foundation that NIH provides, that is $56
billion of research investments done by the private sector
exceeding what NIH is putting in at a little bit more than half
of that.
The whole landscape, then, I think you can see is very much
triggered by this. Let me give you an example of a company
called Affymetrix in California, which is the main purveyor now
of these DNA chips which have become a revolution in research
and in clinical practice. They are the reasons now that people
can actually get personalized medicine readouts, as I have done
myself. This was started on an NIH grant, as a single
investigator with a great idea; and here we are now with a
company that has capitalized in the billions.
I could give you many more examples. But I think your point
is extremely well taken. People think of NIH--and we are glad
about that--as the place where new cures for diseases are being
sought, but it is also a place where our economy is getting one
of the best kinds of stimulus it could.
Ms. McCollum. Thank you, Mr. Chair. And I want to thank
past members of this Committee for all the work they did in the
genetic research that has led to the gene therapies that are
out there now. If people were not willing on this Committee to
invest in science, we would not only not have the cures, but we
would find other countries getting far ahead of us in this
technology and job creation field. So thank you, members.
Mr. Obey. Thank you.
Mr. Cole.

PRIORITY SETTING FOR RESOURCE ALLOCATIONS

Mr. Cole. Thank you, Mr. Chairman.
Thank you for being here and thank you all very much for
the work that you do; it is extraordinary.
A number of years ago our Congress passed the Caroline
Price Walker Conquer Childhood Cancer Act and we authorized
$150,000,000 a year for pediatric cancer research over a five-
year period. We, as a Committee, never chose to fund that, to
appropriate money for that purpose.
When you are confronted with a situation like that, where
you have sort of congressional authorization on one hand, this
Committee does not--because, frankly, I think it is very
careful about trying not to interject itself into what are
scientific decisions--how do you take something like that and
balance it and make basic decisions? Or do you at all?
Dr. Collins. Well, it is a daily discussion that goes on
amongst the NIH leadership about how to set priorities,
Congressman, and it is not an easy task when we have so many
opportunities and the resources are not sufficient to chase
after all of them. A lot of this depends on scientific
opportunity. Simply throwing money at a problem, even if it is
a critical problem for public health, is not necessarily going
to get you where you need to go; you need to see is there an
idea here, is there a research project that could push the ball
forward?
So we are always trying to both weigh public health needs,
as well as scientific opportunities. We do not want to neglect
rare diseases--and many pediatric cancers are rare--just
because they do not affect that many people, because if it is
your family where a child has been stricken with cancer, it
does not matter a whole lot to you that that happens to be a
rare disease.
With pediatric cancer, we have certainly adopted that as an
area of great priority because of the terrible toll this takes
on young people and their families. We have made great strides
in many of these cancers that occur in children, but we have
many others, particular solid tumors, for which we are not as
successful as we would like to be.
The good news here is I think we have the tools--and this
was sort of a couple of the themes that I talked about in my
opening statement--both in terms of really laying out the
landscape of why cancer occurs in children and accelerating the
process of going from that understanding to a therapeutic; and
that is moving forward at a pace that would not previously have
been imaginable, and we are empowering academic investigators
to take a larger role in the development of therapies, which,
in the past, was largely left to the private sector. And for
pediatric cancers that are rare, there is not much of an
economic incentive to develop a new therapy if it is going to
be risky. If academic investigators could de-risk the project,
then it becomes more attractive.
The Cures Acceleration Network is another example of an
authorized, but not yet appropriated, effort that I raised
briefly in the opening statement that we are quite excited
about because it would facilitate this process.

PEDIATRIC CANCER RESEARCH

Mr. Cole. Well, quite often our colleagues count on this
Committee to protect them from themselves, so this may be one
of those instances, I do not know.
Let me ask you a follow-up question. I have gotten two
different sets of responses--and they are not dramatically
different--on how much money is actually devoted toward
pediatric cancer care. From Director Worzog I think we had a
communication that suggested it was something like
$215,000,000; from the NIC we got an estimate like it was
$195,000,000. Do we have any idea what the range, relatively,
of dollars devoted in this effort is?
Dr. Collins. I do not have the numbers in front of me,
Congressman; I can certainly provide them for the record. We do
now have a better method of tracking how NIH is spending its
dollars than we have had in the past, something that got
unveiled about a year ago. So we are able to tell you, I think,
accurate numbers based upon our entire portfolio.
[The information follows:]

Pediatric Cancer Research

NIH has not set its tracking system on disease spending to be able
to capture estimates for childhood cancers or pediatric cancer research
funding across all of NIH. However, these estimates are available for
research funded by NCI. The estimated funding level in Director
Orszag's letter reflects the NCI-projected FY 2010 funding level for
pediatric research (approximately $215 million), which is a broader
research category than childhood cancer alone, and includes research
related to child health, childhood cancers, birth defects, multiple
sclerosis, etc. In FY 2011, NCI expects to fund pediatric research at
$233.7 million. NCI also projects funding in the category ``childhood
cancer research'', which is a subset of pediatric research and includes
only childhood cancer research (such as childhood leukemia and
neuroblastoma). The National Cancer Institute (NCI) estimates it will
spend $196.3 million in FY 2010 and $202.7 million in FY 2011 on
childhood cancer research. This is the funding level that was provided
in the recent NCI document. The key difference between these two
categories of research is pediatric research is a broader category that
includes research related to child health in general, whereas childhood
cancer specifically deals with cancers affecting children.

NCI's Pediatric Research and Childhood Cancer Funding, 2007-2010
(dollars in millions)
----------------------------------------------------------------------------------------------------------------
2010
Year 2007 2008 2009 (estimate)
----------------------------------------------------------------------------------------------------------------
Pediatric Research.......................................... 243.2 235.4 240.8 215.0
Childhood Cancer............................................ 172.7 189.7 192.9 196.3
----------------------------------------------------------------------------------------------------------------

Mr. Cole. That would be very helpful. I would really
appreciate that. And particularly if you could trend-line is
over several years, if that was possible, so we could sort of
see relatively where we are headed.
Finally on this topic--and you have answered this partly,
but I just want to give you an opportunity to add anything else
you would like to--where do you see us going in pediatric
cancer research over the next five or ten years?
Dr. Collins. I think it is going to be a very exciting
time. We will have the ability to identify what are the basic
molecular drivers of a cancer that occurs by analyzing hundreds
of these tumors and figuring out precisely what has gone wrong;
what has made a good cell go bad and have it start growing in
this fashion.
I should say, by the way, there is a wonderful new
partnership between St. Jude's and the Genome Center at
Washington University in St. Louis involving $60 million of
private philanthropic donations to make this go forward for
pediatric cancers on hundreds of tumors.
We are going to, therefore, be able to say what are the
targets for which we need magic bullets, and we should be able,
in the next five or ten years, to transform our approach to
pediatric cancer from the chemotherapies, which can be
successful but which, as you know, are also quite toxic, into
compounds that are much more directed, much more rational; more
likely to be effective, less likely to be toxic.
Mr. Cole. Terrific. Thank you.
Thank you very much, Mr. Chairman.
Mr. Obey. Mrs. Lowey.

FOOD ALLERGIES

Mrs. Lowey. Thank you very much, Dr. Collins, Doctors all.
I must say, having served on this Committee for many years,
this is one of the most exciting hearings that we have, and I
do wish we had hours, but we do not want to take you away from
your important work, so let me just thank you for your service
to the Country and to the people, and we look forward to
continuing to increase the appropriations.
A few particular areas, first with food allergies. It is
very frustrating, to those who suffer, that the only advice
doctors can give now is do not eat certain foods. And as you
probably remember, shockingly, it took me five years, five
years to get legislation passed that mandated clear labels on
food. But now at least allergy sufferers and celiac disease
people call me and tell me how grateful they are that we have
those labels on food.
So two questions. Allergies. I never had them until I got
here to Washington. What progress are we making in
understanding why the same amount of allergens has minimal
impact on one person, lethal to another? And we are any closer,
Dr. Rodgers, to understanding why the number of children under
the age of five who suffer from peanut allergies has grown so
much between 1997 and 2002? Every school has peanut tables;
many schools do not allow peanuts to be served. Perhaps you can
respond.
Dr. Rodgers. We are going to redirect it.
Mrs. Lowey. Wrong directions. Dr. Fauci.
Dr. Rodgers. I would be happy to talk about celiac, but let
me turn to my colleague.
Dr. Fauci. Thank you for the question. It is obviously
very----
Mrs. Lowey. How could I forget my good friend Dr. Fauci? I
do not know. Yes.
Dr. Fauci. It is very important, as you well know. Four
percent of the people in the United States of America suffer
from food allergy, peanut allergy being one of the most severe.
Your question about the differences in individuals are clearly
related to genetic predispositions. We do not know the exact
genetic profile that would pinpoint someone who has a
propensity, but clearly these are things that run in families,
which strongly point to it being genetic factors, which, as Dr.
Collins mentioned in many of his remarks related to other
diseases, the more we get a better handle on the genomic basis
of disease, the better opportunity we will have to do one of
the things that Francis mentioned, more personalized medicine
approach. And I think allergies and the response to allergies
and the desensitization to allergies are going to very, very
much fall into that category of personalized medicine.
The other question you asked is that why does it seem like
we have more peanut allergy now than we had before. Well, the
honest answer is we do not know. But we do feel that one of the
issues that may contribute to it is that, because of the
greater sensitivity in the community to the possibility of
peanut allergy, more families are withholding peanuts and
peanut derivatives from children early on in their lives,
which, in our research projects now, we are finding that that
might actually, if a person is not allergic to peanuts, have a
paradoxical, deleterious effect, because some studies are
showing now that when you give children, at a very early age,
exposure to peanut, you naturally desensitize them to any
allergy they may have. There is a very interesting Israeli
study that shows that early exposures to peanuts actually wind
up having a lesser incidence of peanut allergy as the child
gets older.
So there is a lot of active research going on. We are very
excited about it. We are getting new young investigators in the
field, and I hope in a year or so we will be able to give you
even more encouraging information.

