[Senate Hearing 111-758]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-758
 
   DOMESTIC PARTNER BENEFITS: FAIR POLICY AND GOOD BUSINESS FOR THE 
                           FEDERAL GOVERNMENT

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                                 of the

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 15, 2009

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs



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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           JOHN McCAIN, Arizona
MARK L. PRYOR, Arkansas              GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina
JON TESTER, Montana                  ROBERT F. BENNETT, Utah
ROLAND W. BURRIS, Illinois
PAUL G. KIRK, JR., Massachusetts

                  Michael L. Alexander, Staff Director
                   Lawrence B. Novey, Senior Counsel
                        Kenya N. Wiley, Counsel
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
         Amanda Wood, Minority Director of Governmental Affairs
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     3
    Senator Akaka................................................     7
Prepared statements:
    Senator Lieberman............................................    23
    Senator Collins..............................................    26
    Senator Akaka................................................    28
    Senator Burris...............................................    30
    Senator Kirk.................................................    31

                               WITNESSES
                       Thursday, October 15, 2009

Hon. Tammy Baldwin, a Representative in Congress from the State 
  of Wisconsin...................................................     4
Hon. John Berry, Director, U.S. Office of Personnel Management...     8
William H. Hendrix III, Ph.D., Global Leader, Gays, Lesbians, and 
  Allies at Dow (GLAD), The Dow Chemical Company.................    10

                     Alphabetical List of Witnesses

Baldwin, Hon. Tammy:
    Testimony....................................................     4
    Prepared statement...........................................    32
Berry, Hon. John:
    Testimony....................................................     8
    Prepared statement with attachments..........................    35
Hendrix, William H., III, Ph.D.:
    Testimony....................................................    10
    Prepared statement with attachments..........................    84

                                APPENDIX

``How Many Fortune-Ranked Companies Provide Domestic Partnership 
  Benefits,'' chart submitted by Senator Lieberman...............    25

Responses to post-hearing questions for the Record from:
    Mr. Berry....................................................    95
    Mr. Hendrix..................................................   104

Statements for the Record from:
    John Gage, National President, American Federation of 
      Government Employees, AFL-CIO (AFGE).......................   107
    Susan Rockwell Johnson, President, American Foreign Service 
      Association (AFSA).........................................   112
    Charles M. Loveless, Director of Legislation, American 
      Federation of State, County and Municipal Employees, AFL-
      CIO (AFSCME)...............................................   113
    William Burrus, President, American Postal Workers Union, 
      AFL-CIO (APWU).............................................   114
    Donna Griffin, Senior Vice President and Chief Diversity 
      Officer, The Chubb Corporation.............................   116
    Wendy Wright, President, Concerned Women for America (CWA)...   120
    Domestic Partnership Benefits and Obligations (DPBO) 
      Coalition..................................................   121
    Joe Solmonese, President, Human Rights Campaign (HRC)........   123
    Colleen M. Kelley, National President, National Treasury 
      Employees Union (NTEU).....................................   125
    Jody M. Huckaby, Executive Director, Parents, Families, and 
      Friends of Lesbians and Gays (PFLAG).......................   131
    Teachers Insurance and Annuity Association-College Retirement 
      Equities Fund (TIAA-CREF)..................................   134


