[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

                      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
                                ________
                     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

                                  