PEDIATRIC DIABETES

Mrs. Lowey. Thank you very much.
I was looking at you, Dr. Rodgers, because a group of
children came to my office just this week who suffer from
diabetes, and it is extraordinary to see the advances in
treatment. Little children are taking care of themselves. But
we are not preventing diabetes and we are not curing diabetes,
and perhaps you can--I am not talking about adult onset
diabetes; I am talking about those that are affecting our
children. Perhaps you can comment on the research there and
what progress are we making.
Dr. Rodgers. Thank you. We are actually making
extraordinary progress on the treatments for kids with type 1
diabetes, the type that you are referring to. In fact, just to
back up to one of the points that you made. What we are
learning a lot about diabetes, actually type 1 diabetes, which
is an autoimmune disease in which the body, for unclear
reasons, turns against these insulin-producing islet cells in
the pancreas, are actually giving us clues to patients with
celiac disease. They share many features. So what we are
learning in this particular disease may also have implications
in a disease that perhaps affects about one percent of the U.S.
population, that is, celiac disease.
In diabetes, we are trying to--this is a disease that
affects individuals who have a particular genetic
susceptibility, and within the last few years the number of
genes that account for this susceptibility has greatly
increased. Today there are over 40 susceptibility genes, which
account for more than half of the predilection for developing
the disease, so what that means is that we can identify, early
on, which kids are likely to develop type 1 diabetes and when.
Now, it is thought that there are triggers associated with
this, and understanding what the environmental triggers are is
extremely important. We have almost, very recently, completed a
study, a recruitment of about 7,800 infants who have this high
type 1 diabetes propensity to follow them for a period of 15
years to understand what it is in the environment that is
leading to the disease is it something that they eat, is it
something in the environment, et cetera?
And this work is going on with other work that is funded by
the NIH in specific areas, for example, the National Institute
of Child Health and Human Development (NICHD) is funding a
study comparing the effects of hydrolyzed infant formula to
that of cow's milk, because there are a number of people who
believe potentially that cow's milk may be that trigger. And
that work is proceeding quite well.
The NIH, in association with the CDC, has also, for the
first time, developed a surveillance program to look for
diabetes in youth. This includes both type 1 and type 2. But,
importantly, having CDC's involvement, and because of their
ability to do surveillance within States, we can better
understand the clustering of type 1 diabetes that we are
seeing. This may point to specific triggers in certain locales.
And this is just in the surveillance. I can provide you more,
because I see my time--
[The information follows:]

Pediatric Diabetes

If we find the trigger, we may be able to develop a vaccine or
implement a change in diet that can prevent the disease. In addition to
research to uncover the genetic and environmental components that
contribute to the cause of type 1 diabetes, the NIH is pursuing
research to prevent, treat, and one day cure type 1 diabetes. For
example, Type 1 Diabetes TrialNet tests strategies for type 1 diabetes
prevention and early treatment. TrialNet recently reported that the
drug rituximab could preserve the function of the insulin-producing
beta cells in people newly diagnosed with type 1 diabetes. Previous
clinical trials have suggested that preserving patients' remaining beta
cell function can have dramatic, long-term health benefits. TrialNet
has also launched a trial testing the ability of another agent, oral
insulin, prevent the disease in people who have high levels of insulin
autoantibodies, a pre-clinical marker of the disease. TrialNet also has
two other prevention trials that will launch soon or are under
development.
An earlier, landmark NIH-supported clinical trial showed that
improved control of blood sugar beginning as soon as possible after
diagnosis can greatly improve the long-term prognosis of type 1
diabetes and result in reduced rates of life-threatening diabetes
complications. This research has contributed to the fact that people
with type 1 diabetes are living longer and healthier lives than ever
before. However, blood sugar control is not always easy and even the
most vigilant patients are at risk for sudden, acute episodes of
dangerously low or high blood sugar levels. The NIH is deeply committed
to helping patients achieve good blood sugar control and is taking two
approaches to realize this goal: beta cell replacement and development
of an artificial pancreas. With respect to beta cell replacement, the
NIH supports the Beta Cell Biology Consortium (BCBC), which is studying
ways to grow beta cells in the laboratory for transplantation into
people and examining strategies to promote new beta cell formation in
the pancreas. BCBC scientists are gaining key insights about beta cell
biology and development, which is paving the way toward new cell-based
therapies. The NIH also supports research toward the development of an
``artificial pancreas''--a mechanical system that links glucose
monitoring to insulin delivery--and has the potential to alleviate an
enormous amount of patient burden.

Mrs. Lowey. Thank you. I see that. But I look forward to it
and thank you again, Dr. Collins.
Mr. Obey. Mr. Moran.

ENVIRONMENTAL CAUSES OF ILLNESS

Mr. Moran. Thanks very much, Mr. Chairman.
I want to follow up somewhat on the line of inquiry of Mrs.
Lowey and Mr. Cole. First of all, NIH, of course, has done
wonderful work. The whole Nation is justifiably proud of all
you have done. In your opening remarks you cite the extension
of life and the progress particularly in cardiovascular
disease, the fact that older people with chronic disabilities
is down markedly.
But much of the effort, at least in the past--now, I can
sense kind of a shift here--has been on those called the dusk
of life, and less emphasis on those at the dawn of life. That
is why I was particularly impressed by a lot of the questions
from the panel.
Something is happening among our children. This past
generation, for example, the rate of asthma has tripled. Cancer
is now, for the first time, other than accidents, the primary
cause of childhood death. One in every six children is born
with a developmental disability now; attention deficit
disorder, dyslexia, but in many cases significant mental
disability. One in 59 children is autistic. And we have talked
about obesity, and it is just stunning that one in three
children now, we estimate, will suffer from some form of
diabetes, we understand.
There was a study commissioned by the Environmental Working
Group that looked into umbilical cord blood, and they found
that there were 232 industrial compounds in that umbilical cord
blood. Many feel that what is happening with this most recent
generation is a result of environmental factors; it is
something we are breathing, we are eating or drinking. And it
could well be the number of chemicals that we now depend upon
for our food supply. Cow's milk, I read a number of studies
that it may have a direct link to diabetes.
You have the National Institute of Environmental Health
Sciences (NIEHS), and it is kind of a new thing. For a while it
was sort of marginal in terms of focus.
Well, that is true, Doctor, you know that. You do not need
to be defensive about it, but it really was not NIH's focus.
But I think, as we see what is happening in this new
generation of young people, these dramatic statistics point to
environmental causes that we need to coordinate with our
research. The endocrine disruptors is one. In the Potomac River
here, that we are all familiar with, every single small mouth
bass--and that is a principal fish species--every single one of
them is intersexed. Something is wrong.
So I wonder--my first question really would be the extent
to which we are integrating some of our findings with what the
NIEHS is coming up with.
Dr. Collins. I appreciate the question, Congressman, and I
agree that studying the environmental impact on diseases of
children and of adults is a very high priority. We may be able
to understand hereditary implications, but we are not going to
change those anyway, so it would be much better if we
understood how those interact with the environment.
And this has been one of the challenges, because a compound
that in a certain concentration might be entirely safe for one
person may actually be quite dangerous for another; and if we
do not understand those differences, we have a very hard time
identifying what in the environment we should pay attention to,
because it all gets sort of blurred out by those individual
differences.
With regard to children, the National Children's Study,
which is in its pilot phase of enrolling participants--and we
are working hard to figure out how to do that in the most
effective and cost-effective way--aims to follow 100,000
children preconception, all the way through pregnancy, and then
until age 21. And a big part of that study is to collect the
most sophisticated data we possibly can on environmental
exposures, including in utero exposures, to try to see whether
we can draw conclusions that so far have escaped us about what
is causing these many different problems that we see in
pediatrics.
That is the most ambitious enterprise that has yet been
mounted. But, meanwhile, there are specific efforts in specific
diseases to try to collect that kind of information, for
autism, for instance. Certainly for pediatric cancers, if you
see a cluster, what is going on there in terms of environment?
The difficulty we have oftentimes is we can measure the
presence of many of these compounds, and we know that in larger
concentrations they are not safe because animal studies have
told us that. We often do not have the data to know what level
would be safe, if any.
So our environment, which is full of the consequences of
industrialization, may have things in it that, if we understood
them better, we would want to get out of there, but the data is
often insufficient to be confident that we know that answer;
and what is the safe level is often the question for which
there is not a clear response.
Mr. Moran. Thank you.
Mr. Obey. Mr. Kennedy.