   DOMESTIC PARTNER BENEFITS: FAIR POLICY AND GOOD BUSINESS FOR THE 
                           FEDERAL GOVERNMENT

                              ----------                              


                       THURSDAY, OCTOBER 15, 2009

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m., in room 
SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Akaka, and Collins.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning, and welcome to the 
hearing. Today, our Committee will hear testimony on S. 1102, 
the Domestic Partnership Benefits and Obligations Act, which 
Senator Collins and I introduced last year and again earlier 
this year to bring equity to Federal workers and to strengthen 
the workforce that serves the American people.
    We are holding this hearing as part of the Committee's 
responsibility under Senate rules for the civil service of our 
Federal Government.
    Although we conducted a hearing on this legislation during 
the last Congress, we felt it would be useful to revisit the 
matter this year particularly to give the new Administration an 
opportunity to express its views on S. 1102. And in that 
regard, we are pleased to welcome the new Director of the 
Office of Personnel Management (OPM), John Berry. We are also 
going to hear from Dr. William Hendrix of Dow Chemical, which 
is typical of Fortune 500 companies in that it provides 
benefits to same-sex partners of its employees. And first we 
will hear in a few moments from our colleague from the House, 
Tammy Baldwin, of Wisconsin, who has sponsored companion 
legislation in what over here we love to call ``the other 
body.''
    Senator Collins and I introduced this bill because we 
believe it is the fair and right thing to do, and also because 
we believe it makes practical sense for the Federal Government 
as an employer. Particularly as we approach a generational 
change in the Federal workforce that will see the retirement of 
approximately one-third of all Federal employees, it seems to 
us to be just plan sensible that we do all we can to attract 
and retain the ``best and the brightest'' to serve in the 
Federal Government in the years ahead, and we are convinced 
that this legislation will help us accomplish that.
    Our bill would provide that same-sex partners of Federal 
employees have equal access to their partners' employee benefit 
programs. They would be eligible to receive health benefits, 
long-term care, family and medical leave, Federal retirement 
benefits, and any other benefits for which the spouses of 
traditionally married employees are eligible. Federal employees 
and their domestic partners would have the same legal 
responsibilities that apply to married employees and their 
spouses, such as anti-nepotism provisions, financial disclosure 
requirements, and conflict-of-interest rules.
    The Williams Institute, at the University of California, 
Los Angeles (UCLA), estimated that, as of 2007, over 34,000 
Federal workers live in committed relationships with same-sex 
partners, and of that number, over 30,000 have partners who are 
not Federal employees. These Federal employees have, therefore, 
been forced to choose between their commitment to public 
service and their commitments to their families and have been 
forced in that sense to accept fewer protections for their 
families--essentially less compensation--than other Federal 
employees or than they could receive at many private employers.
    An estimated 18.4 percent of all employees' compensation, 
in fact, comes in the form of benefits, including benefits for 
family members. Therefore, employees who are not afforded equal 
benefits for their families are essentially paid less than 
everyone else is.
    We often hear people say that the government should be run 
like a business. There is truth to that. On the other hand, it 
is also true that government and businesses have different 
purposes and goals. But in this case, I do think government has 
a lot to learn from private sector business models.
    The fact is that today--this is a very significant number, 
and I am going to say it slowly--almost 10,000 private sector 
companies of all sizes provide benefits to domestic partners 
and more than half--59 percent--of all Fortune 500 companies do 
so. Among them are famous names like Disney, General Electric, 
IBM, the Chubb Corporation, Lockheed Martin, Duke Energy, and 
Dow Chemical, which will be represented today. I presume that 
these companies provide domestic partner benefits not just 
because it is the right thing to do but also because they have 
determined that such employee management practices make good 
business sense.
    The fact is also that the public sector is catching up. 
Currently, the governments of 22 States, including my home 
State of Connecticut, and about 154 local jurisdictions provide 
domestic partner benefits, as do over 300 colleges and 
universities.
    In June of this year, President Obama announced that his 
Administration would extend certain identified benefits to 
eligible same-sex domestic partners of Federal employees, but 
that he could do so only to the extent possible by executive 
action under existing law. The State Department promptly 
extended certain important benefits to same-sex partners of 
employees serving overseas, such as the use of medical 
facilities and inclusion in emergency evacuation. OPM has also 
proposed that sick leave and long-term care insurance benefits 
can be extended administratively. But Federal legislation, such 
as that which Senator Collins and I have introduced, is really 
necessary to provide to Federal employees and their same-sex 
partners the benefits that are available to married employees 
and their opposite-sex spouses and that provide the bedrock of 
any modern employee-benefit program.
    Will this add to the cost of providing Federal employee 
benefits? The answer is yes. How much? Well, that is what we 
are looking forward to hearing from Mr. Berry today. Of course, 
then we all have to make a judgment, which we have made, which 
is: Is it worth it? And I believe in many ways it is.
    The Domestic Partnership Benefits and Obligations Act will 
balance the scales of justice, but, again, it will also help 
the Federal Government be the best it can be, and that is why I 
am proud to cosponsor this legislation with Senator Collins, 
and I look forward to her opening statement now.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman. I appreciate very 
much your important leadership on this issue, and I am very 
pleased that our House colleague, Representative Baldwin, is 
able to join us today.
    The title of this hearing really says why we have 
introduced this bill. The title of this hearing is ``Domestic 
Partner Benefits for Federal Employees: Fair Policy and Good 
Business.'' It aptly describes why we believe this legislation 
is necessary.
    When it comes to employment, the Federal Government must 
compete with the private sector in attracting the most 
qualified, skilled, and dedicated employees. Today, health, 
medical, and other benefits are a major component of any 
competitive employment package.
    As the Chairman has explained, the Domestic Partnership 
Benefits and Obligations Act, which we have introduced, would 
give a Federal employee and his or her domestic partner the 
same benefits that are available to married Federal employees.
    The Federal Government already faces a two-pronged 
challenge in attracting and retaining talented and dedicated 
employees.
    The first challenge comes from the private sector. As the 
Chairman has pointed out, increasingly private sector employers 
are offering these kinds of benefits as standard fare. Among 
the Fortune 500 companies, domestic partner benefits are 
becoming commonplace. According to the Office of Personnel 
Management, nearly 60 percent of the Fortune 500 companies, 
including some of our top Federal contractors, extend 
employment benefits to domestic partners.
    But, indeed, if you look more broadly, as the chart before 
us demonstrates,\1\ it is not just the largest companies. We 
are finding that increasingly businesses of all sizes are 
offering equal benefits, and the reason is simple. They want to 
have a competitive package to attract and keep the very best 
employees.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Collins appears in the Appendix 
on page 25.
---------------------------------------------------------------------------
    The second challenge facing the Federal Government comes 
from the potential wave of Federal employee retirements in the 
next few years. Approximately 60 percent of the Federal 
workforce will be eligible for retirement over the next decade. 
If the Federal Government fails to attract or retain employees 
because of a lack of competitive benefits, then the impact of 
these retirements will be magnified.
    I recall last year at our hearing we heard from a Foreign 
Service Officer who was leaving the Foreign Service over just 
this issue. We cannot afford that exodus of talent.
    As we learned at our hearing on this bill during the last 
Congress, the private sector offers domestic partner benefits 
as part of its strategy for building a stronger workforce. 
These benefits help foster a sense of loyalty between the 
employees and the organization and create a more stable and 
productive work environment.
    Many State and local governments also have extended 
employee benefits to domestic partners in committed 
relationships. Like Connecticut, the State of Maine offers 
benefits to its State employees who are in committed domestic 
partnerships.
    If the Federal Government is to compete with the private 
sector as well as with State and local governments for the most 
talented members of our workforce, and if our goal is to create 
a loyal, dynamic Federal workforce for the future, then we 
simply must be able to offer competitive benefits.
    In that regard, I would note that the Human Rights 
Campaign's testimony points out that nearly 13 percent of 
employees' compensation comes in the form of insurance and 
retirement benefits. So for not providing those benefits 
equally, we are really shortchanging some of our employees.
    Again, Mr. Chairman, thank you for your leadership and for 
holding this hearing today. I believe that our legislation will 
help to promote a strong Federal workforce.
    Chairman Lieberman. Thanks very much, Senator Collins.
    We are really pleased now to welcome our colleague from the 
House, Congresswoman Tammy Baldwin, representing the 2nd 
congressional district of the great State of Wisconsin.
    I just had a flashback, I believe, being at a Milwaukee 
Brewers' game with you some years ago.
    Ms. Baldwin. That is an accurate flashback. [Laughter.]
    Chairman Lieberman. Thank you for validating that.
    It is good to see you. Thanks for taking the time to come 
over, and that is why we wanted to give you the opportunity to 
speak first and on a separate panel, and then we will let you 
go back to the House because I know you have another committee 
meeting going on now. But thanks for your leadership on this 
issue and others in the House. We welcome you.