MENTAL ILLNESS AMONG VETERANS

Mr. Kennedy. Thank you, Mr. Chairman.
Welcome all of you. Thank you for your service to our
Country in a very significant way in reducing the burden of
illness for our people. One of the big burdens of illness for
our people, and certainly an area where our budgetary dollars
are so significant now, more than ever before--and if I could
ask you all to comment on that with respect to the recent
technology and the opportunities for that technology in the
research that we have uncovered so far to make huge advances in
this area as it relates to all of your institutes and every
institute--is in neuroscience.
And particularly, talking about the burden of illness, my
colleague, Mr. Moran, just mentioned autism and the prevalence
of autism. Others of my colleagues have mentioned the burden of
illness of Alzheimer's with the aging of America. And then, of
course, you already have, as Dr. Insel knows, the huge burden
of illness of mental illness in this Country, and addiction and
substance abuse. And then on top of all of that you have a bow
wave of needs coming down the line with our veterans
population, and that is what I want to ask you about.
I know that there is greater coordination within the
institutes on sharing relevant science amongst yourselves. When
you are under a budget that Mr. Obey understands is part of the
cap on discretionary funding increases, but Department of
Defense and the VA are not, what I would like to know from you
is to what extent can you coordinate your neuroscience research
and--by the way, they have a big portfolio in areas that you
also do research--that affect the veteran.
And I would like to know to what extent do you coordinate
your work with perhaps medical research that is designed to
help the veteran, because clearly the veteran is going to be--
their challenges are going to also be the challenges of America
with respect to all of these issues, because in finding out
more about Traumatic Brain Injury (TBI) and Post Traumatic
Stress Disorder (PTSD) and the complications of those, we are
going to also find out the answers to many of these other
issues.
And I even point out diabetes because not only do we know
the correlation between depression and diabetes, but I know
that there has just been a drug approved for type 2 diabetes
that relates to neurotransmitters in the brain. And it is
ironic because most people think it has to do with the
pancreas. Now we know it has to do with the brain, just to show
the interconnections in whole health.
So, Dr. Collins, if we could start with you.
Dr. Collins. Well, Congressman, you put your finger on a
very important issue, and that is the need for us to
collaborate across agencies to try to improve health in the
area of neuroscience, and I think it is fair to say that that
is a topic of great interest. Certainly the topics you
mentioned--traumatic brain injury, PTSD, Alzheimer's--have all
been areas in which we now have developed partnerships with the
Department of Defense and with the Veterans Administration.
I am going to ask Dr. Insel, because he is intimately
involved in several of those, to cite a few examples in answer
to your question.
Mr. Kennedy. And, Tom, if you could--by the way, I loved
meeting Laura the other day. Anyway, I just want to say do you
know if there is the same collaboration within VA and DOD that
you have within NIH with respect to the various institutes, in
terms of their neuroscience collaboration?
Dr. Insel. Thanks for the question. I do not actually know
what coordination goes on in terms of neuroscience between DOD
and VA. It would be a great question to pose to each of them. I
can tell you that for the collaboration with DOD, this is very
tight and real, and it is a project that really came about
because of the DOD's concern, the Pentagon's concern with the
rising rate of suicide. As you know, there is a doubling of
suicide amongst active duty soldiers. Last year, 160 suicides
in the Army. That is actually more than the combat deaths in
Iraq.
Mr. Kennedy. Can I mention something, just if you could
comment? Anahedalcystine. Do you know the drug that reduces
inflammation in the capillaries, if given, in the brain,
because it only goes to those areas where there is blood, so it
covers the brain blood barrier? There is Defense Advanced
Research Projects Agency (DARPA) research that shows that it
can minimize or eliminate mild traumatic brain injury. Do you
know about that research?
Dr. Insel. We have a center that actually--it is a joint
center between funded by the Veterans Administration and partly
by DOD, but it is a joint center between the Intramural Program
at NIH, National Institute of Neurological Disorders and Stroke
(NINDS) and National Institute of Mental Health (NIMH), and the
Uniformed Services University of the Health Services (USUHS),
which is looking precisely at that issue.
I just met with the folks from USUHS about a week ago and
heard a little bit about their excitement about this, that this
is perhaps a great way for an acute treatment for TBI. And they
are also very interested in being able to visualize the changes
using new neuroimaging techniques which are just coming online.
So absolutely a very exciting area for science. It is not
ready for prime time, but an area where it looks like we are
getting some interesting advances.

NATIONAL CANCER INSTITUTE CLINICAL TRIALS

Mr. Obey. Dr. Collins, as you know, the New York Times
published an editorial about a week ago which raised serious
questions about waste of time and money with respect to
clinical trials, and the editorial indicated that 40 percent of
the clinical trials sponsored by NCI are never completed, and
it quoted the Institute of Medicine as being quite concerned
about the entire situation.
I would like to know what your observations are, what your
response would be to that report; where you agree with the
concerns they raised, where you might disagree, and what you
think ought to happen in order to correct the problem.
Dr. Collins. I am very concerned about the outcome of that
report. I should tell you that is a report the National Cancer
Institute (NCI) asked the Institute of Medicine to conduct and
brought in experts to look at the cancer Clinical Trials
Network and draw the conclusion that, as you have said, there
are major difficulties in terms of not finishing trials that
get started, in terms of trials that take very long to get on
the ground after they have initially been designed. And they
make a number of recommendations which NIH and NCI are going to
now take very seriously.
One of the problems is that the networks are complicated in
terms of multiple centers, and that is the nature of phase 3
trials, that they generally involve multiple centers. But there
is so much bureaucracy involved in trying to get a trial
started, some of that just being the paperwork, some of it
being the human subjects effort, where every center has to have
its own Institute Review Board (IRB) that reviews the protocol.
We clearly need to move in the direction of more centralized
IRBs.
It is clear that some of the clinical trials are not
necessarily designed in a way that takes advantage of some of
the newer discoveries about ways that you could optimize a
trial by identifying those most likely to respond and,
therefore, making a smaller, more tightly focused trial that
would give you a result more quickly; and we need to think
about that.
Some of this, though, I think relates to the fact that many
of these were for rare diseases, and they simply were not able
to enroll enough subjects to get enough power; and perhaps that
was an unanticipated problem that should have been anticipated.
So clearly what needs to happen--and I think the IOM
recommendations are actually very well put and will be a great
starting point for NIH--is to worry more explicitly about
efficiencies that could be achieved that are not being
achieved. Maybe we do not need to have so many centers if they
are only enrolling a few patients each; maybe we could do this
more efficiently with a smaller number of centers with larger
enrollments.
Maybe we need to prioritize what trials are really critical
to do. And maybe we need to come up with a better way to
encourage participation by patients, because right now only 3
percent of adult patients with cancer participate in clinical
trials, compared to the majority of pediatric patients; and we
have to figure out why that is and why we have trials that we
cannot manage to fill.
Mr. Obey. Well, my concern is that one out of every four
Americans is expected to die of cancer, so this is not a minor
problem.
Dr. Collins. No.
Mr. Obey. And people look at clinical trials as being the
gold standard, and when we get a report like this, it raises
really significant questions. I would ask that you keep in
close touch with the Committee as you review those
recommendations and concerns, because we are talking about not
just a lot of lives, but a lot of money as well.
But what is the main reason why you think so many of those
clinical trials do not finish?
Dr. Collins. I think many of them are for conditions where
it has just been difficult to find enough patients with the
precise conditions that had to be present to be able to enroll
in the trial. They cannot find----
Mr. Obey. Would not that tell us something about what is
going on at the front end, before those trials are ever
started? How should that process be changed?
Dr. Collins. I agree with you, it does tell you something
about the inability to plan effectively about whether a trial
is likely to be able to meet its enrollment criteria or not;
and that is something that has to be looked at very carefully.
Imminently, we will see the appointment of a new Director
of the National Cancer Institute. I guarantee you this will be
a matter of the highest importance for that individual. And I
think, as you have said, we have to get this right, because we
are going to see, coming forward, in the next five or ten
years, a very exciting list of new cancer therapeutics. But we
will only know if they work if we have a clinical trials
network that can test them quickly and efficiently. This has to
be the highest priority.
Mr. Obey. My time has expired.
Let me suggest we do a second round of about three minutes
apiece.
Mr. Tiahrt.

BIODEFENSE RESEARCH

Mr. Tiahrt. Thank you, Mr. Chairman. This may have been
asked by Dr. Fauci than you, Dr. Collins. Last year we ended up
transferring $304,000,000 from the Bioshield Reserve Fund to
the National Institute of Allergy and Infectious Diseases, and
we justified that additional research was needed because,
before we can purchase countermeasures for use in the event of
a bioterrorism event.
Now, I was opposed to this; I think that it is better spent
at the Biomed Advanced Research and Development Authority
(BARDA)--in their advanced development program. But if these
funds go to NIAID, will NIAID work with BARDA to ensure that
the research is supported by those funds that address the
issues that we are concerned about, and that is a bioterrorism
event? And through these applications can you ensure that the
funding will be spent on biodefense research?
Dr. Fauci. Thank you for that question, Mr. Tiahrt. The
answer is we work extraordinarily closely with BARDA. In fact,
those very funds that ultimately came to us were spent in
coordination with BARDA; they were allocated for the biodefense
research and development. As you, I know, well know, we have an
issue with regard to the far-end, downstream purchase of
something to put into the strategic national stockpile, and
what the NIH has been doing for decades, and does very well, is
the fundamental basic research, concept development and
preclinical development; and then there is a gap in the middle
which many people refer to as the valley of death. Not a very
good terminology, but it feels that way sometimes.
And that is really what we needed to shore up with the
funds that were technically transfers from BioShield, but
really went into the research and development in close
coordination with BARDA.
So the answer to your question is yes, it will be.
Second question, is it used for biodefense? Absolutely yes.

CURES ACCELERATION NETWORK

Mr. Tiahrt. Okay. Thank you very much.
The valley of death, which we have referred to, I guess it
was last authorization we put $500,000,000 in for the Cures
Acceleration Network, or CAN, as we refer to it. Is CAN the
best way to go about bridging this valley of death that we
refer to, or are there other ideas that we should be
considering?
Dr. Collins. Well, I think CAN is a very exciting idea. The
Institute directors will all be gathering for a retreat all day
tomorrow to talk about this, because this is an opportunity in
a very flexible way to try to push forward new and exciting
approaches to therapeutics.
The idea here is, as authorized, but not yet appropriated,
is to provide large grants that include participation by public
and private sector partners. It includes some flexible research
authority to allow us, in a DARPA-like fashion, to move such
projects forward rather quickly. And, if appropriated at a
reasonable level, would allow multiple projects to go forward
simultaneously with project managers that are authorized to
both bring in resources when you need it and to kill projects
that are failing, which is critical in this high-risk area as
well.
The idea here is to develop a new paradigm for how we come
up with new therapeutic ideas, partnering in a new way with the
private sector, where academics are de-risking projects, which,
as soon as they become commercial viable, can then be out-
licensed, so the companies can take them and run with them. And
I think, from my perspective as a physician who is anxious to
see therapeutic successes come forward, this is a mechanism
that we very much need and hope to be able to utilize.
Mr. Tiahrt. If I can just finish with a comment, Mr.
Chairman. One of the things we saw in the DARPA program is that
when we had new ideas that ended up not pursuing, failed, in
other words, the people who were managing those programs got a
black mark on their resume.
And I hope that when you are pursuing new ideas, that just
because the idea does not work out does not mean the person
failed; it may have been a very successful way of finding out
not to waste more money. So please look at the individual and
not put a black mark on their record just because they happen
to be managing a program that is not what we want to invest
more money in.
Dr. Collins. I agree with you, Congressman. Winston
Churchill famously said that success is nothing more than going
from failure to failure with undiminished enthusiasm. And one
needs to keep that in mind. If we are not doing the kind of
research that fails on a fairly regular basis, we are not
pushing the envelope hard enough.
Mr. Obey. [Remarks made off microphone.]
Mr. Ryan. Thank you. I have been watching from my office,
so do not feel like I have not been paying attention.
[Laughter.]

BEHAVIORAL RESEARCH

Mr. Ryan. And I know not to ask about comparative
effectiveness research. I know that ground has been covered.
Just briefly, I know Mr. Moran has talked about this, and I
heard Congressman Kennedy talk about it a little bit, the issue
of behavioral sciences, behavioral research. And last time you
were here I talked to you a little bit about mindfulness and
some of the other approaches that I know NIH is looking into
doing some research. Can you just kind of update me as far as
is there anything that you have been doing over the last year
that I should know about?
Dr. Collins. So, Congressman, we agree that this is a
fruitful area for research. Clearly, the mind-body interaction
plays a significant role in lots of illnesses, both in terms of
their occurrence and their adaptation to those who are
afflicted with them. Certainly, several of the institutes have
significant portfolios in this area. I would think the National
Center for Complementary and Alternative Medicine particularly
comes to mind as a place that is devoted to trying to test out
some of these what people might call unconventional therapies,
but which clearly many people in the public are convinced are
of value, and we need to develop the data to underscore what
that is.
Already those kinds of studies, for instance, have shown
some value of yoga in terms of helping people cope with chronic
disease, and many others are being tested as well.
The National Heart, Lung and Blood Institute is also
engaged in a number of these. We have a new program in basic
behavioral and social science research called OPPNET, which we
think also will provide some of the foundational information to
help us understand the correlation between behavior and
illness.
And I might ask my colleague, Dr. Insel, at NIMH, if he has
other comments he would like to make about the mind-body
connection because, of course, that is a topic of great
interest in that area of medicine.
Dr. Insel. Well, I would say it is a topic of great
interest across much of NIH in the same way as Mr. Kennedy
mentioned the development of the neuroscience effort across
institutes so that it is not balkanized in any way. We have a
neuroscience blueprint effort across 16 institutes and centers
who are now doing this, as Dr. Collins mentions, for behavioral
and social science research as well.
So OPPNET is a new project; it is just getting off the
ground at this point. It involves all of the institutes and
centers at NIH and it will be a new forum, as well, for talking
about these kinds of issues and their opportunities for taking
those into a translational study of health.
Our own institute has been very interested in the work of
people like Richie Davidson in Madison. We fund a center that
he runs on the study of mindfulness, not only understanding
what its health implications might be, but also looking at the
brain and looking at physiology to understand the biology of
this process as well as the psychology.
Mr. Ryan. Well, I appreciate that. I went out last year to
see Richie's lab, and the work he is doing there is just
amazing. And we are talking about adding 30 million people to
the health care system, and I think this kind of individual
responsibility, where we are actually teaching people how to
manage their own levels of stress. We know what stress does to
all of us in our daily lives, but over the long term that kind
of high stress level leads to a lot of the problems that we are
researching and spending a lot of money trying to figure out
and then deal with and manage over time.
So I would just encourage you to continue to go down this
road. I was at a conference a couple weeks ago at the
University of Massachusetts Medical Center was sponsoring, and
across the board recidivism, education, health care,
prevention, right down the line. There were some cops that were
there from Portland, Oregon, talking about being more aware in
these kind of intense situations. There were a couple of
colonels there. There were military folks talking about
building up some resilience in your mind before you even go off
to battle so that, when you come back, you are more resilient,
you respond better, and over time I think it will prevent a lot
of the PTSD that Congressman Kennedy was talking about.
So I just want to encourage you to go down this road. And
whether it is health care or education, the idea that we can
teach kids to focus--we always tell kids pay attention, but we
never teach them how to pay attention. And this is a real way
for us to teach kids how to pay attention, how to make better
decisions, how to not get caught up in the moment and prevent
problems.
So I just want to encourage you, because the science is
there. It is there, and I think the more your seal of approval
and your street cred is on some of these initiatives, the
better off I think we are all going to be.
So I want to thank you for--the last point I wanted to
make, too, in the field of education with social and emotional
learning. I talked to the Secretary of Education about it when
he was before this Committee. They have a metastudy that they
did with 300,000 kids. There was an 11 percentile point
increase with social and emotional learning, with some
mindfulness involved in it as well. Eleven percentile point
increase. You are teaching kids how to pay attention.
And we cannot just tell them to pay attention and not teach
them how to pay attention; how to deal with their emotions and
regulate. When you realize that your emotions are prohibiting
your ability to concentrate, then we have to take step one. It
does not matter how much money we throw--
And I hope our friends on the Republican side, who do not
want us to keep throwing money at problems, will join with us
in some of this and realize we are going to teach kids how to
concentrate, how to focus, and how to reduce their level of
stress and save the health care system a lot of money.
So I am glad I showed up, Mr. Chairman. Thank you.
Mr. Obey. Mr. Lewis.

COORDINATION OF RESEARCH

Mr. Lewis. Thank you, Mr. Chairman.
The gentleman's concern about health cost and quality is
one I share with you, and it has nothing to do with partisan
politics. But let me say this. Years ago a couple of our
members suffered from Parkinson's, and that led some of us to
organize in a nonpartisan way an environment where people who
were doing research and treatment across the country came
together, spent like a day and a half together.
The amazing thing to me at the bottom line was that they
had never talked to each other in any significant level before,
emphasizing that which has been said several ways here today,
the need to have voices within your institution pushing the
kind of coordination that allows for us to tap many, many
resources.
Years ago we specifically were interested in the proton
therapy process. At that time, NIH was not interested in the
proton. I do not know if it was based upon cost or what, but
they were not interested. So we took that issue to a hearing at
the Energy and Commerce Subcommittee of Appropriations, rather
than this Subcommittee; and, as a result of that, that
subcommittee had about a dozen members on it and ten of them
had cancer in their family. They were very interested and
initial funding went forward.
Since that time, it has been suggested this might be a
great item for rationing because of relative cost for
treatment, even though initially we knew there were prospects
for small tumors in the brain, great success with prostate
cancer; most recently, great success with non-invasive breast
cancer treatment. But above and beyond that, NASA is very
fascinated with this work because of how it can help them
understand better the effects of radiation upon man perhaps in
space.
Well, that sort of coordination and communication could
cause NIH to help us very much tenor and hold back the tendency
of wanting to cut off avenues of research, as well as
treatment, because of cost alone. So I would urge that to
become a priority.
Mr. Kennedy. I would hope maybe we could work together on
getting DOD and VA to really figure out how they are going to
coordinate like the NIH has on their neuroscience, because,
really, the biggest amount of additional science in brain
research is going to happen on TBI for the veteran, and that is
going to accrue to Parkinson's, it is going to accrue to
epilepsy, it is going to accrue to Alzheimer's and autism, and
everything, because once you start researching the brain--and
the VA and DOD are going to be--those veterans are going to be
kicking down the door, as they did overseas, to all of these
diseases here at home.
Mr. Lewis. Mr. Chairman, he is referring to a project that
Mr. Kennedy and I were going to begin to work on long-range
relative to the problems with veterans and specific problems
like alcoholism and drugs, et cetera, leading to homelessness.
Unfortunately, Mr. Kennedy has made a decision not to run for
re-election.
Mr. Kennedy. That is why I am leaving it all in your hands,
Jerry. [Laughter.]
Mr. Lewis. Thank you, Mr. Chairman.
Mr. Ryan. Mr. Chairman, I would like to intervene. I would
love to help and make sure that this project continues.
Mr. Obey. Mr. Kennedy.

TRAUMATIC BRAIN INJURY

Mr. Kennedy. I want to go back to this anahedalcystine.
From what I understand, the DARPA showed that within the first
24 hours of a veteran suffering a concussion--and they can tell
from your rapid eye movement whether you have--and there are
objective standards--whether you have suffered this--that that
goes right through the blood brain barrier because of the
capillaries and it can have long-term impacts in terms of the
suffering of the consequences of TBI. And it is sitting right
now at the Surgeon General's Office of Review or whatever at I
guess it is the Navy, because it is the Marine Corps.
This is something that cannot be sitting around; it has to
get out there. We already have FDA approval for this. This
would be off-label use of it. So I am just asking, with your
basis of science at NIMH and coordination within your group, if
you can offer research and support to whatever that surgeon
general is going to have to review in terms of that DARPA
research, please, as soon as possible, because this is going to
help avoid a lot of that downward consequences as a result of
TBI.
Dr. Insel. We are on it.