    TESTIMONY OF HON. TAMMY BALDWIN,\1\ A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. Baldwin. Thank you, Mr. Chairman, and Ranking Member 
Collins, for affording me the opportunity to testify, for 
having this historic hearing, and for your leadership on the 
Domestic Partnership Benefits and Obligations Act. I very much 
appreciate this opportunity, and I, too, want to add my 
appreciation of the members of your second panel--OPM Director 
John Berry and Dr. William Hendrix from Dow Chemical Company, 
showing leadership in the private sector on this important 
issue.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Baldwin appears in the Appendix 
on page 32.
---------------------------------------------------------------------------
    As my colleagues on this Committee know, the Federal 
Government employs more than 1.8 million civilian employees, 
making it the Nation's largest employer. Historically, the 
Federal Government has been a leader in offering important 
benefits to its employees. But today we are lagging behind, and 
this is particularly true regarding the extension of benefits 
to employees with same-sex partners.
    As it stands, some Federal employees do not receive equal 
compensation and benefits for their equal contributions. And 
the Federal Government is not keeping pace with leading private 
sector employers in recruiting and retaining top talent.
    Mr. Chairman, you have outlined in your opening statement a 
lot of the progress made in the private sector, as did you, 
Ranking Member Collins, and I will not repeat those statistics 
that are revealed in this chart and others. I would just share 
one anecdote from my own district, and that is that the 
University of Wisconsin and the State of Wisconsin did not have 
any domestic partnership laws until very recently, until this 
year. And a couple of years ago, we lost an engineering 
professor to another university that did offer domestic 
partnership benefits because of his feeling that the lack of 
those policies was unjust. He brought with him to this new 
university his $3.4 million engineering grant, and the estimate 
of that loss would have covered the whole cost of implementing 
domestic partnership policies in the University of Wisconsin 
system. And so one anecdote, not a scientific study, of what 
difference these policies do make to retaining great talent. 
And Ranking Member Collins referenced Ambassador Michael Guest 
and his decision that was a very painful one for him to leave 
the Foreign Service because of the lack of domestic partnership 
protections.
    Under the Domestic Partnership Benefits and Obligations 
Act, a Federal employee and his or her same-sex domestic 
partner who are not related by blood and are living together in 
a committed, intimate relationship would be eligible to 
participate in Federal retirement benefits, life insurance, 
health benefits, workers' compensation, and family and medical 
leave benefits to the same extent as married employees and 
their spouses. These employees and their domestic partners 
would likewise be subject to and assume the same obligations 
that are applied to married employees and their spouses.
    I want to make it very clear that this bill has very strong 
anti-fraud provisions, requiring employees to file an affidavit 
of eligibility in order to extend benefits to their domestic 
partner, and this is significant especially considering that we 
do not require married employees to show any documentary 
evidence of their marriages when claiming spousal benefits.
    The penalties for fraudulent claims for domestic partners 
would be the same as current penalties for fraudulent claims of 
marriage. For example, intentional false statements on the 
Federal Employee Health Benefits form is punishable by a fine 
of up to $10,000 or imprisonment of up to 5 years, and the same 
would apply under this legislation.
    Mr. Chairman, I appear before you today both as the lead 
author of this legislation in the House of Representatives, but 
also as a lesbian Federal employee who has been in a committed 
relationship with my partner, Lauren, for over 13 years. Over 
the years, Lauren and I have examined the differences between 
my benefits and my ability to provide for her compared to the 
benefits enjoyed by my straight and married colleagues in the 
Congress.
    Some quick number crunching would demonstrate that the 
difference between my health benefits and yours with regard to 
just that benefit alone over the course of my tenure in 
Congress is measured in five figures. Although the Federal 
Government offers its employees and their dependents more than 
300 health insurance plans and subsidizes health insurance 
premiums, I am not eligible to cover Lauren under any of these 
plans like my straight married colleagues can. And this is a 
significant inequality.
    Although I can designate Lauren as a beneficiary for my 
life insurance, my Thrift Savings Plan, and any unpaid 
compensation in the event of my death, if for some reason I had 
not taken the extra step of completing that paperwork, the 
order of precedence would have prevented Lauren from receiving 
those savings. And, heaven forbid, anything should happen to 
me, Lauren is not eligible to receive the survivor annuity from 
my pension nor health insurance survivor benefits to which 
others would be able to gain access.
    Unlike the spouses of my colleagues, Lauren is also not 
currently subject to any of the obligations related to my 
Federal service, and I find this disturbing. Think about this. 
All Members of Congress file annual financial disclosures. 
Married members must file very important information about 
their spouses' income, their investments, gifts, and debts, 
etc. Surely the public interest would require that these 
obligations apply also to partners of gay and lesbian office 
holders.
    In June, as you referenced, President Obama signed a 
presidential memorandum on Federal benefits and 
nondiscrimination which directs OPM and the State Department to 
extend certain benefits to the same-sex partners of Federal 
employees within the confines of existing Federal law. Although 
the memorandum is an important step in providing same-sex 
partners of Federal employees with benefits already available 
to the spouses of heterosexual employees, it falls short of 
providing the full range of benefits.
    President Obama recognized and acknowledged that fact when 
he signed the memorandum, calling it ``just a start.'' And he 
went on to say, ``As Americans, we are all affected when our 
promises of equality go unfulfilled.''
    President Obama recognizes that the full extension of 
benefits will require an act of Congress and proclaimed his 
strong support for the legislation that you are reviewing 
today.
    Like our President, I strongly believe that we must address 
the significant inequality in compensation experienced by an 
estimated 30,000 employees at all levels of the Federal 
Government who currently cannot provide benefits to their same-
sex domestic partners. The purpose of the Domestic Partnership 
Benefits and Obligations Act is to ensure that hard-working 
Americans can no longer be denied equal compensation for equal 
work just because of who they love. There is certainly nothing 
more American than ensuring that people have equal job 
opportunities and are paid fairly for a full day's work.
    Chairman Lieberman, Ranking Member Collins, my thanks to 
you again for inviting me to testify.
    Chairman Lieberman. Congresswoman Baldwin, thanks very much 
for that testimony, which was very strong--strong in terms of 
the public impact overall, but also to the extent to which you 
talked about its personal impact, which is very real and to me 
very compelling.
    I do not have any questions. Senator Akaka, do you have any 
questions for the Congresswoman?
    Senator Akaka. Mr. Chairman, I do have some questions.
    Chairman Lieberman. Go right ahead, if you would like.
    Senator Akaka. Mr. Chairman, I would ask that my full 
statement be inserted in the record.
    Chairman Lieberman. That is fine. Actually, if you wanted 
to wait until afterwards, because she is going to go back, 
unless you have specific questions for her, I would welcome 
your opening statement.
    Senator Akaka. Thank you.
    Chairman Lieberman. Is that OK? All right.
    Ms, Baldwin, maybe we will let you go because I know you 
have the other meeting. Thanks very much, and obviously we will 
continue to work together. Our own hope is to mark this bill up 
as soon as possible within this Committee and send it out to 
the floor, and then obviously scheduling depends on higher 
authorities--earthly authorities, but higher. [Laughter.]
    Thank you very much. Have a good day. I thank Congresswoman 
Baldwin.
    Senator Akaka, would you like to make your opening 
statement at this time? We would welcome it. You have worked, 
obviously, very hard in the overall area of human capital 
management. You are the chair of the relevant Subcommittee of 
this Committee, so I would welcome your opening statement.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I would 
ask that my full statement be placed in the record.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Akaka appears in the Appendix 
on page 28.
---------------------------------------------------------------------------
    Chairman Lieberman. Without objection.
    Senator Akaka. I want to thank you and Ranking Member 
Collins for holding this hearing. It addresses a very important 
issue: Providing domestic partnership benefits to Federal 
employees.
    I am proud to be a cosponsor of your bill, Mr. Chairman, S. 
1102, the Domestic Partnership Benefits and Obligations Act of 
2009. My Subcommittee on Oversight of Government Management, 
the Federal Workforce, and the District of Columbia has been 
working to improve Federal recruiting and hiring in order to 
make the Federal Government the employer of choice in the 
Nation. This simply is not possible if we deny a subset of 
potential employees important benefits that other employers 
offer.
    A large number of private and public employers, including 
my home State of Hawaii, already provide domestic partner 
benefits to employees. If the Federal Government is to recruit 
and retain the most talented employees, it must follow the lead 
of the private sector and offer domestic partner benefits to 
Federal employees. Simply stated, Mr. Chairman, providing these 
benefits makes sound business sense.
    I am pleased that President Obama showed his commitment to 
Federal employees by signing a presidential memorandum in June 
directing the heads of the executive departments and Federal 
agencies to provide certain benefits to the same-sex partners 
of Federal employees. As the President acknowledged, however, 
this was only the first step, and more work needs to be done on 
the issue.
    We must not ask our dedicated Federal employees to 
sacrifice the needs of their families and loved ones in order 
to serve their country. As a Nation and as an employer, we must 
hold ourselves to the highest standards of equality. Providing 
Federal employees with domestic partner benefits will bring us 
a significant step closer to the principle of equality under 
the law.
    I look forward to hearing from our witnesses today, and, 
again, Mr. Chairman, thank you for holding this hearing.
    Chairman Lieberman. Thank you very much, Senator Akaka.
    We will now go to the Hon. John Berry, Director of the U.S. 
Office of Personnel Management. It is great to welcome you 
back. I was thinking, of course, I still associate you with 
wonderful visits my family and I took to the National Zoo when 
you were the Director there, happy as I am that you are at OPM. 
And I do have the impression when I drive up Connecticut Avenue 
that every now and then I can hear the plaintive cries of some 
of the animals there about the fact that they miss you. 
[Laughter.]
    You were really a wonderfully spirited, effective, and 
devoted leader there, as you already have proven yourself to be 
at OPM. So it is an important issue, and the new Administration 
I know brings a new perspective to it, so we welcome your 
testimony at this time.