ELECTRONIC HEALTH RECORDS

Mr. Kennedy. And they show literally if you do not give it
within the first 24 hours, you give it 72 hours later, the
effectiveness diminishes dramatically.
To go to David Obey's question about the registries and
clinical studies, tell us about how the new health bill and IT
with the health bill offers us an opportunity, Dr. Collins, to
have gene banks and registries of identify data to essentially
do a lot of this that we are currently doing through clinical
studies, but to really do it through the new health system.
Dr. Collins. Well, we desperately need better systems to do
those kinds of large-scale research projects and, frankly, in
this Country, we have been significantly impeded by the lack of
electronic health records. It is very difficult to do thorough,
accurate, efficient, cost-effective studies when everything is
scribbled on bits of paper and it is very hard to sort out
exactly what is in the medical record at all, if you can even
find it. So having the opportunity to see our health care
system evolve into an electronic framework is going to help
enormously.
But there are a number of issues that we are engaged in
here to make sure that we get the most out of this. There is
whole term called meaningful use----
Mr. Kennedy. Are you consulting with those IT folks on
this?
Dr. Collins. Yes, we are. Yes, we are. Obviously, one of
the hopes is that that meaningful use will be defined for the
standard medical record so that it is optimized for research
questions to be posed. Obviously, this needs to be done, and
shall be done, in a fashion that protects privacy and adheres
to standards of informed consent, but I believe that those are
pathways that can be negotiated. And we are really looking
forward to the chance to greatly enlarge the ability to survey
exactly what are the causes of illness by potentially having a
much more robust system for doing so with the electronic
record.
Mr. Obey. Mr. Cole.

BIOMEDICAL RESEARCH IN THE UNITED STATES

Mr. Cole. Thank you, Mr. Chairman.
Thank you, Dr. Collins. I want to ask you a series of
questions just, frankly, will be easier if I just sort of laid
it out, and then maybe you could educate me a little bit, since
I am new to this Committee and certainly new to this topic, but
very interested.
If you could, could you compare our national effort with
other countries? Where would you rank us, obviously? Second,
what percent of biomedical research done in the United States
is actually done by NIH or something you fund? And, again, what
percentage would that be nationally, if you know? And, finally,
is there some realistic way--you implied in an earlier question
that obviously you are at the foundation of a lot of very
profitable research for people--that some of the money, some of
the profits generated down the line in the private sector
could, in some realistic way, flow back to you for the
continuation and the augmentation of basic research? Not
eliminating our role, but generating additional resources for
you to do what you obviously do very well at NIH?
Dr. Collins. Those are great questions, Congressman, and I
would be happy to quickly go through them.
As far as the national effort of the United States in
biomedical research, I think it is fair to say we continue to
lead the world, but that leadership is certainly being
challenged substantially now by other countries--Europe, Japan,
and increasingly China and India. And our trajectory in terms
of the support and the numbers of individuals working in the
field has tended to be fairly flat, while those are going up
rapidly.
We were grateful to hear the President announce a year ago
an intention to raise the U.S. investment in research and
development to 3 percent of GDP, which would be a big shot in
the arm, but no timetable has been set for that. The time is
right, certainly, in terms of taking advantage of opportunity
and of investigators who are ready to come forward with their
best ideas and pursue them.
In terms of research that goes on in this Country, if it is
research done in academia, that is, in our great universities
and institutes all over the Country, and it is biomedical
research, almost all of that is supported by the National
Institutes of Health, with a healthy contribution also from
philanthropy. Certainly, the private sector--I think I
mentioned numbers a little bit ago--invests about $56 billion a
year in biomedical research; NIH, at $31 billion is about 40
percent of the total, but in a good partnership.
And your third question about profits that might actually
be able to feed back in some way to support the research that
goes on at NIH is something we have thought about. In this new
model, where we might have a partnership where academic
investigators get more involved in the front-end of developing
new therapeutics, that will result in some identification of
intellectual property.
That intellectual property can then be licensed to a
private company that is interested in taking it to the next
step and all the way to FDA approval. And if a drug then
actually gets approved and for which profits are made, some
royalties stream back to the NIH would be highly appropriate,
and most companies I have talked to are comfortable with that
model as a good way to get the job done.
Mr. Cole. Thank you.
Thank you very much, Mr. Chairman.
Mr. Obey. Mr. Ryan.

RECOVERY ACT INVESTMENTS

Mr. Ryan. Thank you, Mr. Chairman.
I just wanted to see if you can kind of outline--we put a
lot of money into the Recovery Act, and I think you touched
upon it a few times here. Can you just talk about, in your
estimation, I know a lot of that money was needed to be spent
years ago, and we were playing a lot of catch-up here in good
measure to the leadership from Mr. Obey, but can you talk a
little bit about how you feel the most impactful investments
through the Recovery Act, where that went, what it is doing,
and how we can--like you said, it is a marathon, not a sprint,
and how we can continue to build on it over the years?
Dr. Collins. Well, because this was such a significant
investment, the list of projects that were possible because of
it is much longer than I can fit into this three minutes, but
let me give you a couple of highlights of maybe signature
initiatives----
Mr. Cole. I mean, things like we want to go out and there
is a bid across the Country. Stimulus bill is not working, some
people say. Well, all the metrics show otherwise. But if you
could give us some tangible information on what would resonate
with people, what they would grasp onto.
Dr. Collins. So Recovery Act dollars from NIH in fact went
out to all 50 States, and we are in the process--quite clear we
are creating or retaining 50,000 high-quality jobs in the
biomedical research enterprise, which is a significant
contribution.
In terms of science that this supports that is going to
have a large impact on health, I have mentioned the Cancer
Genome Atlas as a rapid acceleration in the ability to
understand exactly at the molecular level what is going on in
cancer. Similarly, with heart disease. We have the Framingham
study, which has been going on for three generations, which
now, because of these dollars, is possible to move into a phase
of getting even more detailed information about the
environmental and genetic risk factors for cardiovascular
disease.
In the area of HIV/AIDS--and Dr. Fauci could tell you more
details about this--this money has made it possible to tackle a
couple of very novel and potentially very valuable ways to
reduce the incidence of new cases of HIV/AIDS by identifying
individuals who are infected and do not even know they are, and
starting them on treatment which will reduce the likelihood
that they can transmit the virus to others.
Autism. The effort now is funded by the Recovery Act to
obtain the complete DNA sequence of 300 cases of autism and
their parents to finally really understand what are the genetic
contributions to a disease which clearly can run in families,
so there must be something going on there.
All of those are things that we could not have done without
Recovery Act dollars to provide that real opportunity to tackle
things that are risky and expensive, but are potentially
groundbreaking.
Mr. Ryan. I appreciate it. Kent State University, I was
there a couple weeks ago. They got a significant amount of
money from the stimulus bill from NIH, and I just want to say
thank you, because there were a lot of folks there who were
working in hiring people in Portage County, Ohio, because of
what we did through the stimulus bill and what your work is. So
I want to thank you for that as well. Thank you.
Dr. Collins. And I could have mentioned the pandemic flu
effort, which also was greatly benefitted by the Recovery Act
dollars.
Mr. Obey. Mr. Kennedy, you had one question?

HEALTH CARE REFORM AND RESEARCH

Mr. Kennedy. Yes.
Dr. Collins, you mentioned a new paradigm in terms of
translational medicine perhaps working with the private sector.
I would like to ask you, with this new health bill, the
elimination of preexisting condition, the elimination of
lifetime and annual caps puts a big onus on insurance companies
now to come forward and develop models of care for different
disease groups. How they put that together will ride on what
the evidence-base is on how to best treat and care for groups.
That is going to involve you talking to the President's
assembled people who are going to roll this out, but also to
insurers and, like is said, that public-private partnership as
to how they best meet their obligations in the most efficacious
way.
And, Tom, how do you think to do that, when it is not
necessarily medical and clinical for autism, Alzheimer's, you
know, cognitive disorders, but functional? And how do you have
a reimbursement system that is not based on the old model? And
what are you doing now to help instruct them so they are not
just blocking--which they are doing now--and suing against the
system? But how do you help them meet their obligations by
showing them what the evidence-base is?
If you read this Sunday's New York Times about the veteran,
we are not even getting it right in the DOD and VA, and we are
supposed to have the best in cutting edge of treating cognitive
disorders as a result of TBI and PTSD, and it is a disaster if
you read or take anything from that New York Times cover story
on returning warriors.
So I am wondering--hopefully, that is not the model, and I
do not even know whether you guys are consulting with the VA or
DOD.
Dr. Collins. We are. But I think your question is even
broader in terms of the health care of the Nation, and how are
we going to come up with systems that work in the new health
care reform environment.
One of the things we are doing in that regard that might be
worth mentioning is to try to work with HMOs that already have
electronic medical record and are effectively well set up for
experiments that we might be able to run in a research way to
try to understand how could you provide different kinds of
incentives to providers to be able to improve outcomes. Because
that is the big sort of missing piece in much of where we hope
to go.
It is great to have all the data, and we generate a lot of
that data to tell you what works and what does not. But how do
you get it implemented and how do you implement it in a way
where you have a health care system that actually responds to
the right incentives instead of the wrong ones?
Mr. Kennedy. [Remarks made off microphone.] Are outcomes
quality of life or outcomes blood pressure?
Dr. Collins. Oh, I would think quality of life and blood
pressure, because they are connected.
Mr. Kennedy. Yes, but HMOs do not measure--or insurance do
not measure quality of life.
Dr. Collins. And you are right that we need better measures
of whether quality of life is actually considered, and how
would you define that in a rigorous way. Actually, we have a
Common Fund Roadmap project on that, where patients actually
are able to define, from their perspective, whether they are
being benefitted by an intervention or not, which is often left
out of the equation.
Mr. Kennedy. Tom.
Dr. Insel. If I may. I think you put your finger on what is
going to be a very important challenge over the next couple of
years. We are in a very interesting point in time for at least
those with serious mental illness. We have the advent of parity
for the first time as it rolls out--in spite of some suits, I
think it is rolling out--and we have health care reform, which
is going to have a tremendous impact for those with mental
illness because of parity.
What has been such a struggle for us is so much of the cost
and so much of the challenge for those with serious mental
illness is outside of the health care system. They are
incarcerated, they are homeless, or there are problems that
play out in the school system, where we just do not see them in
the health care system and we do not think about them through
health care dollars.
And one of the challenges will be to figure out how do you
throw that net so that all of those needs, as well as the needs
of caretakers, get taken into account. We are in discussions
with people and it has been a very interesting process, partly
because of the parity in health care reform advances that we
now are in discussions with payors, as well as everyone else,
to think about what is the evidence that you need to make that
extension? What would it take?
So I think you know about our Recovery After an Initial
Schizophrenia Episode (RAISE) effort, which was really
developed almost in the reverse; started with the payors and
said what would you need for someone with an acute psychotic
break to cover everything, to cover all the things that we know
are necessary for recovery? And what kind of evidence could we
provide to you that would make you come to the table and say
this is a good buy for us, this is worth supporting?
And we are rolling this out; it is a large $25 million
effort done with the Recovery Act funds, and we think this is
actually going to be transformative for those people who end up
being huge costs if we do not get it right on the front end.
Mr. Kennedy. Thank you very much.
Mr. Obey. Mr. Tiahrt.
Mr. Tiahrt. Mr. Chairman, I ask unanimous consent to submit
some questions for the record.
Mr. Obey. Sure.
Mr. Tiahrt. Thank you.
Mr. Obey. Let me ask just two questions. Do not worry, you
are not missing much. [Laughter.]

NEW STEM CELL LINES

Mr. Obey. First of all, would you explain the significance
of the story that appeared in the Post this morning with
respect to stem cell?
Dr. Collins. Yes, I would be happy to. As you know,
President Obama, a little more than a year ago, issued an
Executive Order indicating that stem cell lines--we are talking
about human embryonic stem cell lines--that have been derived
since August 2001--which is when the Bush Executive Order took
effect--ought to now be considered for Federal funding if they
met certain standards as far as the way in which those lines
were developed in terms of the consent, especially, to be sure
that that was ethical.
NIH was charged with putting together guidelines about how
to do that review of stem cell lines, and those went into
effect in July, and we have been receiving the information from
many stem cell line developers since then and, as of today,
there are 64 lines that have been approved.
Today's news was about two particular lines that go by the
names H7 and H9, which were derived a long time ago, more than
10 years ago, and were heavily utilized by researchers between
2001 and now, and for which there was a lot of data. Those
lines had not been submitted to NIH for review until about two
weeks ago; there were some complications in terms of finding
all the documentation. The materials were submitted, we
reviewed them rigorously, and yesterday I approved them as now
being appropriate for support by Federal funding. Those two
lines actually accounted for a substantial amount of the
publications that have occurred in this field up until now.
So many people in the research community were hopeful for
this outcome and I am glad to say we were able to get there
with complete adherence to rigorous standards of consent, which
were part of the Obama Executive Order.

DR. RUTH KIRSCHSTEIN TRAINING AWARDS

Mr. Obey. Okay, one other long observation. As you know,
Dr. Ruth Kirschstein visited this Subcommittee many, many
times. She was a legendary scientist and administrator at the
National Institutes of Health, and she died October 6th of 2009
after a public service career that spanned more than 50 years.
Dr. Kirschstein worked on polio research, made history as the
first woman to head an NIH institute, and later served as
Deputy Director and Acting Director of NIH. She was a pioneer.
A significant part of her legacy is the way she served as a
champion for the advancement of women and minorities in
biomedical research. She was a strong advocate for research
training, especially interdisciplinary pre-doctoral programs
and programs to increase the number of minority biomedical
scientists, physician scientists, and scientists trained in
emerging or evolving areas.
In 2002, as a fitting tribute to her many years of
exceptional service, particularly in the area of research
training, Congress renamed the National Research Service Award
Program in her honor. The Ruth Kirschstein National Research
Service Award is an important tool to ensure we have a pipeline
of future investigators ready to take over as the current
workforce continues to age and move toward retirement.
In 2001, NIH agreed to work towards increasing entry-level
stipends under this program to $45,000 a year. Currently, NIH
pays just under $38,000 a year despite their advanced degree in
specialized technical skills that would allow them to earn
considerably more in the open market.
I understand that the President's budget proposes an
increase of 6 percent in stipends under that program. How does
that fit into your efforts to ensure a robust pipeline of young
investigators? What is the current NIH policy for cost of
living support in this program? And, more generally, how are we
doing in attracting and keeping the next generation of
biomedical researchers?
Dr. Collins. Well, Mr. Chairman, I appreciate your citation
of Dr. Kirschstein and her role at NIH. It is impossible to
overstate the remarkable impact that she had on the institution
and on many of us personally, and she is greatly missed. We are
having a symposium on May 17th, inviting many of the Ruth
Kirschstein awardees to come back and talk about the science
they have done in order to recognize the way in which her
contribution has had a very specific personal effect on each of
them, and we are expecting that to be a day of great
celebration of her legacy.
In terms of what we are doing about training grants, yes,
the President's budget does propose a 6 percent increase, which
I think is long overdue. If one looks at the stipends that have
been proposed by NIH for such trainees, they have remained
essentially flat for a long period of time, even as inflation
has been eating away at the buying power. This has--I can tell
you, because I recently met with the National Postdoctoral
Association in Pennsylvania. This news of at least a proposed
increase was a big morale booster for a group that has begun to
worry about just how valued are they.
Being in that kind of training circumstance, you can
imagine why that might feel a little uncertain. You are not yet
independent. You have a Ph.D., so you know some stuff, but you
are not making much money and you are not necessarily sure
where you are going. And to get that kind of pat on the back,
saying we value you and we think you are a bit underpaid--
probably a lot underpaid, but we are going to try to do
something about it--was well received.
How are we doing in terms of recruiting? I would say okay,
but not great. And certainly when you look at the way other
countries--for instance, China and India--are doing as far as
bringing new talent into the scientific research community,
they are surpassing us in terms of their reach and their
ability to encourage people to find their careers in this path,
and we are flagging a bit.
More particularly, I am concerned about the fact that our
trainees do not represent the complexion or the diversity of
our Country, and we need to work harder on the diversity issue
and recruiting more disadvantaged individuals into this area,
because we need the best and the brightest no matter what their
background happened to be; and some of our programs have
succeeded at that and some have not, and we are looking at a
new set of ideas through a Pathfinder Award to try to improve
that outreach to groups that are traditionally not represented
in our workforce and should be.
So we have a lot of work to do here between the graduate
students and the post-docs, the clinical investigators, the
M.D. Ph.D.s who I met with this past Saturday, who are also
concerned about their future but enormously energized about the
scientific potential; and this is one of my personal
priorities, to be sure that we are not passing up the chance to
be filling our pipeline with this next generation.
And there are risks here, because they do hear their elders
wringing their hands and complaining about the fact that it is
hard to get a grant funded, and that one chance out of seven of
having your grant actually receive funding may be a bit
discouraging to some of the young people; and a few of them who
met with me in Chicago talked about being on the brink of going
off to do something else because of their uncertainty about
whether there was a place for them. We have to work hard on
that to be sure that they do see there is a place, even in
difficult budget times, and hoping that, in the longer term, we
might ultimately get to a point where we have stable,
predictable kinds of trajectories for medical research instead
of the feast and famine up and down experience, which has been
pretty hard on everybody, but specifically on young trainees.

TEN MOST IMPORTANT ADVANCEMENTS

Mr. Obey. One last question. There is a very sour mood in
the Country about a lot of things these days, and when that
occurs people tend to overlook some very important things that
have occurred in society and in government through the years. I
mentioned earlier that I have been on this Committee since, I
do not remember, 1973 or 1974, one of those, and the way
politics works, I guess, if you produce something that is
physical and tangible, like a missile or a space vehicle, a
shuttle, people can see visibly what they get for their tax
dollars. But in a field like health care, there is not much
that you can put your hands on to say, yes, this is what
improvement in cancer research looks like. I mean, you cannot
touch it. It is very different. And I think it is important
that taxpayers understand that a lot of times, in lots of
places, their tax dollars do some very good things.
The problem is also that you cannot see that in any one
year. But if you step back and look at it over time, then you
can see some major changes that have occurred.
What I would like you to do--and I do not expect you to do
it now, but I would like you, at least for the record, to do
this. If you take a look at what has happened because of NIH
funding through the years, what are the ten biggest
improvements, what are the ten most important steps forward?
What are the ten ways in which the public's health has been
advanced because of what NIH and the researchers that it funds
all around the Country have produced? If you can prepare that
for the record, that would be useful.
Dr. Collins. I would appreciate the chance to do that.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T8233B.119

[GRAPHIC] [TIFF OMITTED] T8233B.120

[GRAPHIC] [TIFF OMITTED] T8233B.121

[GRAPHIC] [TIFF OMITTED] T8233B.122

[GRAPHIC] [TIFF OMITTED] T8233B.123

[GRAPHIC] [TIFF OMITTED] T8233B.124

Dr. Collins. Just very quickly, but not the full response
that I know you expect, if one looks at what has happened to
death rates, and the fact that we have seen longevity improve
by one year about every six years, and that can be tracked to
NIH research in a very large extent. That is a pretty good
general indicator. Disability is dropping off.
In this document (NIH: Turning Discoveries Into Health)
that we left for you, we tried to capture some of these others,
such things as, for instance, what has happened with HIV/AIDS,
which used to be a death sentence and which now the average
person diagnosed at age 21 can expect to live to age 70. When
you look at something like deafness, where children born with
congenital deafness would have cost the Country, in the past,
$1 million of extra educational efforts and would therefore
have had many limitations on them, now, with the ability to
treat that, you can in fact expect, and we have seen for 50,000
kids, that they can be mainstreamed because of the ability to
repair the problem.
Heart disease dropping by 60 percent in the course of the
last 30 years in terms of the deaths is another very good one
to cite.
There is a lot there. But, you know, you are right, Mr.
Chairman. I do not think that that is a story that is often
told. It does not happen overnight; it happens over years. And
when it does happen, people may not realize why it happened,
and much of it is resting upon this foundation of medical
research that this Subcommittee has supported down through the
years.
Mr. Tiahrt. Can you put that all in 28 seconds, please?