   TESTIMONY OF HON. JOHN BERRY,\1\ DIRECTOR, U.S. OFFICE OF 
                      PERSONNEL MANAGEMENT

    Mr. Berry. Mr. Chairman, thank you for your leadership over 
so many years on this important issue, and, Ranking Member 
Collins and Senator Akaka, thank you all for your support and 
the energy that you have put behind this very important issue. 
We would not be here today without the leadership that you have 
provided year in and year out. So thank you, and hopefully we 
are closer to the finish line, so we look forward to that.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Berry with attachments appears in 
the Appendix on page 35.
---------------------------------------------------------------------------
    I appreciate very much the opportunity to testify today, 
and I will do a short statement in exchange for the more 
detailed one for the record.
    This critical legislation, as has been discussed, would 
provide health, life, and survivor benefits to the same-sex 
domestic partners of Federal employees.
    I applaud each of you and all of the cosponsors of S. 1102 
for introducing this bill in the Senate. Since the 109th 
Congress, you have demonstrated your consistent leadership and 
your commitment on this issue by continually reintroducing this 
legislation. I want to thank you and commend you for your 
efforts to improve the Federal Government's competitiveness in 
recruiting and retaining our most qualified workers. I also 
would like to recognize Congresswoman Baldwin's incredible 
leadership in the House on this issue.
    The White House and the Office of Personnel Management 
wholeheartedly endorse passage of this bill, and I will 
summarize the reason why in the next 5 minutes. In my written 
testimony, I have mentioned some technical fixes to the bill 
that we are seeking, but I guess I would just make the offer to 
you and to the Committee staff that we will make all of our 
resources in the office available to help you as you move 
forward with the legislation.
    At my confirmation hearing, I said that two of my primary 
goals as the Director of OPM would be to make the Federal 
Government the country's model employer, as Chairman Akaka 
shares in that effort, and to attract the best and the 
brightest of our country to Federal service. The passage of S. 
1102 is essential to accomplishing both of these goals.
    Under current law, the Federal Government cannot offer 
basic benefits like health insurance, life insurance, and 
dental and vision insurance to the domestic partners of our gay 
and lesbian Federal employees. Opposite-sex domestic partners 
are not eligible for these benefits either, but they may gain 
eligibility through a valid marriage. Even in those States 
where same-sex partners can marry, their marriages are not 
recognized for purposes of Federal benefits because of the 
Defense of Marriage Act.
    The failure to provide these benefits to same-sex domestic 
partners directly undermines the Federal Government's ability 
to recruit and retain the Nation's best workers. Historically, 
the Federal Government has in many ways been a progressive 
employer. In this case, however, we have fallen behind the 
private sector and 22 States now, including Connecticut, Maine, 
and Hawaii, and the District of Columbia. Almost 85 percent of 
the Fortune 100 already offer similar benefits to their same-
sex domestic partner employees. These companies include Dow 
Chemical--which is with us today--Chevron, Archer Daniels 
Midland, Perot Systems, Lockheed Martin, and Food Lion. The 
Federal Government does not effectively compete with these 
companies for every talented person when we fail to offer 
comparable job benefits to our employees.
    We are also at a disadvantage, as has been discussed, in 
retaining experienced and highly effective employees--in whom 
we have invested, I should add, significant resources in their 
training and their job development--who may decide to find 
employment elsewhere because of the Federal Government's 
failure to keep up with the private sector.
    The President took an important first step toward 
addressing these shortfalls in the June memorandum, but he also 
made clear we need a change in the law to provide these 
critical benefits to our employees. I would also note that the 
cost of extending these benefits to same-sex domestic partners 
is negligible.
    Additional premiums for providing life, dental, and vision 
insurance to same-sex domestic partners will be borne 
entirely--entirely--by the gay and lesbian employees who enroll 
their partners in those benefit plans. Adding domestic partner 
health insurance and survivor benefits for retirees would cost 
approximately $56 million. This cost also includes $19 million 
in savings in the short term in that, if you opt to provide an 
annuity for your survivor, you opt for a lower benefit payment 
in the early years in exchange, just as you do for heterosexual 
married couples over the long term, and so there is a $19 
million offset savings in the short term that is provided by 
the fact that there would be lower retirement annuities paid 
out to our Federal employees if we offer this benefit.
    Chairman Lieberman. Excuse me. Am I right that is an annual 
number?
    Mr. Berry. Yes, sir.
    Chairman Lieberman. Good.
    Mr. Berry. The marginal increase, the total cost of the 
entire implementation of this program equates to about two-
tenths of 1 percent of the entire cost of our Federal 
Government health insurance program. To put this in 
perspective, we spend $35 billion a year on the Federal 
Employee Health Benefits Program (FEHBP) for our Federal 
employees and retirees. I can assure the Committee that the 
efficiencies and the program reforms that we intend to put in 
place that will benefit our Federal employees and retirees will 
more than offset the cost of this program over the life of this 
Administration.
    Simply put, end to end, extending benefits to same-sex 
partners is a good, sound business decision. Dow Chemical and 
the other 60 percent of the Fortune 500 which provide these 
benefits can testify to that. This legislation is a valuable 
opportunity for the Federal Government to enhance an essential 
recruitment and retention tool. Just as important, this bill 
shows that we recognize the value of every American family and 
are committed to the ideal of equal treatment under the law 
that our Founding Fathers envisioned.
    Thank you, and I look forward to continuing our work 
together, and I am available to answer any questions that you 
might have.
    Chairman Lieberman. Thanks very much, Director Berry, and 
we will have questions.
    We are glad to welcome Dr. William Hendrix, who serves as 
biology team leader for Insect Traits and Seed Treatment at 
Dow, and also chairs Dow's Gays, Lesbians, and Allies at Dow 
Chemical Network.
    Dr. Hendrix, we are delighted to have you here and would 
welcome your testimony at this time.