RECOVERY ACT FUNDS

Mr. Obey. What it really amounts to is--I mean, it is 35
years. It is a generation. And I think it is important people
understand what has happened from one generation to another,
what the taxpayer expenditures finally produce.
The other question I would have is you mentioned feast and
famine. Some people might take that remark to suggest that that
demonstrates that we made a mistake when we put the funding in
that we did for the recovery package. So, again, I would like
to know would it have been better had the Committee not
provided that money over the last two years? Is it worth the
discombobulation that you have because it is a two-year
temporary shot in the arm? And you know what I am getting at.
Dr. Collins. I do.
Mr. Obey. Is it worth it? Was it worth it? Was it a
mistake? And is it worth the complication, I guess I would put
it that way?
Dr. Collins. Well, Mr. Chairman, thank you for the
opportunity to correct any misapprehension that might have
arisen from my use of that particular phrase. It has been a
wonderful investment in medical research. This $10 billion came
at a time where there was a great pent-up demand and need, and
a whole series of innovative ideas that were not possible to
support; and they came forth in great numbers, and scientists
supported by the Recovery Act are doing remarkable things right
now, and we will see the consequence of those; not overnight,
because science does not operate overnight, but in the long-
run, as having been a very wise investment in advancing
research.
It does create some stresses for the system when this comes
forth in a two-year period and we cannot see sort of a more
stable trajectory, and we are going to be experiencing those
stresses, I fear, in fiscal year 2011, but it was worth every
bit of it to get the research done that has been possible to
support through the Recovery Act.
Mr. Obey. Any other last questions?

ALZHEIMER'S FUNDING CARE VERSUS CURE

Mr. Kennedy. On those questions that you would have Dr.
Collins come back with, if there could be--we are spending a
lot of money on the care of people with certain illnesses. I am
thinking Alzheimer's is one. Lots and lots of money is going to
continue to go and it is going to go up.
However, if we put a fraction of the money that we are
going to be putting into long-term care into researching the
cure, or even researching delaying the onset of Alzheimer's,
how does that budgetarily pay for itself by averting costs
averted from the actual dollars that we would otherwise be
spending in the costly care of folks with these illnesses? If
you could try to figure out a way how we put some metrics to
that.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T8233B.125

Mr. Kennedy. And on Dr. Kirschstein, I too, David, want to
just say what a pleasure it was working with her, and the fact
that we were able to, with her help, put the network of basic
behavioral research together, and encourage you to try to get
med schools to incorporate behavioral education into their
medical school curricula. I know that is a priority of yours.
If you could keep the pressure going on our State boards to
include that in their medical school curriculum.
Dr. Collins. Point well taken.
Mr. Obey. Thank you gentlemen. Thank you all.

[GRAPHIC] [TIFF OMITTED] T8233B.126

[GRAPHIC] [TIFF OMITTED] T8233B.127

[GRAPHIC] [TIFF OMITTED] T8233B.128

[GRAPHIC] [TIFF OMITTED] T8233B.129

[GRAPHIC] [TIFF OMITTED] T8233B.130

[GRAPHIC] [TIFF OMITTED] T8233B.131

[GRAPHIC] [TIFF OMITTED] T8233B.132

[GRAPHIC] [TIFF OMITTED] T8233B.133

[GRAPHIC] [TIFF OMITTED] T8233B.134

[GRAPHIC] [TIFF OMITTED] T8233B.135

[GRAPHIC] [TIFF OMITTED] T8233B.136

[GRAPHIC] [TIFF OMITTED] T8233B.137

[GRAPHIC] [TIFF OMITTED] T8233B.138

[GRAPHIC] [TIFF OMITTED] T8233B.139

[GRAPHIC] [TIFF OMITTED] T8233B.140

[GRAPHIC] [TIFF OMITTED] T8233B.141

[GRAPHIC] [TIFF OMITTED] T8233B.142

[GRAPHIC] [TIFF OMITTED] T8233B.143

[GRAPHIC] [TIFF OMITTED] T8233B.144

[GRAPHIC] [TIFF OMITTED] T8233B.145

[GRAPHIC] [TIFF OMITTED] T8233B.146

[GRAPHIC] [TIFF OMITTED] T8233B.147

[GRAPHIC] [TIFF OMITTED] T8233B.148

[GRAPHIC] [TIFF OMITTED] T8233B.149

[GRAPHIC] [TIFF OMITTED] T8233B.150

[GRAPHIC] [TIFF OMITTED] T8233B.151

[GRAPHIC] [TIFF OMITTED] T8233B.152

[GRAPHIC] [TIFF OMITTED] T8233B.153

[GRAPHIC] [TIFF OMITTED] T8233B.154

[GRAPHIC] [TIFF OMITTED] T8233B.155

[GRAPHIC] [TIFF OMITTED] T8233B.156

[GRAPHIC] [TIFF OMITTED] T8233B.157

[GRAPHIC] [TIFF OMITTED] T8233B.158

[GRAPHIC] [TIFF OMITTED] T8233B.159

[GRAPHIC] [TIFF OMITTED] T8233B.160

[GRAPHIC] [TIFF OMITTED] T8233B.161

[GRAPHIC] [TIFF OMITTED] T8233B.162

[GRAPHIC] [TIFF OMITTED] T8233B.163

[GRAPHIC] [TIFF OMITTED] T8233B.164

[GRAPHIC] [TIFF OMITTED] T8233B.165

[GRAPHIC] [TIFF OMITTED] T8233B.166

[GRAPHIC] [TIFF OMITTED] T8233B.167

[GRAPHIC] [TIFF OMITTED] T8233B.168

[GRAPHIC] [TIFF OMITTED] T8233B.169

[GRAPHIC] [TIFF OMITTED] T8233B.170

[GRAPHIC] [TIFF OMITTED] T8233B.171

[GRAPHIC] [TIFF OMITTED] T8233B.172

[GRAPHIC] [TIFF OMITTED] T8233B.173

[GRAPHIC] [TIFF OMITTED] T8233B.174

[GRAPHIC] [TIFF OMITTED] T8233B.175

[GRAPHIC] [TIFF OMITTED] T8233B.176

[GRAPHIC] [TIFF OMITTED] T8233B.177

[GRAPHIC] [TIFF OMITTED] T8233B.178

[GRAPHIC] [TIFF OMITTED] T8233B.179

[GRAPHIC] [TIFF OMITTED] T8233B.180

[GRAPHIC] [TIFF OMITTED] T8233B.181

[GRAPHIC] [TIFF OMITTED] T8233B.182

[GRAPHIC] [TIFF OMITTED] T8233B.183

[GRAPHIC] [TIFF OMITTED] T8233B.184

[GRAPHIC] [TIFF OMITTED] T8233B.185

[GRAPHIC] [TIFF OMITTED] T8233B.186

[GRAPHIC] [TIFF OMITTED] T8233B.187

[GRAPHIC] [TIFF OMITTED] T8233B.188

[GRAPHIC] [TIFF OMITTED] T8233B.189

[GRAPHIC] [TIFF OMITTED] T8233B.190

[GRAPHIC] [TIFF OMITTED] T8233B.191

[GRAPHIC] [TIFF OMITTED] T8233B.192

[GRAPHIC] [TIFF OMITTED] T8233B.193

[GRAPHIC] [TIFF OMITTED] T8233B.194

[GRAPHIC] [TIFF OMITTED] T8233B.195

[GRAPHIC] [TIFF OMITTED] T8233B.196

[GRAPHIC] [TIFF OMITTED] T8233B.197

[GRAPHIC] [TIFF OMITTED] T8233B.198

[GRAPHIC] [TIFF OMITTED] T8233B.199

[GRAPHIC] [TIFF OMITTED] T8233B.200

[GRAPHIC] [TIFF OMITTED] T8233B.201

[GRAPHIC] [TIFF OMITTED] T8233B.202

[GRAPHIC] [TIFF OMITTED] T8233B.203

[GRAPHIC] [TIFF OMITTED] T8233B.204

[GRAPHIC] [TIFF OMITTED] T8233B.205

[GRAPHIC] [TIFF OMITTED] T8233B.206

[GRAPHIC] [TIFF OMITTED] T8233B.207

[GRAPHIC] [TIFF OMITTED] T8233B.208

[GRAPHIC] [TIFF OMITTED] T8233B.209

W I T N E S S E S

----------
Page
Collins, F. S.................................................... 279
Duncan, Hon. Arne................................................ 59
Fauci, A. S...................................................... 279
Insel, T. R...................................................... 279
Rodgers, G. P.................................................... 279
Sebelius, Hon. Kathleen.......................................... 145
Solis, Hon. Hilda................................................ 1