TESTIMONY OF WILLIAM H. HENDRIX, III, PH.D.,\1\ GLOBAL LEADER, 
  GAYS, LESBIANS, AND ALLIES AT DOW (GLAD), THE DOW CHEMICAL 
                            COMPANY

    Mr. Hendrix. Thank you very much, Chairman Lieberman. We 
appreciate the opportunity to testify today.
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    \1\ The prepared statement of Mr. Hendrix with attachments appears 
in the Appendix on page 84.
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    Chairman Lieberman, Ranking Member Collins, Senator Akaka, 
and other Members of the Committee for Homeland Security and 
Governmental Affairs, as has already been mentioned, my name is 
Dr. Bill Hendrix, and I am the biology team leader at Dow 
AgroSciences, a wholly owned subsidiary of Dow Chemical 
Company. I hold a Ph.D. in Entomology from Iowa State 
University and have worked for Dow almost 20 years.
    In addition to that role, I also serve as chair for the 
company's Gays, Lesbians, and Allies at Dow, or the GLAD 
Network. It is an affinity group advocating for gay, lesbian, 
bisexual, and transgender and their allied employees within the 
company. GLAD is one of the seven employee networks at Dow, all 
working toward promoting an increasingly diverse and inclusive 
workplace.
    First, I should probably provide a little bit more 
background on Dow Chemical. Dow was founded 112 years ago in 
Midland, Michigan, and that is a small town of about 40,000 
people, roughly 100 miles north of Detroit, Michigan. Our 
small-town Midwestern roots have encouraged us to establish our 
enduring core values of integrity and respect for people. It is 
these values that form the very heart of our approach to 
diversity and inclusion.
    Over the years, as we have grown and become a major player 
in the global economy, diversity and inclusion have become key 
elements of our corporate culture. Just consider our footprint: 
We serve customers in 160 countries, we have manufacturing 
facilities in 35 different countries, and at last count, I have 
46,000 colleagues who represent 100 different nationalities. 
And we are all working together to generate $57.5 billion in 
annual sales.
    Earlier this year, Dow completed its acquisition of Rohm 
and Haas, a $10 billion specialty chemicals company, that will 
further expand our growth potential and our reach into new 
markets and geographies.
    So, clearly, diversity underpins our workforce, our 
culture, and absolutely our business model. It is a highly 
competitive world where innovation is the key to securing 
competitive advantage, and we know that it is our ``human 
element'' that is the key to our success. As a result, we know 
that creating a respectful, inclusive working environment is 
not only a matter of fairness and equality, but also one of 
very critical economic and business importance. Likewise, we 
feel that S. 1102, the Domestic Partnership Benefits and 
Obligations Act of 2009, will similarly help the U.S. 
Government create a more respectful and inclusive work 
environment.
    With a shrinking and ever more diverse talent pool--
particularly in the sciences and engineering--it is essential 
for us to actively include everyone to ensure we attract, 
develop, and advance the very best talent available in the 
marketplace. As an industrial, business-to-business supplier 
with almost no consumer marketing, and located largely in 
smaller rural areas, we must work even harder to create an 
identifiable employer brand to attract our top talent. We see 
our proactive stance on diversity and inclusion as a key 
element of this brand.
    Our open policy allows us to hire the best employees, with 
the greatest range of perspectives. When we discuss domestic 
partnership policies in the workplace, we do so knowing that 
this policy does give us an advantage. Because we do not have 
major offices or facilities in the metropolitan areas in the 
United States, our employees who would like access to domestic 
partnership policies often have more protection and freedoms 
under the Dow system than under the laws of their State or 
locality.
    Specifically, our Lesbian, Gay, Bisexual, and Transgender 
(LGBT) policies have been good for our workplace for two main 
reasons: One, retention of our employees has been enhanced 
because they know that they can perform their jobs openly and 
with the full support of their family situation without any 
fear of repercussions, and, therefore, they have much more 
reason to be committed to our company in return; and two, 
better recruitment of allies and younger workers, who often use 
employee benefits, such as support for domestic partner 
benefits and flexible work hours, as a litmus test for 
prospective employers.
    For Dow, like most companies, the offering of benefits to 
LGBT employees has been the result of a multi-stage journey. We 
first instituted sexual orientation in our employment 
nondiscrimination policies in 2000. We then added parity for 
domestic partnerships in 2002. We added protection for gender 
identity in 2007. And a copy of our policy was entered into the 
written record.\1\ Of special note, I wanted to highlight the 
fact that is implemented globally for all 160 countries that we 
do business in.
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    \1\ The document submitted for the record by Mr. Hendrix appears in 
the Appendix on page 90.
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    The offering of domestic partner benefits is certainly not 
out of the norm, and we have already heard some statistics 
about that. According to the Human Right Campaign Foundation 
2010 Corporate Equality Index, ``the majority of Fortune 500 
companies provide them, and they remain an overall low-cost, 
high-return benefit for businesses.'' Currently 94 percent of 
the ranked companies in that survey offer domestic partner 
benefits to same-sex couples and 70 percent offer them to 
opposite-sex couples.
    Often domestic partner benefits are seen as just a benefit 
for same-sex couples. But domestic partner benefits do not only 
attract LGBT employees; many companies report that the 
implementation of domestic partner benefits help attract and 
retain critical talent from non-gay and lesbian talent. These 
particular candidates have reported that the existence of a 
domestic partner benefits policy shows that the company values 
and truly believes in a workplace that is respectful and 
protects their employees. This trend is especially prevalent 
among younger candidates in the workforce--a segment obviously 
very critical to our success. And I would say you mentioned 
statistics of the retirement that is coming in the Federal 
Government, and we are looking at a very high rate as well, 
roughly 50 percent within the next 5 years. So it is very 
critical.
    Within Dow, we have instituted policies to create parity 
between those who are traditionally married and those couples 
who would like to take advantage of our domestic partner 
benefits. Therefore, we do offer benefits to both same-sex and 
opposite-sex couples, and those who qualify also have access to 
a wide range of benefits, which, on the whole, are very similar 
to those outlined in S. 1102. Many of these benefits do not 
require the company to incur any additional costs. As examples, 
in addition to our U.S. medical plan, prescription drug plan, 
and our dental plan, employees have access to family leave, 
insurance, pension, adoption assistance, and international 
relocation benefits. Where a benefit is offered to a 
traditional spouse, we try to offer that same benefit to a 
domestic partner. Therefore, partners may take advantage of 
things like company discounts, visits to the fitness center, 
access to the flu prevention program, and have ability to open 
up a checking account at the credit union.
    Obviously, on an international scale, local law can impact 
our offerings within different countries and for international 
relocation. However, our global policy is to provide parity 
between domestic partners and those that are traditionally 
married within the country.
    Obviously, our management is sensitive to the very critical 
issues related to the cost that offering such benefits would 
add to our company's bottom line. After 7 years of offering 
domestic partner benefits to both same-sex and opposite-sex 
couples, I can tell you that the program does not add 
significantly to the bottom line. Currently, Dow Chemical has 
105,653 covered lives under our U.S. Medical Plan with an 
annual cost of $325 million. Quite in the ballpark of numbers 
quoted earlier. This number includes employees, retirees, and 
dependents of both our employees and retirees. We currently 
have 282 domestic partners who are covered under Dow's U.S. 
health benefits. That represents 0.27 percent of our covered 
lives. Interestingly, the average net payments for domestic 
partners is slightly less--0.24 percent of our total spending, 
which is roughly $2,730 per domestic partner.
    A second concern is how you create a registry of qualified 
domestic partnerships. This does entail a balance between 
respecting the individual's need for privacy with the company's 
need to install guidelines, as there are no national or State 
registries of domestic partnerships in most States, such as 
marriage licenses. For your use, we have provided to the record 
a copy of our policy for determining the existence of a 
qualified domestic partner relationship.\1\ Once this form is 
completed by the employee, the couple is granted access to all 
of Dow's domestic partner benefits. To date, we have had no 
issue with fraudulent claims for benefits. In fact, according 
to Lambda Legal, time has shown that fraud has not been a 
problem in the domestic partner benefits programs, and it is 
probably a lesser risk among employees claiming benefits. It is 
probably less of a risk compared to couples in a traditional 
marriage situation due to the tax penalty that is incurred with 
a domestic partner benefit.
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    \1\ The document submitted for the record by Mr. Hendrix appears in 
the Appendix on page 91.
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    Public policy can also augment a company's diversity 
program. Accordingly, Dow continues to strongly support the Tax 
Equity for Domestic Partner and Health Plan Beneficiaries Act, 
or S. 1556. Unfortunately, current law requires an employee 
whose domestic partner receives health benefits to pay taxes on 
their employer's contribution for health insurance benefits, 
and both the employee and employer must pay payroll taxes on 
this additional taxable income.
    Overall, Dow has found it a relatively easy transition to 
offer domestic partner benefits. This cost has been minimal 
while the impact to the daily culture has been immense. Every 
time an email goes out to employees stating that ``spouse/
domestic partner,'' then we send a very positive message for 
our workplace inclusion and reinforce our ``human element'' 
advantage.
    Dow appreciates the chance to share our views and applauds 
the Committee's work to gather more information on domestic 
partner benefits within the workplace. We strongly support the 
addition of these policies to all workplace environments and 
stand ready to assist in any way to review our own policies in 
this area. We welcome any further questions you might have at 
this time.
    Chairman Lieberman. Thanks very much, Dr. Hendrix. I 
appreciate your opening statement. We will do 7-minute rounds 
of questions.
    I must say perhaps the obvious, that I think it is really 
significant that you are from Dow Chemical, and if you look at 
the list of corporations that have provided benefits, equal 
benefits to same-sex partners of their employees, it has gone 
way beyond what might be called the New Age industries, the 
high-tech information technology companies centered around 
Silicon Valley or Seattle.
    Mr. Hendrix. Absolutely.
    Chairman Lieberman. I do not mean this personally, but Dow 
is an old business. [Laughter.]
    Mr. Hendrix. And we are quite proud of that, and you are 
exactly right. It is a very traditional business.
    Chairman Lieberman. It is a traditional business, right, 
obviously with progressive management, but this very 
traditional business has made this judgment based, presumably 
again, on what it thinks is fair, but also based on what its 
business model is. So I think there is significance in that.
    Director Berry, at some point, as we consider this in the 
full Committee or out on the floor of the Senate, I am sure we 
are going to be pressed to try to estimate the total additional 
costs of this. I thought the numbers you provided were very 
helpful, and two-tenths of 1 percent not of Federal employee 
expenses, but two-tenths of 1 percent of the Federal health 
benefits alone. I do not need this now, but to the extent as we 
go on, people will ask about what are the cost implications 
beyond the health benefits, and if you can help us do that, I 
am sure we will benefit.
    Mr. Berry. Mr. Chairman, we will definitely get you those 
numbers for the record.\1\ We have that on a 10-year basis, and 
we can get you all of that. But I think it is important to have 
some comparison because this is such an important recruitment 
and retention tool. We spend money on important recruitment 
efforts. Right now, we are spending $43 million a year on 
relocation of employees for the Federal Government. We spend 
$85 million in recruitment incentives. We spend $155 million a 
year on retention incentives.
---------------------------------------------------------------------------
    \1\ The information referenced by Mr. Berry appears in the Appendix 
on pages 39-83 respectively.
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    So, when you put this in that context, it is in a very 
small category in terms of what we can do in terms of tools in 
our tool belt that we can have that can help us with 
recruitment and retention. This is one of the lowest-cost 
options you could give us. So, at the same time it is an 
incredibly powerful tool for its price.
    And so when I put it in the context of those other tools 
that we use, this is a no-brainer for us in terms of a good 
deal for the Federal taxpayer.
    Chairman Lieberman. That is very well said. I notice on the 
chart that you provided to the Committee, you have a 10-year 
projection for current employees of $633 million.\2\ I know it 
is not even over the 10 years, but if you average it, obviously 
it comes to about $63 million, which is--I think those 
comparisons are excellent. The other money that is being spent 
for the retention incentives are--well, more than twice that 
number.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Lieberman appears in the 
Appendix on page 102.
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    Mr. Berry. Absolutely, sir.
    Chairman Lieberman. Have there been--I quoted one study 
from UCLA about estimated numbers of Federal employees with 
same-sex partners who were not working for the Federal 
Government. Have there been any studies or surveys that tried 
to quantify, beyond the anecdotal or common sense, the impact 
that providing these benefits would have on recruitment and 
retention? Obviously, these would be mostly in the private 
sector.
    Mr. Berry. There are studies in the private sector, Mr. 
Chairman, and we can provide those to the staff for the record 
so that you will have access to those. A lot of good work has 
been done, and it references what Dr. Hendrix referenced, which 
is that it is not as if there is a tidal wave of applicants in 
any company for this benefit.
    Chairman Lieberman. Right.
    Mr. Berry. It is an important tool, but in terms of the 
level of application across the board in companies across the 
Nation and in States and local governments that have done this 
they have found that the rate of application is very low. And I 
think what you have hinted at and Dr. Hendrix hinted at is the 
more important fact that this isn't just for the LGBT 
employees. This has become a litmus test for this generation. 
Kids coming out of school today are looking at companies and 
places to work, and they have in the back of their minds 
certain litmus tests that they use to determine, ``Is this a 
place I want to work?''
    Chairman Lieberman. Yes.
    Mr. Berry. And young kids today are looking at this as a 
basic indicator, that if your company does not have this, you 
are not a cool place to be. This is not just important for the 
LGBT community. This is important so that we can be competitive 
in hiring kids out of college and graduate schools today who, 
if we do not have this, are not seeing us as a cool place to 
be.
    Chairman Lieberman. It is a good point, and it is certainly 
validated by the differing opinions among different age groups 
on questions of gay rights generally, including this one.
    I think your testimony, Dr. Hendrix, has been very helpful, 
both in terms of that factor, the impact on recruitment of non-
gay and lesbian personnel to work for the Federal Government.
    In Connecticut, we have a large employer, one of whose 
major concerns about the current debate about health care 
reform is that the employer not be compelled to reduce their 
benefits to their employees. And the justification is that they 
believe from a business point of view that the provision of 
benefits for the workers and their families actually pays off 
in more hours, more days at work, fewer days missed, either 
because of the illness of the employee or the illness of a 
family member.
    So I do not know whether there is any experience that you 