I N D E X

----------

Department of Labor

Page
Chairman's Opening Remarks....................................... 1
Secretary's Opening Statement.................................... 1-6
Secretary's Written Statement.................................... 7-23
Green Jobs....................................................... 24/38
G-20 Summit...................................................... 25
Bureau of International Labor Affairs............................ 27
OSHA Ergonomics Regulation....................................... 27
Worker Protection................................................ 28
OSHA Staffing.................................................... 29
Racial Disparities in Unemployment............................... 29
Ex-Offender Grants............................................... 30
Ratio of Job Seekers to Jobs..................................... 31
Number of Federal Employees...................................... 31
Foreign Government Subsidized Employment......................... 31
DOL Budget Request............................................... 32
Addressing Chronically Unemployed................................ 32
Job Sectors Facing Contraction................................... 34
Rebounding Job Sectors........................................... 34
Job Sector Contractors........................................... 34
Shortages in Traditional Energy Industry......................... 37
Continuing Education............................................. 37
Employee Readiness To Enter Job Market........................... 39
Extension of Retirement Age...................................... 40
Protecting Migrant Farm Worker Children.......................... 42
Exposure of Children to Hazardous Materials...................... 43
Leveraging Stimulus Funding...................................... 44
Reemployment of Highly-Skilled Workforce......................... 44
Training for High-Growth Industries.............................. 45
Improving Job Loss Picture....................................... 46
Conclusion....................................................... 47
Questions of Record.............................................. 48-58

Department of Education

Chairman's Opening Remarks....................................... 59
Secretary's Opening Statement.................................... 59-66
Secretary's Written Statement.................................... 67-75
Pell Grant Programs Costs........................................ 76
Rising Tuitions and Cost to Students............................. 76
Financing Pell Grants and Direct Lending Proposal................ 77
Direct Lending Proposal-Terminating Lender Subsidies............. 77
21st Century Community Learning Centers.......................... 78
Impact of Economy on After-School Programs....................... 78
After-School Programs............................................ 78
Competitive Grant Programs and Rural Districts................... 80
Turning Around Low-Performance Schools........................... 80
School Improvement Intervention Models........................... 81
Helping Struggling Populations................................... 81
Charter Schools in Rhode Island.................................. 82
Adult Literacy................................................... 82
Pell Grants and College Tuition.................................. 82
Adult Literacy and Training...................................... 83
Student Loan Interest Rates...................................... 84
Even Start Program--Family and Adult literacy.................... 84
Teacher Support and Chronic Low-Achieving Schools................ 85
Holding Schools, Districts and States Accountable................ 86
Funding for Low-Achieving Schools................................ 86
Support for Teachers............................................. 86
Increased Resources, Shared Responsibility....................... 87
Programs Flat-Lined in FY 2011 Budget............................ 87
Indian Education................................................. 88
Increased Funding in Consolidations.............................. 88
Graduation Rates of NCAA Athletes................................ 89
Real Estate Market Impact on School Funding...................... 89
Education Funding as Investment in Nation........................ 90
Disparities in CCAA Graduation Rates............................. 90
National Education Policy Discussions............................ 91
Formula-Driven Stimulus Bill Funding............................. 91
Helping Schools Not in Formula Calculations...................... 91
State Fiscal Stabilization Funds................................. 92
Tax Credit for Privately Schooled Students....................... 92
Fiscal Constraints on National School Districts.................. 92
Federal vs. Local Share in Education Funding..................... 93
Addressing Low Graduation Rates of NCAA Athletes................. 94
Native American and Alaska Native Students Education............. 94
Common Course Standards.......................................... 95
Texas Proposed Textbook Changes.................................. 95
48 States Working Toward Common Standards........................ 95
ESEA Reauthorization............................................. 96
Shepherd Program--Poverty and Human Capability................... 96
Effective Teachers and Leaders Funding........................... 96
Educational Opportunity Equity Commission........................ 97
Ensuring Educational Equity...................................... 97
Teacher and Principal Equity..................................... 98
Schools as a Reflection of Community............................. 98
Promise Neighborhoods............................................ 99
Shift Toward Competitive Programs and Consolidations............. 99
Educational Technology State Grant Programs...................... 99
Income-Based Repayment of Student Loans.......................... 100
TRIO, Gear-Up, HEP and Camp Program Requests..................... 100
College Access and Completion Funds.............................. 101
Social and Emotional Learning Programs........................... 101
Social, Emotional Development and Decision Making Ability........ 101
Teaching Students To Understand Emotions......................... 102
Early college Enrollment and Dual Enrollment Programs............ 102
College Pathways................................................. 103
Pell Grant and Early College Programs............................ 103
Disproportionality in Special Education.......................... 103
Early Learning Challenge Fund.................................... 103
Even Start....................................................... 104
Education Jobs Saved by Recovery Act............................. 105
Education Jobs Bill.............................................. 105
Title 1, ESEA Funds for High-Poverty Schools..................... 106
School Improvement Grants........................................ 106
Title 1 Funding.................................................. 106
Addressing Inequality in Education............................... 107
Race to the Top Application Process.............................. 107
Focusing Increased Resources on Inequality....................... 108
History and Civics Education..................................... 108
Budget Increased To Promote Well-Rounded Education............... 109
Civil Rights..................................................... 109
Proposal for Direct Lending for Student Loans.................... 109
Proposal To Increase Pell Grant Funding.......................... 110
Student Loan Reform.............................................. 110
Individuals With Disabilities--Grant to States................... 111
Teachers Recruitment and Retention............................... 111
Teachers Incentive Fund.......................................... 112
Promise Neighborhoods............................................ 112
Move Toward More Consolidation and Competitive Programs.......... 113
Dropout Rate and College Completion.............................. 113
Focus on Achievement Gaps........................................ 114
Assessment of No Child Left Behind............................... 114
Focus on Growth, Gain; Reward Success, Excellence................ 114
Flexibility and Accountability................................... 114
Proposal To Move to Student Loan Direct Lending.................. 115
Robotics Competitions............................................ 116
Incentives and Public-Private Partnerships....................... 116
Partnering of School Districts To Share Services................. 117
Pell Grants...................................................... 117
Savings From Direct Lending...................................... 117
IG Audit of Reading First........................................ 117
Eliminating Conflict of Interest in Competitive Awards........... 118
Actions To Prevent Conflicts of Interest......................... 118
Origins of U.S. Deficit.......................................... 119
Chairman's Closing Remarks....................................... 119
Questions for the Record........................................120-143

Department of Health and Human Services

Chairman's Opening Remarks....................................... 145
Witnesses Opening Statements....................................147-149
Witnesses Written Statements....................................150-161
Health Care Reform............................................... 162
Cost of Insurance Premiums....................................... 162
Individual Mandates.............................................. 168
Medical Loss Ration.............................................. 168
State Insurance Commissioners.................................... 169
Single-Payor System.............................................. 170
Medical Error Rates.............................................. 171
Medical Advantage................................................ 171
Diversity in Health Professionals................................ 172
High Risk Pools.................................................. 175
Prohibition on Lobbying With Federal Funds....................... 176
Prevention and Wellness Funding.................................. 177
Reducing Caesarean Births........................................ 178
Increasing Birthing Centers...................................... 178
FMAP Formula..................................................... 179
Health Care Fraud................................................ 179
Medicare Reimbursement........................................... 180
Hospital Acquired Infections..................................... 181
Medicare Reimbursements Rates.................................... 182
Health Insurance Costs........................................... 184
Prevention and Public Health Fund................................ 185
Prevention and Mindfulness....................................... 185
Primary Care Physician Shortage.................................. 186
Health Reform Compliance and Enforcement......................... 187
Prevention Issues................................................ 188
Health Care Reform............................................... 190
Unfunded Programs in Health Reform............................... 192
Underage Drinking................................................ 194
Section 317 Vaccination Program.................................. 195
Projected Coverage Rates......................................... 195
Physician-Owned Hospitals........................................ 196
Children's Health Task Force..................................... 196
Forum Health Bankruptcy.......................................... 197
Food Safety...................................................... 198
Questions for the Record........................................200-277

National Institutes of Health

Chairman's Opening Statement..................................... 279
1Witnesses Opening Statement....................................281-285
Witnesses Written Statement.....................................286-308
Comparative Effectiveness Research............................... 309
Adult and Embryonic Stem Cells................................... 310
Sickle Cell...................................................... 311
FY 2011 Funding.................................................. 313
Pancreatic Cancer................................................ 316
Class B Dealers.................................................. 317
Breast Cancer Mammography Guidelines............................. 317
Funding for Comparative Effectiveness Research................... 318
Private Sector Innovations From NIH Investments.................. 319
Priority Setting for Resource Allocations........................ 321
Pediatric Cancer Research........................................ 322
Food Allergies................................................... 323
Pediatric Diabetes............................................... 324
Environmental Causes of Illness.................................. 326
Mental Illness Among Veterans.................................... 328
National Cancer Institute Clinical Trials........................ 329
Biodefense Research.............................................. 331
Behavioral Research.............................................. 332
Coordination of Research......................................... 334
Traumatic Brain Injury........................................... 335
Electronic Health Records........................................ 336
Biomedical Research in the United States......................... 336
Recovery Act Investments......................................... 337
Health Care Reform and Research.................................. 339
New Stem Cell Lines.............................................. 341
Dr. Ruth Kirschstein Training Award.............................. 341
Ten Most Important Advancements.................................343-349
Recovery Act Funds............................................... 350
Alzheimer's Funding Care Versus Cure............................351-352
Questions for the Record........................................354-437