have had at Dow or you have any other data reflection on this, 
but I wonder if, in addition to helping recruitment and 
retention, whether this provision of health benefits for 
partners of Federal employees also may be beneficial to what I 
call ``productivity''?
    Mr. Hendrix. I can say that we have not done a firm survey. 
Again, it is more anecdotal. But we feel that is very true, 
again, with the increased support of the company that they feel 
that they are getting in return, it does pay back. And it has 
been quite strong.
    Like you have already said, if the company helps support 
their infrastructure, then that makes them a lot more able to 
work and to put more into it. We definitely believe that has 
been the case.
    Chairman Lieberman. You are talking also, I think, if I am 
getting the drift, about loyalty and morale.
    Mr. Hendrix. Yes.
    Chairman Lieberman. In addition to the domestic partner 
being healthy so a worker can go to work without concern. Part 
of it is building up loyalty to the company, which hopefully we 
would do with the Federal employees.
    Mr. Hendrix. Absolutely.
    Chairman Lieberman. My time is up. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Berry, in your written testimony, you discussed at more 
length a memorandum that the President issued in June in which 
he requested that the Secretary of State and OPM identify 
benefits that could be extended to the same-sex partners of 
Federal employees. In addition, the President directed all 
executive departments and agencies to undertake that review.
    In light of that Executive Order or memorandum, could you 
please explain, in case we get this question, why our 
legislation is still needed?
    Mr. Berry. That is a great question, Senator Collins. The 
President made clear in signing that bill--and my General 
Counsel Elaine Kaplan, who is behind me here today--did a 
thorough and exhaustive review of Title 5 on this issue as to 
whether either OPM or the President has the authority to move 
forward and provide this benefit dealing with health insurance 
and retirement insurance benefits to our Federal employees. And 
the conclusion of that study, which was done in consultaton 
with OPM, the Justice Department, White House Counsel, and the 
State Department's Counsel, was no, neither the Office of 
Personnel Management nor any Federal agency nor, in point of 
fact, the President of the United States, can unilaterally 
extend these benefits to our Federal employees and retirees in 
the absence of law. That is why this legislation is absolutely 
critical and essential.
    So that has been confirmed now. I know there has been 
discussion over the years regarding whether this may or may not 
be possible. The conclusion is it is not. Not even the 
President has this authority. It requires the passage of 
legislation by Congress, and that is why this Act is so 
important and critical.
    Senator Collins. Thank you for clarifying that.
    Mr. Hendrix, I noted in your testimony that you said that 
Dow Company offers benefits to both same-sex and opposite-sex 
couples who are in committed domestic relationships, and this 
brings up a difficult issue that I am going to turn to Mr. 
Berry and put him on the spot.
    Maine State employees receive employment benefits 
regardless of whether they are in same-sex or opposite-sex 
domestic partnerships, just as Dow does.
    There are some who would say that the reason our 
legislation does not do that is that opposite-sex domestic 
partners can gain eligibility by getting married; whereas, in 
most States, same-sex partners cannot do so.
    On the other hand, if our objective is to increase the 
recruitment and the retention of qualified, highest-quality 
employees, should we be drawing a distinction between two 
committed relationships based solely on the gender of the 
partner on whether or not it is same sex or opposite sex? Is it 
fair? If we are talking about fairness, is that a fair 
distinction for us to make? And I know I am treading on 
delicate ground here. Mr. Hendrix, let me start with you, and 
then I will go to Mr. Berry.
    Mr. Hendrix. So it was a discussion, obviously, within Dow 
Company as we moved forward with it, but, again, if you are 
trying to recruit the best and the brightest and retain those 
once you have attracted them, it did not make sense for us to 
distinguish. So we were looking for parity between non-
traditional and traditional relationships. What we were trying 
to do is establish a committed relationship and how do you move 
forward with that.
    Senator Collins. Mr. Berry, what is your view on this 
issue?
    Mr. Berry. Well, Senator Collins, the Administration view 
is that right now this bill is correctly drawn in terms of a 
first step, and that the cost of this first step is one that we 
can manage and can offset over the course and term of the 
Administration.
    The cost of opening it, as you said, to opposite-sex 
couples in committed relationships does have a significant 
financial impact. At this point in time, the Administration 
feels that impact is of such a size and magnitude that we just 
cannot afford to make that step at this time.
    Right now the Administration is willing to support this for 
same-sex couples. We would look forward to working with you and 
the Committee and the Congress in years forward as we identify 
the costs and cost offsets better, but you clearly have 
identified a fairness issue, and I think we need to keep open 
the possibility of exploring how we might be able to move 
forward with that in the future.
    Senator Collins. Mr. Hendrix, opponents of our bill raise 
the issue of fraud, of people trying to get benefits by 
pretending that they are in domestic partnerships and filling 
out the forms. That is less likely to be the case, they would 
argue, if someone is married because it is more easily checked 
to see whether people are married.
    Has this been a problem at your company, to your knowledge?
    Mr. Hendrix. No, it has not been a problem. I put in there 
rather ambiguously that fraud has not been an issue, but when 
we were searching, we could not find a case in our search, for 
the testimony here today. So I am sure it could happen. We have 
the policy with documentation required to limit that as a 
consequence. So, we think that we have got a good form in place 
and a good process that is keeping us from having issues with 
fraud.
    Senator Collins. Mr. Berry.
    Mr. Berry. Senator Collins, I think it is a great point. I 
think what will be a significant difference between the public 
sector and the private sector on this is that under this 
legislation, if a Federal employee were to misrepresent this, 
there are criminal penalties. So this is a pretty serious 
charge, and we will be obviously enforcing it, just as we do 
now, through the use of our Inspector General, who regularly 
audits our benefit programs and checks to make sure that such 
fraud is not occurring. And so we do not face much fraud on 
this, and it is an area where we would not expect fraud, but we 
would clearly be on guard for it.
    We would ask our Inspectors General to use our oversight 
capacity to make sure that was not happening; and if it did, 
quite frankly, one or two cases would have quite a chilling 
effect on that fraud in that a criminal penalty would be 
substantial. And so I do not see this as a big threat or a 
deterrent to moving forward with this legislation.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Director Berry, it is good to see you again, as always.
    Mr. Berry. Yes, sir.
    Senator Akaka. You testified that this legislation is 
needed to assist the government in recruiting new employees to 
the Federal workforce. Clearly, corporations and public 
employers who do offer domestic partnership benefits have a 
substantial advantage for recruiting the best and brightest gay 
and lesbian employees.
    Additionally, many young people today want to work in an 
inclusive and diverse environment. As you have suggested, these 
potential employees, regardless of sexual orientation, may 
prefer an employer that makes its commitment to inclusiveness 
clear in its personnel policies.
    Can you discuss whether there may be broader recruiting 
advantages that domestic partnership benefits might provide?
    Mr. Berry. Thank you, Senator. Mr. Chairman, it is always 
such a pleasure to be with you and Senator Voinovich on your 
Subcommittee and talking about so many issues which we all care 
deeply and passionately about.
    You will recall from my confirmation hearing that when the 
President called and asked me to do this job, he said, ``John, 
we have got to make government service cool again.'' And I 
laughed, and I said, ``Well, Mr. President, I just turned 50, 
so by definition, 20-year-olds are going to do the opposite of 
what I say, and that will be closer to cool.''
    But in this case, this really has become a litmus test for 
this generation. I know because I have been out talking with 
college students in our recruitment and job fairs. Quite 
frankly, this comes up as a regular question: ``Why doesn't the 
Federal Government do this?'' And I am at a real disadvantage 
in responding.
    It is a competitive world out there with the private sector 
and with State and local governments. As you know from the 
Committee, we have between 10 and 20 positions for which we 
issue direct-hire authority to agencies so that they do not 
even have to follow the competitive process, because we have 
been unsuccessful in recruiting enough applicants for those 
jobs that we need to fill.
    A good example of that is veterinarians at the Food and 
Drug Administration. We cannot hire them right now. And so in 
guaranteeing the food safety of the Nation, we are having a 
hard time hiring people because we cannot effectively compete 
with Dow and other companies who snatch those people up before 
we do.
    That is a growing problem. Even with the economy, as dark 
as it has been, we are still facing these problems with 
veterinarians, engineers, doctors, nurses for our Department of 
Veterans Affairs (VA) hospitals. We are not competitive. Proof 
of that is that I issue direct-hire authority to agencies so 
they do not even have to advertise or compete for the job. In 
other words, if the VA finds a nurse and they are walking and 
breathing, they can hire them on the spot. They do not have to 
go through the paperwork. Well, that is proof that we are 
having trouble competing and that we are not effectively 
recruiting among those populations.
    Will this solve that problem? No, it is not a silver bullet 
that will solve everything. But it is one more tool in our tool 
belt that can help us, as people might be thinking about 
whether this employer is progressive or not. They may not be an 
LGBT person. They may not have a domestic partner of the same 
sex. They are looking at it as: Is the Federal Government a 
progressive employer? And right now you would have to conclude, 
if that was their test, no. They would look for people here 
who, quite frankly, would also pay them more. And so we are 
losing good people.
    So this is a good tool. It would be a great tool for us to 
have. It is not an expensive tool to have, and I think it will 
be very helpful, sir.
    Senator Akaka. Thank you very much, Director Berry, for 
your positive response.
    Dr. Hendrix, you talked a bit about that issue in your 
testimony. I would like to hear more about how Dow Chemical 
Company's domestic partnership benefits program has affected 
its ability to recruit individuals who are not gay or lesbian?
    Mr. Hendrix. Yes, I am quite happy to do that--although you 
have done a very good job of summarizing it, Mr. Berry.
    It is a litmus test. It is a very different situation when 
you are interviewing 20-year-olds right out of college, and 
this is one of the checks that they look for, for a company 
that they might want to be a part of. It gets back to, ``Is the 
company going to look out for us as a whole, me as a whole? So 
it may not be something I particularly want to take advantage 
of, but I know that it is something that as a whole, it is a 
great benefit to have.''
    The other issue was flexible work hours that we mentioned. 
It is a policy we have had for several years as well. These are 
the types of things that younger recruits are now looking at.
    We also have good examples where we had lost employees, so 
this is another reason. It is a lot more expensive to retain a 
good employee than it is to attract a new one, and so when you 
see one or two people leaving and that is the reason--and 
Representative Baldwin also pointed that out--that opens up a 
lot of eyes.
    So it is definitely there. We do feel it offers us the 
competitive advantage.
    Senator Akaka. Let me ask this question of Director Berry. 
As Senator Collins mentioned, in July, at the President's 
request, you issued a memorandum directing agencies to review 
the benefits they offer to employees and determine which of 
those benefits could be extended to same-sex domestic partners 
without legislation. You instructed the agencies to report back 
by September 15, 2009. Please comment on the information OPM 
received and any recommendations you made to the President, if 
you can, based on this information.
    Mr. Berry. Thank you, Mr. Chairman. The good news that I am 
here to report is that the agencies have all responded to that 
request. Our staff is now going through those responses and 
preparing a report that will go to the President. We have not 
completed that review of the agency response yet, but that is 
underway.
    The good news is that everyone did respond. We are wading 
through that information right now and looking at what might be 
able to be done administratively and what might also require 
additional legislation. We will be sure to report back to you 
and the Chairman and the Ranking Member as to the results of 
that as soon as that work is completed. It is underway right 
now.
    Senator Akaka. Thank you very much for your responses. They 
are helpful. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Akaka.
    Thanks, Director Berry and Dr. Hendrix. I think your 
testimony, Congresswoman Baldwin's, and the exchanges we have 
had have really been very constructive and very informational. 
I think people will continue to come back to the estimate of 
the cost and all the benefits that come from those incremental 
costs and the comparison to the other expenditures that the 
Federal Government makes to recruit, retain, and increase 
productivity. And I think the fraud question will come up also, 
but you have handled it very well.
    So it is our intention to mark this bill up at our 
Committee markup in either November or December, to get it out 
to the floor of the Senate by the end of the year, and hope 
that we can then take it up sometime early in the next year, 
which would be a step forward, and hopefully be in time for you 
to put it to work. I thank you for your testimony.
    Senator Collins, would you like to say anything in 
conclusion?
    Senator Collins. Thank you. I just want to echo your 
comments by thanking our witnesses today.
    Chairman Lieberman. Thanks very much. Yes, Mr. Berry?
    Mr. Berry. Mr. Chairman, just in the interest of full 
disclosure, since Congresswoman Baldwin did it as well, I also 
would personally stand to benefit from this legislation, so I 
would like to just disclose that to the Committee in that my 
partner does not work for a company that provides this benefit 
and so would be likely to take this benefit if it were offered 
by the Federal Government. And so I also would just like to 
disclose that for the record.
    The other thing I would like to mention, Mr. Chairman, if I 
could before you close, is that if it is of assistance to you 
and the Ranking Member, I think now that working together we 
will be able to identify efficiencies to fully offset the cost 
of this legislation over the term of the Administration. And so 
if you need a commitment or a promise to that effect, I am 
happy to deliver that, that we will work with both parties to 
find efficiencies and improvements that we can both agree on 
that will not damage Federal employees, not restrict benefits 
in any other way, but fully cover the cost of this program.
    Chairman Lieberman. That is a very constructive suggestion 
because, otherwise, we would have to fund it incrementally in 
the next fiscal year beginning October 1st of next year, 
assuming we can get it passed next year, which I hope and 
believe we can. But all the better if we can say it is deficit 
neutral because you have identified some savings. I appreciate 
that.
    Dr. Hendrix, do you want to say anything in conclusion?
    Mr. Hendrix. Well, I guess I should go for full disclosure, 
too, and tell you that my partner of 28 years takes advantage 
of the Dow benefits. [Laughter.]
    And it is of great peace of mind to us, and I hope one day 
that the U.S. Government will also be able to do that. So thank 
you.
    Chairman Lieberman. I appreciate your saying that.
    I do not believe that there is any need for you to recuse 
yourself from this, Mr. Berry, as a result---- [Laughter.]
    No, I guess it also says that we are lucky to have 
attracted you to public service, notwithstanding that 
inequitable burden that you have been dealing with, and your 
partner has. But the record of the hearing will stay open for 
15 days, as is our custom, for additional statements or 
questions. I thank all of you very much, and with that, the 
hearing will stand adjourned.
    [Whereupon, at 11:16 a.m., the Committee was adjourned.]


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